Kmart Australia Limited T/A Kmart Australia

[2020] FWC 5811

[2020] FWC 5811

FAIR WORK COMMISSION

DECISION

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

Kmart Australia Limited T/A Kmart Australia
(AG2020/2996)

TARGET AUSTRALIA RETAIL AGREEMENT 2012

Retail industry
DEPUTY PRESIDENT HAMILTON	MELBOURNE, 30 OCTOBER 2020

S.318 - Application for an order relating to instruments covering new employer and transferring employees.

[1] On 6 October 2020, Kmart Australia Limited T/A Kmart Australia (the Applicant) made an application pursuant to s.318 of the Fair Work Act 2009 (the Act) for an order that the Target Australia Retail Agreement 2012 (or any successor agreement) does not, and will not cover:

a) all Target Australia Pty Ltd (Target) employees:

i. covered by the Target Australia Retail Agreement 2012; and

ii. employed in the 71 Target and Target Country stores which have been, or are to be, converted to Kmart stores in 2020 and 2021 (the Conversion Stores); and

iii. who have accepted offers of employment with Kmart Australia Limited (Kmart); and

b) all permanent employees (casual, part-time and full-time) hired by Target:

i. into the Conversion Stores after the date of Kmart’s application to the Fair Work Commission pursuant to section 318, being dated 6 October 2020; and

ii. who accept offers of employment with Kmart,

(together, the Transferring Employees) in respect of their employment with Kmart.

[2] Pursuant to s.318(1)(b) of the Act, the Applicant seeks for the Kmart Australia Limited Agreement 2018 (or any successor agreement) to cover the Transferring Employees in respect of their employment with Kmart.

[3] On 8 October 2020, my Chambers sent an email in order to ascertain the views of employees, which I am required to take into account pursuant to s.318(3)(a). I requested the trade unions who were identified by the applicant in the email filing the application to provide any information they had about the views of employees who stood to be affected by the proposed order by no later than 04:00 pm AEDT on Wednesday, 14 October 2020. The unions identified in the email were the Australian Workers’ Union (AWU), the Shop, Distributive and Allied Employees Association (SDA), and the United Workers’ Union (UWU). On 12 October 2020, the AWU and SDA 1 advised that employees to their knowledge had no opposition to the application and order sought. The SDA and its member employees had been particularly active in negotiating and dealing with this matter. No response was received from the UWU.

[4] In a further attempt to ascertain the views of employees or any others, I listed the matter for non-attendance hearing on 30 June 2020. The employer was directed to provide a copy of this Notice of Listing to all employees and unions affected by this application as soon as practicable and to advise the Commission as to how it has complied with this direction. Persons were asked to contact Chambers if they wished to be heard in the matter.

[5] On 19 October 2020 the applicant advised that it had taken the following action:

“1. Employees: Kmart, with the assistance of Target, has taken (or is taking) the following stapes to provides the Notice to all affected employees:

a. Uploading the Notice of Listing onto the MyTarget intranet page dedicated to Conversion Stores, which acts as the central hub of information regarding the Application. Uploading of the Notice will be completed today, and the Notice will be accessible to team members from tomorrow;

b. Posting a message on the “Team News” channel of Target’s WorkJam platform (a digital platform or ‘notice board’ accessible by all Target employees) directing wages team members in Conversion Stores to MyTarget to view the Notice of Listing. Target regularly uses WorkJam for company-wide announcements. It is expected the message will be visible to team members on WorkJam today; and

c. In line with Target’s usual team member communication method, it is the process of distributing the Notice of Listing via email to each conversion Store, which should be completed today. In that email, the Respondent has provided instructions to the stare manager to, as soon as possible:

i. Print copies of the Notice and display them in the team room in a prominent position; and

ii. Inform team members of the Notice in the daily team huddles, and direct them to the tea room or to the MyTarget conversion page to view the Notice of Listing.”

[6] No person requested to be heard and no opposition to the application was received from or on behalf of any persons.

Background

[7] In May of 2020, the Wesfarmers Group announced its intention to close up to 167 Target and Target Country stores, with plans to convert some of these stores to Kmart or Kmart Hub stores. The application relates to 71 Target and Target Country stores nationally which have been, or will be, converted to Target and Target Country stores in 2020 and 2021.

[8] The applicant has offered employment to all Target team members employed in such stores and will recognise their service and leave entitlements. The team members’ start dates with Kmart vary from store-to-store. There are over 1500 Target team members covered by the Target Australia Retail Enterprise Agreement 2012 (Target Enterprise Agreement) who have accepted employment with the Applicant. In addition, the Applicant intends to offer employment to any casual, part-time and full-time employees recruited by Target into the relevant conversion stores after the date of the Application.

[9] Employment has been offered on the basis that, if the Applicant is successful in the application, the Kmart Australia Ltd Agreement 2018 (Kmart Enterprise Agreement) will apply to the team members. It is the Applicant’s preference that the Kmart Enterprise Agreement applies to the Transfering Employees on commencement of their employment with Kmart. Accordingly, Kmart seek an order that the Kmart Enterprise Agreement applies to the transferring employees.

The Act

[10] Section 318 of the Act 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.”

Consideration

[11] Overall I am satisfied that an order should be made pursuant to s.318. I am satisfied that the applicant may make an application pursuant to s.318(2), and that the orders sought may be issued pursuant to s.318(1). I have taken into account the material provided by the applicant in support of its application and the matters set out in s.318(3) of the Act. That material was not contradicted by any party. I have taken into account all the matters I am required to pursuant to s.318 of the Act. I am satisfied on the basis of the materials filed by the applicant that the matters set out in s.318(3) of the Act support the making of the order.

[12] An order to this effect will be issued with this decision.

DEPUTY PRESIDENT

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Appendix 1 – Letter submitted by SDA

 1   Appendix 1 – Letter submitted by SDA.