Immulab Pty Ltd T/A Immulab

[2018] FWC 4103

[2018] FWC 4103

FAIR WORK COMMISSION

DECISION

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

Immulab Pty Ltd T/A Immulab
(AG2018/2237)

BIOCSL ENTERPRISE AGREEMENT 2015

(ODN AG2015/4488) [AE415799]

Pharmaceutical industry
COMMISSIONER MCKINNON	MELBOURNE, 10 JULY 2018

Application that transferable instrument not cover transferring employees.

Introduction

[1] Immulab Pty Ltd (Immulab) has applied for an order under section 318 of the Fair Work Act 2009 (the Act) dealing with instruments covering a new employer and transferring employees in the context of a transfer of business.

[2] The application concerns employees who transferred or will transfer to Immulab from Seqirus Pty Ltd (Seqirus), a CSL Limited (CSL) company. The employees are currently covered by the bioCSL Enterprise Agreement 2015 (the Agreement). The order sought is that the Agreement will not cover Immulab, Paragon Care Limited (Paragon) and employees of Immulab previously employed by CSL Limited.

Background

[3] On 1 December 2017 Paragon announced that it had acquired the immunohematology business unit from Seqirus. Immulab was created by Paragon in order to run the immunohematology business and employ the 27 transferring employees (Transferring employees).

[4] The Transferring employees were offered employment conditional upon the acquisition of Seqirus being finalised. That occurred on 9 April 2018 and the transferring employees commenced employment with Immulab on 10 April 2018.

The relevant legislation

[5] Part 2-8 of the Act describes when a transfer of business occurs and provides for the transfer of certain enterprise agreements, modern awards and other instruments from one employer to another in a transfer of business.

[6] Section 311(1) defines “transfer of business” and section 312 defines the types of “transferable instrument” that may transfer. Sections 317 and 318 empower the Commission to make orders in relation to a transfer of business, including orders that a transferable instrument will, or will not, cover the new employer in relation to the transferring employee.

[7] In deciding whether to make orders of this kind, the Commission must take into account a range of factors set out in section 318(3).

Consideration

[8] Immulab is the new employer of the Transferring employees as well as the entity likely to be the new employer of existing Seqirus employees The Agreement is a transferable instrument within the meaning of section 312(1)(a).

[9] In relation to the Transferring employees, I am satisfied that in each cash:

(i) their employment with Seqirus has terminated;

(ii) they were employed by Immulab within 3 months of termination;

(iii) their work for Immulab is the same, or substantially the same, as the work they performed for Seqirus; andd

(iv) there is a connection between Immulab and Seqirus in that Immulab has the beneficial use of some or all of the assets of Seqirus.

[10] Accordingly, the Transferring employees are each transferring employees in relation to a transfer of business for the purposes of section 311(2).

The views of the new employer and employees affected by the order

[11] Immulab has filed a statutory declaration in support of the application by Mary-Jane O’Sullivan, General Manager of Immulab. According to Ms O’Sullivan, Immulab consulted with the Transferring employees 1 including by conducting a survey about their views in relation to the application. Ten employees supported the application, two did not support it and 16 employees did not respond.2

[12] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), the National Union of Workers (NUW) and the Community and Public Sector Union (CPSU) are the employee organisations covered by the Agreement. The CPSU do not oppose the application and no other union has taken the opportunity to give their views.

[13] On balance, the evidence before me indicates that there is more support for the application than opposition to it. This weighs in favour of the application.

Whether any employees would be disadvantaged by the order

[14] The Agreement contains a number of benefits that will not apply if the application is granted, including access to additional dispute resolution, consultation and flexible working arrangement clauses, performance management, additional annual leave benefits, learning and development and notice of termination in excess of the National Employment Standards (NES).

[15] If the order is granted, employees will benefit from a one-off lump sum payment of $1,089. A number of Agreement conditions will become terms of the Transferring employees’ contracts of employment, including additional superannuation during paid parental leave, additional public holidays, income maintenance and related redundancy benefits. 3 In addition, the various terms of relevant modern awards including the Pharmaceutical Industry Award 2010, Professional Employees Award 2010, the Commercial Sales Award 2010, the Manufacturing and Associated Industries Award 2010 and the Clerks – Private Sector Award 2010 will apply.

[16] On balance I consider that the terms and conditions of employment for Transferring employees will be less prescriptive than is currently the case. However, I am not satisfied that employees will be disadvantaged if the application is granted. This factor does not weigh against the application.

The nominal expiry date of the agreement

[17] The Agreement has a nominal expiry date of 30 June 2018 and has now expired. This weighs marginally in favour of the application.

Whether the transferable instrument would have a negative impact on productivity at Immulab

[18] Immulab says that continuing to apply the Agreement will have a negative impact on productivity at the workplace, including because two sets of different terms and conditions will apply to employees performing the same work and the Agreement contains a range of inefficient procedural terms. I accept that concurrent but competing pay arrangements will increase the regulatory burden on Immulab and may have a negative effect on productive and harmonious workplace relations. This factor weighs in favour of the application.

Whether Immulab would incur significant economic disadvantage by coverage of the Agreement

[19] Immulab submits that if the Agreement continues to cover the Transferring employees, it will need to meet the costs of maintaining two contrasting sets of employment arrangements. I accept that there will be an economic cost to ongoing regulatory inefficiency of this kind although I am not persuaded that it would amount to ‘significant economic disadvantage’. This factor is a neutral consideration.

Degree of business synergy between the Agreement and other workplace instruments

[20] The Agreement was negotiated for CSL, which originated as a government organisation over 100 years ago and is an established public company. It is based on numerous historical CSL agreements and awards, and covers a range of employment classifications and operations not relevant to Immulab.

[21] Immulab is a new and small business compared to CSL. It has not historically had enterprise agreements and instead relies on ‘above award’ common law contracts of employment. Only two of the classifications in the Agreement are relevant to Immulab.

[22] In addition to contracts of employment, the Transferring Employees are covered by relevant modern awards.

[23] I am satisfied that there is limited business synergy between the Agreement, the relevant modern awards and the contracts of employment covering employees of Immulab. This factor weighs in favour of the application.

The public interest

[24] Immulab says that it will not be contrary to the public interest to make the order sought, as the only parties affected by the making of the order are Immulab and the Transferring employees.

[25] No other party made submissions on the public interest.

[26] I find that it is not contrary to the public interest to make the order sought.

Conclusion

[27] Having regard to each of the factors set out above, I am satisfied that the conditions for the making of an order in the terms sought have been met.

[28] An order [PR608911] will be issued separately to this decision.

COMMISSIONER

 1   Statutory Declaration of Mary-Jane O’Sullivan

 2   Statutory Declaration of Mary-Jane O’Sullivan at MO-4.

 3   Statutory Declaration of Mary-Jane O’Sullivan at MO-3

Printed by authority of the Commonwealth Government Printer

<AE415799  PR608910>