Qube Logistics (Aust) Pty Ltd
[2024] FWC 1276
•16 MAY 2024
| [2024] FWC 1276 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Qube Logistics (Aust) Pty Ltd
(AG2024/146)
| DEPUTY PRESIDENT GRAYSON | SYDNEY, 16 MAY 2024 |
Application for an order relating to instruments covering new employer and transferring employees
Qube Logistics (Aust) Pty Ltd (the Applicant) has made an application under s.318 of the Fair Work Act 2009 (Cth) (the Act). The application seeks orders from the Fair Work Commission (Commission) that:
"A.The Viterra Operations Pty Ltd - Narrabri Agreement 2022 will not cover the Applicant and the EA covered transferring employees;
B.The Qube Logistics Regional NSW Intermodal Terminal Enterprise Agreement 2023 will cover the EA covered transferring employees.”
The Commission directed the Applicant to file submissions and material in support of its application, addressing the relevant provisions of the Act, and directed that it serve the submissions and material and a copy of its application on the employees covered by the Viterra Operations Pty Ltd - Narrabri Agreement 2022 (Viterra EA or Transferable Instrument) who were transferring their employment to the Applicant (the Transferring Employees). The Applicant filed its submissions on 20 February 2024.
On 27 March 2024 and having reviewed the material filed, I issued further Directions requiring the Applicant to file evidence and submissions including further evidence and analysis supporting its submissions already filed and submissions specifically addressing s. 311 of the Act. These Directions were also complied with by the Applicant.
The application, supporting documentation and all materials filed by the Applicant in accordance with the Directions were served on the Transferring Employees. The Transferring Employees did not file any submissions in opposition to the application nor request to be heard in relation to the application. Accordingly, I determined to deal with the matter on the papers and without the need for a hearing.
The Applicant provides logistics services across Australia by rail transport and the operation of intermodal logistics hubs and rail terminals. Employees of the Applicant who are engaged at intermodal logistics hubs and rail terminals are covered by the Qube Logistics Regional Intermodal Terminal Enterprise Agreement 2023 (Qube EA).
Viterra Operations Pty Ltd (ABN 29 106 378 885) (Viterra) owned and operated the Narrabri Agri-Storage and Handling Facility located at 74 Boundary Street, Narrabri, New South Wales. The Narrabri site is an agricultural storage and handling facility that deals with the transport of containerised grain from Northern New South Wales to Port Botany.
The Applicant commenced negotiations to purchase the Narrabri site business from Viterra in or around July 2023. On 28 September 2023, the purchase of the Narrabri site was effected and ten employees of Viterra commenced employment with the Applicant. Across the group of ten employees who accepted the offer of employment with the Applicant, the Viterra Operations Pty Ltd Narrabri Agreement 2022 covered seven employees.
Legislation
Part 2-8 of Chapter 2 of the Act describes when a transfer of business occurs and s.312(1) of the Act provides for the transfer of certain instruments if there is a transfer of business from one employer to another employer.
Section 311 of the Act relevantly provides:
“311 When does a transfer of business occur
Meanings of transfer of business , old employer , new employer and transferring work
(1) There is a transfer of business from an employer (the old employer ) to another employer (the new employer ) if the following requirements are satisfied:
(a)the employment of an employee of the old employer has terminated;
(b)within 3 months after the termination, the employee becomes employed by the new employer;
(c)the work (the transferring work ) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d)there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a)the old employer or an associated entity of the old employer; and
(b)the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c)that the old employer or the associated entity of the old employer, owned or had the beneficial use of; and
(d)that relate to, or are used in connection with, the transferring work.
….”
Section 313 of the Act 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
(b)while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.
(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee’s employment with the old employer.
(3) This section has effect subject to any FWC order under subsection 318(1).”
Sections 317 and 318 of the Act relevantly provide:
“317 FWC may make orders in relation to a transfer of business
This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.
318 Orders relating to instruments covering new employer and 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 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) 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 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 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 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.”
