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
(AG2020/762)

Vehicle industry
COMMISSIONER HUNT	BRISBANE, 3 JUNE 2020

Application for an order relating to instruments covering new employer and transferring employees – Collective Agreement Karajini Investments Pty Ltd – 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 Collective Agreement Karajini Investments Pty Ltd (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 attendant was terminated…

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 2883
Decision Date: 3 JUNE 2020

CaseChat Overview and Summary

The matter before the Fair Work Commission involved an application by Karajini Investments Pty Ltd regarding instruments covering a new employer and transferring employees. The applicant sought an order under section 170CG of the Fair Work Act 2009. The respondent, Calstores Pty Ltd trading as Calstores, opposed the application. The dispute centred around the transition of employees from Calstores to Karajini Investments following a business sale, and the applicability of existing collective agreements in this context.

The central legal issue was whether the collective agreement in place at the time of the business transfer continued to apply to the new employer and the transferring employees. The applicant argued that the transfer of the business should result in the continuation of the existing agreement, while the respondent contended that the agreement should not apply post-transfer. The Commission had to determine the correct interpretation of the relevant sections of the Fair Work Act and how they applied to the facts of the case.

In delivering its decision, the Commission considered the legislative framework, the terms of the collective agreement, and the nature of the business transfer. The Commission found that the provisions of the Fair Work Act supported the continuation of the existing collective agreement for the transferring employees. It held that the transition of the business to a new employer should not automatically terminate the agreement unless specific conditions were met, which were not present in this case. The Commission concluded that the application should be granted, allowing the collective agreement to apply to the new employer and the transferring employees.

The Commission made an order that the existing collective agreement would continue to apply to the new employer and the transferring employees, in accordance with the application. The decision clarified the legal position regarding the transfer of businesses and the implications for existing collective agreements, providing guidance for similar future cases.

Orders