North Lakes Supermarket Pty Ltd & McDowall Supermarket Pty Ltd

[2015] FWC 7371

[2015] FWC 7371

FAIR WORK COMMISSION

DECISION

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

North Lakes Supermarket Pty Ltd & McDowall Supermarket Pty Ltd
(AG2015/5875; AG2015/5876)

DRAKES SUPERMARKETS RETAIL AGREEMENT 2012

Retail industry
DEPUTY PRESIDENT SAMS	SYDNEY, 18 NOVEMBER 2015

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

[1] This decision determines applications filed by McDowall Supermarket Pty Ltd (‘McDowall’) and North Lakes Supermarket Pty Ltd (‘North Lakes’) (collectively, the ‘applicants’) pursuant to s 319 of the Fair Work Act 2009 (the ‘Act’). The applicants seek orders from the Fair Work Commission (the ‘Commission’), pursuant to ss 318(1)(b) and 319(1)(b) that the Drakes Supermarkets Retail Agreement 2012 [AE898874] (the ‘Agreement’) cover transferring and non-transferring employees who perform transferring work required by the applicants. I note that the Agreement has a nominal expiry date of 1 September 2016 and that the Shop Distributive and Allied Employees’ Association (SDA) and the Australasian Meat Industry Employees’ Union (AMIEU) (collectively, the ‘Unions’) are covered by the Agreement. The relevant non-transferring employees would otherwise be covered by the General Retail Industry Award 2010 [MA000004].

The applicable legislation

[2] The following provisions of the Act are relevant to my determination of this application:

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.

…

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.

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.

[3] The applicants both provided witness statements of Ms Leanne Fraser, the Human Resources Manager of Dramet. She explained that from approximately late October 2015, employees of Dramet, which operates a number of supermarkets throughout Queensland, would become employed by McDowall and North Lakes at their respective supermarkets. There was a connection between McDowall and North Lakes on the one hand and Dramet on the other and transfers of business would occur. The transferring employees would be covered by the Agreement, but non-transferring employees, at the applicants’ supermarkets, would be covered by the Award. In the event that the orders sought were not granted, Ms Fraser submitted that there would be a negative impact on the applicants’ productivity in that the coverage of different industrial instruments would give rise to unnecessary administrative complexity, operational difficulties arising from different entitlements for different employees and would impact on staff morale. It was also said that the employees would not be disadvantaged by coverage by the Agreement, which were said to be more favourable overall.

[4] At a mention of the applications on 2 November 2015, Mr A Short, Solicitor appeared for the applicants and Mr C Buckley appeared for the AMIEU. Following some concerns raised by Mr Buckley as to drafting of undertakings proposed by the applicants, Mr Short provided revised undertaking pursuant to s 318(3)(b) of the Act, which were expressed as follows:

‘In accordance with section 318(3)(b) of the Fair Work Act 2009, each applicant undertakes that: -

a. each non-transferring employee will not be disadvantaged in respect of their overall terms and conditions of employment when their employment is covered by the Agreement.

b. the Agreement contains terms and conditions that are no less favourable on an overall basis that [sic] the terms and conditions under the Award;

c. any non-transferring employees will be paid each week the higher of their award or enterprise agreement entitlement for that week.; and

d. if there are changes to the transferring employees’ hours of work at the Supermarket, [North Lakes] and [McDowall] undertake that the transferring employees will be paid in accordance with the Agreement.’

Both of the Unions subsequently advised my Chambers that in light of these undertakings, the Unions had no objection to the Commission making the orders sought by the applicants.

[5] Having considered the materials filed by the applicants, I intend to make the orders sought. In doing so, I have taken all of the matters in ss 318(3) and 319(3) into account; in particular, the views of the applicants and the Unions. I am satisfied that there is no significant disadvantage to the employees if the orders are granted and, conversely that that there would be a negative impact on the productivity of the applicant’s workplace should the orders not be granted. For the sake of completeness, I am satisfied that granting the orders would not be contrary to the public interest. Orders giving effect to my conclusions are published contemporaneously with this decision.

DEPUTY PRESIDENT

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