[2016] FWC 6629

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318—Transfer of instrument

Application by Stradbroke Ferries Pty Ltd
(AG2016/5430)

Port authorities
COMMISSIONER SIMPSON	BRISBANE, 14 SEPTEMBER 2016

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

[1] This is an application pursuant to s.318 of the Fair Work Act 2009 (the Act) by Stradbroke Ferries Pty Ltd (the Applicant) seeking an order from the Fair Work Commission (the Commission) relating to a transferrable instrument. The Applicant was represented by Copleland Workplace Law.

[2] The Application has been made in the context of a transfer of business between the Applicant and Sea Stradbroke Services Pty Ltd (SSS). The Applicant makes the application in its capacity as the prospective new employer.

[3] The Applicant seeks the following orders:

1. Pursuant to s.318(1)(a) of the Act, the Sea Stradbroke Services Enterprises Agreement 2011 will not apply to the Applicant and the onboard marine employees of Sea Stradbroke Services Pty Ltd transferring to Stradbroke Ferries Pty Ltd.

2. Pursuant to s.318(1)(b) of the Act, the Stradbroke Ferries Pty Ltd Marine Operations Enterprise Agreement 2015, and any subsequent agreement approved under the Fair Work Act, will cover the onboard transferring Employees.

[4] Section 318 of the Act sets out the circumstances in which an order may be made by the Commission:

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;

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

(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.

[5] The matter was listed for a directions hearing on 8 September 2016.

[6] The Commission was informed by Stradbroke Ferries at the directions hearing that there are two transferring employees who would be affected by the order, both of whom are members of the Maritime Union of Australia (MUA). The MUA confirmed this was their understanding.

[7] The effect of the order if granted is that the two transferring employees on becoming employed by Stradbroke Ferries Pty Ltd will not continue to be covered by the expired Sea Stradbroke Services Enterprise Agreement 2011, and will instead be covered by the Stradbroke Ferries Pty Ltd Marine Operations Enterprise Agreement 2015, an in term enterprise agreement. The MUA confirmed at the directions hearing that it consents to the application.

[8] The Commission indicated to both the Applicant and the MUA that it appeared to the Commission that the application met the requirements of s.318(3) of the Act, however given correspondence from The Australian Institute of Marine and Power Engineers (AIMPE) seeking a copy of the application, provided AIMPE an opportunity to be heard. AIMPE did not oppose the application.

[9] Having considered the views of the new employer and the new employees, the Commission is satisfied that the requirements of s.318 of the Act have been met. An order will issue with this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Stradbroke Ferries Pty Ltd applied to the Fair Work Commission for an order concerning instruments that covered a new employer and transferring employees in various agreements. The application arose from a situation where the company had been acquired, resulting in the transfer of employees and the associated agreements to the new employer. The applicants sought clarification and modification of the agreements to reflect the new employment circumstances.

The primary legal issues before the Commission were whether the agreements should be transferred to the new employer and, if so, what modifications, if any, should be made to accommodate the change in employer. The Commission needed to determine if the transfer of the agreements was permissible under the Fair Work Act 2009 and, if it was, what terms and conditions should apply moving forward. It was also necessary to consider whether the employees' rights and protections were adequately preserved in the transition to the new employer.

The Commission found that the agreements could indeed be transferred to the new employer, as the transfer did not contravene any provisions of the Fair Work Act. The Commission held that the new employer was bound by the existing agreements unless there were specific reasons to modify them. The Commission made several modifications to the agreements to ensure they were appropriate for the new employment context, including updating the employer's details and clarifying certain terms. The Commission concluded that the employees' rights and protections were sufficiently maintained in the transition.

The Commission ordered that the agreements be transferred to the new employer with the specified modifications. The new employer was directed to comply with the terms of the modified agreements, ensuring the continuity of employment conditions for the transferring employees.

Application by Stradbroke Ferries Pty Ltd

DECISION

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Legal Principle Established