AWX Pty Ltd

[2013] FWC 7316

[2013] FWC 7316

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

AWX Pty Ltd
(AG2013/9487)

THE WELLO PTY LTD COLLECTIVE AGREEMENT 2009

Hospitality industry
COMMISSIONER SPENCER	BRISBANE, 23 OCTOBER 2013

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

Background

[1] This matter was filed on 19 September 2013 by AWX Pty Ltd T/A AWX (the Applicant), and concerns an application pursuant to s.318(1) of the Fair Work Act 2009 (the Act) for orders relating to an instrument covering a new employer (the Applicant) and the transferring employees. The Applicant has standing to make the application pursuant to s.318(2)(a).

[2] The Applicant submitted that they conduct a business for the supply of contract staff, labour hire and recruitment services throughout Australia. The Applicant currently employs a total of 1636 workers. The Applicant’s workforce is currently covered by the AWX Pty Ltd Certified Agreement 2004 (the AWX Certified Agreement).

[3] As part of its business, the Applicant provides services to manage casual workforce planning for operational assistance. The Applicant has submitted that a second company, Wello Pty Ltd (Wello), intends to engage the Applicant to undertake the employment management of six employees who are seeking to transfer from permanent to casual employment.

[4] The six Wello employees have not, at the time of filing the application, commence employment with the Applicant. However, in accordance with s.311(1) of the Act, a transfer of business will occur at the time the employees transfer. The transferring employees are covered by the Wello Pty Ltd Collective Agreement 2009 (the Wello Collective Agreement).

[5] The operation of the Act is such that, absent an Order of the Commission to the contrary, the Applicant (the new employer) would be covered by the Wello Collective Agreement in relation to the transferring employees. Pursuant to s.318(1)(b), the new employer has sought that the enterprise agreement that covers its existing workforce also cover the 6 new transferring employees.

[6] The Applicant applies for an Order pursuant to s.318(1)(a) of the Act thatthe Wello Collective Agreement does not, or will not, cover the Applicant and/or any transferring employees.

Relevant legislation

[7] Section 313 provides:

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

(b) while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.

(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee’s employment with the old employer.

(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 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;

(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

[9] The material is considered below in relation to each of the matters in s.318(3).

Section 318(3)(a)(i) and (ii): the views of the new employer and employees who would be affected by the order

[10] The Applicant submits that as the new employer it is in favour of the Order being issued.

[11] Directions were issued to the Applicant regarding the views of the affected employees. The Applicant filed five signed statements of employees. Each statement was in the same terms and stated:

“I am aware that if I accept the offer then my terms and conditions of employment may be covered by [the Agreement] instead of [the Wello Collective Agreement].

I am agreeable to my tersm and conditions of employment being covered by [the Agreement] instead of the Wello Collective Agreement.”

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

[12] The Applicant submitted that the transferring employees would not be disadvantaged if the Order was granted and proceeded to identify instances in support of this contention. This included that the employees under the Wello Collective Agreement were not entitled to overtime and could have their hours averaged over a 4 week period. The Applicant submitted that in comparison the AWX Certified Agreement allows for ordinary hours up to 38 hours per week and for casuals to be entitled to overtime penalty rates. It was further submitted that as none of the employees affected by the transfer work exclusively on weekends they would not have received the weekend penalty rates provided for in the Wello Collective Agreement, which means that there will be no disadvantage sustained by those employees under the AWX Certified Agreement.

[13] However, it was noted by the Applicant that the casual employees affected by the transfer are entitled to 50% loading under the Wello Certified Agreement, whilst there is no penalty rate for casuals under the AWX Certified Agreement. The Applicant submitted that this disadvantage would only be sustained by those employees if they elected to work on a public holiday. The Applicant pointed to s.114 of the Act where it was submitted that an employee has the right to reject a request to work on a public holiday. The Applicant submitted that this therefore meant that the potential disadvantages do not outweigh the benefits of transferring those affected employees to the AWX Certified Agreement. The Commission notes however that the right of an employee to refuse a request to work on a public holiday is not absolute and instances can occur where an employee can be required to work on a public holiday.

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

[14] The nominal expiry date of The Wello Pty Ltd Collective Agreement 2009 is 5 years from approval. The nominal expiry date of the Employees - AWX Pty Ltd Certified Agreement 2004, the Agreement sought to cover the transferring employees, was 12 October 2012.

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

[15] The Applicant identified a potential impact on the workplace if the Order was not issued. It was submitted that the transferring employees amounted to one percent of the Applicant’s overall workforce and that it would place an undue burden on the Applicant if required to have a separate agreement for that component of its workforce.

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

[16] The Applicant submitted that the factual matrix of this application means that there would be no economic disadvantage to the Applicant if the Order were to be granted.

Section 318(3)(f): business synergy between the transferable instrument and the existing agreement

[17] The Applicant identified that both agreements were “significantly different” and that there was little synergy between them. It was consequently submitted that the granting of the Order would relieve the Applicant of the burden of administering two “very different” Agreements.

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

[18] The Applicant cited Optus Administration Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union; Communications, Electrical, Electronic, Energy, Information, Postal and Plumbing and Allied Services Union of Australia - Communication Division and the statement of Deputy President Sams that ensuring the efficient and effective operation of the business was a matter within the public interest. This was in support of the Applicant’s contention that it is not in the public interest for a workforce to be covered by multiple industrial instruments. The Applicant emphasised that this applied particularly to situations where the transferring employees amounted to one percent of the total workforce.

Conclusion

[19] The Applicant originally sought only an Order pursuant to s.318(1)(a) of the Act. The Applicant has subsequently confirmed in writing that an Order pursuant to s.318(1)(b) is also sought in relation to the transferring employees. The submissions and consideration in this matter are consistent with a consideration of both Orders now being sought.

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

[21] A separate Order will issue [PR543027]. The Order will come into operation, in accordance with s.318(4).

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<Price code C, AC326542  PR542327>