Australian Tourist Park Management Pty Ltd

[2013] FWC 6815

[2013] FWC 6815

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements

Australian Tourist Park Management Pty Ltd
(AG2013/9086)

Hospitality industry
COMMISSIONER SPENCER	BRISBANE, 26 SEPTEMBER 2013

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

Background

[1] This decision relates to an application filed on 3 September 2013 by Australian Tourist Park Management Pty Ltd (the Applicant), and concerns an application for the Fair Work Commission (the Commission) to issue Orders pursuant to s.318(1)(a) of the Fair Work Act 2009 (the Act) being for orders relating to an instrument covering a new employer (in this case the Applicant) and the transferring employees. The application has been made in relation to the FreeSpirit Resorts Pty Ltd Certified Agreement 2006-2009 (the Agreement) 1.

[2] The Applicant submitted that it had entered into an Agreement with FreeSpirit Resorts Pty Ltd (the old employer) whereby the Applicant agreed to take over the management of four holiday parks which were, at the time, managed by FreeSpirit Resorts Pty Ltd.

[3] The arrangement took effect on the following dates:

Darlington Beach Holiday Park 12 November 2012

Merimbula Beach Holiday Park 19 November 2012

Ocean Beach Holiday Park 26 November 2012

Treasure Island Holiday Park 4 December 2012

[4] There was a total of 224 employees of FreeSpirit Resorts Pty Ltd that accepted employment with the Applicant. These are the transferring employees.

[5] In accordance with s.311(1) of the Act, a transfer of business has occurred. An enterprise agreement is a transferable instrument by operation of the Act s.312(1)(a). Section 313(1) provides that a transferrable instrument that covered the old employer and the transferring employees immediately before the termination of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant (the new employer) is covered by the Agreement in relation to the transferring employees, however s.313(3) operates subject to any Order of the Commission made pursuant to s.318(1) of the Act.

[6] The Applicant applies for an Order pursuant to s.318(2)(a) to displace the operation of s.313(1) in relation to the Agreement. The Applicant currently also employs employees, who are not transferring employees, undertaking the same scope of work as the transferring employees. These employees are covered by the Hospitality Industry (General) Award 2010.

Relevant legislation

[7] Section 313 provides:

S313text

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

....

(3) This section has effect subject to any FWC order under subsection 318(1).

[8] Section 318 provides:

318 Orders relating to instruments covering new employer and transferring employees

Orders that FWC may make

(1) 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) 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 FWC must take into account

(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.

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.

Consideration

Section 318(3)(a)(i): the views of the new employer

[9] The Applicant is the new employer. The Applicant submitted that the Order should issue to remove inefficiencies in administering the terms of two different industrial instruments; the Agreement and the Modern Award.

[10] The Applicant submitted that having transferring employees and non-transferring employees undertaking similar work and receiving different entitlements also created an incongruity in the workplace.

Section 318(3)(a)(ii): the views of the employees prospectively affected by any order

[11] The Applicant submitted that they conducted information sessions at each of the sites mentioned in [3] above. These information sessions were completed on Tuesday, 30 July 2013.

[12] The Applicant submitted that employees “understand” the implications of the proposed transition from the Agreement to the Modern Award and that the vast majority of employees would be better off under the Modern Award. The Applicant conceded that 7, of the 243 employees (which includes non-transferring employees) had been identified as being worse off, if the Agreement is terminated. The quantum of this reduction was submitted by the Applicant as being in the order of $15 to $28 worse off per week.

[13] The Applicant submitted however that employees are supportive of the Applicant’s intention to create a workplace that promotes consistency and equality.

[14] Further Directions were issued to the Applicant in relation to this matter. The Applicant filed additional material in response.

[15] The Applicant filed some 17 letters signed by various employees of the Applicant across the various sites. These letters generally confirm that the employee attended an information session regarding the proposed transfer from the Agreement to the Modern Award. The employees confirm that they were advised of the “benefits” of such a move and that the employee, signing the letter, consents to the transfer and has no objections to the application presently before the Commission. Each of the letters was expressed differently, however was in the same vain.

[16] The Applicant also filed some additional material that was used in relation to employee presentations given about the proposed application. This material has been taken into account in considering this application.

Section 318(3)(b): any disadvantage to the employees

[17] The Applicant has conceded that a small number of employees are predicted to be worse off (discussed above). However the Applicant submitted that this has only been identified on the basis of a comparison of data that does not take into account a full period of operation that includes peaks and troughs in the work in the tourism/hospitality industry.

[18] The Applicant submitted that the Agreement does contain some terms which are not consistent with the Modern Award, and some clauses which may contravene the National Employment Standards (the NES). For example clause 8.1 of the Agreement in relation to notice of termination provides that an employee with 6 months or less continuous service or in probationary period is only entitled to one days notice. This is not consistent with the NES.

[19] The Applicant submitted that the Agreement does not contain penalty rates.

Section 318(3)(c): the nominal expiry date of the transferable instrument (the Agreement)

[20] The nominal expiry date of the Agreement is 22 May 2009.

Section 318(3)(d): any negative impact on the employer’s workplace

[21] The Applicant submitted that the termination of the Agreement would bring about consistency and certainty of employment terms and conditions across its workforce and reduce the risk of discrepancies in the application of two industrial instruments.

[22] The Applicant also relied upon the termination as removing negativity in the workplace brought about by two employees undertaking similar work receiving different terms and conditions under the two industrial agreements.

Section 318(3)(e): any significant economic disadvantage to the employer

[23] The Applicant submitted that it is suffering economic disadvantage at the moment due to the administrative and operational burden brought about by administering the two industrial instruments.

Section 318(3)(f): business synergy between the transferable instrument and the other workplace instrument

[24] The Applicant submitted that there is little business synergy between the industrial instruments. The Applicant relied upon the differences in conditions between the two instruments in this regard.

[25] The Applicant has provided a list of matters that are inconsistent or out-dated when reviewing the Agreement and comparing it with the current legislation, modern award and the policies and procedures of the Applicant.

Section 318(3)(g): the public interest

[26] There is no evidence that the public interest is agitated in this matter.

Conclusion

[27] On balance, taking into account each of the matters stipulated at s.318(3), I am satisfied that the Order sought should be granted.

[28] A separate Order will issue [PR542329]. The Order will come into operation, in accordance with s.318(4).

COMMISSIONER

 1 AC300242.

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<Price code C, AC300242  PR541599 >