JLG Australia Pty Limited T/A JLG Industries (Australia)

[2023] FWC 550

[2023] FWC 550

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

JLG Australia Pty Limited T/A JLG Industries (Australia)

(AG2023/159)

Manufacturing and associated industries
COMMISSIONER MCKINNON	SYDNEY, 14 MARCH 2023

Application for an order relating to instruments covering new employer and non-transferring employees

1. JLG Australia Pty Limited (JLG Australia) has applied for an order under section 319 of the Fair Work Act 2009 (Act) to the effect that the JLG Industries (Australia) Enterprise Agreement 2020 (Agreement) will cover JLG Australia in relation to new non-transferring employees of JLG Australia who perform work covered by the classifications set out at Schedule A of the Agreement.

1. The Agreement currently covers JLG Pacific Holdings Inc (JLG Pacific Holdings). JLG Pacific Holdings and JLG Australia are related bodies corporate. On 12 December 2022, JLG Australia acquired the business of JLG Pacific Holdings. In the resulting transfer of business, all employees of JLG Pacific Holdings who are covered by the Agreement were offered employment with JLG Australia on the same terms and conditions of employment, and with continuity of service. These “transferring employees” accepted offers of employment with JLG Australia and commenced with JLG Australia on 1 January 2023.

1. Section 313 of the Act has the effect that the Agreement now covers JLG Australia in relation to the transferring employees.

1. The application seeks to ensure that new (non-transferring) employees of JLG Australia who perform work covered by the Agreement will be covered by the Agreement instead of the Manufacturing and Associated Industries and Occupations Award 2020 (Award). I have decided to grant the application and these are my reasons.

The relevant legislation

1. Part 2-8 of the Act describes when a transfer of business occurs. It also provides for the transfer of enterprise agreements from one employer to another in a transfer of business.

1. Section 311(1) defines “transfer of business”, and section 312 defines the types of “transferable instrument” that may transfer from one employer to another. Sections 317 and 319 of the Act 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 non-transferring employees.

1. In deciding whether to make orders of this kind, the Commission must take into account a range of factors set out in section 319(3) of the Act.

Consideration

1. The Agreement was approved by the Commission on 18 September 2020. It is a transferrable instrument for the purposes of section 312(1)(a) of the Act.

1. I am satisfied that there has been a transfer of business between JLG Pacific Holdings and JLG Australia for the purposes of section 311(1). This is because:

1. the employment of employees of JLG Pacific Holdings who were covered by the Agreement ceased on 31 December 2022;

2. the employees commenced employment with by JLG Australia on 1 January 2023;

3. the work of employees for JLG Australia is the same as the work they performed for JLG Pacific Holdings (the transferring work); and

4. JLG Pacific Holdings and JLG Australia are related entities.

The views of JLG Australia and employees affected by the order

1. Gemma Chapman, Human Resources Manager for JLG Australia, has expressed the view on behalf of JLG Australia that new non-transferring employees will be better off overall if they are covered by the Agreement than if they were to remain covered by the Award. I accept the submission, which is consistent with the decision of the Commission on 18 September 2020[1] to approve the Agreement on grounds including that it passed the better off overall test. At the time the application was made there were no employees affected by the order, as no new (non-transferring) employees have yet been employed by JLG Australia.

Whether any employees would be disadvantaged by the order

1. The transferring employees will not be disadvantaged by the orders sought as it will have no effect on them. New non-transferring employees performing work to which the Agreement would apply will see their position improved by coverage of the Agreement instead of the Award.

The nominal expiry date of the Agreement

1. The nominal expiry date of the Agreement is 24 September 2024.

Whether the Agreement would have a negative impact on productivity at JLG Australia

1. JLG Australia submits that there is no foreseeable negative impact on productivity if the orders are made. By contrast, it submits that there will be negative impacts if the orders are not made, as JLG Australia would have to divert more resources to administer and manage the different terms and conditions of employment which would apply to separate groups of employees performing the same work. This would add unnecessary complexity to the existing payroll and human resources functions and result in inefficiencies with JLG Australia’s operations and functions. The disparity in the minimum terms and conditions which apply to transferred employees and new (non-transferring) employees may also result in conflict and discontent amongst employees who perform the same work, affecting morale and productivity.

1. I am satisfied that granting the orders will promote productivity, efficiency and workplace harmony by reducing the administrative burden on JLG Australia while ensuring that employees performing the same work have the same minimum terms and conditions of employment.

Whether JLG Australia would incur significant economic disadvantage by coverage of the Agreement

1. JLG Australia submits that it will incur significant economic disadvantage if the order is not made, due to the administrative burden and complexity discussed above. This includes because if orders are not made, JLG Australia will be required to engage a third party software provider to reconfigure its service and time recording software (Baseplan) to accommodate two separate regimes for the remuneration of employees. While I am satisfied that unnecessary economic costs would be incurred by JLG Australia associated with the administration of two separate regulatory regimes for the same purpose, the evidence does not permit a finding that this would amount to “significant” economic disadvantage.

Degree of business synergy between the Agreement and other workplace instruments

1. JLG Australia operates in the manufacturing industry. There is a high degree of business synergy between the terms and conditions of the Agreement and the Award, which will cover new non-transferring employees if the application is not granted.

The public interest

1. There is no material to suggest that granting the application would adversely affect the public interest. I am satisfied that it is not contrary to the public interest to make the order sought.

Conclusion

1. 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. The application is granted.

1. Order [PR760069] will issue separately to this decision.

COMMISSIONER

Hearing details:

Determined on the papers.

[1] [2020] FWCA 5001

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<AE509051   PR760068>