HYCOM P&D PTY LTD T/A HYCOM P&D
[2024] FWC 2443
•18 SEPTEMBER 2024
| [2024] FWC 2443 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
HYCOM P&D PTY LTD T/A HYCOM P&D
(AG2024/3218)
| COMMISSIONER LEE | MELBOURNE, 18 SEPTEMBER 2024 |
Application for an order relating to instruments covering new employer and transferring employees
An application has been made by HYCOM P&D PTY LTD T/A HYCOM P&D (Applicant or HYCOM) to the Fair Work Commission (Commission) for an order pursuant to s.318 of the Fair Work Act 2009 (Cth) (the Act). The Applicant seeks an order in the following terms:
“The existing agreement known as the CC P&D Pty Ltd-TAS-Enterprise Agreement 2022-2024 will cover HYCOM P&D PTY LTD for transferring employees and new employees as defined under section 311 (2) being employees formerly employed by CC P&D Pty Ltd TAS who became employees of HYCOM P&D PTY LTD.
The transferring employees referred to above previously covered by the CC P&D Pty Ltd - TAS Enterprise Agreement 2022-2024 will be covered by their employment with HYCOM P&D PTY LTD.
Subject to S.318(4) of the Act, this order shall come into operation in relation to each employee upon the commencement of their employment with HYCOM P&D PTY LTD.”
The Applicant seeks that the order come into operation in relation to each transferring employee upon the commencement of their employment with HYCOM.
The application consists of a Form F40 - Application for orders in relation to transfer of business.
On 28 August 2024, my Chambers wrote to the Applicant as follows:
“It is requested that brief submissions be provided addressing each of the criteria in section 318(3) of the Fair Work Act 2009 (Cth), as well as a draft order. Please ensure these are provided by no later than close of business Wednesday, 4 September 2024.”
On 5 September 2024, the Director of the Applicant provided submissions and on 6 September the Director provided the draft order after an extension to file had been granted.
My Chambers wrote to the Applicant again on 13 September 2024 and proposed some amendments to the orders sought as follows:
Pursuant to s.318(1)(b) of the Act the CC P&D Pty Ltd-TAS-Enterprise Agreement 2022-2024 will cover HYCOM P&D PTY LTD T/A HYCOM P&D (HYCOM), all transferring employees (as defined by s.311(2) of the Act) from CC P&D Pty Ltd TAS and all new employees of HYCOM who perform work under the enterprise agreement.
In accordance with s.318(4) of the Act, this order shall take effect in respect of each transferring employee from the date on which they commenced their employment with HYCOM.
In accordance with s. 319(4) from the time each non-transferring employee starts to perform the transferring work for HYCOM.
The Applicant was asked to contact Chambers by 4:00pm on Tuesday, 17 September 2024 if they had any concerns with the amended orders as set out above. My Chambers received no further correspondence from the Applicant.
I have determined the matter on the papers without the need for a hearing.
Legislation
FAIR WORK ACT 2009 - SECT 318
Orders relating to instruments covering new employer and 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 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)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 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 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 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.
Background
The background of this matter as set out in the application is as follows:
“Trying to transfer the existing EBA from former employer to new employer to cover the same employees.
Existing employer has withdrawn from TAS, Hycom P&D have absorbed their work and employees.”
The Enterprise Agreement has a nominal expiry date of 31 December 2024, the Agreement continues to operate until replaced or terminated.
Transferrable instrument
Section 311 of the Act sets out when a transfer of business occurs. On the evidence before me, as set out in the Form F40 and the submissions, all of the elements of s.311(1) of the Act have been met and therefore, a transfer of business has occurred within the meaning of the Act.
Section 312 of the Act details instruments that may transfer:
“Instruments that may transfer
Meaning of transferable instrument
(1)Each of the following is a transferable instrument:
(a) an enterprise agreement that has been approved by the FWC;
(b) a workplace determination;
(c) a named employer award.
