ASF Security Services Pty Ltd T/A Australian Manpower Solutions & Services

[2018] FWC 808

[2018] FWC 808

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

ASF Security Services Pty Ltd T/A Australian Manpower Solutions & Services
(AG2017/5815)

Security services
COMMISSIONER GREGORY	MELBOURNE, 7 FEBRUARY 2018

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

Introduction

[1] ASF Security Services Pty Ltd T/A Australian Manpower Solutions & Services (“AMSS”) has made application to the Fair Work Commission for an Order under s.319 of the Fair Work Act 2009 (Cth) (“the Act”). The application is made with the intention of obtaining an order that the ASF Protective Services Enterprise Agreement 2013 – 2017 (“the Agreement”) cover non-transferring employees of AMSS who perform, or are likely to perform, transferring work in a role within a Job Level listed in Part 3 of the Agreement.

[2] The application indicates that ASF Security Services Pty Ltd trading as ASF Protective Services (“ASF”) currently delivers security services to a range of clients under various contracts. However, as a consequence of a recent restructure, it is now proposed that the services delivered by ASF will in the future be delivered by employees of AMSS. ASF and AMSS are associated entities as defined by the Act.

[3] On 11 January 2018 the Commission wrote to AMSS proposing that the matter be dealt with “on the papers.” ASF indicated, in response, that it had no objection to that course of action. I therefore consider it appropriate to determine the matter “on the papers” based on the details contained in the application and the accompanying materials.

Relevant legislation

[4] Section 311 of the Act set out the circumstances in which a transfer of business occurs. It states:

“S.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).” 1

[5] Section 312 also indicates that a “transferable instrument” includes “an enterprise agreement that has been approved by the FWC”. 2

[6] Section 313 continues to state, “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” 3

[7] Section 314 of the Act continues to provide for a transferable instrument to cover other employees in certain circumstances. It states:

“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 FWC order under subsection 319(1).” 4

[8] As indicated, the provisions contained in s.314 are subject to s.319, which allows for the Commission to make an Order that a transferring instrument cover non-transferring employees. Section 319 states:

“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 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) 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 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 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;

(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.” 5

[9] Therefore, in dealing with the application, the Commission is required to have regard to each of the matters in s.319(3) in determining whether an Order should be made. I now turn to deal with each of those considerations.

The views of the new employer – s.319(3)(a)(i)

[10] AMSS as the applicant and the new employer obviously supports the application and the orders that it proposes should be made. The application also indicates that AMSS anticipates that it will have a requirement to hire new employees over the next few months due to additional work becoming available. These non-transferring employees will not be covered by the Agreement. The application also indicates that if the orders are made AMSS will be able to tender for more work thereby creating the potential for it to employee more employees.

The views of the new employees – s.319(3)(a)(ii)

[11] The applicant states that it is not possible to obtain the views of the new employees who will be affected by the Order because there are no non-transferring employees currently employed by AMSS.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.319(3)(b)

[12] AMSS submits submit that if the orders sought are not made any non-transferring employees will be paid in accordance with the Security Services Industry Award 2010 6 (“the Award”). These employees would be disadvantaged as a consequence because the rates in the Agreement have been increased annually at a rate of 4% each year and are now significantly higher than the rates contained in the Award.

Expiry date of the agreement – s.319(3)(c)

[13] The nominal expiry date of the ASF Protective Services Enterprise Agreement 2013 – 2017 is 15 December 2017. The application also indicates that AMSS intends to negotiate a new enterprise agreement in 2018. If a new agreement is able to be put in place in accordance with this timeframe this means that the orders will only have effect for approximately twelve months.

Negative impact on Productivity – s.319(3)(d)

[14] AMSS submits that there will be no negative impact on productivity if the Order is made. Making the Orders will instead have a positive effect on productivity as it will avoid the requirement for it to have to administer two different industrial instruments for employees who are undertaking the same work. It will also ensure there is a consistent set of terms and conditions of employment for all employees.

Economic disadvantage – s.319(3)(e)

[15] The application states that AMSS has based its forward budgets on the terms and conditions in the Agreement and does not anticipate that the Agreement’s coverage of non-transferring employees will cause any significant economic disadvantage.

Degree of business synergy – s.319(3)(f)

[16] As indicated, the Agreement and the Award contain a number of different terms and conditions of employments. However, if the orders are granted they will put in place a single framework of regulation and accordingly enhance the degree of synergy that exists within the business.

Public interest – s.319(3)(g)

[17] AMSS submits that it is in the public interest to grant the orders as they will provide non-transferring employees with a higher rate of pay. In addition, they will eliminate the potential for employees employed by the same employer and doing the same work to have different industrial instruments applying to them, depending upon whether the person became an employee as a consequence of the transfer or was first employed after the transfer date.

Conclusion

[18] I am satisfied, in conclusion, after having considered each of the matters in s.319(3) that it is appropriate for the Orders sought to be made.

[19] In accordance with s.319(4) the Order will not come into operation in relation to each non-transferring employee until the later of the following:

•  the time when the non-transferring employees starts to perform the transferring work for the new employer; or

•  the day on which the order is made.

[20] The Orders are issued in conjunction with this decision.

COMMISSIONER

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 1   Fair Work Act 2009 (Cth) s 311(1).

 2   Fair Work Act 2009 (Cth) s 312(1)(a).

 3   Fair Work Act 2009 (Cth) s 313(1)(a).

 4   Fair Work Act 2009 (Cth) s 314(1).

 5   Fair Work Act 2009 (Cth) s 319(1)-(3).

 6   MA000016.

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