PP&C Pty Ltd T/A Papas Painting Pty Ltd

[2017] FWCA 7043

[2017] FWCA 7043

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.320 - Application to vary a transferable instrument - agreement

PP&C Pty Ltd T/A Papas Painting Pty Ltd
(AG2017/5204)

PAPAS PAINTING CONTRACTORS PTY LTD AND EMPLOYEES ENTERPRISE AGREEMENT 2016-2020

Australian Capital Territory
DEPUTY PRESIDENT KOVACIC	CANBERRA, 22 DECEMBER 2017

Application to vary a transferable instrument.

[1] An application has been made by PP&C Pty Ltd T/A Papas Painting Pty Ltd (Papas Painting – the Applicant) to the Fair Work Commission (the Commission), pursuant to s.320 of the Fair Work Act 2009 (the Act), to vary the Papas Painting Contractors Pty Ltd and Employees Enterprise Agreement 2016-2020 (the transferable instrument).

[2] The Agreement is a single enterprise agreement with a nominal expiry date of 13 November 2020.

[3] The matter was heard on 5 December 2017 with Mr Cameron Spence and Mr Hamish Harrington of the Master Builders Association of the ACT appearing on behalf of the Applicant together with Mrs Vicky Papas and Mr Paul Papas from Papas Painting.

[4] The application arises in circumstances where employees engaged by Papas Painting Contractors Pty Ltd were transferred to the new employer PP&C Pty Ltd as a result of a business restructure on 30 June 2017. The application seeks that the Agreement be varied to replace the reference to the previous company name, i.e. Papas Painting Contractors Pty Ltd, with PP&C Pty Ltd.

[5] Section 320 of the Act provides as follows:

“320 Variation of transferable instruments

Application of this section

(1) This section applies in relation to a transferable instrument that covers, or is likely to cover, the new employer because of a provision of this Part.

Power to vary transferable instrument

(2) The FWC may vary the transferable instrument:

(a) to remove terms that the FWC is satisfied are not, or will not be, capable of meaningful operation because of the transfer of business to the new employer; or

(b) to remove an ambiguity or uncertainty about how a term of the instrument operates if:

(i) the ambiguity or uncertainty has arisen, or will arise, because of the transfer of business to the new employer; and

(ii) the FWC is satisfied that the variation will remove the ambiguity or uncertainty; or

(c) to enable the transferable instrument to operate in a way that is better aligned to the working arrangements of the new employer’s enterprise.

Who may apply for a variation

(3) The FWC may make the variation only on application by:

(a) a person who is, or is likely to be, covered by the transferable instrument; or

(b) if the application is to vary a named employer award—an employee organisation that is entitled to represent the industrial interests of an employee who is, or is likely to be, covered by the named employer award.

Matters that the FWC must take into account

(4) In deciding whether to make the variation, 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 transferable instrument as varied;

(b) whether any employees would be disadvantaged by the transferable instrument as varied in relation to their terms and conditions of employment;

(c) if the transferable instrument is an enterprise agreement—the nominal expiry date of the agreement;

(d) whether the transferable instrument, without the variation, 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, without the variation;

(f) the degree of business synergy between the transferable instrument, without the variation, and any workplace instrument that already covers the new employer;

(g) the public interest.

Restriction on when variation may come into operation

(5) A variation of a transferable instrument under subsection (2) must not come into operation before the later of the following:

(a) the time when the transferable instrument starts to cover the new employer;

(b) the day on which the variation is made.”

(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 transferable instrument as varied;

[6] The Applicant as both the new employer and previous employer supports the proposed variations to the transferrable instrument and has discussed the proposed variations with employees, adding that employees raised no concerns.

(b) whether any employees would be disadvantaged by the transferable instrument as varied in relation to their terms and conditions of employment;

[7] At the hearing Mr Spence submitted that the variations sought were administrative in nature and noted that all employees were currently working under the Agreement. Mr Spence further submitted that making the variations sought would not result in any changes to employees’ terms and conditions of employment, nor would the changes disadvantage employees.

(c) if the transferable instrument is an enterprise agreement—the nominal expiry date of the agreement;

[8] As previously noted, the nominal expiry date of the transferable instrument is 13 November 2020.

[9] The Agreement having nearly three years to operate until the nominal expiry date weighs in favour of granting the variation sought. If the transferable instrument had only a limited life until its expiry date then this would weigh against the variation sought and support the employer taking steps to negotiate a new enterprise agreement with its employees.

(d) whether the transferable instrument, without the variation, 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, without the variation;

[10] The Applicant submits that the transferring instrument, without the proposed variations, would have a negative impact on the business of the Applicant. In its Form F41 the Applicant stated that not making the order sought would result in uncertainty for new employees in terms of their terms and conditions of employment. Further, as the new employees would be covered by the relevant modern award, the Applicant would need to administer two sets of terms and conditions with the consequent costs and added additional administrative workload and employees doing the same work would be employed on different terms and conditions.

[11] At the hearing it was submitted that not changing of name of the transferable instrument would also negatively impact the Applicant’s ability to demonstrate compliance with the relevant industrial instrument when tendering for work given the different business name cited in the Agreement.

(f) the degree of business synergy between the transferable instrument, without the variation, and any workplace instrument that already covers the new employer;

[12] The Applicant did not point to any issues in respect of this consideration other than reiterating the ambiguity created by the difference between the company’s current name and the company name referred to in the Agreement and the inefficiency associated with administering two sets of terms and conditions of employment.

(g) the public interest.

[13] There is no evidence that the public interest is agitated in this matter.

Conclusion

[14] Taking into account each of the matters set out in s.320(4) of the Act and the administrative nature of the variations proposed, I am satisfied that it is appropriate to vary the transferrable instrument as sought and in accordance with s.320(2)(c) of the Act.

[15] An Order to that effect will be issued concurrently with this decision.

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