Coles Supermarkets Australia Pty Ltd and Liquorland (Australia) Pty Ltd

[2016] FWC 1967

[2016] FWC 1967

FAIR WORK COMMISSION

DECISION

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

Coles Supermarkets Australia Pty Ltd and Liquorland (Australia) Pty Ltd
(AG2016/2561)

Retail industry
COMMISSIONER GREGORY	MELBOURNE, 8 APRIL 2016

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

[1] This matter involves an application under s.318 of the Fair Work Act 2009 (Cth) (“the Act”). It is made as a consequence of the acquisition by Coles Supermarkets Australia Pty Ltd (“Coles”) and Liquorland Australia Pty Ltd (“Liquorland”) of five Supermarkets in the ACT and NSW currently owned and operated by Supabarn Supermarkets (“Supabarn”). The stores that have been acquired are specifically located at Wanniassa, Kaleen and Civic in the Australian Capital Territory and at Sutherland and Five Dock in New South Wales.

[2] The application was dealt with in a hearing on 5 April 2016 and a decision handed down in transcript at the conclusion of those proceedings. This decision now confirms the decision contained in transcript.

[3] The application intends to bring to an end the coverage of the enterprise agreement that currently applies to the employees at the former Supabarn Supermarkets, being the Supabarn Supermarkets (NSW & ACT) Collective Agreement 2011 1, and for those employees to now be covered by the enterprise agreements that generally apply to employees of Coles at similar locations around the country. Those agreements are the Coles Store Team Enterprise Agreement 2014 – 20172(“the Coles Agreement”) and the Coles Liquor Group Retail Agreement 20143(“the Liquorland Agreement”). They have nominal expiry dates of 31 May 2017 and 31 December 2017 respectively.

[4] Section 318 of the Act enables an Order to be made to the effect that an existing transferable instrument that would otherwise “cover the new employer and a transferring employee does not, or will not, cover the new employer and transferring employee.”

[5] It also provides that any such Order can be made on application by various parties, including “the new employer or a person who is likely to be the new employer.”

[6] Section 318(3) further provides that in deciding whether to make any such Order the Commission must take into account the various matters set out in the sub section. I therefore now turn to consider each of those matters in the context of the present application.

The views of the new employer or a person who is likely to be the new employer.

[7] The application has been made by the new employers, Coles Supermarkets Australia Pty Ltd and Liquorland (Australia) Pty Ltd, and they clearly support the application and seek that an Order in the form of the draft Order attached to the application be made.

[8] A Statutory Declaration made by Mr Jamie Gordon, the State Leasing Manager NSW/ACT for Coles Supermarkets and Liquorland, lodged with the application, provides additional explanation about why the Order would be of benefit to Coles and Liquorland. The Declaration indicates that Mr Gordon has been involved in the acquisition and divestment of supermarkets and liquor businesses for Coles Supermarkets and Liquorland. It continues to indicate that as part of the acquisitions the stores will be rebranded as Coles Supermarkets and Liquorland, and it is also intended to offer employment to all of the existing Superbarn employees, including the Store Managers.

[9] The Declaration continues to indicate that if the Order sought is not made Coles would be required to set up and administer a separate payroll system for the transferring employees and would be required to apply separate terms and conditions in order to comply with the existing Superbarn Agreement. However, it also indicates that if the application is granted, and the Order made, this would provide particular benefits for Coles and Liquorland and, in particular, would assist in the management of employee relations in the former Supabarn stores by ensuring that all employees engaged by Coles and Liquorland at the time of acquisition, and thereafter, are on common terms and conditions.

[10] Secondly, it would enable the former Supabarn stores to be fully integrated into the employee management systems currently in place in all other Coles Supermarkets across the country.

[11] Thirdly, it would avoid unnecessary administrative costs for Coles and Liquorland in having to establish a separate payroll system and employment management arrangements for the transferring employees.

[12] Finally, it would remove any disincentive to Coles and Liquorland offering employment to the current employees at the Supabarn stores.

The views of the employees

[13] Section 318 next requires that the Commission take account of the views of the employees who would be affected by the application, and by the making of any Orders pursuant to the application. The application attaches a Statutory Declaration provided by Ms Belinda Page, the Regional HR Manager of Coles Supermarkets Australia Pty Ltd. Her Declaration provides further detail about the nature of the application, the terms of the offer of employment provided to the former Superbarn team members, and the processes of consultation that have taken place with those employees, and with the Shop Distributive and Allied Employees Association (“the SDA”). The Declaration provides significant detail, in particular, about the consultation meetings that have taken place at each of the five stores during March of this year. It also attached various documentation that has been prepared as part of the acquisition and information processes. The Declaration concludes by indicating that Ms Page believes, based on her regular discussions with the team members in the various stores, that they support the application.

[14] The application also includes Statutory Declarations from various representatives of the SDA. These include Declarations from Ms Alison Varga, Mr Anthony Maiatico, and Mr Athol Williams, who are each employed as Organisers with the SDA in either New South Wales or the Australian Capital Territory, as well as a further Declaration made by the Assistant Secretary of the SDA in New South Wales, Mr Robert Tonkli.

[15] The Declarations from each of the Organisers detail the processes of consultation that have taken place at the different store locations. Each concludes by indicating that the Organisers believe the majority of employees in those stores support the application and understand it would have the effect of replacing the existing Supabarn Agreement with the Coles Agreement and the Liquorland Agreement.

