PJL Equipment Pty Ltd

[2013] FWC 864

[2013] FWC 864

FAIR WORK COMMISSION

DECISION

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

PJL Equipment Pty Ltd
(AG2013/4463)

COMMISSIONER BULL SYDNEY, 18 FEBRUARY 2013

Application in relation to a transfer of business - transferrable instrument - application that the transferrable instrument not cover transferring employees.

[1] This decision concerns an application by PJL Equipment Pty Ltd (the Applicant) for an Order under s.318(1) of the Fair Work Act 2009 (the Act) which relates to instruments covering a new employer and transferring employees in the context of a transfer of business.

Background

[2] The Applicant submits that on 1 July 2012, it acquired part of the business of Prevision Pty Ltd (Prevision). As a result of the acquisition, the Applicant employed 10 Prevision employees. Nine of those employees (the transferring employees) remain employed by the Applicant at the time this application was lodged with the Commission on 16 January 2013.

[3] The transferring employees were covered by the Prevision Pty Ltd Employee Collective Agreement 2009 (AC325185) (Prevision Agreement). The Prevision Agreement is an employee collective agreement made under s.327 of the Workplace Relations Act 1996 (WR Act).

[4] Employee collective agreements made under the WR Act are transitional instruments pursuant to Item 3, Part 2, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendents) Act 2009 (FW Transitional Act). Pursuant to Item 8, Part 3, Division 1, Schedule 11 of the FW Transitional Act a transitional instrument is a transferable instrument as defined by s.312(1) of the Act. Accordingly, the Prevision Agreement, which is a transitional instrument, is a transferable instrument for the purposes of the Act.

[5] Pursuant to s.313(1)(b) of the Act the Prevision Agreement currently covers the Applicant and the transferring employees. The Prevision Agreement has a nominal expiry date of 30 June 2014.

[6] The Applicant and its employees, other than the transferring employees, that are engaged in the same scope of work are covered by the PJL Equipment Pty Ltd Enterprise Agreement 2010 - 2014 (AE878304) (PJL Agreement).

[7] The Applicant seeks that the PJL Agreement cover the transferring employees and that the Prevision Agreement not cover the Applicant and the transferring employees.

The relevant legislation

[8] Part 2-8 of the Act describes when a transfer of business occurs and provides for the transfer of enterprise agreements, certain modern awards and certain other instruments if there is a transfer of business from one employer to another employer.

[9] Sections 317 and 318 of the Act provide that the Commission may order that a transferable instrument not cover the new employer and transferring employees.

[10] Pursuant to s.318(3) of the Act, in considering whether the order should be made the Commission must take into account the following matters:

318 Orders relating to instruments covering new employer and transferring employees

...

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

Applicant’s submissions

[11] The Applicant submits that the proposed orders should be made as the Prevision Agreement does not align with the terms and conditions in the PJL Agreement which applies to other employees of the Applicant doing the same job as the transferring employees.

[12] The Applicant submits that the Prevision Agreement does not align with its operations, and is adversely affecting productivity through the additional administrative burden.

[13] The Applicant further submits that the PJL Agreement provides for better terms and conditions for employees than the Prevision Agreement.

[14] In support of its Application, the Applicant provided two statutory declarations made by Mr Phil Wilkin, General Manager, dated 24 December 2012 and 11 January 2013. In Mr Wilkin’s first declaration dated 24 December 2012, Mr Wilkin states that he met with all of the transferring employees on 13 and 14 November 2012 to discuss a proposal to move transferring employees from the Prevision Agreement to the PJL Agreement.

[15] During the meetings Mr Wilkin explained to the transferring employees that the Applicant had utilised a third party to establish the differences between the two agreements. Each transferring employee was given a copy of the Prevision Agreement with the differences highlighted and a copy of the PJL Agreement. A copy of both these documents was provided to the Commission.

[16] Each transferring employee was asked to review both agreements and respond to Mr Wilkin after one week.

[17] Mr Wilkin provided a second statement to the Commission, dated 11 January 2013, wherein he states that in addition to the documents provided to the transferring employees at the meetings on 13 and 14 November 2012, he also gave each employee a blank statutory declaration and asked each employee to sign it after they had reviewed the documents and if they agreed to the PJL Agreement applying to their employment in lieu of the Prevision Agreement.

[18] Following the meetings, Mr Wilkin received completed statutory declarations from all nine transferring employees confirming that they agreed with the PJL Agreement applying to their employment. A copy of each of the statutory declarations was provided to the Commission.

Conclusion

[19] I am satisfied that the Prevision Agreement is a transferable instrument as described in s.312(1)(a) of the Act and the circumstances described are a transfer of business within s.311 of the Act.

[20] I have considered the all the factors required to be taken into account. I am of the view that it is appropriate and not contrary to the public interest to make orders in relation to the application of the PJL Agreement to the transferring employees. I have given significant weight to the fact that Mr Wilkin has discussed the application with the transferring employees and that each of the transferring employees have provided a statutory declaration confirming that they agree with the PJL Agreement applying to their employment.

[21] For the reasons set out above an Order [PR533880] will issue that the Prevision Agreement will not cover the transferring employees during any period of their employment with the Applicant and the PJL Agreement will apply.

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