Noosa Pacific Hotel Pty Ltd

[2015] FWC 1087

[2015] FWC 1087

FAIR WORK COMMISSION

DECISION

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

Noosa Pacific Hotel Pty Ltd
(AG2015/1804)

Hospitality industry
COMMISSIONER SPENCER	BRISBANE, 16 FEBRUARY 2015

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

[1] Noosa Pacific Hotel 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 Sheraton Noosa Resort & Spa Enterprise Agreement 2012 (the Agreement) cover non-transferring employees of the Applicant who perform, or are likely to perform, transferring work.

[2] In accordance with s.311(1) of the Act, a transfer of business is to occur. The Applicant has entered into an agreement to purchase the business trading as Sheraton Noosa Resort and Spa from Noosa Venture 1 Pty Ltd. The sale is proposed to be completed on 27 February 2015. All employees currently employed by Noosa Venture 1 Pty Ltd have been offered employment with the Applicant following completion of the sale. These transferring employees are covered by the Agreement.

[3] Mr Peter Downie, in house legal counsel for the Applicant, stated that the Applicant is likely to employ approximately 60 new employees (non-transferring employees) per year. The Applicant seeks an Order that these non-transferring employees are covered by the Agreement. Otherwise, new (non-transferring) employees would be covered by the Hospitality Industry (General) Award 2010 (The Award).

Relevant legislation

[4] 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’s submissions

[5] The Applicant filed submissions and addressed the criteria in relation to s.319(3) of the Act. An affidavit of Mr Peter Downie, in house legal counsel for the Applicant, was also filed in support of the application.

[6] The Applicant submitted that the Order sought would avoid a situation where some employees, being covered by the Agreement, would receive better entitlements than new employees (non-transferring employees) in the same workplace, being covered by a different industrial instrument (the Award) with lesser entitlements. Mr Downie stated that having employees perform the same work side-by side- under different industrial instruments was “unsound and may lead to disharmony and resentment between co-workers”.

[7] Further, the Applicant submitted that the Order sought would avoid the administrative and human resource and payroll challenges of applying two different industrial instruments to employees, such as having separate payroll systems for transferring employees and non-transferring employees.

[8] The Applicant submitted that non-transferring employees will be better off under the Agreement than the Award as some terms and conditions of employment under the Award are inferior to those under the Agreement, such as the base rate of pay for permanent employees.

[9] The Agreement has a nominal expiry date of 21 December 2015.

[10] The Applicant submitted that the Agreement would not have a negative effect on productivity, rather, if the Order was granted, it would have a positive effect on the productivity of the workplace.

[11] The Applicant submitted that they would not incur significant economic disadvantage as a result of the Agreement covering the new employer.

[12] The Applicant submitted that there is little synergy between the two instruments. It was submitted that permanent employees are employed on a salary, and the hourly salaried rate under the Agreement is higher than the hourly rate under the Award, to compensate for penalty rates under the Award. The Applicant submitted that it would be extremely inefficient to have some employees working under the rostering principles under the Agreement and others not.

[13] The Applicant submitted that the making of the Order would not disturb the public interest.

Summary of United Voice’s submissions

[14] United Voice was a bargaining representative for, and is covered by, the Agreement. United Voice submitted that, after gauging the views of employee representatives and viewing the submissions of the Applicant and the Affidavit of Peter Downie, it consents to the making of the Order in the terms sought by the Applicant.

Consideration

[15] The Commission had jurisdiction to issue an Order that the Agreement would cover non-transferring employees prior to the transfer of business occurring (s 319(2)). I have taken into account the material provided by the Applicant in support of the application, the views of United Voice and the matters listed in s.319(3) of the Act. I am satisfied the Order should be issued.

[16] An Order, PR561061, will issue with this decision and take effect in accordance with s.319(4) of the Act.

COMMISSIONER

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