BFS Wollongong Pty Ltd T/A Bidvest Wollongong

[2017] FWC 549

[2017] FWC 549

FAIR WORK COMMISSION

DECISION

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

BFS Wollongong Pty Ltd T/A Bidvest Wollongong
(AG2016/5821)

Road transport industry
DEPUTY PRESIDENT BULL	PERTH, 1 FEBRUARY 2017

S.319—Transferable instrument.

[1] This decision concerns an application by BFS Wollongong Pty Ltd (the applicant) for an Order (the Order) under s.319 of the Fair Work Act 2009 (the Act) which relates to instruments covering a new employer and non-transferring employees.

[2] Specifically, the applicant seeks an order under s.319(1)(b) that the Bidvest Wollongong - Enterprise Agreement 2016 (the 2016 Agreement) covers, or will cover non-transferring employees of the applicant.

[3] The 2016 Agreement is a transferrable instrument to which this application relates and the applicant is the new employer of the business. The applicant therefore has standing under s.319(2)(a) to apply for the Order.

Background

[4] United Imports & Exports Co Pty Ltd T/A Bidvest Wollongong (United Imports) is a subsidiary company of Bidvest Australia Limited.

[5] On 10 January 2014 Commissioner Roberts approved the Bidvest Wollongong - Enterprise Agreement 2013 (the 2013 Agreement).

[6] On 27 June 2016 employees of United Imports voted to approve the 2016 Agreement, and an application was lodged in the Fair Work Commission (the Commission), pursuant to s.185 of the Act.

[7] On 1 July 2016 United Imports terminated the employment of all of its employees covered by the 2013 Agreement (10 employees), with the exception of Mr Brett Barlow. On 1 July 2016 the terminated employees were subsequently employed by the applicant. This change in company structure was the result of an internal company restructure within the Bidvest Group of companies in New South Wales.

[8] Pursuant to s.313(1) of the Act, after the time that the ten employees became employed by the applicant, the 2013 Agreement covered the employees and the applicant because a transfer of business occurred in accordance with s.311 of the Act.

[9] On 17 August 2016 the Commission approved the 2016 Agreement, and it began operating on 24 August 2016.

[10] On 14 September 2016 Mr Barlow’s employment was terminated by United Imports and on 15 September 2016 Mr Barlow was employed by the applicant.

[11] Mr Barlow was covered by the 2016 Agreement while employed by United Imports, and the application is brought on the basis that the applicant is covered by the 2016 Agreement because there has been a transfer of business and the 2016 Agreement has transmitted along with the transferring employee , Mr Barlow, as a result of the operation of the Act.

[12] The applicant has also employed non-transferring employees since the transfer of the business. The non-transferring employees are currently covered by the Storage Services and Wholesale Award 2010( SSW Award) or the Road Transport and Distribution Award 2010 (RTD Award), which are modern awards within the meaning of s.314(1) of the Act.

[13] The applicant therefore currently employs ten employees covered by the 2013 Agreement, a number of employees covered by the modern awards and one employee covered the 2016 Agreement.

Transfer of business

[14] The applicant submits that pursuant to s.311 of the Act a transfer of business occurred and that Mr Barlow is a transferring employee within the meaning of the Act because:

(a) Mr Barlow was employed by the applicant within three months of his termination from United Imports;

(b) the work Mr Barlow performs for the applicant is the same or substantially the same as the work performed for United Imports;

(c) there is a connection between the applicant and United Imports as they are associated entities in that they are both subsidiaries of Bidvest Australia Limited.

[15] The 2016 Agreement is a transferrable instrument by virtue of s.312(1)(a) of the Act. Section 313 provides for the transferable instrument (the 2016 Agreement) to transfer to the new employer (the applicant) along with the transferring employees (Mr Barlow).

[16] Therefore, the applicant and Mr Barlow are covered by the 2016 Agreement.

Non-transferring employees

[17] The ten former United Imports employees now employed by the applicant, and other employees employed by the applicant since the transfer of business are non-transferring employees for the purpose of this application, in respect of the 2016 Agreement.

[18] With respect to the whether the 2016 Agreement should cover the non-transferring employees; s.314 of the Act makes provision for a transferable instrument to automatically cover other employees in certain circumstances.

[19] Section 314 of the Act states:

“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).”

[20] The applicant is covered by the SSW and RTD Awards which are modern awards within the meaning of s.314(1)(d) of the Act as well as the 2013 Agreement. As some of the non-transferring employees were engaged subsequent to the 2016 Agreement covering the new employer and the employer is covered by a modern award, the broader coverage of the 2016 Agreement to the “new” employees, as contemplated by s.314 above does not operate in relation to those employees.