Initial matters
Based on the material before the Commission, I am satisfied that:
(a) The employment of the Transferring Employees with Viterra was terminated (s.311(1)(a) of the Act).
(b) The Transferring Employees became employed by the Applicant within three months after the termination of their employment with Viterra (s.311(1)(b) of the Act) and are transferring employees for the purposes of s.311(2) of the Act.
(c) The work the Transferring Employees perform for the Applicant is the same or substantially the same as the work they performed for Viterra (s.311(1)(c) of the Act).
(d) There is a connection between Viterra and the Applicant as the Applicant owns or has the beneficial use of the assets that Viterra previously owned and that relate to, or are used in connection with, the transferring work (s.311(3)(a)-(d)). These include the physical assets at the Narrabri site, being seven warehouses and three grain bunkers.
(e) The Transferring Employees are transferring employees in relation to the transfer of business (s.311(2) of the Act).
(f) The Transferable Instrument covered Viterra and the Transferring Employees immediately before the termination of the Transferring Employees’ employment with Viterra.
(g) The Transferable Instrument covers the Applicant and the Transferring Employees in relation to the transferring work subject to any order of the Commission under s.318(1) of the Act (s.313 of the Act).
(h) The Applicant has standing to apply for the orders it seeks pursuant to s.318(2) of the Act.
Consideration
In deciding whether or not to make an order pursuant to s.318(1) of the Act, the Commission must take into account the matters set out in s.318(3) of the Act.
The views of the Applicant (new employer) – s.318(3)(a)(i)
The Applicant supports the orders sought. The Applicant’s stated reasons for making the application include the promotion of harmonious workplace relations on the basis that the Qube EA’s terms are more advantageous than those of the Viterra EA, as well as to maintain fairness between the Transferring Employees and the Applicant’s other employees performing substantially similar work.
The views of the Applicant weigh in favour of the making of the orders.
The views of the employees who would be affected by the order – s.318(3)(a)(ii)
There are currently seven Transferring Employees covered by the Transferable Instrument. The Applicant filed documents filled in by each of the Transferring Employees which indicates that they support the application. The Transferring Employees did not file any submissions in opposition to the application and did not request to be heard in relation to the application.
The views of the Transferring Employees weigh in favour of the making of the orders.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.318(3)(b)
The Applicant submits that the Transferring Employees would not be disadvantaged by the orders sought in relation to their terms and conditions of employment as the terms and conditions of employment set out in the Qube EA are better off overall than those in the Viterra EA. The Applicant filed comprehensive evidence with the Commission which set out the differences between the instruments, including both the financial and non-financial terms of both instruments. The Applicant submits that, having regard to the hours worked, classifications and rates of pay, the Transferring Employees will receive higher rates of take-home pay if the orders are made. The Applicant submits that to the extent that the Viterra EA contains more favourable provisions than the Qube EA, these are sufficiently offset by the advantageous conditions and rates of pay provided by the Qube EA. The Applicant submits that where terms and conditions of employment with a new employer are different to those provided by a former employer prior to the transfer of business, the Commission is to consider whether “overall, the employees would not be disadvantaged” by the making of the orders sought.[1] The Applicant referred to the higher rates of pay under the Qube EA as well as its provisions for wage increases until 2026, in comparison to the lower rates under the Viterra EA, which, having nominally expired on 14 December 2023, did not provide for any pay increases.
I am satisfied that the Transferring Employees would not be disadvantaged if the proposed order is made. The financial and non-financial terms under the Qube EA are largely superior to the equivalent terms under the Viterra EA. This factor weighs in favour of making the order.
The nominal expiry date of the agreements – s.318(3)(c)
The Viterra EA’s nominal expiry date was 14 December 2023.
The Viterra EA, being approved on 8 December 2022 for a nominal period of just over one calendar year, does not have guaranteed minimum remuneration increases. The Qube EA has prescribed pay increases effective on 1 June annually until 2026.
