Amcor Limited Amcor Packaging (Australia) Pty Ltd
[2012] FWA 9045
•2 NOVEMBER 2012
[2012] FWA 9045 |
|
DECISION |
Fair Work Act 2009
s.318—Transfer of instrument
Amcor Limited
Amcor Packaging (Australia) Pty Ltd
(AG2012/8249)
Manufacturing and associated industries | |
COMMISSIONER GOOLEY | MELBOURNE, 2 NOVEMBER 2012 |
Application for an order relating to instruments covering new employer and transferring employees in agreements.
[1] Amcor Limited and Amcor Packaging (Australia) Pty Ltd (the Applicants) applied pursuant to section 318 of the Fair Work Act 2009 (FW Act) for orders that the One HPA Certified Agreement 2004-2007 (the Agreement) not apply to its employees.
Background
[2] In 2003 Amcor Limited contracted out its information technology support services to Hewlett-Packard Australia Pty Ltd. In 2012 Amcor Limited determined to in source the work.
[3] In June 2012 Amcor Packaging (Australia) Pty Ltd offered employment to some of the Hewlett Packard employees who had worked on the outsourced work. Six employees accepted offers of employment and commenced on 1 July 2012. Another employee accepted an offer of employment later in July 2012. One employee accepted an offer of employment with Amcor Limited.
Legislative provision
[4] Schedule 11 Item 7 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 provides that Part 2-8 of the FW Act, as modified by item 8, applies to the transfer of business of employees covered by transitional instruments. The Agreement is a transitional instrument.
[5] Section 311 of the FW Act provides:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
[6] Section 312 of the FW Act provides:
“312 Instruments that may transfer
Meaning of transferable instrument
(1) Each of the following is a transferable instrument:
(a) an enterprise agreement that has been approved by FWA;
(b) a workplace determination;
(c) a named employer award.
Meaning of named employer award
(2) Each of the following is a named employer award:
(a) a modern award (including a modern enterprise award) that is expressed to cover one or more named employers;
(b) a modern enterprise award that is expressed to cover one or more specified classes of employers (other than a modern enterprise award that is expressed to relate to one or more enterprises as described in paragraph 168A(2)(b)).
Note: Paragraph 168A(2)(b) deals with employers that carry on similar business activities under the same franchise.”
[7] Section 313 of the FW Act 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
(b) while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.
(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee’s employment with the old employer.
(3) This section has effect subject to any FWA order under subsection 318(1).”
[8] Section 314 of the FW Act provides:
“314 New non-transferring employees of new employer may be covered by transferable instrument
(1) If:
(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and
(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and
(c) the non-transferring employee performs the transferring work; and
(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;
then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.
(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWA order under subsection 319(1).”
[9] Section 318 of the FW Act provides:
“318 Orders relating to instruments covering new employer and transferring employees
Orders that FWA may make
(1) FWA 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) FWA 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 FWA must take into account
(3) In deciding whether to make the order, FWA 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;
(b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;
(c) if the order relates to an enterprise agreement—the nominal expiry date of the agreement;
(d) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace;
(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;
(f) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;
(g) 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.”
[10] Section 319 of the FW Act provides:
“319 Orders relating to instruments covering new employer and non-transferring employees
Orders that FWA may make
(1) FWA 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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;
(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.
Who may apply for an order
(2) FWA 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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(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 FWA must take into account
(3) In deciding whether to make the order, FWA 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;
(b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;
(c) if the order relates to an enterprise agreement—the nominal expiry date of the agreement;
(d) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace;
(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;
(f) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;
(g) the public interest.
Restriction on when order may come into operation
(4) The order must not come into operation in relation to a particular non-transferring employee before the later of the following:
(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;
(b) the day on which the order is made.”
