KOCM 3 Pty Ltd Trading AS Kinetic Melbourne (Brown)
[2025] FWC 2052
•16 JULY 2025
| [2025] FWC 2052 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
KOCM 3 Pty Ltd Trading AS Kinetic Melbourne (Brown)
(AG2025/1386)
KINETIC MELBOURNE MAINTENANCE AGREEMENT 2022 – 2026
| Vehicle industry | |
| COMMISSIONER CONNOLLY | MELBOURNE, 16 JULY 2025 |
Application for an order relating to instruments covering new employer and non-transferring employees – application granted.
Background
On 9 May 2025, KOCM 3 Pty Ltd T/A Kinetic Melbourne (Brown) (the Applicant) made an application under section 319 of the Fair Work Act 2009 (Cth) (the Act) in respect of the operation of the Kinetic Melbourne Maintenance Agreement 2022 – 2026 (AE516380) (the Agreement).
The application seeks, pursuant to s.319(1)(b) of the Act, that the FWC order that the transferable instrument (the Agreement) covers, or will cover, the Applicant in respect of non-transferring employees who perform the work contained within the classifications of the Agreement.
The Agreement was approved on 22 June 2022 and has a nominal expiry date of 31 March 2026.
The Applicant is the new employer and is proposing to transfer several maintenance employees currently employed by its associated entity, Kinetic Melbourne (the old employer) to work at its Preston Workshop from July 2025.
The transferring employees are currently covered by the Agreement, being the transferable instrument.
In summary, I am satisfied that:
a)A transfer of business has occurred (as defined in s.311),
b)the Agreement is a transferable instrument (as defined in s.312),
c)transferring employees will continue to be covered by the Agreement (per s.313),
d)unless an Order is made under s.319, non-transferring and any new employees will otherwise be covered by the Manufacturing and Associated Industries and Occupations Award 2020 (the Award),
e)it is appropriate to make the Order under s.319 so that transferring employees, non-transferring employees and any new employees performing the same work for the new employer are all covered by the same Agreement.
Relevant Legislation
Part 2-8 of Chapter 2 of the Act describes when a transfer of business occurs and s.312(1) of the Act provides for the transfer of enterprise agreements, certain modern awards and certain other instruments if there is a transfer of business from one employer to another employer.
Section 311 of the Act relevantly provides:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Sections 317 and 319 of the Act relevantly provide:
“317 FWC may make orders in relation to a transfer of business
This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.
…
319 Orders relating to instruments covering new employer and non‑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 non‑transferring employee because of subsection 314(1) does not, or will not, cover the non‑transferring employee;
(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non‑transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non‑transferring employee who performs, or is likely to perform, the transferring work for the new employer.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non‑transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non‑transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.
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 non‑transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(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 non‑transferring employee before the later of the following:
(a) the time when the non‑transferring employee starts to perform the transferring work for the new employer;
(b) the day on which the order is made.”
The Transfer of Business
The Applicant submits that pursuant to s.311(1) of the Act, a transfer of business occurred on the following basis:
a)The Applicant has recently acquired a number of tangible and non-tangible assets from a non-associated entity, LC Dyson’s Bus Service Pty Ltd (LC Dyson’s).
b)Part of this process involves the Applicant constructing a new bus depot and workshop in Preston, Victoria.
c)There will be no transferring employees from LC Dyson’s, however, several employees will transfer over to the Preston depot from an associated entity of the Applicant, being the old employer.
d)These transferring employees will be performing the same, or substantially the same work as they were with the old employer, constituting a transfer of business between associated entities pursuant to these provisions.
e)These transferring employees are covered by the Agreement and the Agreement, being the transferrable instrument, will cover the Applicant with respect of the transferring employees pursuant to s.312 and 313 of the FW Act.
f)The Applicant will likely also engage new non-transferring employees at the Preston depot. The new non-transferring employees will not automatically be covered by the transferrable instrument but rather the relevant award.
g)The Applicant is seeking an order that the transferrable instrument will cover the new non-transferring employees.
The application was made by Ms Maria Bicchi on behalf of the Applicant. Ms Bicchi also provided a witness statement dated 3 June 2025, in further support of the application. In reliance on this uncontested evidence, I am satisfied that a transfer of business has occurred.
A “transferrable instrument” includes “an enterprise agreement that has been approved by the FWC” as provided by s.312(1)(a) of the Act, which states:
“313 Transferring employees and new employer covered by transferrable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employees employment with the old employer, then:
(a)the transferrable 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:”
Accordingly, pursuant to s.311 of the Act, I am satisfied that there has been a transfer of business, and the employees of the old employer are “transferring employees” within the meaning of the Act.
I am also satisfied that the Agreement listed is a transferrable instrument that will cover the Applicant and the transferring employees in accordance with s.313(1)(a).
Section 314 of the Act provides for a transferrable instrument to over other employees in certain circumstances as follows:
“314 New non-transferring employees of new employer may be covered by transferrable instrument
(1) If:
a)A transferrable instrument covers the new employer because of paragraph 313(1)(a); and
b)After the transferrable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and
c)The non-transferring employee performs the transferring work; and
d)At the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;
then the transferrable instrument covers the new employer and the non-transferring employee in relation to that work.
