Application by Toyota Motor Corporation Australia Limited

[2016] FWC 724

[2016] FWC 724

DECISION

Fair Work Act 2009

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

transferring employees

Toyota Motor Corporation Australia Limited T/A Toyota Motor

Corporation Australia

(AG2016/2194)

Vehicle industry

DEPUTY PRESIDENT GOOLEY MELBOURNE, 5 FEBRUARY 2016

Application for an order in relation to transfer of business - Transferrable instrument -

Application that transferrable instrument not cover transferring employees - Conditional offer

of employment - Application not opposed – Fair Work Act 2009, ss. 311, 312, 317 and 318.

Introduction

[1]        The Toyota Motor Corporation Australia Limited T/A Toyota Motor Corporation

Australia has applied under s.318 of the Fair Work Act 2009 (the Act) for an order that the

Toyota Technical Centre Australia Agreement 2006 not apply to Aya Ling, Martin Zandbergs

and Reiko Little (the transferring employees) who are employed by the Toyota Technical

Centre Australia Pty Ltd under the TTCA Agreement.

[2]        There is no dispute that the employees are transferring employees. TMCA and TTCA

are associated entities, or have a connection by virtue of their status as related bodies

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corporate, as that term is defined by s.50AAA of the Corporations Act 2001.

Background

[3]        In July 2016, TTCA will cease performing the Technical Translation and Job Request

Coordinator and the Workshop Vehicle Fleet Coordinator functions of its business. As a

result, the positions of the transferring employees will no longer be required to be performed

by anyone at TTCA.

[4]        From July 2016, the functions will be transferred to, and be performed by, TMCA.

[5]        TMCA wishes to offer employment to the transferring employees however the offers

of employment are conditional upon an order pursuant to s.318 of the Act being in place.

[2016] FWC 724

Relevant legislation

[6]        Part 2-8 of the Act describes when a transfer of business occurs and provides for the

transfer of enterprise agreements, certain modern awards and certain other instruments if there

is a transfer of business from one employer to another employer. Division 3 of Part 2-8

provides the Commission with the power to make orders that an enterprise agreement that

would otherwise apply to transferring employees because there was a transfer of business, not

apply.

[7]        The making of an order is discretionary and in making any order that an enterprise

agreement that would otherwise apply to transferring employees the Commission must take

into account the following:

(3) In deciding whether to make the order, 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;

(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.

Transfer of the TTCA Agreement

[8]        TMCA submitted that the proposed orders should be made in order to facilitate the

transfer of the transferring employees’ employment.

[9]        TMCA submitted that the transferring employees were each provided with a letter of

offer, a letter detailing its intention to make this application to the Commission and a

declaration form for them to complete, indicating whether they supported TMCA’s

application for an order that the TTCA Agreement not apply to their employment on transfer
[2016] FWC 724

to TMCA. TMCA filed copies of the declarations signed by the transferring employees and

indicating their support of the application with the Commission.

[10]      The transferring employees have accepted TMCA’s offer of employment and support

the application before the Commission.

[11]      TMCA submitted that the transferring employees will not, on an overall basis, be

disadvantaged in relation to their terms and conditions of employment if the order was made.

The transferring employees will receive a higher base salary than they currently receive under

the TTCA Agreement, along with a car allowance as part of their fixed remuneration.

[12]      TMCA submitted that the transferring employees will receive a higher superannuation

rate if they commenced employment with TMCA than they currently receive under the TTCA

Agreement.

[13]      The transferring employees’ entitlements to annual leave, personal/carer’s leave,

compassionate leave and parental leave would remain the same and in accordance with the

provisions of the National Employment Standards in the Act.

[14]      TMCA submitted that applying the TTCA Agreement to the transferring employees

would impose an economic disadvantage on TMCA by requiring it to establish separate

administrative arrangements to ensure it meets its obligations to the transferring employees,

which are separate to other employees who perform similar work. They submitted that this

would impose an administrative and cost burden on TMCA, resulting in operational

inefficiency.

[15]      TMCA further submitted that if the TTCA Agreement were to apply to the transferring

employees’ employment with TMCA, it could create disharmony in the workplace as the

terms and conditions of the transferring employees’ employment would be different to other

employees performing the same work at the same classification level.

[16]      On 27 January 2016, I caused an email to be sent to TMCA in which the TMCA were

asked to address s.318(3)(b) of the Act. I noted that if the application were granted, any

redundancy entitlement would be in accordance with the National Employment Standards and

the employees would no longer be entitled to the redundancy entitlements under the TTCA

Agreement which are significantly more generous. Further, long service leave under the

TTCA Agreement was also more generous. As a result, I was provided with further material

from TMCA which advised that employees would not be disadvantaged in respect to long

service leave and redundancy entitlements if the s.318 application was successful. TMCA

provided an undertaking to the Commission that the more beneficial long service leave

provisions would be preserved and that the employees would receive redundancy entitlements

no less beneficial than provided for in the TTCA Agreement. Upon receipt of that

undertaking, the transferring employees indicated their support for the application.

Conclusion

[17]      I am satisfied that the TTCA Agreement is a transferable instrument.

[18] I have had regard to the views of the employees and the TMCA who support the

making of the order. I further note that the TTCA Agreement had a nominal expiry date of 25
[2016] FWC 724

July 2009. I accept the submissions of TMCA, given the undertaking, that the employees

would not be disadvantaged by the making of the order. I further accept the submissions that

requiring the TMCA to apply the TTCA Agreement would impose an economic disadvantage

as it would impose an administrative and cost burden on TMCA. I am not satisfied that it

would cause TMCA to incur a significant economic disadvantage. I further accept the

submissions of TMCA that it would be in the public interest to make the order sought.

[19]      For the reasons above, I will make an order that the TTCA Agreement will not cover

the transferring employees during the period of their employment with TMCA.

DEPUTY PRESIDENT

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<Price code A, AC302516 PR576701 >

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s.311(6) of the Act.