Munro Footwear Group
[2019] FWC 7066
•16 OCTOBER 2019
| [2019] FWC 7066 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Munro Footwear Group
(AG2019/3465)
DEPUTY PRESIDENT MASSON | MELBOURNE, 16 OCTOBER 2019 |
Application for an order relating to instruments covering new employer and non-transferring employees.
[1] An application has been made pursuant to s. 318 of the Fair Work Act 2009 (the Act) by Munro Footwear Group Pty Ltd (Munro) seeking orders from the Fair Work Commission (the Commission) that;
(i) The Betts Group Agreement 2013 (the Betts Agreement) 1 not cover Munro and employees of Munro formerly employed by Betts Group Pty Ltd (Betts Group), who commenced employment with Munro on or after 22 December 2017 (Transferring Employees).
[2] The application was accompanied by an affidavit dated 10 September 2019 prepared Ms. Kya Besley who is the Human Resources Manager for Munro.
[3] Directions were issued by the Commission on the 26 September 2019 allowing for submissions and materials to be filed in relation to the application by; Munro, any Transferring Employees and any Unions that are party to the Betts Agreement.
[4] No submissions or materials were received from any of the Transferring Employees, while the Shop, Distributive and Allied Employees Association (the SDA) advised in correspondence to the Commission on 15 October 2019 that they did not oppose the application.
Background
[5] Ms. Besley affirmed the following in her affidavit.
[6] Munro is a leading Australian retailer and wholesaler of footwear and employs approximately 2142 employees, 1800 of whom are retail employees. Munro consists of several well know retail brands including; Cinori, Diana Ferrari, Mathers, Mollini, Mountfords, Wanted and Williams. Munro’s retail employees are with, the exception of the Transferring Employees, covered by the General Retail Industry Award 2010 (the Award) 2
[7] Betts Group is an Australian Retailer that also specialises in footwear and currently has 70 locations across Australia. Munro entered into an agreement with Betts Group on 22 December 2017 for Munro to acquire and commence operating 22 retail stores (the Stores) previously operated by Betts Group.
[8] From 1 March 2018 Munro;
(i) Commenced as lessee at each of the properties on which the Stores operated;
(ii) Commenced to operate the Stores as going concerns; and
(iii) Commenced to own the plant and equipment in the Stores formerly owned by Betts Group.
[9] Munro made offers of employment to all employees of Betts Group employed in the Stores at that time. The offers provided for the same status of employment with Munro as Betts Group had provided, that is casual employees of Betts Group were offered casual roles with Munro and all part-time and full-time employees of Betts Group were offered respectively part-time and full-time roles with Munro. The offers of employment recognised prior service with Betts Group for the purpose of all service-related entitlements under the Act. Munro made 109 employment offers to Betts Group employees of which 95 staff commenced employment with Munro.
[10] The Transferring Employees were at the time of their transfer of employment to Munro covered by the Betts Agreement which continued to apply to them following their transfer to Munro.
[11] As at 10 September 2019 there were 33 Transferring Employees still employed by Munro. Of those 33 employees, 13 are casual retail assistants, 2 are part-time retail assistants, 5 are part-time Assistant Store Managers, 1 is a part-time Store Manager, 1 is a full-time Assistant Store Manager and 11 are full-time Store Managers.
Statutory Provisions
[12] Section 318 of the Act sets out the circumstances in which an order may be made by the Commission in respect of a new employer and transferring employees:
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
[13] Before turning to consider the orders sought by Munro it is necessary to establish that the Betts Agreement is a transferrable instrument and would cover Munro and the Transferring Employees, subject to any order of the Commission.
Transferable Instrument
[14] I am satisfied that the Betts Agreement is a transferrable instrument pursuant to s 312(1)(a) of the Act. I am further satisfied that;
(i) The employment of the Transferring Employees with Betts Group has terminated (s. 311(1)(a));
(ii) Within 3 months of termination of employment, the Transferring Employees became employed by Munro (s. 311(1)(b));
(iii) The work of the Transferring Employees performed for Munro is substantially the same or similar to the work formerly performed by the Transferring Employees for the Betts Group (s. 311(1)(c)); and
(iv) There is a connection between Betts Group and Munro as described in s 311(3), in that Munro has the beneficial use of some or all of the assets formerly held by Betts Group and which relates to or are used in connection with the transferring work (s. 311(1)(d)).
