Mascot Pharmacy Services Pty Ltd

[2021] FWC 6262

[2021] FWC 6262

FAIR WORK COMMISSION

DECISION

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

Mascot Pharmacy Services Pty Ltd
(AG2021/7490)

Pharmacy operations
COMMISSIONER P RYAN	SYDNEY, 3 NOVEMBER 2021

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

[1] On 20 September 2021, Mascot Pharmacy Services Pty Ltd (MPS or the Applicant) made an application under s.318 of the Fair Work Act 2009 (the Act). The application seeks an order from the Fair Work Commission (the Commission) relating to former employees of Sydney Pharmacy Services Pty Ltd(SPS) who became employed by MPS on 1 September 2019 (the transferring employees), and whose employment was covered by the Community Pharmacy Single Enterprise Agreement (New South Wales) (Pharmacy Assistants employed by Sydney Pharmacy Services Pty Ltd) (the Agreement or transferable instrument).

[2] MPS seeks an order in the following terms:

“That a transferable instrument, Community Pharmacy Single Enterprise Agreement (New South Wales) (Pharmacy Assistants employed by Sydney Pharmacy Services Pty Ltd) does not and will not cover Mascot Pharmacy Services Pty Ltd and any transferring employees in respect of any work undertaken as Pharmacy Assistants and including pharmacy assistants employed to work in the pharmacy dispensary.”

[3] On 8 October 2021, the Applicant filed an amended Form F40 application (the Amended Application). The Amended Application sought to make minor typographical amendments to the Application, and I considered it appropriate in the circumstances to allow the amendment and did so pursuant to s.586 of the Act.

[4] A copy of the Amended Application was provided to the transferring employees, along with directions giving the transferring employees the opportunity to make any written submissions in response to the Amended Application or participate in the hearing of the matter.

[5] No submissions were received from the transferring employees or otherwise in opposition of the Amended application.

Relevant Legislation

[6] Section 313 of the Act relevantly provides:

“313 Transferring employees and new employer covered by transferable instrument

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).”

[7] Sections 317 and 318 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.”

“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

[8] In deciding whether or not to make an order pursuant to s.318 (1) of the Act, the Commission must take into account the matters set out in s.318 (3).

[9] Before turning to those matters, having taken into consideration the Amended Application and accompanying materials, as well as the submissions made by MPS at the hearing on 28 October 2021, I am satisfied as to the following:

(i) That there was a transfer of business from SPS to MPS on 1 September 2019 (s.311 (1) of the Act);

(ii) That the former employees of SPS who became employed by MPS on 1 September 2019 are transferring employees (s.311 (2) of the Act);

(iii) That the transferring employees were covered by the Agreement at the time their employment was terminated by SPS (s.313(1) of the Act);

(iv) That the Agreement is a transferable instrument (s.312 (1) of the Act); and

(v) That MPS as the new employer of the transferring employees can make an application for the order sought (s.318 (2) (a) of the Act).

[10] I now turn to a consideration of the matters set out in s.318 (3) of the Act.

Views of the new employer – s.318 (3)(a)(i)

[11] The Applicant is the new employer who seeks, and is supportive of, the order.

Views of the employees who would be affected by the order – s.318 (3)(a)(ii)

[12] While there were no submissions filed by the transferring employees in response to directions issued by my chambers, the Amended Application included documents signed by the transferring employees which stated they were supportive of the order being made.

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

[13] The Applicant submitted that the transferring employees will not be disadvantaged by the order. In support of this submission the Applicant confirmed that all full-time and part-time transferring employees are currently paid in excess of the Agreement rates and any applicable rates that will apply under the terms and conditions of the Pharmacy Industry Award 2020 (the Pharmacy Award).

[14] In relation to the casual transferring employees, the Applicant confirmed their rates of pay will be increased to be at least equal to the applicable rates of pay under the Pharmacy Award. I also note the Pharmacy Award provides for some more favourable entitlements, such as a longer minimum engagement provision for casual employees.

The nominal expiry date of the agreement – s.318 (3)(c)

[15] The nominal expiry date of the Agreement is 21 December 2013.

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

[16] The Applicant submits that the transferable instrument has had a negative impact on productivity of the Applicant’s workplace as it has required the Applicant to apply two different sets of terms and conditions for employees performing the same work for the same employer.

[17] The Applicant submits that if the order is granted it will have a positive impact on productivity as the one instrument will cover the work of both transferring employees and non-transferring employees.

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

[18] The Applicant submits that it has been burdened through additional administrative and payroll costs as a result of managing employees performing the same work for the same employer under two separate instruments.

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

[19] The Applicant submitted there is a degree of business synergy between the Agreement and the Pharmacy Award, as both instruments apply to community pharmacy operations.

[20] However, it is clear that a greater degree of synergy for the Applicant, transferring employees and non-transferring employees would occur should the order be granted.

The public interest – s.318 (3)(g)

[21] I consider it is in the public interest for the order to be made, taking into consideration the commercial benefits to the Applicant, and that the transferring employees will not be disadvantaged by, and are supportive of, the order being made.

Conclusion

[22] Taking in to account the matters to be considered in section 318(3) of the Act, I am satisfied that it is appropriate that this application be granted and an Order [PR735454] to that effect will be issued in conjunction with this decision.

[23] In accordance with s.318(4)(b) of the Act the Order shall have effect from today.

COMMISSIONER

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<AE872801  PR735453>