Oji Cardboard Carton Solutions Pty Limited
[2018] FWC 6724
•2 NOVEMBER 2018
| [2018] FWC 6724 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 – Application for an order relating to instruments covering new employer and transferring employees
s. 319 - Application for an order relating to instruments covering new employer and non-transferring employees
Oji Cardboard Carton Solutions Pty Limited
(AG2018/4935)
| DEPUTY PRESIDENT DEAN | SYDNEY, 2 NOVEMBER 2018 |
Application for an order relating to instruments covering new employer, transferring and non-transferring employees.
On 3 September 2018 Oji Cardboard Carton Solutions Pty Limited (OCCS) made an application for an order pursuant to s.318 and s.319 of the Fair Work Act 2009 (the Act).
The application was made in the context of a transfer of business between OCCS and its associated entity, Cardboard Cartons Pty Ltd (Cardboard Cartons). The transfer of business, within the meaning of s.311(1) of the Act, arose when employees who performed work for Cardboard Cartons (the transferring employees) accepted offers of employment with OCCS. In accordance with s.313(1) of the Act, the Cardboard Cartons Collective Agreement 2007 (the Agreement), being a transferable instrument by virtue of s.312(1)(a) of the Act, covers OCCS (new employer) and the transferring employees. OCCS also has one non-transferring employee, Mr Brendan Gray, who was employed to perform work previously performed by a transferring employee. By virtue of s.314 of the Act, the Agreement also covers Mr Gray.
OCCS seeks an order in the following terms:
1. Pursuant to section 318(1)(a) of the Act, that the Cardboard Cartons Collective Agreement (2007) (CCCA) will not cover:
a. Oji Cardboard Carton Solutions Pty Limited (OCCS);
b. employees of OCCS to whom the CCCA applies due to the operation of section 313(1) of the Act;
2. Pursuant to section 319(1)(a) of the Act, that the CCCA will not cover:
a. current employees of OCCS to whom the CCCA applies due to the operation of section 314(1) of the Act; and
b. future employees of OCCS to whom the CCCA will apply due to the operation of section 314(1) of the Act.
Sections 318 and 319 of the Act set out the circumstances in which orders may be made relating to instruments covering new employer, transferring and non-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.”
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.
The application is supported by statements from Ms Kaycie De Celis, Human Resources Manager of OCCS, Ms Belinda Brunton, Payroll and Human Resources Co-ordinator of OCCS, and Mr Gray, the non-transferring employee.
The evidence of Ms De Celis and Ms Brunton, which is not contested, dealt with each of the matters in s.318(3) and s.319(3) that the Commission must take into account when considering to issue the order sought in the present application. On their evidence, the transferring employees were widely consulted about the effect of this application and none of them raised any objections. OCCS has provided written forms signed by 15 out of the 17 affected employees which indicated their support for the issuing of the order. Further, Mr Gray affirmed in his statement that it is his desire not to be covered by the Agreement.
If the order were granted, the transferring employees and the current and future non-transferring employee would be covered by the Clerks Private Sector Award 2010, Graphic Arts, Printing and Publishing Award 2010, Commercial Sales Award 2010 or by their employment contracts. OCCS submits that this would result in no reduction in the base rate of pay of any affected employees, and would in fact allow them greater entitlement to overtime pay and other allowances.
It was submitted by OCCS that the granting of the order would have a positive impact and provide consistency, as the Agreement has passed its nominal expiry date and pre-dates both the Act and the system of Modern Awards.
No opposition to the application has been received from or on behalf of any OCCS employees.
Having considered the material before me, I am satisfied that all the requirements of s.318 and s.319 of the Act have been met and an Order in the terms sought should be made.
An Order will be issued with this decision.
DEPUTY PRESIDENT
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