Curwoods Legal Services Pty Ltd

[2014] FWC 2165

[2014] FWC 2165

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 319 - Application for an order re instruments covering new employer and non-transferring employees in agreements

Curwoods Legal Services Pty Ltd
(AG2014/4073)

DEPUTY PRESIDENT SAMS SYDNEY, 11 APRIL 2014

Application in relation to transfer of business - transferable instrument - application that the transferring employees not be covered by existing instrument - application that future employees not be covered by existing instrument.

[1] This decision will confirm the orders I made in this matter on 1 April 2014. What follows are my reasons for doing so.

[1] This is an application filed by Curwoods Legal Services Pty Ltd (the ‘applicant’), pursuant to s 318 of the Fair Work Act 2009 (the ‘Act’). The applicant seeks orders pursuant to s 319 from the Fair Work Commission (the ‘Commission’) that the Suncorp Group Enterprise Agreement 2011 (the ‘Agreement’) not cover employees who transfer their employment from Curwoods Lawyers and Quinton Investments Pty Ltd (‘Quinton’) to the applicant. The applicant seeks further orders, pursuant to s 319, that the Agreement not cover its future employees, although does not seek orders that the Agreement not cover its current employees. These orders are sought in the context of the purchase of the Suncorp in-house Legal Department by the applicant in September 2012 and a proposal by the applicant to consolidate the workforce of the applicant with Curwoods Lawyers and Quinton Investments Pty Ltd into Curwoods Legal Services Pty Ltd.

The applicable legislation

[2] The following provisions of the Act are relevant to my determination of this application:

‘317 FWC may make orders in relation to a transfer of business

This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.

318 Orders relating to instruments covering new employer and 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 transferring employee because of paragraph 313(1)(a) does not, or will not, cover the new employer and the transferring employee;

(b) an order that an enterprise agreement or a named employer award that covers the new employer covers, or will cover, the transferring employee.

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 transferring employee, or an employee who is likely to be a transferring employee;

(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 transferring employee before the later of the following:

(a) the time when the transferring employee becomes employed by the new employer;

(b) the day on which the order is made.

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.

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.’

[3] The application was accompanied by comprehensive statutory declarations of Mr J Snelgrove, Director of the applicant. He is also an equity partner of Curwoods Lawyers, which acts for the applicant. All of the equity partners of Curwoods Lawyers are also directors of the applicant. He explained that the applicant had been incorporated so as to facilitate the purchase of GILD Insurance Litigation Pty Ltd (‘GILD’), which was previously wholly owned by Suncorp Insurance Services Limited (‘Suncorp). All of the transferring employees were covered by the Agreement and the applicant was ‘quarantined’ from Curwoods Lawyers due to the existence of the Agreement. At the time of the purchase, there were 42 Legal Employees and 10 other employees. As at December 2013, 10 of these Legal Employees and 2 of the other employees had resigned. At present, Curwoods Lawyers only employs professional staff (Solicitors), whilst all administrative and support staff are employed by Quinton. Curwoods Lawyers employes 66 lawyers, including 6 equity partners and 9 Fixed Share Partners. Quinton employs 62 employees.

[4] At a hearing of the application on 1 April 2014, Mr I Latham of Counsel appeared with Mr J Snelgrove for the applicant. Mr Latham outlined the history to the application and detailed all of the surrounding circumstances. He submitted that the applicant had engaged in a consultative process with its employees and that there was no opposition by the relevant employees. He also said that there was no question of any disadvantage to the employees. He relied on correspondence from the Finance Sector Union of Australia, which indicated that the Union did not oppose the application. In addition, Mr Latham sought orders, pursuant to s 594 of the Act, that sections of the broad and comprehensive supporting documentary material be prohibited from publication, due to its confidential business and commercial nature. I propose to make such orders and these orders shall be published separately to this decision.

[5] Having considered the comprehensive and well presented material filed by the applicant and the submissions of Mr Latham, I intend to make the orders sought by the applicant. In doing so, I have taken all of the matters in ss 318(3) and 319(3) of the Act into account; in particular, the views of the employees, that there is no disadvantage to the employees and that there would be a negative impact on the productivity of the applicant’s workplace should the orders not be granted. In addition, the public interest is satisfied in this case.

[6] These orders shall take effect on and from 1 April 2014.

DEPUTY PRESIDENT

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