Bega Cheese Limited T/A Bega

[2018] FWC 5680

[2018] FWC 5680

FAIR WORK COMMISSION

DECISION

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

Bega Cheese Limited T/A Bega
(AG2018/3894)

DEPUTY PRESIDENT MASSON MELBOURNE, 11 SEPTEMBER 2018

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

[1] Bega Cheese Limited T/A Bega (Bega) has applied for an order under s 319(1)(b) of the Fair Work Act 2009 (the Act) that the Murray Goulburn Co-Operative Co. Limited and the AMWU and ETU Reliability Agreement 2014-2018 (the Agreement) will cover any non-transferring employee who commences employment with it on or after 17 August 2018 at its Koroit, Victoria site.

[2] The Agreement was approved by the Commission on 13 April 2015 1 and reached its nominal expiry date on 30 April 2018. In the absence of an order in the form sought, the relevant non-transferring employees would otherwise be covered by the Manufacturing and Associated Industries and Occupations Award 20102 (the Award).

[3] Given the material that has been filed and the fact that there are currently no non-transferring employees, I have determined that the matter can be dealt with on the papers.

The applicable legislation

[4] Sections 317 and 319 of the Act relevantly provide:

317 FWC may make orders in relation to a transfer of business

This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.

…

319 Orders relating to instruments covering new employer and non-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 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.

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.

Restriction on when order may come into operation

(4) The order must not come into operation in relation to a particular non-transferring employee before the later of the following:

(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;

(b) the day on which the order is made.

Background

[5] The Form F40 – Application for orders in relation to a transfer of business filed in support of this Application is accompanied by an affidavit of Mr Christian Willmott, Group Remuneration & Benefits Manager of Bega (the new employer).

[6] Mr Wilmott said that Bega has entered into an agreement with Saputo Dairy Australia (the old employer) to purchase its Koroit dairy processing facility, such purchase having been approved by the Australian Competition and Consumer Commission (ACCC). The purchase was completed on 17 August 2018.

[7] Mr Wilmott states that the Agreement previously applied to Saputo Dairy Australia as a transferring instrument pursuant to s 313(1) of the Act due to the purchase from Murray Goulburn of the Koroit facility by Saputo Dairy Australia on 1 May 2018.

[8] Mr Wilmott says that Bega has offered employment to all employees employed by the old employer and that as the purchase of the Koroit site by Bega constitutes a transfer of business; the Agreement is a transferrable instrument and will continue to apply to transferring employees.

[9] Mr Wilmott confirmed that as Bega is not party to an enterprise agreement, any non-transferring employee would be covered by the Award.

Consideration

[10] The application for an order under s 319(1)(b) of the Act has been made by the new employer. 3 In deciding whether to make the order sought, I must take into account the matters outlined in s 319(3) of the Act.

Section 319(3)(a) – views of the new employer and employees who would be affected

[11] Mr Willmott stated that the new employer wishes to engage employees in classifications on a common set of terms and conditions, regardless of whether they are transferring employees or non-transferring employees. He said that if the order is not made, it would result in two sets of employment conditions for staff working side-by-side in the same roles, resulting in unfairness to non-transferring employees.

[12] Mr Willmott stated that the Agreement provides for more generous terms and conditions than the Award.

[13] Each of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers Union (AMWU) and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) confirmed their support for the application.

[14] There are currently no non-transferring employees and I note that the Agreement will apply to transferring employees from the commencement of their employment with the new employer, pursuant to s 313(1) of the Act.

Section 319(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[15] While there are currently no non-transferring employees, I have noted that Mr Willmott has said the Agreement contains terms and conditions of employment which are more favourable than those in the Award.

[16] The Agreement provides for base rates of pay, allowances, penalty rates and redundancy provisions that are substantially more favourable than the Award.

Section 319(3)(c) - if the order relates to an enterprise agreement--the nominal expiry date of the agreement

[17] As noted above, the nominal expiry date of the Agreement was 30 April 2018.

Sections 319(3)(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[18] I also note the submission of Bega that were the application to be granted, the Agreement would not be expected to have any negative impact on its productivity in respect of the employees who will be covered by the Agreement. Bega has submitted that the granting of the application is expected to enhance productivity, including by avoiding the practical difficulties associated with applying two sets of terms and conditions on the site.

Section 319(3)(e) - whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[19] It was not submitted and nor do I consider that Bega would incur significant economic disadvantage as a result of the Agreement covering it in respect of non-transferring employees.

Section 319(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[20] I have noted the differences between the Agreement and the Award, suggesting there would be reduced business synergy if both were to apply to Bega.

Section 319(3)(g) – the public interest

[21] There were no submissions regarding the public interest but having considered the material filed, I am satisfied that granting the order would not be contrary to the public interest.

Conclusion

[22] Having considered each of the matters outlined in s 319(3) of the Act and the material that has been filed, I am satisfied that an order pursuant to s 319(1)(b) of the Act should be made. The Order (PR700285) will take effect on 11 September 2018.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR700245>

 1   [2015] FWCA 2531.

 2   MA000010.

 3 Section 319(2)(a) of the Fair Work Act 2009.