Evolving Appetites Pty Ltd T/A Burger Urge Chermside

[2016] FWC 4531

[2016] FWC 4531

FAIR WORK COMMISSION

DECISION

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

Evolving Appetites Pty Ltd T/A Burger Urge Chermside
(AG2016/3731)

Fast food industry
COMMISSIONER SPENCER	BRISBANE, 7 JULY 2016

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

[1] An application has been filed in relation to the Burger Urge Enterprise Agreement 2015 [AE415344] (the Agreement)by Evolving Appetites Pty Ltd T/A Burger Urge Chermside (the Applicant).

[2] The Agreement covers employees employed by Burger Urge Pty Ltd, however, at the time the application was made, a contract of sale was in place for the Applicant to purchase the Chermside franchise of Burger Urge owned by Burger Urge Pty Ltd. This purchase is to take place on 17 July 2016.

[3] The Applicant was represented by Mr Ben Cooper, of Livingstones. The application was accompanied by an Affidavit of Mr Nigel King, Director of the Applicant.

[4] In accordance with s.311(1) of the Act, a transfer of business from Burger Urge Pty Ltd to the Applicant is to occur on 17 July 2016 2016. An enterprise agreement is a transferable instrument by operation of the Act s.312(1)(a). Section 313(1) provides that a transferrable instrument that covered the old employer and the transferring employees immediately before the termination of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant (the new employer) would be covered by the Agreement in relation to the transferring employees.

[5] Mr King, in his Affidavit, stated that there are 14 employees employed by Burger Urge Pty Ltd at the Chermside franchise, and that all 14 employees have accepted an offer of employment by the Applicant (transferring employees). The Applicant also intends to employ new employees (non-transferring employees).

[6] Non-transferring employees are covered by the Fast Food Industry Award 2010 (the Modern Award). The Applicant seeks an Order that the Agreement will cover any non-transferring employees of the Applicant who perform, or are likely to perform, the transferring work, pursuant to s.319(1)(b) of the Act.

Relevant legislation

[7] Section 313 provides:

313 Transferring employees and new employer covered by transferable instrument

(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:

(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and
....

(3) This section has effect subject to any FWC order under subsection 318(1).

[8] Section 319 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

[9] The Applicant submitted, with respect to the views of the employees who would be affected by the Order, that the Applicant had not yet engaged any non-transferring employees as the contract of sale had not been finalized.

[10] 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.

[11] The Agreement has a nominal expiry date of 8 October 2019.

[12] The Applicant contended that the Agreement would not have a negative impact on their workplace productivity as there will only be one applicable industrial instrument which would standardize the terms and conditions of employment across the basis. The Applicant submitted that this would promote a cohesive workplace culture and reduce costs incurred in the administration of employment conditions.

[13] It was submitted by the Applicant that it would incur minimal economic disadvantage as a result of the Agreement covering both transferring and non-transferring employees, as the administrative burden of operating two separate systems for each industrial instrument would be diminished.

[14] The Applicant submitted that there was minimal business synergy between the Agreement and the Modern Award, and that business synergy would be enhanced by the making of the Order sought. The Applicant submitted that the public interest would not be affected by the making of the Order.

Consideration

[15] 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. I am satisfied the Order should be issued.

[16] The Order, PR582509, 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 C, AE415344  PR582508 >