R & R Family Investments Pty Ltd

[2015] FWC 3387

[2015] FWC 3387

FAIR WORK COMMISSION

DECISION

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

R & R Family Investments Pty Ltd
(AG2015/524)

COMMISSIONER BULL SYDNEY, 19 MAY 2015

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

[1] On 12 March 2015, R&R family Investments Pty Ltd (the applicant) lodged an application in the Fair Work Commission (the Commission) 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.

[2] The applicant is the new employer of the business to which this application relates. The applicant has standing to apply for the order under s.318(2)(a) of the Act. The Shop, Distributive and Allied Employees’ Association (SDA) represents employees of the applicant.

Background

[3] The applicant operates 2 stores:

i. R&R Supa IGA Merrylands West (the Merrylands store); and

ii. R&R Supa IGA Gulgong (the Gulgong store).

[4] The Merrylands store is covered by the Franklins National Retail Enterprise Agreement 2008 (the Franklins Agreement).

[5] This application relates to the Gulgong store only.

[6] In its application, the applicant stated that it had operated the Merrylands store since March 2006. The Merrylands store previously traded as ‘Franklins’. Employees at the Merrylands store are covered by the Franklins Agreement.

[7] The applicant submits there was a transfer of business on 20 June 2010, when the applicant purchased the Gulgong store from FoodWorks Retail Pty Ltd, which was previously owned and operated by Coles Supermarkets (Australia) Pty Ltd and Liquorland (Australia) Pty Ltd.

[8] The transferring employees at the Gulgong store continue to be covered by the following instruments (the Agreements):

i. The Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited Retail Agreement 2008 (the Coles Agreement);

ii. The Coles Liquor Group Retail Agreement 2008 (the Coles Liquor Agreement); and

iii. The FoodWorks Enterprise Agreement 2009 (the FoodWorks Agreement).

[9] On 12 May 2015, the Commission wrote to the applicant requesting further information in relation to the number of transferring employees who are still currently covered by the Agreements to which this application relates. Correspondence was received from the applicant on 12 May 2015.

[10] The applicant submits the following:

i. There are 16 transferring employees that are covered by the Coles Agreement, which had a nominal expiry date of 28 February 2011;

ii. 2 transferring employees are covered by the Coles Liquor Agreement which had a nominal expiry date of 31 March 2011, and

iii. 35 employees are covered by the FoodWorks Agreement, which had a nominal expiry date of 21 December 2013.

Relevant legislation

[11] Section 312(1) of the Act defines the meaning of a transferable instrument. Pursuant to s.312(1)(a) the Franklins Agreement is a transferable instrument for the purposes of the Act.

[12] The orders sought are under s.318(1)(a) of the FW Act:

“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; ...”

[13] The applicant seeks that the Coles Agreement, the Coles Liquor Agreement, and the FoodWorks Agreement not cover the applicant and the transferring employees, and that the Franklins Agreement to cover the applicant and the transferring employees.

[14] Section 318(3) of the Act sets out considerations that the Commission must take into account in deciding whether to make the order.

“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 transferableinstrument would have a negative impact on the productivity of the newemployer'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 coversthe new employer;

   (g)  the public interest....”

Applicant’s submissions

[15] The grounds set out in the application address each of the requirements in s.318 of the Act. In particular, it is submitted that the order would enable the applicant to streamline administration of pay and conditions. The applicant further submitted that the order would avoid transferring and non-transferring employees being disadvantaged relative to each other when they are performing the same work.

[16] I note that the SDA is covered by the Coles Agreement, the Coles Liquor Agreement, and represents employees of the applicant. The applicant has advised the Commission that it had served a copy of the application on the SDA.

[17] In its application, the applicant stated that in agreement with the SDA, it will pay wages above those required by the Franklins Agreement to ensure that no employee would be financially disadvantaged.

[18] The applicant further submits that wage increases will apply to all employees in July 2015, and July 2016.

[19] On 7 May 2015, the Commission sent written correspondence to the SDA asking for any response with respect to the application. Written correspondence from Mr Mitchell Worsley of the SDA was received on the same day.

[20] The SDA states that it had consulted with members who work at the Gulgong store and supports the making of the orders sought in the application. The SDA also provided documents that had been distributed to employees at the Gulgong store with respect to the proposed orders 1.

[21] A comparative table of the differences of the less significant entitlements provided to the employees at the Gulgong store was also submitted to the Commission.

[22] I am satisfied that employees who would be affected by the proposed order were made aware of the application.

Conclusion

[23] I am satisfied that the Franklins 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.

[24] I have considered 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.

[25] For the reasons set out above, an order [PR567491] will issue that the Coles Agreement, the Coles Liquor Agreement, and the FoodWorks Agreement cease to cover the applicant or any transferring employees at R&R Supa IGA Gulgong, and the Franklins Agreement will apply in their place.

COMMISSIONER

 1   The documents included a comparison between the transferrable instruments and the Franklins Agreement, as well as an SDA ‘Union News’ document, which highlighted the applicant’s proposal to have all employees at the Gulgong store be covered by the Franklins Agreement.

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<Price code C, PR567490>