Legend Land Perth Pty Ltd

[2018] FWC 2707

[2018] FWC 2707

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

Legend Land Perth Pty Ltd
(AG2018/1150)

Hospitality industry
DEPUTY PRESIDENT BINET	PERTH, 30 MAY 2018

Application for an order relating to instruments covering new employer and non-transferring employees – application granted.

[1] Legend Land Perth Pty Ltd (Legend Land) has made an application (Application) for an order pursuant to section 319(1)(b) of the Fair Work Act 2009 (FW Act) that the Holiday Inn Perth City Centre Enterprise Agreement 2011-2012 (Agreement), cover employees of Legend Land not currently covered by the Agreement who perform, or are likely to perform, hospitality work performed by employees covered by the Agreement.

[2] The Agreement is a single enterprise agreement made pursuant to section 185 of the FW Act with a nominal expiry date of 31 December 2012. The parties to the Agreement are Hub Land Dato Pty Ltd as trustee for Hub Land Dato Trust, trading as Holiday Inn Perth City Centre (Dato) and the employees of Dato engaged in the classifications set out in Appendix A of the Agreement.

Background

[3] On 7 December 2017 Legend Land entered into a Sale and Purchase Agreement with Dato. This transaction is due to be completed on 30 May 2018. Legend Land asserts this transaction will result in a transfer of business for the purposes of section 311 of the FW Act.

[4] Under the terms of the Sales and Purchase Agreement, Legend Land is obliged to offer all employees currently employed by Dato and covered by the Agreement a comparable position on terms and conditions no less favourable than those the employees currently enjoy (Transferring Employees).

[5] If a transmission of business has occurred for the purposes of section 311 of the FW Act and the work the Transferring Employees will perform for Legend Land is the same, or substantially the same, as the work they currently perform for Dato, then by virtue of section 313 of the FW Act, the Agreement will cover Legend Land and the Transferring Employees.
[6] If the Fair Work Commission (FWC) declines to grant the order sought, non-transferring employees of Legend Land (Non-Transferring Employees) performing the same or substantially the same work as the Transferring Employees will by virtue of s 314 be covered by the Hospitality Industry (General) Award 2010.

[7] To ensure consistency in terms and conditions of employment for Transferring Employees and Non-Transferring Employees performing the same or substantially the same work, Legend Land seeks an order from the FWC that the Agreement covers Non-Transferring Employees (Proposed Order).

[8] The Application was supported by a Statutory Declaration made by Ms Deane Palmer (Palmer Statutory Declaration), General Manager of Holiday Inn Perth City Centre, accompanied by a copy of the Agreement and the draft orders sought (Draft Orders).

Relevant legislation

[9] Section 319(3) of the FW Act sets out matters that the FWC must take into account in deciding whether to make an order pursuant to section 319(1)(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.”

Consideration

[10] In accordance with directions issued to parties on 12 April 2018 (Directions) Legend Land filed the following with FWC:

a. an outline of submissions addressing section 319(3) of the FW Act as to why the Proposed Order should be made;

b. a signed statutory declaration of solicitor Robert Ian Stephenson of Dentons Australia Pty Ltd (Stephenson), the firm engaged by Legend Land, confirming that the Directions had been complied with and that the Application, the Agreement, the Draft Orders, the Directions and the Palmer Statutory Declaration had been served on United Voice.

[11] The Directions contained an invitation for any Non-Transferring Employee who wished to be heard with respect to the Application to contact the FWC by close of business on Thursday 26 April 2018. However, the Statutory Declaration of Mr Stephenson confirmed that, at that time, there were no Non-Transferring Employees employed by the Applicant. There are therefore currently no Non-Transferring Employees which would be affected by the Proposed Order.

[12] The outline of submissions had annexed to it a table comparing the terms of the Award and the Agreement. It appears from that table that Non-Transferring Employees will not on an overall basis be disadvantaged by the Draft Order.

[13] In fact if the Draft Order is not granted Non Transferring Employees would not obtain the benefit of high base rates of pay and other benefits contained in the Agreement which are superior to those contained in the Award.

[14] The Agreement has a nominal expiry date of 31 December 2012 and therefore the nominal term of the Agreement expired some time ago allowing those covered by the Agreement to freely enter into negotiations to replace it.

[15] If the Proposed Order is not granted Legend Land will be denied the benefits of flexibilities contained in the Agreement, face the risk of industrial disharmony resulting from employees working side by side under different terms and conditions of employment and the additional cost burdens of administering two sets of pay and conditions for one workforce.

[16] Legend Land submits that it is in the public interest to grant the Proposed Orders to enable it to operate its business efficiently and to ensure consistency in employment among its workforce.

Conclusion

[17] I am satisfied that:

a. a ‘transfer of business’ has occurred as defined by section 311 of the FW Act;

b. the Agreement is a ‘transferable instrument’ as defined by section 312 of the FW Act; and

c. Legend Land is a ‘new employer’ for the purposes of section 319(2) of the FW Act and is therefore eligible to apply for the Proposed Order.

[18] The view of the new employer is that the order should be made by the FWC.

[19] The views of the Non-Transferring employees affected by this order are not known as no such employees have been engaged yet, and no objection to the Draft Orders was received from United Voice.

[20] There is no evidence that the employees affected would be disadvantaged by the order in relation to their terms and conditions of employment.

[21] The nominal expiry date of the Agreement, namely 31 December 2012, weighs in favour of the Proposed Order being granted because it allows both the Transferring Employees and the Non-Transferring Employees to jointly negotiate a new agreement in due course.

[22] By allowing for consistency in terms and conditions of employment between Transferring Employees and the Non-Transferring Employees performing the same or substantially the same work, the Proposed Order is likely to have a positive impact on workplace productivity.

[23] Legend Land submits that it would incur economic disadvantage if the Proposed Order is not made, and I accept these submissions.

[24] There is minimum business synergy between the Agreement and the relevant Award because of the differing terms and conditions.

[25] There is nothing to suggest that the order sought is contrary to the public interest.

[26] In light of the above, it is appropriate to make the order sought by Legend Land. An order to this effect (PR607085) will be issued with this decision.

DEPUTY PRESIDENT

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