The Submissions of the Applicants
Sections 318(3)(a)(i) and 319(3)(a)(ii)
[11] Amcor Packaging (Australia) Pty Ltd as the new employer submitted that it preferred to have the transferring employees employed on the same terms and conditions as their co-workers. The terms and conditions of its employees not covered by an enterprise agreement are governed by common law contracts of employment together with its human resources policies. For some employees their terms and conditions are under pinned by modern awards but it was submitted that the transferring employees would not be covered by a modern award. By virtue of section 314 of the FW Act, new non transferring employees would be covered by the Agreement and it would be difficult over time to determine if “the work” required of the new employee was the same work which was the subject of the transfer.
[12] Amcor Packaging (Australia) Pty Ltd submitted that the Agreement was more relevant to an IT environment and that it is not in the IT business.
Sections 318(3)(a)(ii) and 319(3)(a)(ii)
[13] Amcor Packaging (Australia) Pty Ltd submitted that the transferring employees supported the application. The transferring employees unanimously voted in favour of terminating the Agreement. Directions were issued to the Amcor Packaging (Australia) Pty Ltd to provide a copy of the application and notice of hearing to the transferring employees. No employee attended the hearing to oppose the application.
Sections 318(3)(b) and 319(3)(b)
[14] The Applicants submitted that the employees would not be disadvantaged by the application as the transferring employees will receive more beneficial terms and conditions of employment. The rates under the Agreement have not increased since 2004, and the rates paid by the Amcor Packaging (Australia) Pty Ltd to the transferring employees, are significantly higher than the highest rate in the Agreement. While the employees will lose their entitlement to paid overtime and shift penalties the employees do not work shift work and are not required to work regular overtime. As well the Applicant pays them a significant on call allowance. Even if the employees worked regular overtime the amount paid by Amcor Packaging (Australia) Pty Ltd compared with the Agreement would see employees better off under their contract of employment.
[15] Amcor Packaging (Australia) Pty Ltd indentified three areas where the Agreement provided better conditions than the equivalent Amcor policy. The redundancy entitlement under the Agreement is half a month’s pay per year of service capped at fourteen months’ pay compared with three weeks’ pay per year of service capped at twelve months’ pay under the policy. Amcor Packaging (Australia) Pty Ltd has agreed to maintain the fourteen month cap.
[16] Paid maternity leave of six weeks is provided under the Agreement whereas the policy provides for three weeks’ maternity leave and a three week payment upon return to work. None of the transferring employees are female.
[17] The Agreement provides for accident make up pay which will be lost if the Agreement no longer applies.
[18] If the Agreement no longer applies then employees would be entitled to unlimited sick leave at the discretion of the manager and access to payment of education expenses.
[19] However it is relevant that the transferring employees’ rights in respect of some of these entitlements would be derived from policies which are able to be amended at the Applicants’ discretion. The transferring employees, if as was submitted no modern award applies to the work, would no longer have access to the dispute resolution services of Fair Work Australia.
Sections 318(3)(c)and 319(3)(c)
[20] The nominal expiry date of the Agreement was 31 May 2007.
Sections 318(3)(d) and 319(3)(d)
[21] The Applicants submitted that there would not be any direct impact on productivity but having two sets of conditions may cause disharmony between co-workers.
Sections 318(3)(e) and 319(3)(e)
[22] The Applicants do not submit that they would suffer any economic disadvantage.
Sections 318(3)(f) and 319(f)
[23] The Applicants submitted that there was no workplace instrument that would otherwise cover these employees. The Applicants accept that for some of its managerial and support staff, the relevant modern awards are the Clerks Private Sector Award 2010 and the Professional Employees Award 2010.
Sections 318(3)(g) and 319(3)(g)
[24] The Applicants submitted that it is in the public interest that employees’ terms and conditions be reflective of community standards and be attractive and competitive.
Conclusion
[25] Have regard to all the matters set out in section 318(3) and 319(3) I consider that it is appropriate in all the circumstances to make the orders sought by the Applicants. The orders [PR530446] will operate from 18 October 2012.
COMMISSIONER
Appearances:
D Kavanagh for the Applicant.
Hearing details:
2012.
Melbourne.
18 October.
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