[15] As a consequence of the above I am satisfied that the Betts Agreement will cover Munro and the Transferring Employees, subject to any order the Commission may make. It is also the case that Munro, the new employer, has made the application, thus satisfying the requirements of s. 318(2) of the Act.
[16] Having been satisfied as to the necessary jurisdictional requirements of ss. 311 and 312 being present, I will now turn to each of the matters that I am required to consider under s. 318(3).
The views of the new employer
[17] Munro seeks that the Betts Agreement not operate in its business in respect of the Transferring Employees and that the Award covers those employees. This weighs in favour of the granting of the orders sought by Munro.
The views of the employees who would be affected by the order
[18] No Transferring Employees responded to the Directions issued by the Commission. The SDA advised that it did not object to the application. In the circumstances I regard the views of the affected employees as a neutral consideration.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
[19] The Applicant provided a detailed comparison of terms and conditions under the Betts Agreement versus the Award. The Award provides for equivalent or more favourable terms and conditions in respect of the following provisions;
• Base rates of pay are the same;
• Additional hours for part-time employees requires written agreement under the Award;
• Casual loading;
• Saturday and Sunday penalty rates;
• Penalty rates for evening work for Monday-Friday;
• Junior rates;
• Various allowances including; meal allowance, higher duties allowance, 1st aid allowance and motor vehicle allowance.
• Maximum daily and weekly hours;
• Maximum weekly hours for casual employees;
• Overtime penalties for casual employees;
• Annual leave loading;
• Choice of superannuation fund;
• Cashing out of annual leave; and
• Casual conversion.
[20] According to the Applicant’s summary of conditions the Betts Agreement is more favourable than the Award in several respects including the following;
• Full-time employee daily minimum engagement;
• Overtime penalty payments;
• Family leave for emergencies;
• Public holiday penalty payments; and
• Accident pay.
[21] While there are a small number of terms and conditions under the Betts Agreement that are more beneficial than the Award, they are in my view more than offset by the range of conditions under the Award that are more favourable. Importantly, base rates of pay under the Award are the same as base rates of pay under the Betts Agreement. I am satisfied in the circumstances that Transferring Employees will not be disadvantaged by the orders sought in relation to their terms and conditions of employment. The absence of any demonstrable disadvantage weighs in favour of the granting of the orders sought.
If the order relates to an enterprise agreement—the nominal expiry date of the agreement
[22] The nominal expiry date of the Betts Agreement is 30 June 2015. Having regard to the fact that the Betts Agreement reached its nominal expiry date over 4 years ago this factor does not weigh against the application for the orders sought. It is therefore a neutral consideration.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
[23] The transferable instrument would require Munro to maintain divergent terms and conditions of employment in respect of employees performing similar duties and functions to the balance of the Munro workforce which according to the Applicant has been a source of concern to Transferring employees. I am satisfied that it would also create operational inefficiencies arising from the requirement to administer the terms of an enterprise agreement covering the 33 Transferring Employees out of a total retail workforce of approximately 1800 employees. This weighs in favour of granting the orders sought.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
[24] Munro submits that it would continue to suffer significant economic disadvantage and specifically payroll administrative difficulties arising from the maintenance of and compliance with both the Betts Agreement and the Award covering employees performing the same functions. I agree. This weighs in favour of granting the orders sought.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
[25] The Award already covers Munro and most of its employees within the scope of that Award. While the terms of the Award on balance may be comparable or better than the Betts Agreement, there are differences that would be problematic if both the Betts Agreement and Award continued to apply to the same class of employees. To that extent there is a lack of synergy between the transferable instrument and the Award which covers Munro and its employees. This weighs in favour of the orders sought by Munro.
The public interest
[26] I am satisfied that it is not contrary to the public interest to grant the orders sought by Munro. This weighs in favour of granting the orders sought.
Conclusion
[27] Having considered the application and supporting material and taking into account and weighing each of the requirements in s. 318(3) of the Act, I am satisfied that the orders sought should be granted.
[28] An Order PR713286 will be separately issued with this Decision and will take effect on 16 October 2019.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
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