[21] However, the operation of s.314 is subject to s.319 of the Act, which allows for the Commission to make an order notwithstanding the provisions of s.314, that a transferring instrument covers non-transferring employees.

[22] Section 319(1) provides for Orders that the Commission may make in relation to instruments covering a 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.

[23] Section 319(3) sets out the matters that the Commission must take into account when issuing an Order pursuant to s.319.

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.

Applicant’s submissions

[24] In its application, the applicant has addressed each of the matters the Commission is required to consider when asked to issue an Order under s.319. The applicant has also provided, in support of its application:

i. statutory declaration of Mr Barry Plit, Chief Financial Officer for Bidvest Wollongong;

ii. copy of the newsletter advising employees of the application and seeking employees’ views

iii. letter of support from the Transport Workers’ Union of Australia (TWU);

iv. wage and conditions comparison document addressing differences between the 2016 Agreement and the modern awards;

v. summary document comparing the 2013 Agreement with the 2016 Agreement.

[25] I now deal with each of the matters under s.319(3) of the Act.

Views of the new employer - s.319(3)(a)(i)

[26] The new employer is the applicant, who supports the application, particularly so that it will not need to recommence the bargaining process for a new enterprise agreement when the process has so recently finished, and resulted in an agreement tailored to suit the needs of the employer’s workplace.

Views of the employees who would be affected by the Order - s.319(3)(a)(ii)

[27] The applicant submits that BFS Wollongong sought the views of affected employees by posting a newsletter up at the workplace. The applicant has provided a copy of the newsletter, dated 2 September 2016, which explains the nature of the application and invites employees to express their views to the employer or to the TWU delegate by close of business 9 September 2016.

[28] The applicant states that there are currently 10 non-transferring employees and no employee expressed a view.

[29] The applicant submits that the TWU, which has a number of the employer’s employees in its membership, supports the application. The applicant has provided a letter from TWU official, Lee Lawler, advising that the TWU supports the application.

Whether any employees would be disadvantaged by the Order - s.319(3)(b)

[30] The applicant submits that the non-transferring employees who are covered by the 2013 Agreement would not be disadvantaged by the Order because all the employment conditions and entitlements are for the most part identical as between the predecessor and its replacement. Further, the applicant submits that employees will be advantaged by the Order because the 2016 Agreement provides for higher wages than its predecessor.

[31] The applicant has provided a document which was issued to each employee who could vote to approve the Agreement. The document outlines the changes made to the 2013 Agreement. Having regard also to the 2013 Agreement and the 2016 Agreement, the Commission is satisfied that employees would not be disadvantaged were they to be covered by the 2016 Agreement.

[32] The applicant submits that non-transferring employees employed after the transfer of business would not be disadvantaged because non-transferring employees would otherwise be covered by the SSW Award or the RTD Award, which overall provide lesser minimum entitlements, including lower base rates of pay.

[33] The applicant has provided a wage and conditions comparison document demonstrating how employees would be better off overall under the 2016 Agreement than under the SSW and RTD Awards. The document was previously lodged in the Commission with the application for approval of the 2016 Agreement, and it was determined then that the 2016 Agreement satisfied the better off overall test (BOOT).

[34] The 2016 Agreement has a nominal expiry date of 30 June 2019.

Productivity

[35] The applicant submits that if the Order was to be granted it could only have a positive impact on productivity for the reason that it was negotiated over a period of 12 months by those whom it was originally designed to cover, and it is tailored to the worksite and therefore better suited to the applicant’s operations than the modern awards.

[36] The applicant further submits that productivity issues may arise if a number of different industrial instruments were to cover a group of employees performing the same work over a prolonged period of time.

Economic disadvantage - s.319(3)(e)

[37] The applicant submits that the employer and employees would not incur any economic disadvantage should the Order be granted.

Degree of business synergy - s.319(3)(f)

[38] The applicant submits that there is little business synergy between the 2016 Agreement and the modern awards as the instruments provide for different minimum employment conditions. Further, there is little business synergy between the 2013 Agreement and the 2016 Agreement in respect of rates of pay and some other increased entitlements under that. The Applicant is concerned by the risk of internal disharmony should the employees continue to be covered by different industrial instruments.

Public interest - s.319(3)(g)

[39] The applicant submits that granting the Order would provide a platform to facilitate bargaining for a new enterprise agreement when required, and would also provide certain consistency in relation to employment conditions. The applicant submits that these are matters of public interest.

[40] There is no evidence that it would be against the public interest to issue the Order.

Conclusion

[41] Taking into account each of the matters set out in s.319(3), I am satisfied that the Order sought should be granted.

[42] An Order (PR589713) will be issued to provide that the 2016 Agreement will cover the non-transferring employees of the applicant, who perform the same or similar work as the transferred employee.

DEPUTY PRESIDENT

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<Price code C,  PR589712 >