HP PPS Australia Pty Limited
[2015] FWC 4800
•30 JULY 2015
| [2015] FWC 4800 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
HP PPS Australia Pty Limited
(AG2015/3860)
EDS PEOPLE AGREEMENT 2002
ONE HPA CERTIFIED AGREEMENT 2004-2007
ELDERS RURAL SERVICES AUSTRALIA LIMITED AND ELDERS INSURANCE LIMITED WORKPLACE AGREEMENT 2009
Business Equipment/Information Technology | |
COMMISSIONER BULL | SYDNEY, 30 JULY 2015 |
s.318 - Application for an order relating to instruments covering new employer and transferring employees
[1] This decision concerns an application by HP PPS Australia Pty Limited (the applicant) for an Order under s.318 and s.319 of the Fair Work Act 2009 (the Act). The application was lodged on 6 July 2015. Further submissions were requested from the applicant on 16 July 2015 and received by the Commission on 17 July 2015.
[2] The applicant sought to amend the application on 27 July 2015 by withdrawing the orders sought under s.319. As at the time of application and this decision, there are no non-transferring employees to which this application relates. As such, the application is amended to read as an application under s.318 only.
[3] There are 3 transferrable instruments (the Agreements) to which this application relates:
i. EDS People Agreement 2002 (AG816152);
ii. One HPA Certified Agreement 2004-2007 (AG834469); and the
iii. Elders Rural Services Australia Limited and Elders Insurance Limited Workplace Agreement 2009 (AC324108).
[4] HP PPS Australia Pty Limited is the likely new employer of the business to which this application relates, and therefore has standing to apply for the order under s.318(1)(a) of the Act. There are no employee organisations that are covered by the transferrable instruments.
[5] Section 318 relates to instruments covering a new employer and transferring employees in the context of a transfer of business.
[6] The applicant seeks the following order:
Pursuant to s.318(1)(a) of the Act, the Agreements that cover the applicant and the transferring employees because of s.313(1)(a) of the Act does not, or will not, cover the applicant and the transferring employees.
[7] And that accordingly, the Business Equipment Award 2010 and the Professional Employees Award 2010 (the Awards) will apply.
Background
[8] The Hewlett-Packard Company (HP) is the parent company to its businesses in Australia known as Hewlett-Packard Australia (HPA). HPA have a new and separate line of business which is focused on the sale and marketing of printers, lap-tops and servers – HP PPS Australia Pty Ltd (the applicant).
[9] As a result of the business separation, relevant HPA employees (those employees who have been designated to assist the new business line of HP PPS, of which there are 134) were offered on-going employment contracts with the applicant on 16 June 2015.
[10] All 134 relevant employees who are currently covered by one of the transferrable instruments (now referred to as transferring employees from here on in) have accepted the offers of employment with the applicant effective 1 August 2015.
Relevant Legislation
[11] The application under s.318 is brought on the basis that the transferring employees of the old employer are already covered by the Agreements. On the basis that there will be a transfer of business, the Agreements will transmit along with the transferring employees as a result of the operation of the Act.
[12] Section 311 of the Act provides:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) 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).
[13] The applicant submits that there will be a transfer of business as defined at s.311(1) of the Act in that the transferring work that the transferring employees will perform for the applicant (being the new employer) is the same or substantially the same as the work that the employee performed for HPA (the old employer), as per s.311(1)(c) of the Act.
[14] It is also submitted that there is a connection between HPA and HP PPS as described in ss.311(3) and (6) in that:
1. HP PPS will have beneficial use of some of the assets of HPA that relate to or are used in connection with the transferring work as per ss.311(3)(3)(ii); and
2. HP PPS is an associated entity of HPA, by virtue of s.311(6) where transferring employees becoming employed by the new employer.
[15] The actual transfer of business has not yet occurred (the new employment contract with HP PPS to commence 1 August 2015). Section 317 of the Act provides for the Fair Work Commission (the Commission) to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.
[16] In this regard, the applicant has submitted that the orders sought in this application can be made ahead of the actual transfer of the business as envisaged and defined in s.311, and that accordingly (as set out in the application and submitted statements of transferring employees):
1. HP PPS is “likely to be the new employer” as per s.318(2)(a) of the Act;
2. There is likely to be on and from 1 August 2015 a transfer of part of the business of HPA as the old employer to HP PPS as the new employer, as per s.317; and
3. The application is made pursuant to s.317 which permits the Commission to make certain orders if there is likely to be a transfer of business, as defined in s.311 of the Act.
[17] Transferring employees will be employed by the new employer (the applicant) on 1 August 2015. The work that the transferring employees will perform for the new employer is the same or substantially the same as the work performed for the old employer. There is a connection between the old employer and the new employer in that the transferring work will be performed by one or more transferring employees, as employees of the new employer, because the old employer has transferred work to the new employer.
