JWF Holdings Pty Ltd

[2015] FWC 4307

[2015] FWC 4307

FAIR WORK COMMISSION

DECISION

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

JWF Holdings Pty Ltd
(AG2015/2736)

COMMISSIONER SPENCER BRISBANE, 26 JUNE 2015

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

[1] This application was filed by JWF Holdings 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 has standing to make the application pursuant to s.318(2)(a).

[2] On 22 February 2015, the Applicant purchased Allora Foodworks from A&D Holdings Pty Ltd. The Applicant employed 20 employees that were engaged by A&D Holdings Pty Ltd (the transferring employees).

[3] In accordance with s.311(1) and s.311(3) of the Act, a transfer of business has occurred. The transferring employees are covered by the A&D Holdings Pty. Ltd. Employee Collective Agreement (A&D Agreement), being a transferable instrument by operation of Schedule 11, Part 3, section 8(1) of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). 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 A&D Agreement 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 transferable instrument not cover the new transferring employees.

[4] The Applicant applies for an Order pursuant to s.318(1)(a) to displace the operation of s.313(1) in relation to the A&D Agreement to ensure that the transferring employees are no longer covered by that agreement. The existing industrial instrument that covers the Applicant in relation to operations in which the transferring employees will be engaged, the JWF Holdings Collective Agreement (JWF Agreement), will apply to the transferring employees.

Relevant legislation

[5] 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).

[6] 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.

[7] 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). The Applicant, filed material and submissions in support of the application, statements of 4 of the 20 transferring employees, who responded to the Applicant’s request to provide their views. Additionally, the Applicant also filed a summary of conditions comparison table and calculations in relation to typical roster arrangements for the two Agreements.

[8] 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

[9] The Applicant, as the new employer, wishes to maintain a unified suite of employment conditions across its operations.

[10] The Applicant stated that the application of the two separate enterprise agreements was detrimental to business operations and that they are spending on average double the amount of time on payroll as a result.

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

[11] The Applicant provided statements of 4 transferring employees who responded to the Applicant’s request for transferring employees to provide their views. These statements indicate that the transferring employees are in favour of coverage by the JWF Agreement. The Applicant submitted that all 20 of the transferring employees verbally identified to the Applicant that they supported the proposition of the A&D Agreement no longer covering their employment.

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

[12] The Applicant submitted that the transferring employees will not be disadvantaged by the Order and that the transferring employees will receive higher or at least equal weekly remuneration under the Applicants workplace instruments.

[13] The Applicant provided a summary of the comparison of the two instruments in relation to base rate and casual rates of pay for each of the classifications of the transferring employees. The table demonstrates that most employees will be at least equal, but often better of under the JWF Agreement.

[14] The Applicant identified that full time adult employees may not be better off under the JWF Agreement but stated that there were only two transferring employees that met that classification and that they were already paid above the minimum rate. The Applicant provided an undertaking not to reduce the rate of pay of transferring full time adult employees.

[15] The Applicant concedes that the JWF Agreement provides for a lesser public holiday rate of pay than the A&D Agreement. The Applicant submitted that the increase in casual rates of pay and higher rates of pay on a Sunday provided for in the JWF Agreement is sufficient to offset a reduction in public holiday pay. The Applicant also noted that the public holiday rate payable under the JWF Agreement is double time and a half which is ‘standard’.

[16] With relation to redundancy entitlements, the Applicant provided an undertaking that the transferring employees would maintain their entitlement under the A&D Agreement in circumstances where it provided a more generous entitlement than JWF Agreement or the National Employment Standards (NES), whichever is applicable in the circumstances.

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

[17] The JWD Agreement is a collective agreement approved by the former Workplace Authority. The JWD Agreement has passed its nominal expiry date. Similarly, the A&D Agreement is a collective agreement approved by the former Workplace Authority and has also passed its nominal expiry date.

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

[18] The Applicant is seeking to standardise the conditions of employment applying across operational area in its business on the basis that such arrangement will promote a cohesive workplace culture and will reduce the costs incurred in the administration of employment conditions. The Applicant submitted that this will not occur should the transferable instrument apply.

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

[19] The Applicant submitted that it would incur economic disadvantage due to the administrative burden caused by operating separate systems if the transferable instrument were to cover it.

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

[20] The Applicant indicated that there is little business synergy between the transferable instrument and any workplace instrument that already covers the new employer.

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

[21] The Applicant did not make submissions on this criteria.

CONCLUSION

[22] On balance, taking into account each of the matters stipulated at s.318(3), and on the basis of the views of the transferring employees and the undertakings provided, I am satisfied that the Order sought should be granted.

[23] A separate Order will issue [PR568784]. The Order will come into operation, in accordance with s.318(4).

COMMISSIONER

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<Price code A, PR568760>