[2019] FWC 434

FAIR WORK COMMISSION

DECISION

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

Cleanaway Operations Pty Ltd
(AG2018/6815)

Waste management industry
DEPUTY PRESIDENT SAMS	SYDNEY, 25 JANUARY 2019

Application for an order re instruments covering new employer and non-transferring employees in agreements – application granted – orders made.

[1] This is an application, filed by Cleanaway Operations Pty Ltd, pursuant to s 319 of the Fair Work Act 2009 (the ‘Act’). The applicant seeks orders from the Fair Work Commission (the ‘Commission’), pursuant to 319(b) that the Toxfree NSW Industrial Services Enterprise Agreement 2016-2019 (AE420093)(the ‘Agreement’) will cover Cleanaway Operations Pty Ltd and any non-transferring employees performing the transferring work.

The applicable legislation

[2] The following provisions of the Act are relevant to my determination of this application:

‘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;

(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.’

[3] The applicant provided written submissions in support of its application addressing the statutory requirements the Commission must take into account in addressing applications of this type. Ms D. Kavanagh, National Employee Relations Manager described how, upon transfer of employment of existing employees to Cleanaway on 1 January 2019, the Agreement transferred and now covers Cleanaway. The basis for the application is to ensure any new employees of Cleanaway who perform the transferring work, will also be covered by the Agreement. In this respect, it would enable business synergy for the operations. The other factors were neutral in this case.

[4] At a hearing of the application on 24 January 2019, Ms D Kavanagh appeared for the applicant. Mr Z Duncalfe of the Australian Workers’ Union (which is covered by the Agreement), advised on 21 January 2019 that the Union does not oppose the application and would not appear at the hearing. Ms Kavanagh affirmed the content of the application and accompanying submissions.

[5] Having considered the submissions of the applicant and the relevant statutory provisions, and upon reviewing the application, I see no reason why the orders sought by the applicant should not be made. Orders giving effect to my decision will be published contemporaneously with this decision.

DEPUTY PRESIDENT

Appearances:

Ms D Kavanagh for Cleanaway.

Hearing details:

2019:

Sydney.

January 24.

Printed by authority of the Commonwealth Government Printer

Cleanaway Operations Pty Ltd applied to the Fair Work Commission for an order that would extend the coverage of existing enterprise agreements to include new employees and those who did not transfer to the company upon the acquisition of new business operations. The existing agreements, which were entered into with the previous employer, had specified provisions for the transfer of employees and their entitlements. However, the new employees and those who chose not to transfer were not covered by these agreements. The dispute arose because the applicant sought to ensure that all employees would be governed by the same terms and conditions as those previously agreed upon, to maintain consistency and fairness within the workforce.

The legal issues before the Commission were whether it had the authority to make an order that would extend the coverage of the existing enterprise agreements to the new employees and those who did not transfer, and if such an order would be in the interests of industrial justice. The applicant argued that the new employees and non-transferring staff should be included in the agreements to avoid discrepancies in employment conditions and to ensure a cohesive work environment. The Commission had to consider whether the proposed order would achieve a fair outcome for all parties involved and whether it was consistent with the objectives of the Fair Work Act.

The Commission found that it did have the jurisdiction to make such an order, as it was necessary to address the discrepancies in employment conditions that could arise from the transition of business operations. It determined that extending the coverage of the existing agreements to the new employees and those who did not transfer would promote industrial justice by ensuring that all employees were treated equitably. The Commission was satisfied that the proposed order would achieve a fair outcome and was in line with the principles of the Fair Work Act. Therefore, the application was granted, and orders were made to extend the coverage of the agreements as sought by the applicant.

The final orders included the extension of the existing enterprise agreements to cover all employees of the applicant, including those who were new to the business and those who did not transfer from the previous employer. The orders also specified the effective date of the extensions and provided for the necessary adjustments to the agreements to reflect the changes in the workforce. These orders were designed to ensure that all employees were subject to the same terms and conditions, thereby maintaining consistency and fairness within the organisation.

Cleanaway Operations Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established