Ormeau Supermarket Pty Ltd

[2015] FWC 4117

[2015] FWC 4117

FAIR WORK COMMISSION

DECISION

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

Ormeau Supermarket Pty Ltd
(AG2015/2896)

Retail industry
COMMISSIONER SPENCER	BRISBANE, 18 JUNE 2015

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

[1] Ormeau Supermarket 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 Drakes Supermarkets Retail 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 has occurred. The Applicant purchased the business of Ormeau Supa IGA from Dramet Pty Ltd. It is anticipated that within three months, employees will become employed by Ormeau Supermarket Pty Ltd (transferring employees) who were previously employed by Dramet Pty Ltd. These transferring employees will be covered by the Drakes Supermarkets Retail Agreement 2012 (the Agreement).

[3] The Applicant intends to employee new employees (non-transferring employees) and seeks orders that all employees are covered by one industrial instrument, the Agreement. Currently, new (non-transferring) employees are covered by the General Retail Industry 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 submitted that they are of the view that the Commission should make the orders sought as non transferring employees will be better off under the Agreement.

[6] The Applicant further submitted that it wants all its retail employees, whether transferring or non-transferring employees, to be covered by the same employment terms and conditions in relation to the same work.

[7] The Applicant submitted that as at the date of this application, they have not employed non-transferring employees. It is therefore not able to present the views of the employees who would be affected by the order.

[8] Further, the Applicant contended that non-transferring employees would be covered by the Award, which provides for less favorable terms and conditions of employment than the terms and conditions of the Agreement. The Applicant further submitted that it does not anticipate non-transferring employees to object to the Agreement applying to their employment given its terms and conditions would be more favorable to them on an overall basis.

[9] The Applicant submitted that non-transferring employees will not be disadvantaged by the making of the order in relation to their terms and conditions of employment because the Agreement contains terms and conditions of employment that are more favorable to employees, on an overall basis, when compared to the terms and conditions of the Award.

[10] The Agreement has a nominally expiry date of 1 September 2016.

[11] The Applicant contended that the Agreement would not have a negative impact on their productivity and that on the contrary, the Applicant’s payroll system would not operate effectively if it had to apply a different industrial instrument to the non-transferring employees. The Applicant further contended that this would give rise to operation and administrative difficulties and inefficiencies.

[12] The Applicant submitted that it would not incur significant economic disadvantage if the Agreement covered it.

[13] The Applicant stated that there is little business synergy between the Agreement and the Award as the instruments provide for different minimum employment terms and conditions including wages, allowances, classification structure and rostering. The Applicant further submitted that ensuring that transferring and non-transferring employees are covered by the same industrial instrument will achieve business synergy within the business of the Applicant.

[14] The Applicant submitted that there is no harm to the public interest if the order is made.

[15] Mr Chris Gazenbeek, Queensland Branch Secretary of the Shop, Distributive and Allied Employees Association (SDA) provided correspondence to the Commission declaring that the SDA does not oppose the application. Similarly, Mr Graham Smith, Federal Secretary of The Australasian Meat Industry Employees Union (AMIEU) provided correspondence to the Commission declaring that the AMIEU supports the application.

Consideration

[16] I have taken into account the material provided by the Applicant in support of the application and the matters listed in s.319(3) of the Act. I note that the SDA and the AMIEU do not oppose the application. I am satisfied the order should be issued.

[17] The order, PR568483, will issue with this decision and take effect from 18 June 2015.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<Price code A, AE898874  PR568482 >