Bega Dairy And Drinks Services Pty Ltd

Case •

[2023] FWC 1506

•

22 JUNE 2023
[2023] FWC 1506

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 Dairy And Drinks Services Pty Ltd

(AG2023/1764)

BEGA GRIFFITH ENTERPRISE AGREEMENT 2021

Food, beverages and tobacco manufacturing industry

COMMISSIONER YILMAZ

MELBOURNE, 22 JUNE 2023

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

  1. This decision concerns an application by Bega Dairy And Drinks Services Pty Ltd (the Applicant) for orders pursuant to s.319(1)(b) of the Fair Work Act 2009 (the Act) that the Bega Griffith Enterprise Agreement 2021[1] (the Agreement) will cover non-transferring employees who perform transferring work for the Applicant.

  1. By way of background, the Applicant, a member of the Bega Group of companies has obtained employment for employees of Capitol Chilled Food (Australia) Pty Ltd (CCFA), another member of the Bega Group. These employees are currently covered by the Agreement and the work they will perform is on the same terms and conditions of the Agreement. The Agreement will be a transferable instrument when the employees of CCFA transfer to the Applicant. The Applicant is not covered by the Agreement and expects that it will employ new employees that will perform work covered by the Agreement. Without this order new employees would not be covered by the Agreement. The Applicant is therefore seeking orders that the transferable instrument, the Bega Griffith Enterprise Agreement 2021 apply to new non-transferring employees engaged to perform work that is the same as the transferring employees.

  1. The orders sought by the Applicant are as follows:

1.   The Bega Griffith Enterprise Agreement 2021 (the Agreement) will cover employees of Bega Dairy and Drinks Services Pty Ltd (BDD Services) who are employed in a position which would be covered by the Agreement if "the Company" was defined to mean BDD Services.

  1. The orders will not apply to any other non-transferring employee employed by the Applicant at any other location, and the transferring work will be limited to the work covered by the transferrable instrument at the relevant locations.

  1. There are no unions covered by this Agreement and I am satisfied that the matter can be determined on the papers without the need for a hearing.

New non-transferring employees of new employer to be covered by transferable instrument

  1. I am satisfied that the Agreement is a transferable instrument within the meaning of s.312 of the Act, and I observe that the Applicant accepts that the Agreement is a transferable instrument. I note that the two companies are associated entities. Section 314 of the Act sets out when new non-transferring employees may be covered by a transferring instrument. The clause provides:

“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).”

  1. The Agreement, the transferable instrument, in accordance with s.313(1)(a) is an instrument that covers the new employer and the transferring employee in relation to the transferring work after the transfer time that the employee becomes employed by the new employer.

Consideration of section 319

  1. Section 319 of the Act sets out the matters the Commission must have regard to in determining if the orders sought should be granted.

  1. Section 319 provides as follows:

“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.

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.

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.”

The application in relation to the matters to be taken into account 

Section 319(3)(a)(i) – Views of the new employer

  1. The Applicant is the new employer, who seeks, and is supportive of, the order.

Section 319(3)(a)(ii) – views of the employees who would be affected by the order

  1. It is not possible to obtain the views of the employees who will be affected by the order because there are no non-transferring employees currently employed by the Applicant.

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

  1. The Applicant submits that the transferable instrument is more beneficial than any modern award that would apply.  

  1. Currently there is no other Agreement that applies to the work of transferring employees therefore it would be advantageous that non transferring employees are covered by the same instrument as transferring employees. The employees affected by this Order would not be disadvantaged in relation to their terms and conditions in favour of making the order sought.

Section 319(3)(c) – the nominal expiry date of the agreement

  1. I note that the Agreement has a nominal expiry date of 30 June 2024 and consider that the granting of the proposed orders would not disadvantage employees.

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

  1. The Applicant submits, ‘the relevant transfer of business is an inter-group transfer which will not impact the day-to-day operations. The proposed order will have a positive impact in that it will ensure that day-to-day operations can continue with the current arrangements.’

  1. I am satisfied that there will be no negative impact on productivity upon making the order sought.

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

  1. The Applicant submitted there will be no significant economic disadvantage in making the order.

  1. I consider that if the order sought were made, the Agreement’s coverage of non-transferring employees will not cause any significant economic disadvantage.

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

  1. The Applicant submits that the transferable instrument currently covers transferring employees and that if the order is not made there will be two classes of employees performing the same work, one class which is paid in accordance with the Agreement and another in accordance with the Award.

  1. Given that the Applicant and CCFA operate within the same business group, I am satisfied that the requirement of s.319(3)(f) is met based on a consideration of the materials before me.

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

  1. The Applicant submits that industrial harmony would be served by non-transferring employees working under the same terms and conditions of employment as transferring employees. Having regard to all the material before me, I am not of the view there are public interest reasons that weigh against making the Order sought.

Conclusion

  1. Having taken into the account the material provided by the Applicant in support of its

application and the matters set out in s.314 and 319(3) of the Act, I am satisfied that that it is appropriate to grant the order pursuant to s.319(1)(b), 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.

  1. An order[2] to this effect will be issued together with this decision.

COMMISSIONER


[1] [AE516050].

[2] PR763520.

Printed by authority of the Commonwealth Government Printer

<PR763519>

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