[16] The Statutory Declaration provided by Mr Tonkli also attaches a document that compares the terms and conditions contained in the respective Agreements, and an information circular that was distributed by the Union to the employees. His Declaration also indicates that the SDA conducted information sessions with employees in each of the stores, and it was also agreed, following these information sessions, that a secret ballot would be conducted in each store to confirm the views of the employees. The Declaration also indicates that the ballots in the majority of stores were conducted late last month and resulted in an overwhelming “yes” vote in favour of the employees being covered by the Coles and Liquorland Agreements following the acquisition of the stores.

[17] It is also understood from the submissions provided in the proceedings by the SDA that those ballots have been conducted in four of the five store locations but that the ballot at the Civic store is still to be conducted. However, it is expected that the ballot result at that store is likely to be similar to the results obtained at the other store locations.

[18] I am accordingly satisfied, based on the material contained in those Declarations, that the overwhelming majority of the employees affected by the acquisition of the Supabarn stores by Coles and Liquorland support the present application and the Order being sought.

Whether any employees would be disadvantaged by the Order in relation to their terms and conditions of employment

[19] The submissions provided in the proceedings on behalf of Coles and Liquorland indicate that in the main the employees will not be disadvantaged by the Order sought in relation to their terms and conditions of employment. However, those submissions did make reference to some differences in regard to pay rates in respect of the Liquorland Agreement in particular, and some discrepancies in regard to the Supervisor allowances contained in the Coles Agreement. However, in each case undertakings have been given in the submissions made in the proceedings on behalf of Coles and Liquorland and they deal with each of those differences and provide details about the process put in place in response.

[20] The SDA’s submissions also confirm that as a result of the proposals set out in those undertakings no transferring employees will lose any income as a result of the Order sought by this application. Coles also made reference to some minor discrepancies in other areas, but I am satisfied based on the submissions in the proceedings and, in particular, by the undertakings provided, that there are no employees that would be disadvantaged in any significant way in relation to their terms and conditions of employment by the Order sought being made.

[21] There will, in fact, be some benefits that flow to the employees, particularly in regard to their security of employment, and the fact that the existing Agreements still have some time to run until they reach their nominal expiry dates. They also propose various pay increases during the remaining terms of those Agreements, whereas the existing Supabarn Agreement has already passed its nominal expiry date of 30 June last year. In summary, there is no evidence to indicate that any employees will be disadvantaged by the Order sought in relation to their terms and conditions of employment.

If the Order relates to an enterprise agreement – the nominal expiry date of the agreement.

[22] As indicated, the transferable agreement, being the Supabarn Supermarkets (NSW & ACT) Collective Agreement 2011, has already passed its nominal expiry date of 30 June 2015, whereas the existing Coles and Liquorland Agreements do not reach their nominal expiry dates until 31 May 2017 and 31 December 2017 respectively. I am satisfied that these circumstances provide further support for the Order to be made.

Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace.

[23] I am satisfied that the continuing application of the transferable instrument at the various supermarket locations would have some negative impact on the productivity of the new employer for the reasons indicated in the Statutory Declaration provided by Mr Gordon. This provides further support for the making of the Order sought.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer.

[24] It is unclear whether the new employer would incur significant economic disadvantage if the transferable instrument were to apply to it. However, again for the reasons already referred to and particularly set out in the Statutory Declaration provided by Mr Gordon, I am satisfied Coles and Liquorland would suffer some economic disadvantage, particularly in terms of the different industrial arrangements that would need to be maintained, applied and administered for the employees of the former Supabarn supermarkets if the Order is not made.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer.

[25] I am satisfied that in the main these issues have already been canvassed in response to the other matters that I am required to take into account of. I am satisfied there would be some lack of business synergy between the relevant instruments, if for no other reason that they contain different terms and conditions of employment, and would require Coles and Liquorland to administer and manage these different arrangements. In addition, the fact that the Supabarn instrument has now passed its nominal expiry date means the employees covered by it could potentially initiate various forms of industrial action that might not be available to other Coles and Liquorland employees, given that the existing Coles and Liquorland Agreements have some time to run before they reach their nominal expiry date.

The public interest

[26] Coles made reference to the fact that if the Order sought is made it will enable the employment opportunities that might be provided by Coles and Liquorland to be maximised. I am not aware of any other public interest considerations that need to be taken account of.

Conclusion

[27] In conclusion, having considered all of the matters in s.318(3) that I am required to take account of I am satisfied that it is appropriate for an Order to be made. 4 An Order will accordingly be made in the terms of the draft Order provided in conjunction with the application. The Order issued will have application from the date of the Decision issued in transcript, being 5 April 2016, but in accordance with the provisions contained in section 318(4), it will not come into operation for each employee until such time as those employees become employed by either of the new employers.

COMMISSIONER

Appearances:

Mr Richard West of Minter Ellison appeared on behalf of Coles.

Mr Mitchell Worsley and Mr Robert Tonkli appeared on behalf of the Shop, Distributive and Allied Employees Association.

Hearing details:

2016.

Melbourne:

5 April.

 1   AE887830

 2   AE414390

 3   AE406784

 4   PR578742

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<Price code C, AE887830  PR578480 >