Galway Constructions Pty Ltd T/A Galway Constructions

[2021] FWC 6625

[2021] FWC 6625

FAIR WORK COMMISSION

DECISION

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

Galway Constructions Pty Ltd T/A Galway Constructions
(AG2021/8693)

Building, metal and civil construction industries
COMMISSIONER P RYAN	SYDNEY, 17 DECEMBER 2021

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

[1] Galway Construct Pty Ltd (the Applicant) has made an application seeking an order pursuant to s.319(1)(b) of the Fair Work Act 2009 (the Act) that the GC Employee Agreement 2020 1 (the Agreement or transferable instrument) will cover non-transferring employees who perform, or are likely to perform, transferring work for the Applicant.

[2] The application was lodged by email attaching the Form F40 application and accompanied by an unsworn statement of Mr Colm Brennan, a director of the Applicant. Mr Brennan subsequently filed a sworn affidavit confirming the contents of the unsworn statement.

[3] By way of background, the employer covered by the Agreement is Galway Constructions Pty Ltd (GC Pty Ltd). The Applicant and GC Pty Ltd are associated entities. The employees of GC Pty Ltd were transferred to the Applicant (Transferring Employees), and complete the same type of work for the Applicant that they were performing for GC Pty Ltd prior to the transfer.

[4] No submissions were received in opposition of the application. I have made my determination on the basis of the written materials.

The Transfer of Business

[5] Section 311(1) of the Act sets out the circumstances in which a transfer of business occurs. It states:

“There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:

a. the employment of an employee of the old employer has terminated;

b. within 3 months after the termination, the employee becomes employed by the new employer;

c. the work (the transferring work ) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

d. there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).”

[6] In relation to the relevant connection, s.311(6) of the Act states:

“There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”

[7] Section 312 of the Act indicates that a “transferable instrument” includes “an enterprise agreement that has been approved by the FWC”.

[8] Section 313 of the Act provides that “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”.

[9] I am satisfied that there was a transfer of business and that the relevant employees of the GC Pty Ltd transferred to the Applicant under the terms of the Act. I am also satisfied that the Agreement is a transferable instrument and that it now covers the Applicant and the Transferring Employees.

Consideration of the s.319 Application

[10] Section 319 of the Act states:

“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.”

[11] I am satisfied that the Applicant is entitled to make the application 2, which relies upon the terms of s.319(1)(b) of the Act to, in effect, extend the coverage of the Agreement to non-transferring employees.

[12] In deciding whether to make an order pursuant to s.319(1)(b) of the Act, the Commission must take into account the matters set out in s.319(3). I now turn to a consideration of each of those matters.

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

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

Views of the employees who would be affected by the order – s.319(3)(a)(ii)

[14] 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.

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

[15]  I am satisfied that the employees would not be disadvantaged in relation to their terms and conditions of employment by the making of an Order.

The nominal expiry date of the agreement – s.319(3)(c)

[16] The nominal expiry date of the Agreement is 2 September 2024.

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

[17] I am satisfied that there will be no negative impact on productivity if the Order is made. In contrast, if the Order is not made and Transferring Employees and non-transferring employees are on different terms and conditions of employment, this may have a negative impact on employee engagement and in turn upon workplace productivity.

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

[18] The Agreement’s coverage of non-transferring employees will not cause any significant economic disadvantage.

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

[19] The granting of the order will result in a greater degree of synergy for the Applicant and the employees who perform the transferring work, as all employees will be employed pursuant to a single instrument.

The public interest – s.319(3)(g)

[20] The public interest in this matter would be served by facilitating arrangements that permit the maintenance of the presently approved employment conditions across the entire business pending the making of any new instrument that might apply in the years to come.

Conclusion

[21] Taking in to account the matters to be considered in section 319(3) of the Act, I am satisfied that it is appropriate that this application be granted and an Order [PR736892] to that effect will be issued in conjunction with this decision.

[22] In accordance with s.319(4)(b) of the Act the Order shall have effect from today.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR736891>

 1   AE508918

 2 See s.319(2)(a) of the Act.