Futuris Automotive Interiors (Australia) Pty Ltd
[2010] FWA 1517
•1 MARCH 2010
[2010] FWA 1517 |
|
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements
(AG2010/5282)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN | ADELAIDE, 1 MARCH 2010 |
Transfer of business from MCK Pacific Pty Ltd to Futuris Automotive Interiors (Australia) Pty Limited.
[1] On 3 February 2010 Futuris Automotive Interiors (Aust) Pty Ltd (Futuris) lodged an application for an order pursuant to section 318 of the Fair Work Act 2009 (the Act). The order sought was to the effect that the Plexicor Australia Workplace Agreement (SA) 2008 (the Plexicor agreement) would not cover Futuris with respect to nominated employees of MCK Pacific Pty Ltd trading as Plexicor (Plexicor) upon their employment by Futuris.
[2] The application was the subject of a hearing on 23 February 2010. At this hearing, the National Union of Workers (NUW), certain of whose members were affected by the application, sought and was granted intervention status.
[3] The background to the application is that Futuris and Plexicor operate in adjacent facilities and manufacture interior automotive components. MCK Pacific Pty Ltd is wholly owned by a holding company, MCK Holdings Pty Ltd. Futuris owns 50% of MCK Holdings and operates Plexicor under a formal management operating agreement.
[4] To improve the efficiency of its operations, Futuris is relocating equipment and plant from the Plexicor facility to its own premises and proposes to progressively engage 26 Plexicor employees to operate this equipment. Futuris have undertaken to recognise the continuity of service of these employees and their accrued entitlements.
[5] Futuris has met with the employees involved and has provided information about its terms and conditions of employment and the work to be undertaken. This information extended to comparisons of the existing Plexicor and Futuris agreements which discloses that employees are significantly better off under the Futuris agreement in all respects, excepting superannuation and some redundancy circumstances. The Futuris agreement provides for salaries which are between 4.63% and 22.22% higher than the salaries set out in the Plexicor agreement. The Plexicor agreement provides for 10% employer superannuation contributions as distinct from 9% specified in the Futuris agreement. In terms of redundancy payments, the Futuris agreement is superior except in terms of employees with three and four years of service. In these respects, approximately half of the employees involved have between three and four years of service.
[6] On 24 February 2010 Futuris provided a copy of advice it had sent that day to the NUW. In this advice, Futuris undertook that in the event of a redundancy situation arising within twelve months of the employment transfer date, Futuris would recognise and pay the difference between the Plexicor and Futuris agreement redundancy provisions for those employees with three to four years service who would be otherwise disadvantaged by the application of the Futuris agreement.
[7] Prior to making this application Futuris arranged to have a secret ballot of effected employees. 17 of the 20 employees who voted, indicated that they wished to be covered by the Futuris agreement.
[8] The NUW position was that it had reservations with respect to the application of the Futuris agreement. These reservations fell into two broad categories. The NUW was concerned that the application of the Futuris agreement could disadvantage employees with respect to superannuation and redundancy entitlements. Secondly, the NUW recognised that Futuris employees had traditionally been represented by the AMWU who were recorded as supporting the application, and that it consequently sought additional time to discuss this matter with that union.
[9] The NUW were provided with the opportunity to engage with the AMWU and provide further written submissions.
[10] Subsection 318(1) states:
“318 Orders relating to instruments covering new employer and transferring employees
Orders that FWA may make
(1) FWA 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.”
[11] Subsection 318(2) specifies the parties who are able to seek such an order. I am satisfied that Futuris is able to make the application and that the Plexicor, and for that matter, the Futuris agreements are transferable instruments pursuant to section 3 112, by virtue of Item 8 of Schedule 11 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. The present Plexicor employees are transferring employees, who would, in the event that the order is not granted, retain their Plexicor agreement rights for a limited time.
[12] Subsection 318(3) states:
“Matters that FWA must take into account
(3) In deciding whether to make the order, FWA 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.”
[13] I have considered each of these matters.
[14] I am satisfied that both Futuris, and a significant majority of the transferring employees, seek the application of the Futuris agreement. In this latter respect I have relied on the secret ballot of the employees and have noted that the NUW does not submit that the transferring employees are opposed to the application.
[15] I have noted that the Futuris agreement provides the capacity for employees to salary sacrifice into superannuation and that, even if the transferring employees elected to do this to ensure the minimum 10% superannuation contribution, the financial benefits of the Futuris agreement are significantly higher than those established by the Plexicor agreement. I consider that the reduction in the redundancy payments for certain employees is adequately addressed by the 24 February 2010 undertaking.
[16] The Futuris agreement expires in August 2010 and discussions over a replacement agreement would occur in the months before that date. In this respect I consider that the transferring employees will have the capacity to select their bargaining representatives under the Act and to pursue whatever workplace regulatory arrangements they wish.
[17] I am satisfied that, if Futuris is required to apply the Plexicor agreement provisions this would involve additional administrative costs and the discrepancies in employment benefits has the real potential to create workplace relations issues and concerns.
[18] I am satisfied that the nature of the work to be undertaken by the transferring employees means that Futuris can suitably cover these employees such that dependence on the Plexicor agreement for ongoing work synergy is unnecessary.
[19] Finally, I consider that the application of the Futuris agreement to these employees is in the public interest in so far as it furthers workplace harmony and the long-term interests of the transferring employees.
[20] To the extent that this change disturbs traditional union membership arrangements, I consider that the freedom of association provisions within the Act preserve the rights of employees to be represented by a union of their election and that any contrary conclusion based solely on the traditional demarcation of work between different unions would be inappropriate.
[21] For these reasons I am satisfied that the requirements of section 318(3) have been met and that an order should be issued. Consistent with subsection 318(4) this order [PR994185] will come into effect from today, or the date upon which each transferring employee becomes employed by Futuris, whichever is the latter.
SENIOR DEPUTY PRESIDENT
Appearances:
S Bakewell counsel for Futuris Automotive Interiors (Australia) Pty Ltd.
D Melling for the National Union of Workers.
Hearing details:
2010.
Adelaide:
February 23.
Printed by authority of the Commonwealth Government Printer
<Price code A, PR994183>
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