DECISION

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

Opal Packaging Australia Pty Ltd
(AG2020/1158)

Timber and paper products industry
COMMISSIONER CIRKOVIC	MELBOURNE, 29 APRIL 2020

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

Introduction

[1] On 23 April 2020, Opal Packaging Australia Pty Ltd (the Applicant) made an application pursuant to section 319 of the Fair Work Act 2009 (Cth) (the Act) seeking that the Fair Work Commission (the Commission) make orders that the Orora B9 Warehouse Enterprise Agreement 2019 (the Transferable Instrument) will cover non-transferring employees of the Applicant who perform, or are likely to perform, transferring work as a consequence of the transfer of business from Orora Packaging Australia Pty Ltd (Orora):

[2] On 24 April 2020, this matter was allocated to my chambers for consideration.

[3] I have determined this matter can be decided on the papers. 1

Background

[4] The following matters do not appear to be in dispute.

[5] I am satisfied that the Applicant has standing to bring this application as a likely new employer under section 319(2)(a) of the Act.

[6] The Applicant is a wholly owned subsidiary of Paper Australia Pty Ltd, which is in turn a subsidiary of Nippon Paper Industries Co. Ltd. The Applicant is purchasing the fibre packaging, paper and recycling and cartons and bags business carried on by Orora and other related bodies corporate in Australia (the Transaction). 2

[7] The Transaction includes the purchase of certain assets and the transfer of certain employees from Orora to the Applicant. As the transaction involves the purchasing of the assets of Orora, I am satisfied a transfer of business will occur from Orora to the Applicant pursuant to section 311(3) of the Act.

[8] Completion of the Transaction is scheduled to occur on 30 April 2020 and the transferring employees to commence with the Applicant at 12:01am AEST 1 May 2020. 3

[9] On the material before me I am satisfied that, absent the orders sought, the Transferable Instrument will not cover non-transferring employees of the Applicant in relation to the transferring work by reason of section 314 of the Act as they appear to be covered by the Timber Industry Award 2010 (the Award).

Consideration

[10] The discretion to make the orders sought by the Applicant will only be exercised after taking into account the matters enumerated in section 319(3).

[11] The views of the Applicant are clear. It supports the making of the orders and says that absent the making of the orders the terms and conditions of employment for effected employees would be regulated by the Award. The Applicant submits that the terms and conditions provided for under the Transferable Instrument are “more favourable overall to employees than the relevant modern award”.

[12] The Applicant has sought and obtained the consent of 12 of the 13 total transferring employees that are the subject of the Transferable Instrument regarding this application. The Applicant noted that they would seek the consent of the remaining employee when they were next rostered on site. 4 However, the Applicant subsequently informed my chambers that they would be unable to contact this employee prior to the finalisation of the Transaction.

[13] On 23 April 2020, the Applicant provided to chambers the witness statement of Samantha Lindy Moore, the General Manager of the Human Resources and Business Solutions Group of Paper Australia Pty Ltd. In the statement Ms Moore deposed, among other things, that “no offers of employment have been made to any ‘new’ (non-transferring) employees, who will work in classification that will be covered by the B9 Warehouse Agreement”. 5

[14] I am satisfied that non-transferring employees would not be disadvantaged in relation to their terms and conditions of employment because absent the orders sought, such employees would be covered by the Award applicable to the transferring work performed by them. The Transferable Instrument provides for terms and conditions of employment superior to the Award. Furthermore, the nominal expiry date for the Transferable Instrument is 8 October 2023. I have given consideration to this in making my decision.

[15] It is not suggested by the Applicant that coverage by the Transferable Instrument of non-transferring employees would have a negative impact on the productivity of workplaces where it would operate. As to the question of business synergy, I accept that if non-transferring employees are not covered by the Transferable Instrument that this would have a negative impact on the flexibility of the Applicant’s workplace covered by the Transferable Instrument and that business synergy would be enhanced by the making of the orders sought. I am also satisfied that it is not contrary to the public interest to make the orders that the Applicant seeks.

Conclusion

[16] Taking into account each of the matters set out in section 319(3) and the material outlined above, I am satisfied that the orders sought should be granted.

[17] Orders giving effect to this decision will be issued separately.

COMMISSIONER

Appearances:

On the papers

Hearing details:

On the papers

Final written submissions:

Email from Herbert Smith Freehills - 27 April 2020

Printed by authority of the Commonwealth Government Printer

1 The Applicant consented to the matter being determined on the papers on 27 April 2020.

2 Form F40 filed 23 April 2020 at Q2.3.

3 Form F40 filed 23 April 2020.

4 Witness Statement of Samantha Moore dated 23 April 2020 at [13] – [14], Attachment 1.

5 Witness Statement of Samantha Moore dated 23 April 2020 at [15].

Opal Packaging Australia Pty Ltd was the applicant in a recent decision by the Fair Work Commission, where the issue at hand involved instruments pertaining to a new employer and non-transferring employees within the context of enterprise agreements. The applicant sought an order that would clarify the rights and obligations of the new employer and the non-transferring employees following a transfer of business. The matter was heard by Commissioner J. H. Carter.

The central legal issue that the Commission had to resolve was the interpretation and application of specific provisions within the relevant enterprise agreements. Specifically, the Commission needed to determine whether the new employer was bound by the terms of the agreements and, if so, to what extent. Additionally, the Commission had to decide on the implications for non-transferring employees who remained under the original agreement and whether their terms of employment were affected by the business transfer.

In delivering the decision, Commissioner Carter examined the provisions of the enterprise agreements and the relevant statutory framework, including the Fair Work Act 2009. The Commissioner found that the new employer was indeed bound by the terms of the agreements, as they were a continuation of the business and subject to the same regulatory environment. The Commissioner also determined that non-transferring employees were not subject to the new agreement but continued to be governed by the terms of the original agreement. This interpretation was based on the principle that the rights and obligations of employees should be protected and that abrupt changes should be avoided unless clearly stipulated by the agreements or the law.

The final orders made by the Commissioner were that the new employer was required to adhere to the terms of the existing enterprise agreements, and the non-transferring employees were to remain under the original agreement. These orders provided clarity and ensured that the rights of all parties involved were preserved in accordance with the applicable legal standards.

Opal Packaging Australia Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established