Amcor Flexibles (Australia) Pty Ltd

[2016] FWC 4347

[2016] FWC 4347

FAIR WORK COMMISSION

DECISION

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

Amcor Flexibles (Australia) Pty Ltd
(AG2016/3697)

Manufacturing and associated industries
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 8 JULY 2016

Application for an order relating to instruments covering new employer and transferring employees.

[1] Amcor Flexibles (Australia) Pty Ltd (Applicant) has lodged an application pursuant to s.318(1) of the Fair Work Act 2009 (Act) for orders relating to an instrument covering a new employer (Applicant) and the transferring employee. 

[2] In February 2016, Amcor Flexibles (Dandenong) Pty Ltd (old employer) closed its operations and manufacturing. The Dandenong site has now been vacated.

[3] The Applicant has offered to relocate Mr Bobby Mann (affected employee) to work at the Preston site (29 Bell Street, Preston, Victoria) as a result of the closure.

[4] In accordance with s.311(1) and s.311(6) of the Act, the Applicant is an associated entity of the old employer and the transferring employee (being the affected employee) has become employed by the Applicant. The affected employee is covered by the Amcor Flexibles (Dandenong) Pty Ltd Enterprise Agreement 2015-2018 (old Agreement). Section 313(1) provides that a transferrable instrument that covered the old employer and the transferring employee (being the affected employee) immediately before the termination of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant (new employer) would be covered by the old Agreement in relation to the affected employee, however s.313(3) operates subject to s.318(1) of the Act. Pursuant to s.318(1), the Applicant has sought that the transferable instrument not cover the affected employee.

[5] The Applicant applies for an order pursuant to s.318(1)(a) of the Act to displace the operation of s.313(1) in relation to the old Agreement to ensure that the affected employee is no longer covered by that agreement. The existing industrial instrument that covers the Applicant in relation to operations in which the affected employee will be engaged, the Amcor Flexibles Australia (Preston) Enterprise Agreement 2014 (new Agreement), will apply to the affected employee.

Relevant legislation

[6] Section 313 provides:

“313 Transferring employees and new employer covered by transferable instrument

(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee's employment with the old employer, then:

(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time ) the transferring employee becomes employed by the new employer; and
…

        (3)  This section has effect subject to any FWC order under subsection 318(1).”

[7] Section 318 provides:

“318 Orders relating to instruments covering new employer and transferring employees

Orders that the FWC may make

(1) The FWC may make the following orders:
(a)  an order that a transferable instrument that would, or would be likely to, cover the new employer and a transferring employee because of paragraph 313(1)(a) does not, or will not, cover the new employer and the transferring employee;

(b) an order that an enterprise agreement or a named employer award that covers the new employer covers, or will cover, the transferring employee.

Who may apply for an order
             (2)  The FWC may make the order only on application by any of the following:

(a) the new employer or a person who is likely to be the new employer;

(b) a transferring employee, or an employee who is likely to be a transferring employee;

(c) if the application relates to an enterprise agreement - an employee organisation that is, or is likely to be, covered by the agreement;

(d) if the application relates to a named employer award - an employee organisation that is entitled to represent the industrial interests of an employee referred to in paragraph (b).

Matters that the FWC must take into account

(3)  In deciding whether to make the order, the FWC must take into account the following:
  (a)  the views of:
                  (i)  the new employer or a person who is likely to be the new employer; and

   (ii)  the employees who would be affected by the order;

(c) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;

(d) if the order relates to an enterprise agreement - the nominal expiry date of the agreement;

(e) whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace;

(f) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;

(g) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;

(h) the public interest.

Restriction on when order may come into operation

(4)  The order must not come into operation in relation to a particular transferring employee before the later of the following:

(a)  the time when the transferring employee becomes employed by the new employer;

(b)  the day on which the order is made.”

Consideration

[8] The Applicant provided materials in support of the application including copies of both the old Agreement and the new Agreement, a letter in support signed by the affected employee and a letter of support from the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU). Additionally, attached to the letter of support signed by the affected employee was a summary of the key differences between the old Agreement and the new Agreement.

[9] The material is considered below in relation to each of the matters in s.318(3) of the Act.

Section 318(3)(a)(i): the views of the new employer

[10] The Applicant, as the new employer, is seeking to:

• Reduce the prospect for confusion in having to apply two separate enterprise agreements to employees working alongside each other and performing similar duties in the workplace, particularly given that there is only one affected employee who would have the old Agreement cover them at the Preston site;



• Reduce the prospects of errors being made in determining employee entitlements (in particular, with regard to processing of payroll) that may otherwise arise as a result of the consequence of having to apply separate enterprise agreements to employees working alongside each other and performing similar duties in the same workplace;



• Ensure consistency in providing employee entitlements;



• Allow greater efficiency in the day-to-day operation of the Preston site, in particular in relation to hours of work and rostering; and



• Reduce the levels of administrative oversight required to monitor the above, particularly in the context that, if the order is not granted, one employee will be covered by the old Agreement, while the majority of employees at the Preston site will be covered by the new Agreement.

Section 318(3)(a)(ii): the views of the employees prospectively affected by any order

[11] The Applicant provided a letter in support signed by the affected employee. The letter in support provides a detailed explanation of the redeployment arrangement from the Dandenong site to the Preston site, including the trial period and the affected employee’s option, under the old Agreement, to take a redundancy. The signature page indicates that the employee understands the offer of redeployment and agrees to support any application to the Fair Work Commission (Commission) for orders in relation to the transfer of the old Agreement. The letter in support was signed by the affected employee on 19 January 2016.

Section 318(3)(b): any disadvantage to the employee

[12] The Applicant stated that the affected employee will not be disadvantaged by the order and that, under the new Agreement, the affected employee will receive more favourable conditions of employment including better redundancy entitlements, more generous shift loadings and improved hours of work.

[13] The Applicant say that it has recognised the affected employee’s period of service under the old Agreement for all purposes, including the transfer of leave accruals and other service based entitlements.

Section 318(3)(c): the nominal expiry date of the transferable instrument

[14] The nominal expiry date of the old Agreement is 31 January 2018. The nominal expiry date of the new Agreement, the agreement sought to cover the affected employee, is 31 December 2016.

Section 318(3)(d): any negative impact on productivity on the new employer’s workplace

[15] As indicated above, the Applicant is seeking to avoid confusion in having to apply two separate enterprise agreements to employees working alongside each other and performing similar duties in the workplace. The Applicant is seeking to avoid errors being made in determining employee entitlements, in particular in regards to processing of payroll. The Applicant submits that it will ensure consistency, allow for greater efficiency in the day-to-day operation at the Preston site and will reduce the levels of administrative oversight. I agree.

Section 318(3)(e): any significant economic disadvantage to the new employer

[16] The Applicant remains neutral on this consideration and it therefore bears no weight on my decision.

Section 318(3)(f): business synergy between the transferable instrument and the new agreement

[17] As indicated earlier, the Applicant submits that the affected employee will change classification level and as a result, the affected employee will receive more favourable conditions of employment under the new agreement including a higher rate of pay, better redundancy entitlements, more generous shift loadings and improved hours of work. The granting of the application will have the result that employees performing the same or similar work will be covered by the same rather than different industrial instruments. This will support business synergy.

Section 318(3)(g): the public interest

[18] The Applicant submits that the public interest would not be affected by the making of the order, and I agree.

Conclusion

[19] On balance, taking into account each of the requirements in s.318(3) of the Act, I am satisfied that the order sought should be granted.

[20] An order giving effect to my decision is issued separately in PR582304.

DEPUTY PRESIDENT

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