Meaning of named employer award
(2)Each of the following is a named employer award:
(a) a modern award (including a modern enterprise award) that is expressed to cover one or more named employers;
(b) a modern enterprise award that is expressed to cover one or more specified classes of employers (other than a modern enterprise award that is expressed to relate to one or more enterprises as described in paragraph 168A(2)(b)).
The Enterprise Agreement was approved by the Commission on 22 July 2022 and pursuant to s.312(1) of the Act is a transferrable instrument.”
Who may apply for an order?
The application has been made by HYCOM, the new employer. The requirement under s.318(2) has therefore been met.
Section 318(3) – Matters that the FWC must take into account
The grounds relied on by the Applicant which are set out in the application and their submissions are outlined below.
Section 318(3)(a) – the views of the new employer and the employees who would be affected by the order.
Section 318(3)(a)(i) – the views of the new employer
The Applicant submits that:
“As our previous employer (CC P&D) has withdrawn from the state I have started a new business (Hycom P&D) and have managed to roll over the majority of employees, I have made a verbal agreement with employees that I will honour the current agreement we were working under, I would like to formalise hence the transfer.”
I have taken into account the views of the employer who would be affected by the order, including the effect of not granting the application. In the circumstances, this matter weighs in favour of making the order sought
Section 318(3)(a)(ii) – the views of the employees
The Applicant submits that:
“All transferred employees and new employees would be covered by the transferring
agreement.”
The Applicant has not provided any employee views and I have not received any views from employees, therefore, this is weighs in favour of making the order sought.
Section 318(3)(b) – whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
The Applicant submits that:
“No employee would be disadvantaged by their terms and conditions of employment.”
I have taken into account whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment. I am satisfied that there will be no disadvantage to employees. In the circumstances, this matter weighs in favour of making the order sought.
Section 318(3)(c) – if the order relates to an enterprise agreement—the nominal expiry date of the agreement
The Enterprise Agreement has a nominal expiry date of 31 December 2024. This matter is a neutral consideration.
Section 318(3)(d) – whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
The Applicant submits that:
“The transferring agreement is a continuation of our previous employer agreement to avoid any negative impact.”
I have taken into account whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace. I am satisfied that there would be no negative impact on the productivity of the new employer’s workplace. In the circumstances, this matter weighs in favour of making the order sought.
Section 318(3)(e) – whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
The Applicant submits that:
“As Hycom P&D have absorbed CC P&D work current jobs are priced as per the transferring agreement.”
I have taken into account whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer. I am satisfied that the employer would not incur significant economic disadvantage. In the circumstances, this matter weighs in favour of making the order sought.
Section 318(3)(f) – the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
The Applicant submits that:
“HYCOM P&D officially commenced trading as of this financial year, Hycom’s intention and verbal agreement with transferring employees was to also transfer agreement. Currently Hycom does not have an existing workplace instrument to influence.”
I have taken into account the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer. I am satisfied that there is a degree of business synergy between the transferable instrument and any workplace instrument, likely a Modern Award or Awards that already covers the new employer. In the circumstances, this matter slightly in favour of making the order sought.
Section 318(3)(g) – the public interest
In their submissions the Applicant wrote “Nil” in response to whether the application would be in the public interest.
I have taken into account whether it is in the public interest to grant the order sought, including the opportunity afforded for the employees to transfer employment. In my view it is in the public interest that the transferring employees and the new employees maintain the benefits of their existing and yet to minimally expire enterprise agreement.
Conclusion
Having considered the matters above, it is apparent that all matters either weigh towards the granting of the application sought or are neutral. Taking into account each of the matters set out in s.318(3) of the Act, I am satisfied that the order as sought should be granted. The order[1] will be issued concurrently with this decision.
The order will come into operation in relation to each transferring employee upon the commencement of their employment with HYCOM.
COMMISSIONER
[1] PR779068.
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