Coles Supermarkets Australia Pty Ltd

[2012] FWA 8176

[2012] FWA 8176

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements

Coles Supermarkets Australia Pty Ltd
(AG2012/10820)

JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT SYDNEY, 19 SEPTEMBER 2012

Application in relation to a transfer of business - application that the transferable instrument not cover transferring employees and that other enterprise agreements cover transferring employees.

[1] An application has been made by Coles Supermarkets Australia Pty Ltd (Coles) for an order pursuant to s.318 of the Fair Work Act 2009 (the Act) in relation to the instruments that cover a new employer and transferring employees following a transfer of business.

[2] Coles has entered into an arrangement with Progressive Trading Limited (Progressive) to purchase two supermarkets in Western Australia. The supermarkets are located at the Westfield Whitford City Shopping Centre in Whitford and the Cockburn Gateway Shopping Centre in Success (the Whitford and Success Supermarkets). The transfers are set for completion on 1 October 2012 and 8 October 2012 respectively.

[3] Employees at the Whitford and Success Supermarkets are currently covered by the Progressive Trading Pty Ltd Collective Agreement 2008-2010 1 (the Progressive Agreement). The Progressive Agreement is a collective-agreement based transitional instrument as per Item 2(5)(c)(iv) of Schedule 3 of the Fair Work (Transitional Provisions & Consequential Amendments) Act 2009 (the Transitional Act). It has a nominal expiry date of 30 June 2011.

[4] Following the completion of the abovementioned transactions, Coles intends to engage 156 of Progressive’s employees to work for Coles at the Whitford and Success Supermarkets. Pursuant to s.313 of the Act, Coles, and those employees whose employment transfers from Progressive to Coles, will be covered by the Progressive Agreement.

[5] Coles seeks an order pursuant to s.318 of the Act that the Progressive Agreement will not cover Coles or any employees whose employment transfers from Progressive to Coles at the Whitford or Success Supermarkets, and that those employees whose employment transfers will be covered by the Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2011 2 and the Coles Supermarkets Australia Pty Ltd and Australasian Meat Industry Employees’ Union Western Australia Agreement 20123(the Coles Agreements). The Coles Agreements have nominal expiry dates of 31 May 2014 and 3 April 2015 respectively.

[6] Section 311 of the Act provides the definition of transfer of business, old employer, new employer and transferring work. It also sets out the circumstances in which a transfer of business occurs.

[7] Section 312 of the Act defines transferable instrument. Item 8 of Schedule 11 of the Transitional Act modifies Part 2-8 of the Act to make it clear that the definition of transferable instrument in s.312(1) is extended to cover transitional instruments, other than workplace agreements and workplace determinations that have not yet come into operation.

[8] Section 318(1) of the Act provides that Fair Work Australia may make certain orders in relation to a new employer and a transferring employee. Section 318(3) sets out the matters that FWA must take into account when deciding whether to make an order under s.318(3).

[9] The application for orders in relation to the coverage of the agreements was accompanied by a statutory declaration provided by Coles’ National Transaction Manager, Kane Leopold, and a statutory declaration provided by the Shop, Distributive and Allied Employees’ Association (SDA) Industrial Officer, Peter Francis O’Keeffe.

[10] Mr Leopold’s statutory declaration indicates that following the transfer of business Coles intends to employ 156 of Progressives’ employees at the Whitford and Success Stores. Further, Mr Leopold provides that if the orders sought are made it will assist in the management of employee relations at Coles by ensuring that all Progressive employees engaged by Coles at the Success and Whitford Supermarkets are on common terms and conditions of employment. The orders will enable the Whitford and Success Stores to be fully integrated into the employee management systems currently in place at all other Coles supermarkets across Australia. The orders will also mean that Coles will not be required to set up a separate payroll for those employees that transfer. This will avoid unnecessary administrative costs and will remove any disincentive for Coles not to offer employment to Progressive employees.

[11] Mr Leopold also provided a comparative table as to the differences in remuneration between the Progressive Agreement and the Coles Agreements. This table indicates that the remuneration provided by the Coles Agreements is higher than the Progressive Agreement over the vast majority of classifications.

[12] Mr O’Keeffe’s statutory declaration explains that the SDA prepared summary documents outlining the differences in conditions and remuneration between the Progressive Agreement and the two Coles Agreements. These documents were provided to Progressive employees at the two supermarkets. Mr O’Keeffe conducted information sessions with the employees on 22-25 and 27 of August 2012, at which he explained the comparison documents. A secret ballot of employees was conducted between 25 and 30 August 2012, with 86 votes in support of the application, and 5 votes against.

[13] The application was listed for hearing on 18 September 2012. Coles and the SDA were notified of the hearing. Coles was advised to place a copy of the notice of listing on employee noticeboards at the company’s premises. The notice of listing invited employees to participate in the hearing by video link.

[14] The hearing was attended by Richard West, solicitor, Kane Leopold, National Transaction Manager, and Michelle Klietz, Senior Employee Relations Advisor, for Coles and Peter Francis O’Keeffe, Industrial Officer, for the SDA. No employees attended the hearing or sought to make written submissions.

[15] Coles submitted that if the orders were not made there would be a lack of business synergy between the Progressive Agreement and the Coles Agreements that would require Coles to administer different conditions and payrolls. This would be inefficient and substantially increase administrative costs. It would result in a situation where employees working side by side would be engaged on different terms and conditions of employment. This would create difficulties at a local level, where store managers would be required to apply different terms and conditions to employees dependant on the enterprise agreement that they are covered by.

[16] Coles acknowledged that some classifications under the Coles Agreements have a lower rate of pay than those in the Progressive Agreement, and gave a commitment as to the maintenance of current pay levels and the red circling of various pay rates. Coles submitted that employees support the application being made, and that the employees at the two supermarkets and covered by the Progressive Agreement would not be disadvantaged overall if they were covered by the Coles Agreements.

[17] The SDA supported the application and the submissions made by Coles.

[18] On the basis of the materials and submissions provided, it is appropriate to make the orders sought by Coles under s.318 of the Act. In this regard, I have taken into account the matters set out in s.318(3) of the Act, including the commitment from Coles to maintain the pay rates of transferring employees who may have been disadvantaged by the orders sought and the results of the ballot of employees conducted by the SDA. In all the circumstances I am satisfied that the orders sought should be made.

SENIOR DEPUTY PRESIDENT

Appearances:

R West, solicitor, M Klietz and K Leopold for Coles Supermarkets Australia Pty Ltd

P O’Keeffe for the Shop, Distributive and Allied Employees’ Association

Hearing details:

2012.

Melbourne:

September 18

 1   AC318965

 2   AE888094

 3   AE894202

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