Programmed Industrial Maintenance Pty Ltd

[2017] FWC 2671

[2017] FWC 2671

FAIR WORK COMMISSION

DECISION

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

Programmed Industrial Maintenance Pty Ltd
(AG2017/1613)

Building, metal and civil construction industries
DEPUTY PRESIDENT GOOLEY	MELBOURNE, 17 MAY 2017

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

Introduction

[1] Programmed Industrial Maintenance Pty Ltd has applied under s.318 of the Fair Work Act 2009 (the Act) for an order that the Programmed Industrial Maintenance Metals Labour Hire Agreement 2016 – 2019 (“the PIM Agreement”) that covers Programmed Industrial Maintenance Pty Ltd (PIM) (the “new employer”) will cover those employees formerly employed by Catalyst Recruitment Systems Pty Ltd (CRS) performing maintenance activities at BlueScope’s Westernport site in Victoria on behalf of the new employer (the “transferring employees”).

[2] There is no dispute that the employees are transferring employees. PIM and CRS are associated entities for the purposes of the Corporations Act 2001.

[3] PIM is a national system employer for the purposes of the Act and has standing to bring this application under s.318(2)(a) of the Act as the new employer of the transferring employees.

Background

[4] PIM and CRS are wholly owned subsidiaries of Programmed Maintenance Services Limited (PMS) group of companies. In or about October 2015, PMS acquired Skilled Group Limited (SGL). At the time of the acquisition, CRS was a part of the SLG group of companies.

[5] Since the acquisition of SGL, PMS has undertaken a corporate restructure of its business to streamline and consolidate its operations. As part of the restructure CRS activities at the Westernport site are now performed by PIM and CRS employees became employed by PIM. The transferring employees accepted employment by PIM on or about 27 February 2017 on the same terms and conditions they were receiving with CRS. PIM recognised service periods, accruals and commencement date of the transferring employees with CRS at the time of the transition.

[6] The Catalyst Services Enterprise Agreement 2014 (“transferable instrument”) became a transferrable instrument applying to employees by reason of a transfer of business from CRS to PIM.

Relevant legislation

[7] 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. Division 3 of Part 2-8 provides the Commission with the power to make orders that an enterprise agreement that would otherwise apply to transferring employees because there was a transfer of business, not apply.

[8] The making of an order is discretionary and in making any order that an enterprise agreement that would otherwise apply to transferring employees the Commission must take into account the following:

(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.

Transfer of the Catalyst Services Enterprise Agreement 2014

[9] PIM submit that new employees (“non-transferring employees”) engaged to perform identical work to the transferring employees will not be covered under the transferable instrument and will be covered by the PIM Agreement. As a consequence there will be two groups of employees performing the same work covered by two instruments. The Applicant therefore seeks an order that the PIM Agreement covers and applies to transferring employees

[10] PIM submit that the PIM Agreement is the appropriate instrument to apply to the transferring employees on the basis that the terms and conditions of employment enjoyed by the transferring employees are identical to those prescribed in the PIM agreement.

[11] PIM submit that following consultation with PIM management, employees of PIM performing the transferring work at the Westernport Site (including the transferring employees) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and the Australian Workers’ Union (AWU) supported the application. The AMWU advised my chambers on 12 May 2017 that it had no objection to the application. At my request PIM confirmed that none of the transferring employees are members of, or eligible to be members of, the AWU and that they are not a party to the transferring instrument. The AMWU advised my chambers that it agreed with this position.

[12] PIM submit that no employee would be disadvantaged by the orders sought as the PIM Agreement reflects the actual terms and conditions presently enjoyed by the transferring employees.

[13] The PIM Agreement has a nominal expiry date of 30 June 2019. The transferable instrument has a nominal expiry date of 24 December 2018.

[14] PIM submit that if the transferring instrument continues to apply to transferring employees this may have a negative effect on productivity by creating two groups of employees with each group requiring its own administrative and payroll arrangements. Further, that the Order may improve productivity with a single set of minimum terms and conditions applying to employees.

[15] Further, PIM submit that it would not incur any material significant economic disadvantage as a result of the transferrable instrument covering PIM and it may improve due to savings on costs associated with recruitment and payroll.

[16] PIM submit that no other instruments or employment arrangements within PIM have any degree of synergy with the transferable instrument and that there is a degree of business synergy between the transferable instrument and the PIM Agreement to the extent that both instruments are capable of covering the transferring work.

Conclusion

[17] I am satisfied that the Catalyst Services Enterprise Agreement 2014is a transferable instrument.

[18] I have had regard to the views of the employees and the AMWU who support the making of the order. I accept the submissions of PIM that the employees would not be disadvantaged by the making of the order. I further accept the submissions that requiring the PIM Agreement to apply to PIM would not impose an economic disadvantage. I further accept the submissions of PIM that there is a degree of synergy with the transferable instrument and the PIM Agreement and that it would not be contrary to the public interest to grant the Order.

[19] For the reasons above, taking into account each of the matters set out in section 318(3) of the Act, I am satisfied that the order as sought should be granted.

[20] An Order [PR592942] will be issued concurrently with this decision.

DEPUTY PRESIDENT

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<Price code A, AE412026  PR592941 >