Cenvil Pty Ltd as Trustee for T.C. Family Unit Trust T/A Kailis Bros Fishmarket and Cafe

[2016] FWC 2360

[2016] FWC 2360

FAIR WORK COMMISSION

DECISION

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

Cenvil Pty Ltd as Trustee for T.C. Family Unit Trust T/A Kailis Bros Fishmarket and Cafe
(AG2016/672)

Retail industry
COMMISSIONER SPENCER	BRISBANE, 14 APRIL 2016

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

[1] An application has been filed in relation to the Kailis Bros Fishmarket and Fish Café – Enterprise Agreement 2014 (the Agreement)by Cenvil Pty Ltd as Trustee for T.C. Family Unit Trust T/A Kailis Bros Fishmarket and Cafe (the Applicant).

[2] The Agreement covers employees employed by the Kailis Bros Pty Ltd (Kailis Bros), however, at the time the application was made, Kailis Bros intended to terminate all employees, and from 22 March 2016, the Applicant would employee all transferring employees. The Applicant and Kailis Bros are associated entities.

[3] The Applicant was represented by Mr Chris Agnew, of Agnew Legal. The application was accompanied by a statutory declaration of Ms Jill Winning, Human Resources Manager of the Applicant.

[4] In accordance with s.311(1) of the Act, a transfer of business from Kailis Bros to the Applicant occurred on 22 March 2016. An enterprise agreement is a transferable instrument by operation of the Act s.312(1)(a). Section 313(1) provides that a transferrable instrument that covered the old employer and the transferring employees immediately before the termination of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant (the new employer) would be covered by the Agreement in relation to the transferring employees. Ms Winning, in her statutory declaration, stated that the transferring employees had been consulted and formally notified about the transfer, and that further, the Applicant would recognize transferring employees’ prior service with Kailis Bros, would pay all transferring employees no less than their current hourly or salaried rate as paid by Kailis Bros and would be responsible for all transferring employees’ leave entitlements that accrued during their employment with Kailis Bros.

[5] Non-transferring employees are covered by the Restaurant Industry Award 2010 or the General Retail Industry Award 2010 (the Modern Awards). The Applicant seeks an Order that the Agreement will cover any non-transferring employees of the Applicant who perform, or are likely to perform, the transferring work, pursuant to s.319(1)(b) of the Act.

Relevant legislation

[6] Section 313 provides:

313 Transferring employees and new employer covered by transferable instrument

(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:

(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and
....

(3) This section has effect subject to any FWC order under subsection 318(1).

[7] Section 319 provides:

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.

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.

Summary of Applicant’s submissions

[8] Further information was sought from the Applicant to confirm whether the transfer had taken place on 22 March 2016, and whether the Applicant had employed any non-transferring employees since that date, of whose views are required to be taken into account pursuant to s.319(3)(a)(ii).

[9] The Applicant’s representative confirmed that the transfer had taken place and the Applicant had employed 1 non-transferring employee. The Applicant provided a signed “Acknowledgement and Consent” document, which indicates that the non-transferring employee had been provided with a copy of the Agreement, had had the terms and conditions of the Agreement and the differences between it and the Modern Award explained to him, and further, that the non-transferring employee had no objection to the Agreement applying to his employment.

[10] The Applicant submitted that non-transferring employees will not be disadvantaged by the making of the Order in relation to their terms and conditions of employment, because the Agreement contains terms and conditions of employment that are more favorable to employees, on an overall basis, when compared to the terms and conditions of the Award, as it has passed the better off overall test.

[11] The Agreement has a nominal expiry date of 1 July 2018.

[12] The Applicant contended that the Agreement would not have a negative impact on their workplace productivity as there will only be one applicable industrial instrument and no differential rates of pay. The Applicant submitted that there will be no significant economic disadvantage as a result of the Agreement covering the Applicant’s workplace.

[13] The Applicant submitted that they do not have an existing enterprise agreement and the Applicant submitted that it is in the public interest to maintain the transferring employees’ terms and conditions.

Consideration

[14] I have taken into account the material provided by the Applicant in support of the application and the matters listed in s.319(3) of the Act and note that the employees’ views have been considered. I am satisfied the Order should be issued.

[15] The Order, PR579058, will issue with this decision and will take effect in accordance with s.319(4) of the Act.

COMMISSIONER

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<Price code A, AE410848  PR579057 >