MSPLS Group Pty Ltd

[2013] FWC 7910

[2013] FWC 7910

FAIR WORK COMMISSION

DECISION

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

MSPLS Group Pty Ltd
(AG2013/2900)

REINER INVESTMENTS PTY LTD COLLECTIVE AGREEMENT 2009

Retail industry
COMMISSIONER SPENCER	BRISBANE, 23 OCTOBER 2013

Transfer of employees at Gloria Jean's Coffees Franchise.

[1] MSPLS Group Pty ltd (the Applicant) has made an application pursuant to s.319 of the Fair Work Act 2009 (the Act) for an order that the Reiner Investments Pty Ltd Collective Agreement 2009 (the Agreement) cover non-transferring employees of the Applicant who perform, or are likely to perform, transferring work.

[2] The Applicant is intending to purchase a business, which operates a Gloria Jean’s Coffee franchise. Once the business is purchased the Applicant has indicated an intention to hire the current staff of the business. The Applicant made, originally, an application pursuant to s.318 of the Act and s.319 of the Act.

[3] The Applicant initially sought an order, pursuant to s.318 of the Act, that the Agreement, which currently covers the employees of the old employer, continue to cover the employees and the Applicant once the sale of the business has been completed. After seeking clarification with the Applicant the Commission indicated to the Applicant that the effect of s.313(1) of the Act meant that the order sought pursuant to s.318 of the Act, assuming such an order could be given, was not necessary and would lack any efficacy.

[4] The larger issue with the application pursuant to s.318 of the Act is however that such an order cannot be given. An order pursuant to s.318 can only be issued by the Commission to order that either a transferable instrument does not, or will not, cover a transferring employee and/or that an enterprise agreement which covers the new employer covers, or will cover, the transferring employee. The effect or purpose of s.318 of the Act is essentially the transfer of entitlements of transferring employees from the old employer agreement to the new employer’s agreement (if there is one). This circumvents the operations of s.313 of the Act.

[5] Following this clarification the Applicant abandoned the application for orders pursuant to s.318 of the Act. That leaves, for consideration, an application for order pursuant to s.319 of the Act.

Relevant legislation

[6] Section 319 of the Act provides:

“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.”

Summary of Applicant submissions

[7] The Applicant clarified that an order was sought pursuant to s.319(1)(b) of the Act.

[8] The Applicant was directed to file submissions and any relevant evidence in relation to s.319(3) of the Act. The Applicant filed material in accordance with those Directions.

[9] The Applicant submitted that its view, as the new employer, or the likely new employer (as the transfer of business has not yet occurred), is that the order should issue. This is so because the Applicant submitted that considering that non-transferring employees will be performing the transferring work, alongside the transferring employees, it would be “fair and equitable” that they be on the same pay and conditions as the transferring employees.

[10] The Applicant submitted that there are currently no employees who will be affected by the order.

[11] The Agreement has a nominal expiry date of 5 years from the date of lodgment with the approving Authority.

[12] As to whether the transferrable instrument will have a negative impact upon the business the Applicant submitted that the Agreement is currently in operation in the business. The Applicant submitted that should the order not be issued would have a negative impact upon the business due to inconsistencies in pay and conditions between transferring and non-transferring employees.

[13] The Applicant submitted that no economic disadvantage would be suffered by the effect of the Agreement covering the Applicant.

[14] The Applicant submitted that the modern award which would otherwise cover it and the non-transferring employees has a very low level of business synergy with the Agreement.

[15] The Applicant did not submit any matters in the public interest.

[16] I have taken into account the material provided by the Applicant in support of the application and the matters listed in s.319(3) of the Act. I am satisfied the order should be issued.

[17] The order, PR543084, will issue with this decision and take effect from 23 October 2013.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<Price code C, AC324301  PR543078>