Endeavour Sunnyfield Pty Limited T/A Endeavour Sunnyfield

[2018] FWC 7662

[2018] FWC 7662

The attached document replaces the document previously issued with the above code on 18 December 2018.

To correct paragraph numbering.

Associate to Commissioner Johns

Dated 18 December 2018.

[2018] FWC 7662

FAIR WORK COMMISSION

REASONS FOR DECISION

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

Endeavour Sunnyfield Pty Limited T/A Endeavour Sunnyfield
(AG2018/6378)

COMMISSIONER JOHNS SYDNEY, 18 DECEMBER 2018

s.318 Application for an order relating to instruments covering a new employer and transferring employees.

[1] Endeavour Sunnyfield Pty Limited T/A Endeavour Sunnyfield (Applicant) has applied for an order under section 318 of the Fair Work Act 2009 (the Act) dealing with instruments covering a new employer and transferring employees in the context of a transfer of business.

[2] On 4 June 2018 Endeavour Industries Limited (EGA) went into voluntary administration.

[3] Sunnyfield, the company which wholly owns the Applicant, then expressed intention to acquire the disability services division of EGA. It is noted that Sunnyfield was the only entity to submit a binding offer to acquire the disability services division of EGA.

[4] A sales agreement was executed and consequently on 30 November the Applicant acquired the disability services division of Endeavour Industries Limited.

[5] The Applicant was in the process of making approximately 89 offers of employment to the staff of EGA with a commencement date of 3 December 2018 (Transferring Employees).

[6] 88 of the Transferring Employees were covered by the Endeavour Group Australia Enterprise Agreement 2013 (EGA Agreement). If the EGA Agreement did not apply, these employees would be covered by the Social and Community Services Award 2010 (SCHADS Award).

[7] The Applicant at the time of application had no employees.

[8] The Applicant sought an order from the Commission that the EGA EA does not and will not cover the Applicant or the Transferring Employees.

[9] The initial application was accompanied by a supporting affidavit of Mr Bruce Tosello, General Manager, Business Development & Fundraising of Sunnyfield.

[10] The Applicant stated in their initial application:

“We request that this matter be listed to be heard as a matter of urgency as, effective 3 December 2018, it is anticipated that up to 89 transferring employees will commence employment with the Applicant. One transferring employee is Award free but the other 88 transferring employees would be covered by the Social and Community Services Award 2010 (“SCHADS Award”) if the EGA Agreement did not apply to their employment.

Over 96% of the transferring employees have voted in favour of this Application.

If this application is not heard before 3 December 2018 it will be:

1. very disruptive for these employees to be covered by the EGA Agreement when they commencement [sic] employment with the Applicant; and

2. create a situation whereby the new created business of the Applicant would become unsustainable in the longer term.”

[11] Section 318 of the Act provides:

“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.”

[12] In Directions dated 16 November 2018 (later amended 28 November 2018) the Applicant was directed to provide to all affected employees and relevant employee organisations a copy of the Directions issued by the Commission which required a response by 28 November 2018 if they wished to oppose the application.

[13] On 21 November 2018 the Applicant filed Statutory Declaration of Caroline Cuddihy dated 20 November 2018 which declared that all affected employees and the Australian Municipal, Administrative, Clerical and Services Union, NSW & ACT branch (ASU) had been served with a copy of the Directions and the applications.

[14] On 23 November 2018, the Applicant filed an outline of submissions and a further Affidavit of Mr Bruce Tosello, General Manager, Business Development & Fundraising of Sunnyfield.

[15] On 28 November 2018 the Applicant advised that all contracts to the Transferring Employees were issued by 5.30pm on 27 November 2018.

[16] Also on 28 November 2018 the ASU was granted a one day extension to file their materials (now due at 12:00 noon on 29 November 2018) in order to consider the contracts their members had received.

[17] At 11:57am on 29 November 2018 the ASU contacted the Commission stating:

“The ASU has been unable to receive instructions from our membership with regards to their employment conditions at the new employer.

We are therefore not in a position to support nor object to the application.

We look forward to the opportunity to be heard on the matter at the hearing schedule for 10am tomorrow.”

Hearing

[18] At the hearing on 30 November 2018, the Applicant was represented by Mr A Barwick of WilliamsonBarwick, and the ASU was represented by Mr G South of the ASU.

[19] At the hearing the following exhibits were received:

EXHIBIT NO.	DESCRIPTION
1	F40 Application with Correspondence from Williamson Barwick dated 16 November 2018.
2	First Affidavit Of Bruce Tosello dated 15 November 2018.
3	Statutory Declaration Of Caroline Cuddihy dated 20 November 2018.
4	Second Affidavit Of Bruce Tosello dated 23 November 2018.
5	Outline Of Submissions Of Respondent.

[20] The ASU did not oppose the Applicant being represented and I subsequently granted permission to appear pursuant to s.596 of the FW Act.

[21] The following exchange occurred during the Hearing: 1

THE COMMISSIONER: Mr Barwick, before I come to you, Mr South, can you just clarify, what is the position of the ASU? Does it oppose the application?

MR SOUTH: Commissioner, as previously indicated we haven't received any instructions from our members so our position is that we neither object nor support the application.

THE COMMISSIONER: All right. In those circumstances is there anything further you wanted to say this morning?

MR SOUTH: I would simply observe, Commissioner, that we are concerned that the application will result in the reduction of wages for some employees, and thus we consider that the only approach that we can take in all the circumstances is to look at each of the employee matters on a case by case basis.

(My emphasis)

[22] The ASU tendered no submissions or evidence in relation to the application.

[23] The Applicant’s evidence, which was not contested, dealt with each of the matters that the Commission must take into account in s.318(3).

[24] Having considered the material provided by the Applicant, I was satisfied that all the requirements of s.318 of the Act were met and I issued an Order in the terms sought by the Applicant later that day. 2

COMMISSIONER

Appearances:

Mr A Barwick of WilliamsonBarwick for the Applicant.

Mr G South of the ASU for the ASU.

Hearing details:

30 November 2018

Sydney and Melbourne by VC

Printed by authority of the Commonwealth Government Printer

<PR703245>

 1   Transcript PN7-PN9.

 2   PR702776.