Bed Bath N' Table Pty Ltd T/A Bed Bath N' Table

[2020] FWC 2524

[2020] FWC 2524

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
s.319 Application for an order relating to instruments covering new employer and non-transferring employees

Bed Bath N' Table Pty Ltd T/A Bed Bath N' Table
(AG2020/1271)

Storage services
COMMISSIONER YILMAZ	MELBOURNE, 20 MAY 2020

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

[1] An application has been made by Bed Bath N' Table Pty Ltd T/A Bed Bath N' Table (Bed Bath N’ Table) to the Fair Work Commission (the Commission) seeking an order pursuant to ss. 318 and 319 of the Fair Work Act 2009 (the Act) relating to a transferable instrument.

[2] The Applicant seeks an order that pursuant to section 318(1)(b), The Dempsey Group Enterprise Agreement 2018 (“the Agreement”) covers Bed Bath N’ Table and all transferring employees (as defined under section 311(2) of the Act) from The Dempsey Group Pty Ltd who perform work under the Agreement. Further, the Applicant seeks an order that pursuant to section 319(1)(b), the Agreement covers Bed Bath N’ Table and all new, non-transferring employees (as defined under section 314(2) of the Act) who perform, or are likely to perform, the transferring work as per the Agreement.

[3] On 7 May 2020, the Applicant initiated the application by filing a Form F40 - Application for orders in relation to transfer of business.

[4]On 8 May 2020, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) provided correspondence to the Commission in support of the application and orders sought.

Background

[5] Due to the COVID-19 pandemic, The Dempsey Group Pty Ltd undertook a review of operational costs and operational structure for the purpose of reducing costs or inefficiencies to maintain the business, and minimise the impact on workforce reduction, hours of work or stand-down of employees. The outcome of the review was the transfer of warehouse employees from The Dempsey Group Pty Ltd to Bed Bath N’ Table, a wholly owned company and the principal trading entity of the group. The effect being that all employees are in one company and duplication of operational processes and administrative costs are reduced.

[6] Consultation with the CFMMEU, a registered employee organisation covered by the Agreement, took place at an early stage, enabling the review of materials provided to warehouse employees, including participation in employee consultation. Correspondence from The Dempsey Group Pty Ltd to the CFMMEU was provided to the Commission. The parties observed the relevant Agreement obligations concerning consultation.

[7] All employees received written materials in a pack containing a covering memorandum, questions and answers, employee agreement form to the transfer from The Dempsey Group Pty Ltd to Bed Bath N’ Table, a tax declaration form, JobKeeper materials, payroll information and assurances that all conditions, entitlements, and employment history will transfer to the new employer.

[8] The CFMMEU requested, and Bed Bath N’ Table agreed, to provide an undertaking to the CFMMEU and the Commission that transferring employees will remain on the same title, duties, responsibilities, remuneration, and that current and accrued entitlements and past service remain the same with the transfer.

[9] The undertaking dated 27 April 2020 to the CFMMEU, was provided to the Commission and confirms that Bed Bath N’ Table will apply The Dempsey Group Enterprise Agreement 2018 to all transferring employees under the Agreement and new non transferring employees who perform or are likely to perform the transferring work as per the Agreement.

[10] The transfer of employees took place on 27 April 2020 and the application was lodged in the Commission on 7 May 2020.

Relevant Legislation

[11] Division 2 of the Act deals with the transfer of rights and obligations under industrial instruments if there is a transfer of business. Section 311 of the Act describes when a transfer of business occurs and s.312 provides that an enterprise agreement approved by the Commission is a transferrable instrument.

[12] Section 317 provides that the Commission may make certain orders if there is a transfer of business from an old employer to a new employer.

[13] Relevantly s.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.”

[14] s.319 of the Act is expressed similarly to s. 318 of the Act in respect of the conditions and considerations which must be taken into account.

Consideration

[15] The Dempsey Group Enterprise Agreement 2018 was approved by the Fair Work Commission on 11 April 2019 and pursuant to s. 312(1) of the Act is a transferrable instrument.

[16] The application has been made by Bed Bath N’ Table, the new employer, which had no agreement in place prior to the transfer of business. An order in the manner sought meets the requirements of s.318 to cover transferring employees covered by the Agreement and s.319 non transferring new employees that perform, or are likely to perform, the transferring work to the new employer.

[17] The transfer of employees and the work covered by the Agreement from the old employer to the new employer is agreed.

[18] Employees were consulted and freely agreed to their termination of employment from the old employer and employment with the new employer. Employees are not disadvantaged by the order as proposed. A written undertaking to maintain all terms and conditions, continuity of employment and the transfer of the Agreement was provided to the CFMMEU and the Commission.

[19] The CFMMEU is supportive of the application.

[20] The nominal expiry date of the transferring Agreement is 31 July 2021. The new employer, a wholly owned business of the group will not be disadvantaged by the transfer of the instrument. The employer submits the transfer of the instrument removes duplication of operational processes and administrative costs are minimised, and this application assists the group in addressing the demands of the COVID-19 pandemic on its business. I am satisfied that the agreement is a transferring instrument and the circumstances are a transfer of business.

[21] Having considered all of the factors in s.318 (3) and s.319 (3) I am satisfied that the application and materials filed in support of the application are appropriate and not contrary to the public interest.

Conclusion

[22] I do not consider the application pursuant to the Act to confirm the transfer of the Agreement to the transferring employer is necessary as the enterprise agreement is a transferring instrument, The Dempsey Group Pty Ltd and Bed Bath N’ Table are connected legal entities, and the transfer of employees results in the transfer of rights and obligations under the Agreement by virtue of Division 2 of the Act. Further Bed Bath N’ Table assured employees and the CFMMEU of transfer of rights and obligations, including continuity of employment from the date employees ceased employment with the old employer and commenced with the new employer. The orders sought while unnecessary, do meet the objects of the Act concerning the protection of employee terms and conditions of employment under an industrial instrument, and is in the interests of the employer in running their business efficiently.

[23] Similarly, by virtue of Division 2 of the Act, non-transferring employees employed performing work, or likely to perform work covered by the Agreement, following the transfer of business (and the Agreement) will be subject to the transferring instrument.

[24] Bed Bath N’ Table seek the orders pursuant to ss.318 and 319, to provide assurances to transferring employees and non-transferring employees performing or likely to perform work covered by the Agreement, that their entitlements are covered by The Dempsey Group Enterprise Agreement 2018.

[25] Having taken into account each of the matters set out in s. 318(3) and s. 319(3) of the Act, I am satisfied that the orders sought should be granted. However, this application was made after the transfer of business, the industrial instrument and transfer of employees, and it is important to note that consistent with s.318 (4) and s.319(4), orders cannot be backdated to the date of transfer.

[26] An order will be issued concurrently with this decision.

COMMISSIONER

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