Civil Pacific Services (Aust) Pty Ltd T/A CPS
[2017] FWC 3475
•11 JULY 2017
| [2017] FWC 3475 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.319 – Application for orders relating to instruments covering new employer and non-transferring employees
Civil Pacific Services (Aust) Pty Ltd T/A CPS
(AG2017/1865)
CPS ENTERPRISE AGREEMENT 2016 - 2020
Building, metal and civil construction industries | |
COMMISSIONER HUNT | BRISBANE, 11 JULY 2017 |
Application for orders relating to transferable instrument.
[1] Civil Pacific Services (Aust) Pty Ltd T/A CPS (CPS) and Civil Pacific Services Group Pty Ltd (Previous Employer) are associated entities.
[2] On 6 April 2016 the Fair Work Commission (Commission) approved the CPS Enterprise Agreement 2016 – 2020 (Transferable Instrument). The Transferable Instrument is an agreement entered into between the Previous Employer and its employees.
[3] On or around June 2016, all relevant employees of the Previous Employer who were covered by the Transferable Instrument transferred employment from the Previous Employer to CPS.
[4] CPS have applied for an order under s.318 of the Fair Work Act 2009 (Act) that the Transferable Instrument will cover any transferring employees formerly employed by the Previous Employer who are now employed by CPS (Transferring Employees).
[5] An application has also been made under s.319(1)(b) of the Act that the Transferable Instrument will cover any non-transferring employees.
Section 318 application
[6] Relevant to the order sought under s.318 of the Act, s.313(1) of the Act provides the following:
“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
(b) while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.”
[7] Section 313 of the Act has the effect that the Transferable Instrument which covered the Previous Employer and the transferring employees immediately before the termination of employment with the Previous Employer, covers the new employer, CPS, and the Transferring Employees when they commenced with CPS.
[8] It follows that the Order being sought by CPS under s.318 is not necessary, as the Transferable Instrument already applies to Transferring Employees in accordance with s.313 of the Act. It is a default position. The Transferable Instrument has applied since the relevant employees became employees of CPS on or around June 2016.
[9] Accordingly, the application under s.318 is dismissed.
Section 319 application
[10] In relation to the application made by CPS under s.319, CPS has sought an order that any relevant non-transferring employees of CPS, who would otherwise be covered by the Building and Construction General On-site Award 2010 (Award), will be covered by theTransferable Instrument.
[11] Section 312(1) of the Act provides for the transfer of enterprise agreements and other certain workplace instruments if there is a transfer of business from one employer to another employer.
[12] Section 311(1) contains the definition of transfer of business:
“311 When does a transfer of business occur
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).”
[13] Section 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
(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.”
Transfer of business
[14] Relevant to the consideration required in s.311 of the Act, CPS and the Previous Employer are related entities in that they shared common assets while carrying out business at the workplace. The Transferring Employees were transferred from the Previous Employer to CPS on or around June 2016. The Transferring Employees are performing work which is the same or substantially the same as the work which they performed for the Previous Employer. I am satisfied that there has been a transfer of business between the entities within the meaning of s.311(1) of the Act, which occurred on or around June 2016.
CPS submissions
[15] On 16 June 2017, I conducted a conference by telephone in relation to the application. Mr David Lyons of Workplace Solutions appeared on behalf of CPS along with Mr Luke Gaskin of CPS.
[16] At the conference, CPS expanded on the material stated in the application. CPS submitted that some of its customers have communicated that they hold doubts that the Transferable Instrument applies to Transferring Employees. It is the submission of CPS that making an order for the Transferable Instrument to apply to non-transferring employees will make it clear to its customers that the Transferable Instrument applies to both Transferring Employees and non-transferring employees of CPS.
[17] On 19 June 2017 I issued a Statement 1 which set out the submissions of CPS in support of the application and my preliminary views. I directed a copy of the Statement be provided to both the transferring and non-transferring employees who would be covered by the Agreement if the orders were made. The relevant employees were invited to correspond with my Chambers and CPS if they wished to have their views considered.
[18] No employees of CPS contacted the Commission to express a view in relation to the application.
Matters that FWC must take into account
Section 319(3)(a): the views of the new employer or a person who is likely to be the new employer and the employees who would be affected by the order
[19] CPS is the new employer of the Transferring Employees and the employer of the non-transferring employees. CPS is in full support of an order being made.
[20] CPS submitted employees were provided with a copy of the Statement which set out the grounds on which CPS rely for making the application. Those employees were given an opportunity to express their views to the Commission and CPS.
[21] CPS further submitted that internal communication had been provided to all relevant employees, advising them of their intention to make application for the orders now sought.
Section 319(3)(b): whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
[22] CPS submitted the non-transferring employees would not be disadvantaged in relation to their terms and conditions of employment if the orders sought were granted. The non-transferring employees are currently covered by the Award. The Transferable Instrument provides for conditions of employment, including rates of pay which are more beneficial than the Award.
Section 319(3)(c): if the order relates to an enterprise agreement—the nominal expiry date of the agreement
[23] The nominal expiry date for the Agreement is 1 March 2020.
Section 319(3)(d): whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace and Section 319(3)(e): whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
[24] CPS contends there would be no negative impact on the productivity of CPS if the order is made, nor would it incur significant economic disadvantage. The non-transferring employees are already being provided with the benefits provided for in the Transferable Instrument. The orders sought will ratify that arrangement and therefore there would be no negative impact on CPS.
Section 319(3)(f): the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
[25] CPS did not address this criterion, however as was submitted above, the non-transferring employees are already being provided with the benefits provided for in the Transferable Instrument. If the orders are granted, CPS will apply one industrial instrument, being the Transferable Instrument across the relevant workforce.
[26] CPS submitted that the Transferable Instrument will allow CPS to tender for Federal Government work, while the Award does not.
Section 319(3)(g): the public interest
[27] CPS submitted that if the orders are not made as sought, CPS is at industrial risk of losing opportunities in the industry in which it operates. The orders sought may have an impact on CPS security Federal Government work where the federal building codes have application.
[28] CPS further contended that it is in the public interest to grants the orders sought as the non-transferring employees will be entitled to rates of pay and conditions superior to the Award.
Consideration
[29] I have taken into consideration the views of CPS and note their support for the orders sought. No employees of CPS have expressed a view in relation to the orders sought, despite being afforded an opportunity to do so.
[30] I am satisfied the non-transferring employees will not be disadvantaged by the orders sought. The non-transferring employees will become entitled to the more beneficial entitlements provided for in the Transferable Instrument.
[31] The nominal expiry date of the Transferable Instrument is 1 March 2020. The Transferable Instrument provides for yearly increases in rates of pay, which the non-transferring employees will become entitled to if the orders sought are granted. By making the orders sought, there will be certainty around the cost of employment of both Transferring Employees and non-transferring employees.
Conclusion
[32] For the reasons above, taking into account each of the matters set out in s.319(3) of the Act, I am satisfied that the order as sought under s.319 should be granted.
[33] An Order [PR594486] will be issued to this effect.
COMMISSIONER
1 [2017] FWC 3290.
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