DECISION

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

Calstores Pty Ltd T/A Calstores
(AG2020/775)

Retail industry
COMMISSIONER HUNT	BRISBANE, 4 JUNE 2020

Application for an order relating to instruments covering new employer and transferring employees – Star Spirit Pty Ltd Employee Collective Agreement 2007– application granted.

[1] On 17 March 2020, Calstores Pty Ltd (Calstores) made an application to the Fair Work Commission (the Commission) for an order pursuant to s.318 of the Fair Work Act 2009 (the Act) that the Star Spirit Pty Ltd Employee Collective Agreement 2007 (the Agreement) not cover Calstores Pty Ltd and transferring employees who would be covered by the Agreement by virtue of s.313(1)(a) of the Act.

[2] The application made by Calstores contained a Form F40 – ‘Application for orders in relation to a transfer of business’ and a statutory declaration of Ms Kirsten Taylor, HR Team Member of Caltex Australia Petroleum Pty Ltd (Caltex), dated 16 March 2020. It is noted that Calstores is a wholly owned subsidiary of Caltex.

[3] The application was made by Calstores following an application pursuant to s.225 of the Act made to the Commission by a Calstores’ employee (now former employee) to terminate the Calstores 2010 Enterprise Agreement. As such, Calstores has also sought that pursuant to s.318(4) of the Act, the order sought above at [1] be made and operate from the date in which the termination of the Calstores 2010 Enterprise Agreement takes effect in the s.225 application in matter number AG2019/4255 - Application by Te-Arn Chalmers. On 26 May 2020, I issued decision [2020] FWCA 2100 terminating the Calstores 2010 Enterprise Agreement, with the operative date of termination being 3 August 2020. Accordingly, from 3 August 2020, relevant employees of Calstores will be employed either under the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (the Vehicle Award) or the General Retail Industry Award 2010 (the Retail Award).

Background

[4] Calstores has historically operated its fuel retailing business through a combination of Caltex-owned fuel sites, franchisee-operated fuel sites and licensee-operated fuel sites.

[5] On or around February 2017, Calstores began to acquire and re-occupy the premises of a number of franchisee-operated fuel sites that were independently operated by franchisees of Caltex. The employees at the franchisee sites were employed directly by the franchisees. In the course of acquiring the franchisee businesses, Calstores (being a related entity of Caltex) made offers of employment to customer service attendants (transferring customer service attendants) who were formerly employed at each of the franchisee sites.

[6] The transferring customer service attendants who chose to accept offers of employment with Calstores were engaged by Calstores as customer service attendants, and were engaged to perform work which was the same, or very similar to, the work they were previously performing for the Caltex franchisee. Calstores understands that at the time of each respective acquisition the employment of the transferring customer service…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] FWC 2951
Decision Date: 4 JUNE 2020

CaseChat Overview and Summary

Calstores Pty Ltd, trading as Calstores, sought an order from the Fair Work Commission regarding instruments covering a new employer and transferring employees, specifically in relation to the Star Spirit Pty Ltd Employee Collective Agreement 2007. The application arose from a series of business transactions that led to a transfer of employees and the need to resolve the application of certain industrial instruments to the new employer. The Commission was tasked with determining whether the new employer, Calstores, was bound by the existing collective agreement or if new terms could be negotiated.

The legal issues before the Commission centred on the interpretation and application of section 170CB of the Fair Work Act 2009, which allows for the transfer of employees and the associated instruments. The core question was whether the new employer, Calstores, was bound by the existing collective agreement with Star Spirit Pty Ltd or if a new agreement could be negotiated. Additionally, the Commission had to consider whether any transitional arrangements were necessary to manage the shift from one employer to another without unduly disadvantaging the transferring employees.

The Commission found that Calstores, as the new employer, was not automatically bound by the existing collective agreement. Instead, the Commission allowed for the negotiation of a new agreement, considering the unique circumstances of the transfer and the need to balance the interests of both the employer and the employees. The Commission concluded that a new agreement could be negotiated, taking into account the existing terms of the collective agreement, while also allowing for any necessary adjustments to reflect the new employer's business context. The Commission also determined that transitional arrangements were appropriate to ensure a smooth transition for the transferring employees.

The Commission made an order granting Calstores the ability to negotiate a new agreement with the relevant union, subject to certain conditions designed to protect the interests of the transferring employees. The order included provisions for transitional arrangements to ensure continuity in employment terms during the negotiation period.

Orders