Hills Tankers (Qld) Pty Ltd

[2014] FWC 5852

[2014] FWC 5852

FAIR WORK COMMISSION

DECISION

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

Hills Tankers (Qld) Pty Ltd
(AG2014/1295)

Road transport industry
COMMISSIONER SPENCER	BRISBANE, 25 AUGUST 2014

Application for an order relating to instruments covering new employer and transferring employees in agreements.

Background

[1] This application was filed by Hill’s Tankers (QLD) Pty Ltd (the Applicant), and concerns an application pursuant to s.318(1) of the Fair Work Act 2009 (the Act) for orders relating to an instrument covering a new employer (the Applicant) and the transferring employees. The Applicant’s representative has standing to make the application pursuant to s.318(2)(a).

[2] Centrel Pty Limited t/a Reliance Petroleum (Centrel) has engaged the Applicant to provide road transport services to Centrel or its related entities (Services). The Services to be provided by the Applicant to Centrel are to be substantially the same work performed by the employees for Centrel.

[3] The Applicant submitted that certain employees of Centrel would be made redundant as a result of the Applicant providing services to Centrel. The Applicant proposed new employment to some of the redundant employees (the transferring employees).

[4] In accordance with s.311(1) of the Act, a transfer of business has occurred. The transferring employees were covered by the Centrel Pty Ltd T/A Reliance Petroleum (AG2013/10272) - Reliance Petroleum Consolidated Bulk Fuel Transport (Queensland) Agreement 2013, being an enterprise agreement approved by a Decision of Fair Work Commission (FWC) on 9 December 2013. 1 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 Reliance Petroleum Consolidated Bulk Fuel Transport (Queensland) Agreement 2013 in relation to the transferring employees, however s.313(3) operates subject to s.318(1). Pursuant to s.318(1), the new employer (the Applicant) has sought that the enterprise agreement that covers its existing workforce also cover the new transferring employees.

[5] The Applicant applies for an Order pursuant to s.318(1) to displace the operation of s.313(1) in relation to the Reliance Petroleum Consolidated Bulk Fuel Transport (Queensland) Agreement 2013 (Central EA) and further to ensure that the transferring employees are covered by the existing industrial instrument, the PJ & AD Hill Pty Ltd T/A Hills Tankers Qld (AG2013/6101) - Transport Workers Union and Hill’s Tankers Bulk Liquids Enterprise Qld Agreement 2012, which currently covers some 20 of the Applicant’s employees.

Relevant legislation

[6] 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).

[7] Section 318 provides:

318 Orders relating to instruments covering new employer and transferring employees

Orders that FWC may make

(1) 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) 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 FWC must take into account

(3) In deciding whether to make the order, 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.

Consideration

[8] The Applicant was requested to provide further materials in support of the application particularly referencing those matters that the Commission must take into account by virtue of s.318(3). Mr Ryan Gray, Solicitor of McCabes Lawyers, on behalf of the Applicant, filed material and submissions in support of the application, a statement by the General Manager of the Applicant and a statement in support of the application by a representative of the three transferring employees. The representative, Mr Peter Leemon, is currently employed by Centrel Pty Ltd T/A Reliance Petroleum and may also be offered new employment with the Applicant.

[9] The material is considered below in relation to each of the matters in s.318(3).

Section 318(3)(a)(i): the views of the new employer

[10] The Applicant, as the new employer, seeks that the transferable instrument not cover or apply to it. Several reasons were advanced for this including reasons relating to the disparity which may arise between members of the Applicant’s workforce by having employees in the same workplace covered by different industrial instruments and receiving different entitlements and pay rates. The Applicant also pointed to inefficiencies and additional costs in administration and payroll processes that may arise as a result of having their existing workforce, some 20 employees, covered by one industrial instrument and the 3 transferring employees on another.

Section 318(3)(a)(ii): the views of the employees prospectively affected by any order

[11] The Applicant provided a statement of the transferring employee’s representative. The statement indicated that the transferring employees are agreeable to the Order being issued.

Section 318(3)(b): any disadvantage to the employees

[12] The statement of the transferring employees’ representative does not raise any disadvantage which may occur as a result of the transfer. It states that the transferring employees believe the roster is more flexible and they will be paid at a higher rate. The comparison of the calculable terms and condition demonstrates that employees are likely to be better off under the Transport Workers Union and Hill’s Tankers Bulk Liquids Enterprise Qld Agreement 2012.

Section 318(3)(c): the nominal expiry date of the transferable instrument (the Agreement)

[13] The nominal expiry date of the Central EA is 24 September 2016. The nominal expiry date of the Transport Workers Union and Hill’s Tankers Bulk Liquids Enterprise Qld Agreement 2012, the Agreement sought to cover the transferring employees, is 20 February 2016.

Section 318(3)(d): any negative impact on productivity on the employer’s workplace

[14] The Applicant submitted that productivity would improve if the Transport Workers Union and Hill’s Tankers Bulk Liquids Enterprise Qld Agreement 2012 were to apply, as the transferring employees would be paid at a higher rate.

[15] As set out above, the Applicant identified some potential impacts on the workplace if the Order was not issued. It was submitted that having employees on two different agreements, providing for different entitlements may lead to dissatisfaction among employees who may be required to undertake similar if not the same duties side by side while receiving different entitlements. While it is not uncommon for employees to work in close proximity earning different entitlements the submission in this respect is understandable particularly in what would appear to be a small workplace.

[16] The Applicant also identified certain operational inefficiencies that would arise from having to administer the terms of an additional agreement for 3 employees.

Section 318(3)(e): any significant economic disadvantage to the employer

[17] The Applicant did submit that training costs would be suffered by the Applicant in relation to the Central EA but the matters raised were more relevant to the consideration of s.318(3)(d) and (f), in terms of administration costs and payroll processes.

Section 318(3)(f): business synergy between the transferable instrument and the existing agreement

[18] The Applicant submitted that the Central EA and the Transport Workers Union and Hill’s Tankers Bulk Liquids Enterprise Qld Agreement 2012 were not compatible. The Applicant submitted that significant disturbance would be caused by certain employees being paid at higher rates than other employees and that the Applicant would incur substantial administrative costs in applying two separate agreements.

Section 318(3)(g): the public interest

[19] There is no evidence that the public interest is agitated in this matter.

CONCLUSION

[20] On balance, taking into account each of the matters stipulated at s.318(3), I am satisfied that the Order sought should be granted.

[21] A separate Order will issue [PR554656]. The Order will come into operation, in accordance with s.318(4).

COMMISSIONER

 1   Application by Centrel Pty Ltd T/A Reliance Petroleum [2013] FWCA 9613.

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