[18] The Agreements are transferable instruments by virtue of s.312(1)(a) of the Act. Section 313 provides for the transferable instrument (the Agreement) to, in effect, transfer to the new employer along with the employees who are transferred.
[19] Therefore, the applicant and the transferring employees will be covered by the Agreements.
[20] Section 318 of the Act provides for Orders that the Commission may make:
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 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.
[21] Section 318(3) of the Act sets out the matters that the Commission must take into account when issuing an order pursuant to s.318. The Act states:
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.
Applicant’s submissions
[22] In its application, the applicant has addressed each of the matters that I am required to consider when issuing an Order under s.318. The application was accompanied by:
1. Witness statements of :
i. Richard Stambulic – South Pacific Employee Relations manager;
ii. Ashley Miller – Account Delivery Manager, Rhodes site;
iii. Jack Lee – Project Manager, Rhodes site; and
iv. Steve Rogers – Technical Consultant, Melbourne.
2. Letter of offer of employment;
3. Notices to employees regarding the application to set aside the transferrable instruments;
4. Explanatory emails and letters to transferring employees outlining differences between the transferrable instruments and the Awards; and
5. Letters of notification regarding the application addressed to the Australian Services Union (ASU) and the Association of Professional Engineers, Scientists, and Managers Australia (APESMA).
[23] I will now deal with each of the matters under s.318(3) of the Act that I am required to consider.
Views of the new employer or the likely new employer - s.318(3)(a)(i)
[24] At 5.4 of the application, it is submitted that the new line of business conducted by HP PPS differs from the business that was historically operated by HPA and that the terms and conditions of employment that are now necessary to promote the business of the applicant differ from the enterprise business services of HPA, being the original business that operated under the transferring instruments.
[25] It is further submitted that the transferrable instruments no longer accurately reflect all of the terms and conditions upon which the transferring employees are currently employed by HPA, and will be employed with the applicant.
Views of the employees who would be affected by the Order - s.318(3)(a)(ii)
[26] The applicant states that transferring employees were extensively consulted with prior to the offers of employment by:
1. Inviting all 134 transferring employees to attend a consultation meeting on 15 June 2015;
2. Members of the applicant’s and HPA human resources team to meet with the transferring employees to address questions relating to the proposed transfer of business to the applicant;
3. Provided each transferring employee with an offer of on-going employment which provides a contractual commitment to a number of preserved benefits that were contained in the transferrable instruments; and
4. Provided each transferring employee with questions and answers document to explain the effect of the application to the Commission.
[27] The applicant states that all 134 transferring employees have accepted the offer of on-going employment with the applicant.
[28] No objections or correspondence from the APSEMA and ASU have been received by the Commission.
Expiry date of the agreement s.318(3)(c)
[29] All the transferrable instruments have passed their nominal expiry date:
1. “EDS People” Agreement 2005 is 31 May 2005;
2. One HPA Certified Agreement 2004-2007 is 31 May 2007; and
3. Elders Rural Services Australia Limited and Elders Insurance Limited Workplace Agreement 2009 which the applicant submits expired in May 2014.
Productivity s.318(3)(d)
[30] It is submitted that the applicant has created a single business in Australia for the sale and marketing of the printing and personal systems business of the parent company, Hewlett-Packard, and that the preservation of the 3 transferring instruments would have the capacity to require the applicant to afford 3 sets of potentially different terms and conditions of employment, which in each case have not been updated with reference to the relevant and applicable modern awards.
Economic disadvantage s.318(3)(e)
[31] It is submitted that the preservation of potentially different terms and conditions of employment from industrial instruments which have not been updated for a significant number of years would have the potential to impose unnecessary complexity on the business of the applicant.
Degree of business synergy s.318(3)(f)
[32] The applicant submits that there is little business synergy between the Agreements and theAwardsas they provide for different minimum employment conditions.
Public interest s.318(3)(g)
[33] The applicant submits that it is in the public interest that the orders sought are granted. Further, it is submitted that if the orders are granted will provide transferring employees with access to the benefits contained in the relevant and applicable modern awards, in addition to the preserved benefits offered to the transferring employees by the applicant.
[34] There is no evidence that it would be against the public interest to issue this order.
Conclusion
[35] Taking into account each of the matters set out in section 318(3), I am satisfied that the Order sought should be granted.
[36] Pursuant to s.318(1)(a) of the Act, an Order (PR569432) will be issued to provide that the transferrable instruments do not, and will not cover the applicant and the transferring employees, and that the relevant Awards apply accordingly.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<Price code A, AC324108 PR569431>
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