Regents Park Supermarket Pty Ltd
[2015] FWC 1690
•13 MARCH 2015
| [2015] FWC 1690 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Regents Park Supermarket Pty Ltd
(AG2015/402)
Retail industry | |
COMMISSIONER SPENCER | BRISBANE, 13 MARCH 2015 |
Application for Orders relating to instruments covering new employer and transferring and non-transferring employees
[1] This application was filed by Regents Park Supermarket Pty Ltd (the Applicant), and concerns an application pursuant to s.318 and s.319 of the Fair Work Act 2009 (the Act) for orders relating to an instrument covering a new employer (the Applicant) and the transferring employees, and non-transferring employees.
[2] The Applicant provided by way of background that Babsharp Pty Ltd as trustee for Partridge Family Trust No.3 and Village Super C Family Trust (BPL) owns and operates Supa IGA Regents Park. BPL’s employees are covered by the Supa IGA Regents Park (The Retailers Association) Employee Collective Agreement 2009 (Supa IGA Agreement).
[3] The Applicant intends to purchase Supa IGA Regents Park from BPL. The Applicant will then employ employees of BPL (transferring BPL employees). In accordance with s.311(1)(d) of the Act, a transfer of business will occur between BPL and the Applicant, as there will be a transfer of assets including goodwill, plant, equipment, stock records and property.
[4] The Applicant intends to employ employees of Dramet Pty Ltd (transferring Dramet employees). The Drakes Supermarkets Retail Agreement 2012 (Drakes Agreement) covers employees of Dramet Pty Ltd.
[5] In accordance with s.311(1)(d) of the Act, a transfer of business will occur between Dramet Pty Ltd and the Applicant, as the Applicant will have the beneficial use of some assets that are used in connection with the transferring work (administration support, management personnel, IT systems and payroll system and support).
[6] The Applicant also intends to employ employees not previously employed by BPL or Dramet Pty Ltd (non-transferring employees), who will perform the same or substantially the same work as that performed by BPL and Dramet transferring employees. These non-transferring employees would ordinarily be covered by the General Retail Industry Award 2010 (the Award).
[7] The Applicant seeks an Order pursuant to s.318(1)(a) that the Supa IGA Agreement does not, or will not cover the Applicant and the transferring BPL employees.
[8] The Applicant also seeks an Order pursuant to s.318(1)(b) that the Drakes Agreement will cover the transferring BPL employees.
[9] Further, the Applicant seeks an Order pursuant to s.319(1)(b) that the Drakes Agreement will cover non-transferring employees who perform, or are likely to perform the transferring work for the Applicant.
Relevant legislation
[10] Section 313 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
....
(3) This section has effect subject to any FWC order under subsection 318(1).
[11] Section 318 provides:
318 Orders relating to instruments covering new employer and transferring employees
Orders that FWC may make
(1) 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) 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 FWC must take into account
(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.
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.
[12] Section 319 of the Act provides:
319 Orders relating to instruments covering new employer and non-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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;
(b) an Order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(c) an Order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.
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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(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 non-transferring employee before the later of the following:
(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;
(b) the day on which the Order is made.
Submissions and Consideration
[13] The Applicant provided detailed submissions and wages comparisons between the Supa IGA Agreement and the Drakes Agreement and the Drakes Agreement and the Award with the application. Mr Christopher Gazenbeek, Branch Secretary of the Shop, Distributive and Allied Employees Association (SDA) provided correspondence to the Commission declaring that the SDA does not oppose the application, provided that undertakings were provided by the Applicant in relation to the entitlements of the transferring employees. The Applicant made these undertakings and Mr Darryn Gaffy of the SDA indicated that they had no objection to the application. The AMIEU indicated that they did not wish to be heard in relation to the application.
[14] The Applicant submitted that they are of the view that the Commission should make the orders sought as transferring BPL employees and non-transferring employees will be better off under the Drakes Agreement.
[15] The Applicant further submitted that it wants all retail employees, whether transferring or non-transferring employees, to be covered by the same employment terms and conditions in relation to the same work, and therefore it was desirable that all of the Applicant’s employees be covered by one enterprise agreement. The Applicant submitted that it would suffer a detrimental impact if there were three different industrial instruments applying to its employees.
[16] With respect to non-transferring employees, the Applicant submitted that as at the date of the application, the Applicant had not employed any non-transferring employees and was therefore unable to present the views of the non-employees who would be affected by the Order. Further, the Applicant contends that non-transferring employees would be covered by the Award, which provides for less favorable terms and conditions of employment than the terms and conditions of the Drakes Agreement. The Applicant provided that it did not anticipate non-transferring employees to object to the Drakes Agreement applying to their employment given its terms and conditions would be more favorable to them on an overall basis, and submitted that they would not be disadvantaged by the Order. The Applicant provided a comparison between the Drakes Agreement and the Award of rates of pay to this effect.
[17] The Applicant submitted that it was not aware of the views of the BPL transferring employees who would be affected, but anticipated that there would not be any objections because the terms and conditions of employment under the Drakes Agreement will result in those employees being better off overall. The Applicant submitted that the BPL transferring employees would not be disadvantaged by the Order. The Applicant provided a comparison between the Drakes Agreement and the Supa IGA Agreement of the rates of pay, penalties and overtime rates and submitted that the Drakes Agreement contains terms and conditions of employment more favorable on an overall basis.
[18] The Drakes Agreement has a nominal expiry date of 1 September 2016.
[19] The Applicant contended that the Agreement would not have a negative impact on their productivity and that on the contrary, the Applicant’s payroll system would not operate effectively if it had to apply three different industrial instruments to its employees. The Applicant further contended that this would give rise to operation and administrative difficulties and inefficiencies.
[20] The Applicant submitted that the Drakes Agreement will already cover the Applicant and it would not incur significant economic disadvantage if the Drakes Agreement covered all of its employees.
[21] The Applicant submitted that there is little business synergy between the Drakes Agreement and the Award and the Supa IGA Agreement as the instruments provide for different minimum employment terms and conditions including wages, allowances, classification structure and rostering. The Applicant further submitted that ensuring that all employees are covered by the same industrial instrument will achieve business synergy within the business of the Applicant.
[22] The Applicant submitted that there is no harm to the public interest if the Order is made and that it is in the public interest for the Applicant to have one industrial instrument that covers all of its employees, as it will prevent a disparity arising between Dramet transferring employees, BPL transferring employees and non-transferring employees.
Conclusion
[23] On balance, taking into account each of the matters stipulated at s.318(3) and s.319(3) of the Act, I am satisfied that the Orders sought should be granted.
[24] A separate Order will issue [PR561953]. The Order will come into operation, in accordance with s.318(4).
COMMISSIONER
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