Pensar Construction Group Pty Ltd

[2022] FWC 1610

[2022] FWC 1610

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

Pensar Construction Group Pty Ltd

(AG2022/1689)

Building, metal and civil construction industries
COMMISSIONER SPENCER	BRISBANE, 23 JUNE 2022

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

INTRODUCTION

1. An application pursuant to s.319 of the Fair Work Act 2009 (the Act) was made by Pensar Construction Group Pty Ltd (the Applicant/ the new employer) for an Order under s.319(1)(b), that the Pensar Pty Ltd Workplace Agreement 2018 (the Agreement/the transferable instrument) cover non-transferring employees who perform, or are likely to perform, transferring work for the Applicant.

1. In accordance with s.319(1)(b) of the Act, the Applicant sought an Order to be made to permit the transferable instrument to cover any non-transferring employees who perform, or are likely to perform, the transferring work covered by the Agreement.

1. Section 313(1) provides that a transferrable instrument that covered Pensar Pty Ltd (the old employer) and the transferring employees immediately before the transfer of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant would be covered by the Agreement in relation to the transferring employees.

1. The Applicant sought an Order that the Agreement will cover any non-transferring employees of the Applicant who perform, or are likely to perform, the transferring work, pursuant to s.319(1)(b) of the Act.

RELEVANT PROVISIONS

1. Pursuant to s.319 of the Act:

“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.”

SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE

1. The old employer is the trustee of the Pensar Trust which designs and constructs infrastructure projects (the Business).

1. The old employer is the employing entity covered by the Agreement which applies to approximately 150 employees.

1. The Business is restructuring, and the old employer intends to transfer assets (including employees) to the new employer with an intended start date of 1 July 2022.

s.319(3)(a)(i) – the views of the new employer

1. The Applicant has sought the order to allow it to engage employees on a common set of terms and conditions and within a single classification scheme, regardless of whether they are transferring or non-transferring employees.

1. The Applicant further submits that if the order sought is not made, two sets of employment conditions would apply to employees performing the same work, which would produce inequity between employees and the industrial instruments underpinning their employment, as well as complexities relating to additional payroll compliance.

1. The Applicant submits that it has historically committed to enterprise bargaining with its employees, intends to maintain contemporary industrial coverage for its workforce, and wishes to preserve the status quo of the current industrial arrangements applying to the Business.

s.319(3)(a)(ii) – the views of the new employees

1. The Applicant submits there are not presently any non-transferring employees of the Applicant who would otherwise be covered by the Agreement, and therefore their views in relation to this Application cannot be obtained.

1. However, the Employer has provided the Commission with the proposed terms of an employment agreement for the non-transferring employees. It is recognised that this may be a draft document. On the face of it, those terms may not be entirely consistent with the transferable instrument. For example, the core hours in the terms of the employment agreement are 7.00 am to 6.00 pm Monday to Friday, while clause 14(a) of the transferable instrument states the ordinary hours to be 5.00 am to 6.00 pm Monday to Friday.

1. Given the transferable instrument will be the prevailing instrument, that may rectify these matters. The Employer may consider reviewing the draft terms of the employment agreement where inconsistent with the industrial arrangements.

s.319(3)(b) – whether any employees would be disadvantaged

1. The Applicant submits that if the order is granted, employees will benefit from a number of more beneficial terms and conditions of employment prescribed by the Agreement in comparison to the awards that would otherwise apply, including the Building and Construction General On-site Award 2020, Electrical, Electronic and Communications Contracting Award 2020, and the Professional Employees Award 2020.

s.319(3)(c) – the nominal expiry date

1. The nominal expiry date of the Agreement is 2 April 2023.

s.319(3)(d) – negative impact on productivity

1. The Applicant submits that it does not expect there to be a negative impact on its productivity or the productivity of employees to be covered by the Agreement if the order is made. Instead, the Applicant submits that making the order sought would enhance productivity by avoiding difficulties arising from applying different of terms and conditions to employees that perform the same work.

1. The Applicant also submits that granting the order would promote efficiencies by streamlining terms and conditions of employment so that they apply in the same way to all employees performing work covered by the Agreement. Further, it will assist the management of employee relations by ensuring that transferring and non-transferring employees are employed on common terms and conditions, and that a consistent payroll and reporting system can be utilised by Applicant.

1. Conversely, the Applicant submits that if the order is not made, transferring and non-transferring employees would be on different terms and conditions of employment which may negatively impact team engagement and workplace productivity.

s.319(3)(e) – economic disadvantage

1. The Applicant submits that making the order would not result in any economic disadvantage.

1. Further, the Applicant submits that it would suffer economic disadvantage by having to administer three industrial instruments which would result in a material increase in administrative costs and inefficiencies in relation to the management of transferring and non-transferring employees employed on different terms and conditions.

s.319(3)(f) – degree of business synergy

1. The Applicant submits that applying the various awards is a more complex exercise than applying the Agreement, and having to apply various awards alongside the Agreement to employees performing the same work would reduce synergy within the Business.

1. The Applicant submits that granting the order will confirm a single framework of regulation that has been negotiated and approved in the context in which it has historically applied and will continue to apply.

s.319(3)(g) – public interest

1. The Applicant submits that granting the order would not be contrary to the public interest.

1. The Applicant submits that the public interest, influenced in this context by the objects of the Part of the Act in section 309, is served by facilitating arrangements that permit the maintenance of the presently approved employment conditions across the entirety of the Applicant’s business.

CONCLUSION

1. 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 am satisfied the Order should be issued.

1. The Order PR742986 will issue with this Decision and take effect in accordance with s.319(4) of the Act.

COMMISSIONER

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<AE502663  PR742987>