(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWC order under subsection 319(1).”
In this instance, the Manufacturing and Associated Industries and Occupations Award 2020 would otherwise apply to the non-transferring employees. Therefore, the condition in s.314(1)(d) cannot be satisfied and the Agreement will not otherwise cover non-transferring employees.
The Applicant further submits that it is seeking parity of terms and conditions within its workforce and for the instrument covering their terms of conditions of employment to reflect the reality of non-transferring employees performing the transferring work.
Accordingly, the Applicant is seeking to apply the same minimum terms and conditions to all its employees who perform transferring work by means of this application for an Order under s.319(1)(b) of the Act.
Consideration
Section 319(2) - Who may apply for an order?
The application has been made by the new employer. This meets the requirements of s.319(2) of the Act.
Section 319(3)(a)(i) - Views of the new employer.
The Employer has made the application under s.319 of the Act and supports the making of the Order sought.
Section 319(3)(a)(ii) - Views of the employees who will be affected by the order.
The Applicant’s submissions in support of its application indicates that there are no current non-transferring employees employed by the new employer.
On 26 May 2025, my Chambers issued directions seeking the Applicant provide a copy of its submissions to any Union and/or employees impacted by the application and requested any party who had views regarding the application to advise my Chambers by close of business on 10 June 2025.
On the same day, the Applicant sent an email attaching its application and my directions to the AMWU. On 28 May 2025, a similar email with the same attachments was sent to all employees covered under the transferrable instrument regarding the establishment of its new Preston workshop and the employment of non-transferring employees.
On 28 and 29 May 2025, the Applicant posted notice of its application, and my associated directions and supporting documents on the notice boards in all its workshops in addition to its online communication tool – Blink. On 30 June 2025, the application was also addressed during the employee toolbox talk by the State Maintenance Manager, Mr John Wood.
On this basis, the Applicant submits employees were informed that the transferrable instrument would transfer with transferring employees to the new employer. And that information was also provided regarding the particulars of the Order being sought for new non-transferring employees at the new employer.
On 3 June 2025, the Applicant filed a witness statement authored by Ms Maria Bicchi indicating it had complied with my directions by taking the steps set out above.
The AMWU was a bargaining representative for the Agreement that is the subject of this Application and is covered by the Agreement. The AMWU have not raised any concerns in relation to the application.
The employer submits that, in response to the above, there have been no issues raised by the current workforce in relation to the Orders sought.
Additionally, there have been no issues raised by employees or their representatives with my Chambers in response to the notices provided as indicated above.
As a consequence, and in all the circumstances, I have formed the view that this factor views in favour of granting the Order sought.
Section 319(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 transferring employees will be disadvantaged by the Order sought. Further, it submits that the transferable instrument’s terms and conditions are substantially more advantageous and beneficial to employees in comparison to those under the Award and that the employees’ representatives have provided written confirmation in support of the application.
I have also had regard to the fact that the transferable instrument was approved by the Commission.
Having consider all the material before me, I am satisfied that employees will not be disadvantaged by the Order in relation to their terms and conditions of employment and therefore, this factor weighs in favour of granting the Order sought.
Section 319(3)(c) - If the order relates to an enterprise agreement—the nominal expiry date of the agreement.
The nominal expiry date of the Enterprise Agreement is 31 March 2026, and the terms of the Agreement will continue to apply until the Agreement is formally replaced or terminated.
This factor does not weight against the granting of the Order sought.
Section 319(3)(d) - Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace.
The Applicant submits that, if granted, the effect of the Order will be to assist in promoting workplace productivity of the non-transferring employees due to the terms and conditions of the transferring instrument being substantially more beneficial.
I am persuaded by the merits of these submissions and have formed the view that this factor weighs in favour of granting the Order.
Section 319(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 the workplace productivity and employee benefits outweigh any economic disadvantages of the transferrable instrument covering the new employees of the new employer.
Based on these submissions and the material presented, I have formed the view that this factor weighs in favour of granting the Order.
Section 319(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 if the Order is not made and the transferring and non-transferring employees are left on different terms and conditions of employment, this may have a negative impact on business synergy if both were to apply to the Applicant.
I consider this factor weighs in favour of granting the Order sought.
Section 318(3)(g) - the public interest.
Based on the materials contained in the Form F40 application, and the additional materials provided to me, including the submissions of the Applicant and the witness statement of Ms Bicchi, I am satisfied that it would not be contrary to the public interest to make the Order sought and that that granting of the Order would provide more certainty and consistency in relation to employment conditions for both employees and the employer.
Conclusion
Having considered each of the matters outlined in s.319(3) of the Act and the material that has been filed, I am satisfied that an order pursuant to s.319 of the Act should be made in respect of this application. The Order[1] will be issued concurrently with this decision.
COMMISSIONER
[1] PR789698.
Printed by authority of the Commonwealth Government Printer
<AE516380 PR789695>
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