Coles Group Supply Chain Pty Ltd

[2017] FWC 6136

[2017] FWC 6136

FAIR WORK COMMISSION

DECISION

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

Coles Group Supply Chain Pty Ltd
(AG2017/5107)

Storage services
COMMISSIONER GREGORY	MELBOURNE, 21 NOVEMBER 2017

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

Introduction

[1] Coles Group Supply Chain Pty Ltd (“Coles”) has made application to the Fair Work Commission for an Order under s.319 of the Fair Work Act 2009 (Cth) (“the Act”). The application is made with the intention that a transferable instrument, being the Polar Fresh Victoria and National Union of Workers Enterprise Agreement 2016 (“the Agreement”), which will cover Coles as the new employer, will also cover any new or non-transferring employees who are employed by Coles.

[2] The application indicates that a transfer of business is to occur in accordance with s. 311 of the Act from Polar Fresh Cold Chain Services Pty Ltd (“Polar Fresh”) to Coles. It also indicates that the transferring employees will be employed by Coles, and will continue to perform work that is the same, or substantially the same, as the work they now perform for Polar Fresh.

[3] The National Union of Workers (“NUW”) are also covered by the Agreement, and on 14 November 2017 the Commission wrote to the Union to clarify whether it supported the application and the making of the proposed draft Order. The Union subsequently indicated in response that it does not object to the application or the making of the Order sought by Coles.

[4] In accordance with a request from the Applicant, I now consider it appropriate to determine the matter “on the papers” based on the information contained in the application and the response received from the NUW.

Relevant Legislation

[5] Section 311 of the Act set out the circumstances in which a transfer of business occurs. It states:

“S.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).” 1

[6] Section 312 also indicates that a “transferable instrument” includes “an enterprise agreement that has been approved by the FWC”. 2

[7] Section 313 continues to state, “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” 3

[8] Section 314 of the Act continues to provide for a transferable instrument to cover other employees in certain circumstances. It states:

“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).” 4

[9] As indicated, the provisions contained in s.314 are subject to s.319, which allows for the Commission to make an Order that a transferring instrument cover non-transferring employees. Section 319 states:

“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.” 5

[10] Therefore, in dealing with the application, the Commission is required to have regard to each of the matters in s.319(3) in determining whether an Order should be made. I now turn to deal with each of those considerations.

The views of the new employer – s.319(3)(a)(i)

[11] The Applicant is the new employer and obviously supports the making of the Order sought. It also indicates that the Order will prevent the administrative and other difficulties associated with having two industrial instruments cover employees performing the same or similar work in the same location.

The views of the new employees – s.319(3)(a)(ii)

[12] The application confirms that the Agreement has been approved by the Commission and contains terms and conditions that are more favourable than those contained in the Storage Services and Wholesale Award 2010,  6which would otherwise cover any new employees engaged by Coles. The NUW, who are also covered by the Agreement, have indicated that they do not oppose the application and the making of the Order sought

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.319(3)(b)

[13] As indicated, Coles submits that the non-transferring employees will be entitled to more favourable terms and conditions of employment under the Agreement, if the Order is made, than those that would otherwise apply under the terms of the Storage Services and Wholesale Award 2010.

Expiry date of the agreement – s.319(3)(c)

[14] The nominal expiry date of the Polar Fresh Victoria and National Union of Workers Enterprise Agreement 2016 is 30 April 2019.

Negative impact on Productivity – s.319(3)(d)

[15] Coles submits that there would be no negative impact on the productivity of the workplace if the Order is made. It indicates instead that the making of the Order will enhance productivity by protecting the integrity of the Agreement and its application to the work within its scope, as well as preventing two separate and distinct employment systems applying to employees performing the same work.

Economic disadvantage – s.319(3)(e)

[16] There is there is no evidence indicating that there will be any economic disadvantage if the Order is made.

Degree of business synergy – s.319(3)(f)

[17] Coles submits that having a single industrial Agreement cover all employees within its scope, regardless of whether they are transferring employees or newly employed non-transferring employees, will enhance the degree of business synergy within the business.

Public interest – s.319(3)(g)

[18] Coles submits that granting the Order would not be contrary to the public interest. In particular, it notes that it will allow new employees to receive the benefits of an Agreement negotiated specifically for the needs of the employees at the site. Coles also makes references to the Order being consistent with the object contained in 3(f) of the Act which makes reference to “achieving productivity and fairness through an emphasis on enterprise-level collective bargaining”. 7

Conclusion

[19] I am satisfied, in conclusion, after having considered each of the matters in s.319(3) that it is appropriate for the Order sought to be made.

[20] In accordance with s.319(4) the Order will have effect from 21 November 2017 and will come into operation in relation to each non-transferring employee from the date they start to perform work for Coles. The Order is issued in conjunction with this decision.

COMMISSIONER

 1   Fair Work Act 2009 (Cth) s 311(1).

 2   Fair Work Act 2009 (Cth) s 312(1)(a).

 3   Fair Work Act 2009 (Cth) s 313(1)(a).

 4   Fair Work Act 2009 (Cth) s 314(1).

 5   Fair Work Act 2009 (Cth) s 319(1)-(3).

 6   MA000084.

 7   Fair Work Act 2009 (Cth) s 3(f).

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