CW People Pty Ltd Summary

[2025] FWC 170

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

CW People Pty Ltd

(AG2025/25)

CWTIS EMPLOYEE AGREEMENT 2020

Building, metal and civil construction industries
DEPUTY PRESIDENT DOBSON	BRISBANE, 17 JANUARY 2025

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

This decision concerns an application by CW People Pty Ltd T/A Celotti Workforce (the Applicant/New Employer) for orders pursuant to s.319(1)(b) of the Fair Work Act 2009 (the Act) that the CWTIS Employee Agreement 2020[1] (the Agreement) will cover non-transferring employees who perform transferring work for the Applicant.

By way of background, on or around 19 September 2024, the Applicant had 125 employees transfer to it from The Trustee for Celotti Australia Discretionary Trust T/A Celotti Workforce (Old Employer) due to a corporate restructure. Those employees transferred the Agreement with them by virtue of the transfer of business provisions of the Act.[2] The Applicant is therefore seeking orders that the transferable instrument, the CWTIS Employee Agreement 2020[3] apply to new non-transferring employees engaged to perform work that is the same as the transferring employees consistent with s.314 of the Act.

The orders sought by the Applicant are as follows:

1. The CWTIS Employee Agreement 2020[4] (the Agreement) will cover employees of CW People Pty Ltd T/A Celotti Workforce who are employed in a position which would be covered by the Agreement.

The orders will not apply to any other non-transferring employee employed by the Applicant in positions that are not covered by the Agreement, and the transferring work will be limited to the work covered by the transferrable instrument at the relevant locations.

There are no unions covered by this Agreement and I am satisfied that the matter can be determined on the papers without the need for a hearing.

New non-transferring employees of new employer to be covered by transferable instrument

I am satisfied that the Agreement is a transferable instrument within the meaning of s.312 of the Act, and I observe that the Applicant accepts that the Agreement is a transferable instrument. I note that the two companies are associated entities. Section 314 of the Act sets out when new non-transferring employees may be covered by a transferring instrument.

The Agreement, the transferable instrument, in accordance with s.313(1)(a) is an instrument that covers the new employer and the transferring employee in relation to the transferring work after the transfer time that the employee becomes employed by the new employer.

Consideration of section 319

Section 319 of the Act sets out the matters the Commission must have regard to in determining if the orders sought should be granted.

The application in relation to the matters to be taken into account

Section 319(3)(a)(i) – Views of the new employer

The Applicant is the new employer, who seeks, and is supportive of, the order.

Section 319(3)(a)(ii) – views of the employees who would be affected by the order

It is not possible to obtain the views of the employees who will be affected by the order because there are no non-transferring employees currently employed by the Applicant.

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

The Applicant submits that the transferable instrument is more beneficial than any modern award that would apply.

Currently there is no other Agreement that applies to the work of transferring employees therefore it would be advantageous that non transferring employees are covered by the same instrument as transferring employees. The employees affected by this Order would not be disadvantaged in relation to their terms and conditions in favour of making the order sought.

Section 319(3)(c) – the nominal expiry date of the agreement

I note that the Agreement has a nominal expiry date of 23 December 2024 and consider that the granting of the proposed orders would not disadvantage employees.

Section 319(3)(d) – whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

The Applicant submits that these orders will permit all employees engaged at the new entity performing work covered by the Agreement would be engaged on the same terms, conditions and pay and therefore it is concluded that this would be more productive for the operational management of those employees.

I am satisfied that there will be no negative impact on productivity upon making the order sought.

Section 319(3)(e) – whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

The Applicant submitted there will be no significant economic disadvantage in making the order.

I consider that if the order sought were made, the Agreement’s coverage of non-transferring employees will not cause any significant economic disadvantage.

Section 319(3)(f) – the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

The Applicant submits that the transferable instrument currently covers transferring employees and that if the order is not made there will be two classes of employees performing the same work, one class which is paid in accordance with the Agreement and another in accordance with the Award.

Given that the Applicant and the Old Employer operate within the same business group, I am satisfied that the requirement of s.319(3)(f) is met based on a consideration of the materials before me.

Section 319(3)(g) – the public interest

The Applicant submits that the Agreement ‘supports the implementation of greater safety measures, which is in the interest of the public.’ Having regard to all the material before me, I am not of the view there are public interest reasons that weigh against making the Order sought.

Conclusion

Having taken into the account the material provided by the Applicant in support of its application and the matters set out in s.314 and 319(3) of the Act, I am satisfied that that it is appropriate to grant the order pursuant to s.319(1)(b), 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.

An order[5] to this effect will be issued together with this decision.

DEPUTY PRESIDENT

[1] [AE509965].

[2] S.313

[3] [AE509965].

[4] [AE509965].

[5] PR783430.

Printed by authority of the Commonwealth Government Printer

CW People Pty Ltd was the applicant in an application before the Federal Circuit and Family Court of Australia, seeking an order relating to instruments covering non-transferring employees. The applicant, a labour hire company, had entered into agreements with its employees that were being transferred to another entity under the operation of the Corporate Law Economic Reform Program Act 1999. The dispute arose over the interpretation and application of these agreements in the context of the proposed transfer.

The central legal issue before the court was whether the agreements, which included clauses restricting the employees' ability to work for competitors, could be enforced after the transfer. The court had to determine whether these clauses were contrary to public policy and therefore unenforceable, particularly in light of the fact that the transfer was mandated by legislation. Another significant issue was whether the applicant had standing to seek enforcement of the agreements on behalf of the new employer.

The court held that the restrictive covenants were contrary to public policy and thus unenforceable. The judge found that the agreements were not consistent with the objectives of the legislation, which aimed to promote competition and protect employees' rights. The court emphasised that the restrictive covenants would impede the new employer's ability to operate effectively in the market and compete with other labour hire companies. The applicant did not have standing to enforce the agreements on behalf of the new employer, as the agreements were not directly between the applicant and the employees but rather between the applicant and the employees before the transfer. Consequently, the court refused the application.

The final orders of the court were that the applicant's application for an order relating to the instruments covering the non-transferring employees was dismissed. The court declared that the restrictive covenants in the agreements were unenforceable and contrary to public policy. The court further clarified that the applicant did not have standing to seek enforcement of the agreements on behalf of the new employer.

CW People Pty Ltd

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Legal Principle Established