Application by Terrigal Pacific Hotel Pty Ltd

[2016] FWC 2006

[2016] FWC 2006

DECISION

Fair Work Act 2009

s 318 - Application for an order relating to instruments covering new employer and

transferring employees

Terrigal Pacific Hotel Pty Ltd

(AG2016/627)

Hospitality industry

DEPUTY PRESIDENT SAMS SYDNEY, 11 APRIL 2016

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

employees.

[1]        This is an application, filed by Terrigal Pacific Hotel Pty Ltd (the ‘applicant’),

pursuant to s 318 of the Fair Work Act 2009 (the ‘Act’), seeking orders from the Fair Work

Commission (the ‘Commission’) that the Crown Plaza Terrigal Enterprise Agreement 2011-

2012 (the ‘Agreement’) will cover non-transferring employees of Terrigal Pacific Hotel Pty

Limited who perform, or are likely to perform, transferring work for the applicant. The

application is made in the context of the applicant having entered into a sales agreement with

HANZ (Terrigal) Pty Limited for the purchase of land and business. The transaction was

completed on 31 March 2016.

The applicable legislation

[2] The following provisions of the Act are relevant to my determination of this

application:

317 FWC may make orders in relation to a transfer of business

This Division provides for the FWC to make certain orders if there is, or is likely to

be, a transfer of business from an old employer to a new employer.

[2016] FWC 2006

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;

[2016] FWC 2006

(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.

[3]        The application was accompanied by a statutory declaration of Mr Peter Downie, the

internal legal counsel of Karedis Investment Group, the Crown Plaza Terrigal Enterprise

Agreement 2011-2012 and a comparison of the key terms of the Agreement to the Award.

The evidence demonstrated that there are a number of provisions under the Agreement which

are superior to those under the Award. The Agreement contains higher base rates of pay, paid

parental leave, payment for community service leave and the provision of a paid ‘green day’

to perform volunteer work. Mr Downie noted that there is a lack of business synergy between

the Agreement and the Award, in that there may be a risk of industrial disharmony if the

Agreement was to apply to existing employees and the Award was to apply to non-

transferring employees. Mr Downie stated that there would be an economic disadvantage to

the applicant if the Agreement did not cover non-transferring employees, as the applicant

would be required to simultaneously administer the Agreement and the Award.
[2016] FWC 2006

[4]        Having considered the materials filed by the applicant and the witness statements, I

intend to make the orders sought by the applicant. In doing so, I have taken all the matters in

ss 318(3) into account; in particular, the views of the applicant and whether the employees

would be disadvantaged in relation to the terms and conditions of their employment. I am

satisfied that there is a positive advantage to the employees and there would be a negative

impact on the productivity of the applicant’s workplace, should the orders not be granted. For

the sake of completeness, I am satisfied that granting the orders would not be contrary to the

public interest. Orders giving effect to this decision are published contemporaneously with

this decision.

DEPUTY PRESIDENT

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