Casello Personnel (Vic) Pty Ltd

[2021] FWC 3124

[2021] FWC 3124

FAIR WORK COMMISSION

DECISION

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

Casello Personnel (Vic) Pty Ltd
(AG2021/5282)

Building, metal and civil construction industries
COMMISSIONER LEE	MELBOURNE, 1 JUNE 2021

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

[1] Casello Personnel (Vic) Pty Ltd (the Applicant) has applied for an order under s.319(1)(b) of the Fair Work Act 2009 (the Act) that the Casello Pty Ltd and the CFMEU (Victorian Construction and General Division) Subcontractors Carpentry and Joinery Enterprise Agreement 2020-2023 (the Agreement) will cover any non-transferring employee who commences employment with the Applicant from the date that the order is made, or from the date which employment of each of the non-transferring employees commences with the Applicant, whichever is the latter.

[2] The Agreement was approved by the Commission on 23 February 2021 1 and reaches its nominal expiry date on 30 June 2023. The Agreement covers the Construction, Forestry, Mining and Energy Union. In the absence of an order in the form sought, the relevant non-transferring employees would otherwise be covered by the Building and Construction General On-site Award 20202 (the Award).

The applicable legislation

[3] 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

[4] The Form F40 – Application for orders in relation to a transfer of business filed in support of this application sets out the relevant background to the application.

[5] Employees of Casello Pty Ltd (ABN: 34 081 788 507) covered by the Agreement will be transferred to Casello Personnel (Vic) Pty Ltd, which is a wholly owned subsidiary of Casello Pty Ltd. This transfer will occur on 28 June 2021. The transferable instrument will transfer with the transferring employees. However, new or prospective employees employed by Casello Personnel (Vic) Pty Ltd (Non-Transferring Employees) will not be covered by the transferable instrument. Non-Transferring Employees will be covered by the Award.

[6] As such, the Applicant seeks an order to have the transferable instrument cover Non-Transferring Employees of Casello Personnel (Vic) Pty Ltd to ensure parity of the terms and conditions within the workforce and to reflect the reality of Non-Transferring Employees performing the transferring work.

[7] In addition, the Applicant submits that the order sought will promote productivity in Non-Transferring Employees and not disadvantage any Non-Transferring Employees because the terms and conditions of employment under the Agreement are more advantageous and beneficial compared to those under the Award.

Consideration

[8] 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. However, before turning to consider the order sought by the Applicant, it is necessary to establish whether the Agreement is a transferrable instrument that would cover the Applicant and the Non-Transferring Employees, subject to any order of the Commission.

Transferable Instrument

[9] I am satisfied that the Agreementis a transferrable instrument pursuant to s.312(1)(a) of the Act. I am further satisfied that:

(i) The Applicant will be engaging new employees that are not Transferring Employees (s.314(1)(b));

(ii) the Non-Transferring Employees will be performing Transferring Work (s.314(1)(c)); and

(iii) at the time Non-Transferring Employees are engaged by the Applicant, the Award would otherwise apply to them (s.314(1)(d)),

[10] As a consequence of the above, I am satisfied that the Agreement will not cover the Applicant and Non-Transferring Employees, subject to any order the Commission may make. I now turn to consider the matters set out in s.319(3) of the Act.

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

[11] The Applicant submits that the order sought will ensure parity of the terms and conditions within the workforce and to reflect the reality of Non-Transferring Employees performing the transferring work. In addition, the order sought will promote productivity in Non-Transferring Employees and not disadvantage any Non-Transferring Employees because the terms and conditions of employment under the Agreement are more advantageous and beneficial compared to those under the Award.

[12] The Construction, Forestry, Mining and Energy Union has advised that it does not oppose the application.

[13] There are currently no Non-Transferring Employees engaged 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.

[14] The above factors weigh in favour of granting the application.

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 note that the terms and conditions of employment under the Agreement are more favourable than those in the Award. I can discern no detriment and as such, this weighs in favour of granting the application.

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

[16] As noted above, the Agreement reaches its nominal expiry date on 30 June 2023, which ensures that Non-Transferring Employees will have an opportunity to participate in bargaining directed to the renewal of the Agreement, should that occur, within a reasonable period of time. Non-Transferring Employees will not be prejudiced in their bargaining rights. This is therefore a neutral consideration.

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

[17] It was not submitted, nor do I consider that the Agreement will have a negative impact on the productivity of the Applicant’s workplace. This is therefore a neutral consideration

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

[18] It was not submitted, nor do I consider that the Applicant would incur significant economic disadvantage as a result of the Agreement covering it in respect of Non-Transferring Employees. This is therefore a neutral consideration.

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

[19] No submissions were made by the Applicant on this matter. However, I note that there are significant differences between the Agreement and the Award, suggesting there would be a low degree of business synergy between the two instruments if both were to apply to the Applicant. This weighs in favour of granting the application.

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

[20] There are no public interest considerations that militate against the granting of the application.

Conclusion

[21] Having considered each of the matters outlined in s.319(3) of the Act and the material that has been filed, it is apparent that a number of the factors weigh in favour of granting the application. The other factors are neutral considerations. There are no factors weighing against a decision to make the order. I am satisfied that an order pursuant to s.319(1)(b) of the Act should be made. The Order (PR730322) will take effect from the date that the order is made, or the date from which employment of each of the Non-Transferring Employees commences with the Applicant, whichever is the latter.

COMMISSIONER

Appearances:

J Farrugia for the Applicant
N Grealy for the Construction, Forestry, Mining and Energy Union

Hearing details:

2021.
Melbourne (by telephone):
May 28.

Printed by authority of the Commonwealth Government Printer

<AE510546  PR730320>

 1   [2021] FWCA 982.

 2   MA000020.

 3 s. 319(2) of Fair Work Act 2009.