Palmer Leisure Australia Pty Ltd

[2015] FWC 6371

[2015] FWC 6371

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees

Palmer Leisure Australia Pty Ltd
(AG2015/4749)

Amusement, events and recreation industry
COMMISSIONER SPENCER	BRISBANE, 15 SEPTEMBER 2015

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

Background

[1] This application was filed by Palmer Leisure Australia Pty Ltd (the Applicant), and concerns an application pursuant to s.318(1) of the Fair Work Act 2009 (the Act) for orders relating to an instrument covering a new employer (the Applicant) and transferring employees. The Applicant, as the new employer, has standing to make the application pursuant to s.318(2)(a).

[2] The Applicant purchased a golf course from Juniper Property Holdings No 17 Pty Ltd (Juniper) on 3 December 2012. Two employees of Juniper (transferring employees) continued their employment at the golf course and were employed by the Applicant from 14 February 2013.

[3] In accordance with s.311(1) of the Act, a transfer of business has occurred. The transferring employees were covered by the Sea Temple Resort and Spa Enterprise Agreement 2009 (the Agreement), being an enterprise agreement approved by a Decision of Fair Work Commission (FWC) on 2 December 2009. 1 An enterprise agreement is a transferable instrument by operation of the Act s.312(1)(a). Section 313(1) provides that a transferrable instrument that covered the old employer and the transferring employees immediately before the termination of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant (the new employer) would be covered by the Agreement in relation to the transferring employees, however s.313(3) operates subject to s.318(1). Pursuant to s.318(1), the new employer (the Applicant) has sought that the transferable instrument no longer cover the new (transferring) employees.

[4] The Applicant applies for an Order pursuant to s.318(1)(a) to displace the operation of s.313(1) in relation to the Agreement.The transferring employees will then be covered by the applicable Modern Award, the Amusement, Events and Recreation Award 2010 (the Award).

Relevant legislation

[5] Section 313 provides:

313 Transferring employees and new employer covered by transferable instrument

(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:

(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and
....

(3) This section has effect subject to any FWC order under subsection 318(1).

[6] Section 318 provides:

318 Orders relating to instruments covering new employer and transferring employees

Orders that FWC may make

(1) 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) 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 FWC must take into account

(3) In deciding whether to make the order, 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.

Consideration

[7] The Applicant was requested to provide materials in support of the application particularly referencing those matters that the Commission must take into account by virtue of s.318(3). Ms Laura Delaney, HR & Development Advisor, of the Applicant, filed material and submissions in support of the application, a statutory declaration signed by the General Manager of the golf course and statutory declarations from the two transferring employees.

[8] The Australian Workers’ Union, an organisation covered by the Agreement, provided submissions in response to the application and the Applicant’s material, indicating that it did not oppose the application.

[9] The material is considered below in relation to each of the matters in s.318(3).

Section 318(3)(a)(i): the views of the new employer

[10] The Applicant, as the new employer, seeks that the transferable instrument (the Agreement) not cover or apply to it.

Section 318(3)(a)(ii): the views of the employees who would be affected by the order

[11] The Applicant provided statements of all of the transferring employees. The statements indicated that the transferring employees are agreeable to the Order being issued.

Section 318(3)(b): any disadvantage to the employees

[12] The Applicant submitted that the transferring employees would not be disadvantaged by the Order. The submissions of the Applicant stated that the key difference between the Agreement and the Award was that under the Agreement, employees are paid an all-inclusive base hourly rate (including compensation for penalty and overtime rates), whereas the employees would be paid all relevant penalties under the Award. The Applicant also stated that the base hourly rate under the Agreement would be maintained for each employee. The AWU submitted that the employees will be better off with respect to their take home pay, due to being paid penalty rates on top of their current rate of pay.

Section 318(3)(c): the nominal expiry date of the Agreement

[13] The nominal expiry date of the Agreement is 2 December 2013.

Section 318(3)(d): any negative impact on productivity on the employer’s workplace and section 318(3)(e): any significant economic disadvantage to the employer

[14] The Applicant submitted that the Agreement did not impose significant economic or productivity disadvantage to the Applicant, however, it was submitted that the Order would allow the business to operate with consistency in employment conditions for all employees employed by the Applicant.

Section 318(3)(f): business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[15] The Applicant submitted, as outlined above, that the application of the Award instead of the Agreement would allow the business to operate with consistency.

Section 318(3)(g): the public interest

[16] The Applicant submitted that there was nothing contrary to the public interest in the termination of the Agreement, as the two transferring employees will be no worse off under the Award as compared to the Agreement.

CONCLUSION

[17] On balance, taking into account each of the matters stipulated at s.318(3), I am satisfied that the Order sought should be granted.

[18] A separate Order will issue [PR571928]. The Order will come into operation, in accordance with s.318(4).

COMMISSIONER

 1   Application by Mirvac Hotels Pty Ltd T/A Sea Temple Resort & Spa Palm Cove, Triton Street, Palm Cove Queensland and the Sea Temple Resort & Spa Port Douglas, Mitre Street, Port Douglas Queensland[2009] FWAA 1371.

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<Price code C, AE872471  PR571922 >