Lion-Beer Spirits & Wine Pty Ltd T/A Lion

[2018] FWC 5876

[2018] FWC 5876

FAIR WORK COMMISSION

DECISION

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

Lion-Beer Spirits & Wine Pty Ltd T/A Lion
(AG2018/4853)

Manufacturing and associated industries
DEPUTY PRESIDENT MASSON	MELBOURNE, 19 SEPTEMBER 2018

Application for orders relating to instruments covering new employer and transferring employees.

[1] An application has been made pursuant to s 318 of the Fair Work Act 2009 (Act) by Lion-Beer Spirits and Wine Pty Ltd (Lion) seeking an order from the Fair Work Commission (Commission) that a transferrable instrument, being the West End Brewery Technicians’ Enterprise Agreement 2017 not apply to one employee, Mr Richard Hannah (Mr Hannah), in relation to his employment with Lion. It is intended by Lion that Mr Hannah be covered in his new role by a common law contract underpinned by the Food Beverage and Tobacco Manufacturing Award 2010 (the Award). 1

[2] Mr Hannah has been employed by Lion and its associated entities for approximately 14 years. He is currently employed by the South Australian Brewing Company Pty Ltd in the packaging team at the West End brewery in Adelaide, South Australia. Mr Hannah’s current employment is covered by the West End Brewery Technicians’ Enterprise Agreement 2017 (the Agreement). 2

[3] In its Form F40 - Application for Orders in relation to Transfer of Business, Lion stated that it has offered Mr Hannah employment in the position of Brewer at its Little Creatures Geelong, Victoria brewery. The “old” and “new” employers are associated entities. Mr Hannah’s employment with Lion at the Little Creatures Geelong brewery is due to commence on 1 October 2018.

[4] A conference to deal with the application was conducted by the Commission on 18 September 2018. Mr Nicholas Barkatsas appeared on behalf of Lion while Mr Hannah appeared on his own behalf.

[5] Section 318 of the Act sets out the circumstances in which an order may be made by the Commission:

318 Orders relating to instruments covering new employer and 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 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) 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 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 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 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

[6]  I will now consider each of the matters that I am required to consider under s 318(3).

s.318(3)(a)(i) - the views of the new employer

[7] Lion submits that if the order is made, a voluntary transfer of employment will occur, not a transfer of business. If the order is not made, Lion states that the Agreement which covers Mr Hannah’s employment with South Australian Brewing Company Pty Ltd will transfer. This will have the consequence of preventing standardisation of employment conditions and increase administration costs. Further, Lion’s objective of encouraging a single, unified workplace culture with similar terms and conditions at the Little Creatures Geelong brewery will be frustrated. This weighs in favour of granting the order.

s.318(3)(a)(i) - the views of the employees who would be affected by the order

[8] Mr Hannah is the only employee that would be affected by the order. He stated during the conference on 18 September 2018 that he had been provided with copies of the material filed by Lion and understood the implications of the application being granted. Mr Hannah also stated that he does not oppose the order being made. He stated that he was strongly motivated to transfer from the West End Adelaide brewery where he was presently engaged in the packaging area to a role where he could return to and further progress his career as a Brewer. The views of Mr Hannah weigh in favour of granting the order.

s.318(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[9] Lion furnished a copy of the employment offer to Mr Hannah, dated 11 September 2018, along with a comparison of remuneration between Mr Hannah’s current role and the new role. That comparison revealed current remuneration, including superannuation and bonus, of $103,424.00 per annum under the terms of the Agreement. This compares with total remuneration, including superannuation and bonus, of $100,935.00 in the new role with Lion at the Little Creatures Geelong brewery. Mr Hannah states that he is aware that the terms and conditions of employment with Lion will be slightly less favourable than in his current role but that his future employment prospects will be enhanced by his moving from a role in packaging to the role of Brewer.

[10] While Mr Hannah would suffer a slight reduction in his overall remuneration should the order be made, that reduction is offset by the desire of Mr Hannah to progress his career. This weighs in favour of granting the order.

s.318(3)(c) - if the order relates to an enterprise agreement—the nominal expiry date of the agreement

[11] The order relates to the West End Brewery Technicians’ Enterprise Agreement 2017 which will reach its nominal expiry date on 31 August 2020. This is a neutral consideration in the circumstances of this application.

s.318(3)(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[12] Lion submits that a transfer of the Agreement to the Little Creatures Geelong brewery will have a negative impact on Lion’s business because the Agreement contains separate and distinct entitlements from those that currently apply at the Geelong site. The order, if made, would ameliorate the administrative and payroll costs that would otherwise arise from having two sets of conditions on the site. This weighs in favour of granting the order.

s.318(3)(e) - whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[13]  Lion submits that it would incur administration costs if it were required to move from a salaried monthly payroll system to a fortnightly pay system for one employee. This weighs in favour of granting the order.

s.318(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[14] Lion submits that while there is some synergy between beer production requirements and processes between the West End and Little Creature sites, there is little synergy between the terms and conditions offered in the Agreement and the terms and conditions that govern employment at the Little Creatures Geelong site, that is, common law contracts underpinned by the Award.

[15] Lion further submits that the Agreement is a “sixth generation” agreement and has been developed in the context of the West End brewery which has been in operation for 130 years. The Agreement formalises terms and conditions developed to address specific enterprise level requirements of the West End brewery. Lion contrasts that history and context with the Little Creatures Geelong brewery which has only been operating for 4 years, is of a smaller scale and is characterised by greater operator autonomy and self-direction, a flatter organisational structure and a classification structure with different role responsibilities.

[16] The limited degree of synergy between the West End and Little Creatures Geelong breweries weighs in favour of granting the order.

s.318(3)(g) - the public interest

[17] I am satisfied that it is not against the public interest to grant the order sought by Lion. This weighs in favour of granting the order.

Conclusion

[18] Having read the application and supporting documents and having heard from Lion and Mr Hannah, I am satisfied that all of the requirements of s 318 of the Act have been met and that it is appropriate to issue an order as sought by Lion. An order will be issued in conjunction with this decision.

DEPUTY PRESIDENT

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