Clubmates Travel Operations Pty Ltd
[2016] FWC 891
•10 FEBRUARY 2016
| [2016] FWC 891 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
Clubmates Travel Operations Pty Ltd
(AG2015/6719)
COMMISSIONER CRIBB | MELBOURNE, 10 FEBRUARY 2016 |
Application for an order relating to instrument covering new employer and non-transferring employees.
[1] An application has been made by Clubmates Travel Operations Pty Ltd (Clubmates, new employer), under section 319(1)(b) of the Fair Work Act 2009 (the Act). The application seeks an order that the transferable instrument (the Clubmates Travel Enterprise Agreement 2014 1) (the Clubmates Agreement), which covers the new employer, will also cover the non-transferring employees who perform the transferring work for the new employer. This means that all of the new employer’s employees, who perform the transferring work (whether they are transferring employees or non-transferring employees), will be covered by the transferable instrument (the Clubmates Agreement).
1. Transfer of business and of the transferable instrument
[2] The application is premised on the basis that the new employer is already covered by the transferable instrument. This in turn relies on the proposition that there has been a transfer of business and that the Clubmates Agreement has transmitted along with the transferring employees as a result of the operation of the Act.
[3] I will deal firstly with the issue of a transfer of business.
1(a) Transfer of business
[4] The Act provides as follows in relation to a transfer of business:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(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).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
[5] In the Statutory Declaration of Mr P Negri, Company Director, it was stated that there had been a transfer of employment of all employees from Oztrek Tours Pty Ltd (Oztrek, old employer) to the new employer (Clubmates Travel Operations Pty Ltd). The purpose of the transfer was to realign trading structures and to provide a more effective system of reporting following extensive growth into global markets. The operation of Oztrek will be discontinued as an active trading entity and will become an inactive incorporated shell company in name only. In respect of the transferring employees, it was also stated that Clubmates and Oztrek are associated entities. The transfer of business was affected on 6 July 2015.
[6] On the basis of the material before me, I am satisfied that, pursuant to section 311 of the Act, there is a transfer of business from an old employer to a new employer. Accordingly, I accept the submissions of the Applicant that the Fair Work Commission (FWC, the Commission) is able to make an order where there is a transfer of business from an old employer to a new employer.
1(b) Enterprise Agreement
[7] The Clubmates Agreement is a transferable instrument by virtue of section 312(1)(a) of the Act. Section 313 of the Act provides for the transferable instrument (the Clubmates Agreement) to, in effect, transfer to the new employer along with the employees who transferred.
[8] Therefore, the new employer and the transferring employees are covered by the Clubmates Agreement.
2. Whether the Clubmates Agreement should also cover the non-transferring employees
[9] With respect to whether the Clubmates Agreement should also cover the non-transferring employees, section 314 of the Act makes provision for a transferable instrument to cover other employees in certain circumstances.
2(a) Section 314 of the Act
[10] Section 314 of the Act provides as follows:
“314 New non-transferring employees of new employer may be covered by transferable instrument
(1) If:
(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and
(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and
(c) the non-transferring employee performs the transferring work; and
(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;
then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.
(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWC order under subsection 319(1).”
[11] The new employer and the non-transferring employees are covered by the Social, Community, Home Care and Disability Services Industry Award 2010 2, Passenger Vehicle Transportation Award 20103 and the Clerks - Private Sector Award 20104which are modern awards within the meaning of section 314(1)(d) of the Act. Section 314 of the Act has the effect of not permitting the Clubmates Agreement to apply to non-transferring employees.
[12] However, section 314(3) of the Act provides that this can be altered by an order made by the Fair Work Commission under section 319(1).
2(b) Section 319 of the Act
[13] Section 319 of the Act provides as follows:
“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.”
[14] I am satisfied that Clubmates can make the application pursuant to s.319(2)(a) of the Act. I am also satisfied that the order sought is of the type permitted by section 319(1)(b) of the Act.
[15] I will deal with each of the requirements of section 319(3) in turn.
2(c) Considerations
(i) Section 319(3)(a)(i) and (ii) - the views of the new employer and the employees who would be affected by the order
[16] The Applicant is the new employer and therefore it is assumed that the new employer supports the application. At the time of the transfer, all of the employees of Oztrek provided a signed authority authorising the transfer of their employment to Clubmates.
(ii) Section 319(3)(b) - whether any employees would be disadvantaged by the order
[17] In the statutory declaration, Mr Negri stated that the transfer will not negatively impact on the terms of employment of the employees and that the transferring instrument would be applied consistently and fairly to all transferring and non-transferring employees alike. In addition, Mr C Hammond, a non-transferring employee performing the same transferring work as the transferring employees, made a statutory declaration, on 2 September 2015, in which it was stated that he did not wish to be disadvantaged by not being covered by the Clubmates Agreement (the transferable instrument). Being covered by the transferable instrument was said to ensure that the negotiated terms of employment are applied consistently to all transferring and non-transferring employees.
(iii) Section 319(3)(c) - expiry date of the enterprise agreement
[18] The Clubmates Agreement was approved on 21 May 2014 5 with a nominal expiry date of 19 May 2018.
(iv) Section 319(3)(d) and(e) - any negative impact on the productivity of the new employer’s workplace or significant economic disadvantage to the new employer
[19] Mr Negri, in his statutory declaration, stated that the Clubmates Agreement would not have a negative impact on productivity nor have a significant economic impact on the new employer.
(v) Section 319(3)(f) - degree of business energy
[20] In the statutory declaration, Mr Negri stated that all employees, whether transferring or non-transferring employees, would be covered by the transferable instrument.
(vi) Section 319(3)(g) - the public interest
[21] No submissions were made in relation to the public interest.
3. Conclusions
[22] Taking into account each of the matters set out in section 319(3) of the Act, I am satisfied that the application should be granted. An order 6 in the terms sought (that the Clubmates Agreement will also cover the non-transferring employees of the new employer who perform similar or the same work as the transferring employees) will be issued.
[23] In accordance with section 319(4) of the Act, the order takes effect in respect of each of the non-transferring employees on and from the date of this order, 10 February 2016, or the date from which the employment commences, whichever is the later.
1 AE408261
2 MA000100
3 MA000063
4 MA000002
5 [2014] FWCA 3378
6 PR576917
Printed by authority of the Commonwealth Government Printer
<Price code C, PR576918>
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