I consider this to weigh in favour of making the orders.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace – s.318(3)(d)
The Applicant submits that the Viterra EA negatively affects the productivity of the Applicant’s business because it requires administration of payroll and compliance with respect to two different instruments, despite the employees of the Applicant covered by the two industrial instruments working at the Narrabri site completing substantively similar work. The Applicant also submits that the rates of pay for Transferring Employees are lower than those currently employed by the Applicant and covered by the Qube EA. It is submitted that this may lead to the Transferring Employees becoming disgruntled and potentially less productive.
I accept that the existence of two industrial instruments covering employees would increase the amount of administrative work associated with paying two groups of employees at the same site, and that this would have some negative impact on the productivity of the Applicant’s workplace. I also accept, given that the Applicant’s evidence and submissions on this are uncontested, that a disparity in conditions could lead to dissatisfaction and disharmony within the workforce, causing a negative effect on productivity.
This weighs in favour of the making of the orders.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer – s.318(3)(e)
The Applicant submits that it would experience an economic disadvantage should the orders not be made, in that the operational efficiencies of having the same terms and conditions of employment applying to all employees doing the same work at the Narrabri site would be lost, as well as the disadvantage to the Applicant arising from the maintenance of two separate payrolls at the same site. The Applicant also referred to the risk that employees covered by the Viterra EA may be less likely to continue their employment with the Applicant due to the lower rates of pay than other non-transferring employees, which would result in an economic disadvantage to the Applicant. It does not submit that this economic disadvantage would be significant.
I accept that the Applicant will incur economic disadvantage as a result of having to administer multiple instruments in relation to what is a relatively small portion of its workforce and accept that there may be some risk as to the retention of the Transferring Employees. However, it cannot be established based on the material before me that any economic disadvantage would be significant.
I consider this to be a neutral consideration.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer – s.318(3)(f)
The Applicant submits that there is a lack of business synergy between the Viterra EA and the Qube EA, arising due to the differences in the pay rates and classification structure for employees performing the same work under both agreements. I accept that the Transferable Instrument has significant differences to the Qube EA, however, there is some synergy between the instruments.
I consider this to be a neutral consideration.
The public interest – s.318(3)(f)
The Applicant submits that granting the orders sought is in the public interest in that to do so would appropriately balance the protection of terms and conditions of employment under enterprise agreements with the interests of the Applicant in running its enterprise efficiently. The Applicant also submitted that granting the orders sought was not contrary to the public interest as it would result in the improvement of pay and overall conditions for Transferring Employees.
In all the circumstances, and having considered the materials before the Commission, I am satisfied that there are no public interest considerations that weigh against making the orders sought.
Conclusion
Having taken into account the considerations in s.318(3) of the Act, I consider that the following orders should be made:
- “Pursuant to s.318(1)(a) of the Fair Work Act 2009 (Cth) (the Act), the Viterra Operations Pty Ltd - Narrabri Agreement 2022 will not cover:
(a) Qube Logistics (Aust) Pty Ltd; and,
(b) Any person who:
(i)Has at any time been employed by Viterra Operations Pty Ltd;
(ii)Ceased to be employed by Viterra Operations Pty Ltd;
(iii)Within three months of their employment with Viterra Operations Pty Ltd ceasing, became employed by Qube Logistics (Aust) Pty Ltd to perform the same, or substantially the same work that they performed at Viterra Operations Pty Ltd; and,
(iv)Falls within the coverage clause of the Qube Logistics Regional NSW Intermodal Terminal Enterprise Agreement 2023.
(the Transferring Employees).
- Pursuant to s.318(1)(b) of the Act, the Qube Logistics Regional NSW Intermodal Terminal Enterprise Agreement 2023 will cover the Transferring Employees in relation to their employment with Qube Logistics (Aust) Pty Ltd.”
For the purposes of s.318(4) of the Act, the order will come into operation on 16 May 2024. The order giving effect to this decision will be issued separately in [PR775056].
DEPUTY PRESIDENT
[1] Stratco (NSW) Pty Ltd [2010] FWA 7036 [25].
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<AE518482 PR775055>
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