Goldbreak Holdings Pty Ltd ATF The Brown Family Trust T/A The Local Shack

[2016] FWC 5383

[2016] FWC 5383

FAIR WORK COMMISSION

DECISION

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

Goldbreak Holdings Pty Ltd ATF The Brown Family Trust T/A The Local Shack
(AG2016/1741)

Restaurants industry
COMMISSIONER SPENCER	BRISBANE, 4 AUGUST 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 Local Shack - Enterprise Agreement 2015 [AE413503] (the Agreement)by Goldbreak Holdings ATF the Brown Family Trust T/A The Local Shack (the Applicant).

[2] The Agreement covers employees employed by Wright Hospitality Pty Ltd T/A The Local Shack. However, at the time the application was made, a contract of sale had taken place on 21 December 2015 between Wright Hospitality Pty Ltd and the Applicant for the purchase of The Local Shack business, which operates 4 licenced restaurants in the State of Western Australia.

[3] The Applicant was represented by Mr Christopher Agnew, of Agnew Legal. The application was accompanied by a Statutory Declaration and letter of Mr Brad Wright, Operations Manager of the Applicant.

[4] In accordance with s.311(1) of the Act, a transfer of business from Wright Hospitality Pty Ltd to Goldbreak Holdings ATF the Brown Family Trust (the Applicant) occurred on 21 December 2015. 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 Wright, in his letter, stated that 35 new employees (non-transferring employees) have been employed since the Applicant purchased Wright Hospitality Pty Ltd T/A The Local Shack.

[6] Non-transferring employees are covered by the Restaurant 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 non-transferring employees who would be affected by the Order, that all thirty-five non-transferring employees had been consulted with, and none raised any objection to the transfer to the Agreement. The Applicant provided evidence in support of this by way of ‘Acknowledgement and Consent’ letters which had been signed by 22 of the non-transferring employees to be covered by the Agreement.

[10] The Applicant submitted that the non-transferring employees would 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 1 January 2017.

[12] The Applicant contended that the Agreement would not have a negative impact on the productivity of their workplace as operating under one applicable industrial instrument would enable the standardisation of the terms and conditions of employment across the business. The Applicant submitted that the Agreement has been approved as meeting the better off overall test.

[13] It was submitted by the Applicant that it would incur minimal economic disadvantage as a result of the Agreement covering the non-transferring employees, as operating under one industrial instrument would diminish the administrative burden associated with operating two separate systems.

[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, PR583744 will issue with this Decision and will take effect in accordance with s.319(4) of the Act.

COMMISSIONER

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<Price code C, AE413503  PR583758 >