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

[2014] FWC 8238

[2014] FWC 8238

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
(AG2014/9723)

Retail industry
COMMISSIONER GREGORY	MELBOURNE, 19 NOVEMBER 2014

Order relating to instrument covering new employer and transferring employees.

[1] This matter involves an application under section 318 of the Fair Work Act 2009 (Cth) (“the Act”). The application is made as a consequence of the acquisition by Coles Supermarkets Australia Pty Ltd and Liquorland Australia Pty Ltd (“Coles”) of four supermarkets in Western Australia currently owned and operated by Progressive Trading Pty Ltd (“Progressive”). This decision deals only with the supermarket located in Bunbury. However, it is understood that similar orders will shortly be sought in respect of the three remaining locations.

[2] A decision was handed down in transcript at the conclusion of the proceedings. This decision provides confirmation of that. It contains some minor corrections and amendments which do not change the intent of the decision.

[3] Leave to appear was granted under s.596(2(a) of the Act to Mr Richard West on the basis it would enable the matter to be dealt with more effectively taking into account the complexity involved.

[4] The purpose of the application is to bring to an end the coverage of the enterprise agreement that currently applies to the employees at the Bunbury location, being the Progressive Trading Pty Collective Agreement 2008 – 2011, and for those employees to now be covered by the enterprise agreements that generally apply to the employees of Coles at similar locations around the country. Those agreements are the Coles Supermarkets Australia Pty Ltd and Bi - Lo Limited Retail Agreement 2011 (“the Retail Agreement”) and the Coles Supermarkets Australia Pty Ltd and Australasian Meat Industry Employees’ Union Western Australian Agreement 2012 (“the Meat Employees Agreement”). They have nominal expiry dates of 31 May 2014 and 3 April 2015 respectively.

[5] Section 318 of the Act enables an order to be made that a transferable instrument that would otherwise cover the new employer and the transferring employees does not or will not cover the new employer and transferring employees.

[6] It also provides that 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.

[7] Section 318(3) further provides that in deciding whether to make any such order the Commission must take into account the various matters contained in the sub section. I now turn to consider each of those matters.

The views of the new employer and the employees who would be affected by the order.

The new employer

[8] The application has been made by the new employer and, as such, it clearly supports the application and the view that an Order in the form of the draft order attached to the application be made. The application, and the statutory declarations provided in support of the application, including that provided by Mr Kane Leopold, the National Transaction Manager, also provide further explanation about why the order would be of benefit to Coles. For example:

• it would assist in the management of employee relations by ensuring that all employees are on common terms and conditions;



• it would enable the new acquisition to be fully integrated into the employee management systems currently in place in the company;



• it would avoid unnecessary administrative costs in having to establish a separate payroll system and employee management arrangements; and



• it would remove any disincentive to Coles offering employment to the current employees of Progressive Supermarkets.

The employees

[9] In considering the views of the employees who would be affected by the making of any order the Statutory Declaration provided by Mr Peter Phillips, Change Transformation Manager, with Coles sets out in some detail the various consultation processes that have taken place with all employees at the Bunbury supermarket over the past three months. These have included a variety of “Team Talks” and other discussion groups. The Statutory Declaration also indicates the employees were provided with the details of the Commission hearing date by means of the Notice of Listing being posted and displayed in the Team Room. The Notice indicated that any submissions were to be provided to the Commission no later than three days prior to the hearing. The Commission is not aware of any employee who has since made contact seeking to be involved in these proceedings. I am satisfied that this provides further support, at the very least, for the fact the employees at the Bunbury location do not object to the application. The Statutory Declaration of Mr Phillips also details the contact made with the Shop Distributive and Allied Employees’ Union, (“the SDA”), and the opportunities provided to it to also meet and consult with the employees.

[10] I have also noted that Mr Phillips indicates that all leave entitlements currently held by the employees will be preserved and transferred, as will all existing service accruals. This was confirmed in the submissions made to the Commission in the proceedings. I also note that Mr Phillips concludes by indicating he believes the employees at the Bunbury location support the application.

[11] I have also had regard to the Statutory Declaration provided by Ms Jo Gellatly, a Senior Coordinator with the SDA, who also provided details of the consultation meetings that have been held over the past month with the employees. Her Statutory Declaration also attaches a detailed comparison document that was made available to the employees and provides comparisons between the Progressive Trading Agreement and the Retail Agreement, and the Progressive Trading Agreement and the Meat Employees Agreement. It also indicates these comparison documents were developed and drawn up by an Industrial Officer with the SDA.

[12] I also note Ms Gellatly indicates in conclusion in her Statutory Declaration that she is not aware of any objections from employees to the present application.

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

[13] I have had regard to the submissions that have been made in support of the application and the material contained in the various statutory declarations that have been provided in support.

[14] There is nothing in any of that material to indicate any employee would be disadvantaged in relation to their terms and conditions of employment by an Order being made. This includes both the conditions of employment that would apply to them under the Coles Agreements, and the fact their leave entitlements and service accruals with Progressive are being preserved and maintained in all respects. It does, in fact, appear that rather than being disadvantaged the employees will likely benefit from being covered by the Coles Agreements.

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

[15] The transferable agreement, being the Progressive Trading Pty Collective Agreement 2008 – 2010, has long since passed its nominal expiry date of 30 June 2011. I am satisfied that this situation provides further support for an order to be made.

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

[16] I am satisfied, for the reasons indicated at an earlier point, that the continuing application of the transferable instrument at the Bunbury supermarket would have a negative impact on the productivity of the new employer, and 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.

[17] It is unclear whether the new employer would incur significant economic disadvantage if the transferable instrument were to apply to it but again, for the reasons already referred to, I am satisfied Coles would suffer some economic disadvantage in terms of the different industrial arrangements that would need to be maintained and applied to the employees at the Bunbury supermarket.

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

[18] Again, these issues have already been canvassed in response to the other matters that I am required to take into account. I am satisfied that there is a 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 to administer and manage these different arrangements. In addition, the fact the Progressive instrument has now passed its nominal expiry date means the employees covered by it could potentially get involved in forms of industrial action that might not be available to other Coles employees. However, in this context it is noted the Retail Agreement has also passed its nominal expiry date.

The public interest

[19] I am not aware of any public interest considerations that arise in the context of this application.

Conclusion

[20] Having considered all of the matters in s.318(3) that I am required to take into account I am satisfied that it is appropriate for an Order to be made. An Order will accordingly be made in the terms of the draft order provided in conjunction with the application. The order will apply to the Bunbury supermarket location only and will have application from today’s date, being 19 November 2014.

[21] It is also noted in conclusion that the original application is made in respect of four different supermarket locations in Western Australia, but at this time the application is only pressed in regard to the employees at the supermarket in Bunbury. It is also noted that the supermarket at Bunbury is different from the others in that it is not involved in selling liquor. The Applicant has indicated that similar supporting materials will likely be provided at some future point in regard to the other three supermarket locations. The Commission will accordingly retain the file in anticipation.

COMMISSIONER

Appearances:

Mr Richard West of Minter Ellison appeared on behalf of the Applicant, together with Ms Katrina Llewellyn from Coles Supermarkets Australia Pty Ltd.

Hearing details:

2014.

Melbourne:

19 November.

Printed by authority of the Commonwealth Government Printer

<Price code C, AC318965  PR557941 >