DE Systems Pty Ltd

[2015] FWC 4640

[2015] FWC 4640

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

DE Systems Pty Ltd
(AG2015/3758)

Fast food industry
COMMISSIONER SPENCER	BRISBANE, 13 JULY 2015

Application for an order relating to instruments covering new employer and non-transferring employees - IPCA (QLD) Enterprise Agreement 2012.

[1] DE Systems Pty Ltd (the Applicant) has made an application pursuant to s.319 of the Fair Work Act 2009 (the Act) for an Order that the IPCA (QLD) Enterprise Agreement 2012 (the Agreement) cover non-transferring employees of the Applicant who perform, or are likely to perform, transferring work.

[2] In accordance with s.311(1) of the Act, a transfer of a Subway restaurant business from the old employer to the Applicant occurred on 10 December 2014. Transferring employees are covered by the transferring instrument (the Agreement). Non-transferring employees are covered by the Fast Food Industry Award 2010 (the Award). The Applicant seeks an Order to the effect that all employees are covered by the same industrial instrument, being the IPCA (QLD) Enterprise Agreement 2012.

Relevant legislation

[3] Section 319 of the Act provides:

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.

Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover 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.”

Summary of Applicant’s submissions

[4] The Applicant submitted that they have made the application to avoid some employees being covered by one industrial instrument and receiving different entitlements from other employees. The Applicant also submitted that the Order will avoid the administrative challenges of applying two different instruments in a small workplace.

[5] The Applicant submits that non-transferring employees have been given a copy of the Agreement, and that non-transferring employees have expressed their wish to be covered by the Agreement. The application included a witness statement of Mr Damian Culpeper, the Director of the Applicant. Mr Culpeper stated that the Applicant has employed 7 non-transferring employees since 10 December 2014. Mr Culpeper stated that the Applicant has taken steps to explain (to non-transferring employees) how the Agreement would affect their employment and sought their views on the application. Mr Culpeper stated that all non-transferring employees expressed their intention to be covered by the Agreement. Seven signed employee statements were filed with the application, which indicated that the employees had received a copy of the Agreement, had received an explanation as to how the Agreement would affect their employment, and that they would like to be covered by the Agreement.

[6] The Applicant submitted that non-transferring employees will not be disadvantaged by the making of the Order in relation to their terms and conditions of employment, because the Agreement contains terms and conditions of employment that are more favorable to employees, on an overall basis, when compared to the terms and conditions of the Award, as it has passed the better off overall test.

[7] The Agreement has a nominal expiry date of 23 April 2016.

[8] The Applicant contended that the Agreement would not have a negative impact on their workplace productivity. The Applicant submitted that having employees under two different industrial instruments in a small workplace will lead to dissatisfaction amongst employees, in particular the non-transferring employees who receive lesser entitlements. The Applicant further contended that this would give rise to operational and administrative and inefficiencies.

[9] The Applicant submitted that it would not incur any significant economic disadvantage if the Agreement covered it and that it was prepared to provide the non-transferring employees with better conditions of employment.

[10] The Applicant submits that there is little business synergy between the Agreement and the Award as the instruments provide for different minimum employment conditions.

[11] The Applicant submitted that the Order will not offend the public interest.

Consideration

[12] I have taken into account the material provided by the Applicant in support of the application and the matters listed in s.319(3) of the Act and note that the employees’ views have been considered. I am satisfied the Order should be issued.

[13] The Order, PR569224, will issue with this decision and will take effect in accordance with s.319(4) of the Act.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<Price code A, AE893413  PR569223 >