RACV

[2015] FWC 6363

[2015] FWC 6363

FAIR WORK COMMISSION

DECISION

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

RACV
(AG2015/4272)

COMMISSIONER ROE MELBOURNE, 14 SEPTEMBER 2015

Applications for orders relating to instruments covering a new employer and transferring employees.

[1] RACV Limited (RACV) has purchased the Novotel Forest Resort Creswick. The current employees of the Creswick resort are employed under the terms of the Novotel Forest Resort Creswick Greenfields Collective Agreement 2008. That Agreement passed its nominal expiry date in 2009. The rates of pay in the Novotel Agreement are less than the Hospitality General Industry Award 2010 (the Award) and hence the employees are paid the Award minimum rates and not the rates in the Novotel Agreement. RACV employs people in a range of other clubs and resorts. The employees are engaged under the RACV Club and Resorts Collective Agreement 2015 (the RACV Agreement)

[2] RACV wishes to offer employment to a number of the existing employees at the Creswick Resort. I have no reason to doubt that they wish to do this regardless of the outcome of their application to have the RACV Agreement apply to their employment. As I determined in the ABnote Australia Post transfer matter, 1 where the transfer is conditional upon the Fair Work Commission decision concerning the transferable instrument I cannot be satisfied that there are likely to be any transferring employees in relation to a transfer of business. In the circumstances of this case I am satisfied that RACV intends to employ transferring employees in relation to a transfer of business regardless of the outcome of this application.

[3] RACV seeks that the casual employees be covered by the Award and the other employees be covered by the RACV Agreement.

[4] RACV seeks orders that:

● The Novotel Forest Creswick Greenfields Agreement 2008 no longer apply to those employees transferring to become employees of RACV Limited; and
● The RACV Club and Resorts Collective Agreement 2015 apply to those former employees of Novotel Forest Resort Creswick who are employed to perform work which falls within the scope of the classifications in the RACV Agreement.

[5] There are a number of assets which will change hands as a result of this sale. It is not in contest and I am satisfied that RACV can make the application for orders under Section 318(a) of the Fair Work Act 2009 (the Act) if there is, or is likely to be, a transfer of business from Novotel to RACV (as defined in Sections 311(1) and 317 of the Act). I am also satisfied that the Novotel Agreement is a transferable instrument which, absent the orders, covers the transferring employees and RACV.

[6] The precondition for orders is stated in Section 317 of the Act as follows: “This Division provides for the Fair Work Commission to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.” Transfer of business and transferring employee are relevantly defined as follows in Section 311 of the Act:

“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.”

[7] There is no contest and I am satisfied that there is a connection between the old employer and the new employer in that assets are being transferred (Section 311(d) of the Act is satisfied).

[8] I am satisfied that there is, or is likely to be, a transfer of business. The making of the order sought is discretionary and in exercising discretion I need to consider each of the matters set out in Section 318(3) of the Act:

“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.”

The views of RACV and the transferring employees (Section 318(3)(a))

[9] RACV is obviously in support of the making of the Orders. Primarily the Orders are sought in order to have consistent terms of employment in the enterprise, to reduce administrative complexity, to reduce payroll administration costs, and to avoid dissatisfaction which may arise from more than one set of conditions. I am satisfied that these are legitimate concerns.

[10] In some circumstances employees other than those who are transferring may be affected by the making of an order but in this case I am satisfied that it is the views of the transferring employees which are of particular relevance. I required RACV to provide information to all employees about their proposal and a comparison of their current conditions and the RACV Agreement. I also required RACV to provide each employee with the opportunity to make a confidential submission to my Chambers email. I also required RACV to provide each employee with a copy of the listing of this matter. No objection has been received from any employee. In the circumstances I conclude that there is not strong opposition to the RACV application.

Will any employees be disadvantaged by the making of the order? (Section 318(3)(b))

[11] Given the Novotel Agreement is a workchoices greenfields agreement it is not an instrument which was negotiated with employees or their representatives and it was not subject to any ratification by employees. The rates of pay under the Agreement are either the Award or in respect to some periods when penalties may apply are less than the Award. There are some conditions where employees are disadvantaged when compared to the Award and no matters where they are significantly advantaged. I am satisfied that no employee will be disadvantaged by moving to the Award or to the RACV Agreement which has passed the Better Off Overall Test. There are some matters where the employees will be significantly advantaged by the RACV Agreement, including the rates of pay and the disputes settlement procedures. This factor stands in favour of making the orders sought.

The nominal expiry date of the Agreement (Section 318(3)(c))

[12] The nominal expiry date of the Australia Post Agreement is long past whilst the nominal expiry date of the RACV Agreement is 23 July 2016. It is obvious that the employees concerned have limited bargaining power given that they were not able to do anything about the long expired workchoices agreement which disadvantaged them when compared to the Award. The removal of any bargaining rights is only temporary and also more apparent than real. The replacement of a long expired so called “agreement” with the RACV Agreement is a positive consideration.

Will the Agreement have a negative impact on the productivity of RACV’s workplace? (Section 318(3)(d)) Will RACV suffer significant economic disadvantage if the order is not made? (Section 318(3)(e))

[13] I am not satisfied that there would be any significant impact upon productivity or any significant economic disadvantage if the order was not made. This is a neutral factor.

The degree of business synergy between the Novotel Agreement and any workplace instrument that already covers RACV (Section 318(3)(f))

[14] I accept the submission of RACV that there is little business synergy between the Novotel Agreement and the RACV Agreement. The RACV Agreement covers a significant number of resorts and clubs and reflects the common business policies and practices and employee benefits applicable to RACV as a whole.

[15] This is a factor which stands in favour of making the orders sought.

Is it in the public interest to make the orders sought? (Section 318(3)(g))

[16] I consider that it is in the public interest to make the orders sought. It is in the public interest to ensure that employees are employed on conditions which equal or exceed those in the relevant Award.

Approach to the factors in Section 318(3)

[17] In weighing the factors considered above I would have regard to the Object of Part 2-8 - Transfer of Business of the Act as set out in Section 309. That requires me to balance the protection of employees and the efficient running of business.

Conclusion in respect to the applications for Orders

[18] I am satisfied that the Orders should be made and they should operate from the date the particular transferring employee becomes employed by RACV.

COMMISSIONER

 1   [2015] FWC 1032.

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