RPR Trades Metro Pty Limited T/A RPR Trades
[2024] FWC 1759
•15 JULY 2024
| [2024] FWC 1759 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
RPR Trades Metro Pty Limited T/A RPR Trades
(AG2024/2243)
RPR TRADES PTY LTD EMPLOYEE AGREEMENT 2024
| Industries not otherwise assigned | |
| COMMISSIONER HUNT | BRISBANE, 15 JULY 2024 |
Application for an order relating to instruments covering new employer and non-transferring employees
On 19 January 2024, the Fair Work Commission (the Commission) approved the RPR Trades Pty Ltd Employee Agreement 2024 (the Transferable Instrument). The Transferable Instrument has a nominal expiry date of 18 January 2028, and is an agreement entered into by RPR Trades Pty Ltd (the Previous Employer) and its employees.
Since the approval of the Transferable Instrument, the Previous Employer established a subsidiary company, RPR Trades Metro Pty Limited T/A RPR Trades (the Applicant) for the purpose of providing trade and related services to clients in Victoria. Employees of the Previous Employer covered under the Transferable Instrument accepted employment with the Applicant on the same terms and conditions as those whilst employed by the Previous Employer.
The Applicant has since taken over the customers, operations and general business activity from the Previous Employer. As a consequence, the Previous Employer no longer trades in Victoria’s metropolitan areas and its clients and business activity in Victoria metropolitan areas has been taken over by the Applicant.
The Applicant has applied for an order under s.319 of the Fair Work Act 2009 (the Act) for an order that the Transferable Instrument will cover any non-transferring employee who perform, or is likely to perform, transferring work for the Applicant.
Section 311(1) of the Act sets out the circumstances in which a transfer of business occurs. It states:
“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).”
Section 312 of the Act also indicates that a “transferable instrument” includes “an enterprise agreement that has been approved by the FWC”.
Section 313 of the Act provides that “[i]f a transferable instrument covered the old employer and a transferring employee immediate 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”.
I am satisfied that there was a transfer of business and that the employees of the Previous Employer transferred to the Applicant under the terms of the Act. I am also satisfied that the Transferable Instrument is a transferable instrument and that it now covers the Applicant and the transferring employees.
Section 314 of the Act also provides for a transferable instrument to cover other employees in certain circumstances. It states:
“314 New non-transferring employees of new employer may be covered by transferable instrument
(1) If:
(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and
(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and
(c) the non-transferring employee performs the transferring work; and
(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;
then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.
(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWC order under subsection 319(1).”
I observe that the following modern awards are likely to cover the Applicant’s enterprise:
· Manufacturing and Associated Industries and Occupation Award 2010 (Manufacturing Award);
· Building and Construction General On-Site Award 2020 (BC Award); and
· Electrical, Electronic and Communications Contracting Award 2020 (EEC Award).
Given the coverage of modern awards, s.314(1) does not operate to have the Transferable Instrument cover the non-transferring employees.
However, as indicated, the provisions contained in s.314 are subject to s.319 of the Act, which allows for the Commission to make an order that a transferring instrument covers non-transferring employees.
Section 319 of the Act provides as follows:
“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.”
The Applicant is entitled to bring the application, which relies upon the terms of s.319(1)(b) of the Act, in effect, extend the coverage of the Transferable Instrument to the non-transferring employees.
In dealing with the application, the Commission is required to have regard to each of the matters in s.319(3) in determining whether an Order should be made. I now turn to deal with each of those considerations.
The views of the new employer – s.319(3)(a)(i)
The Applicant, as the applicant and new employer, supports the application and the sought order.
The views of the new employees – s.319(3)(a)(ii)
The Applicant has four non-transferring employees employed in work which would fall under the scope of the Transferable Instrument. On 30 May 2024, the Applicant sent an email to each of the four non-transferring employees by email seeking their views on this application. On 6 June 2024, two of the four non-transferring employees indicated agreement with the application.
On 26 June 2024, I directed the Applicant to communicate in writing to each of the non-transferring employees, inviting them to correspond by email with my chambers in the event they wished to provide their views. On 1 July 2024, I received confirmation from the Applicant that it had complied with the above direction. I confirm I have not received correspondence from any of the non-transferring employees.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.319(3)(b)
The Applicant submits that there would be no disadvantage to the affected employees if the Orders sought was made. This is on the basis that the new employees would be better off overall under the Transferable Instrument compared to the relevant Awards, given it satisfied the better off overall test.
I am satisfied that the employees would not be disadvantaged in relation to their terms and conditions of employment by making of an order.
The nominal expiry date of the Transferable Instrument – s.319(3)(c)
The nominal expiry date of the Transferable Instrument is 18 January 2028.
Negative impact on the productivity – s.319(3)(d)
The Applicant submits that by not obtaining the orders, it would inevitably have a negative impact upon the morale productivity of the applicant on the basis that there would be two distinct groups of employees on substantially different terms and conditions of employment performing identical transferring work at the same sites. The new employees, in particular, will be engaged on the less favourable minimum terms and conditions of the Awards compared to the transferring employees under the Transferable Instrument.
Without the orders sought, the Applicant argues that it will require two distinct employment and administrative arrangements to operate for the two groups of employees working at the same client sites and/or performing the same work.
I am satisfied that there will be no negative impact on productivity if the order is made.
Economic disadvantage – s.319(3)(e)
The Applicant does not consider it would incur a significant economic disadvantage should an Order be issued. In contrast, if the order is not made, the Applicant would incur significant economic disadvantage for the increased costs associated with managing two employment systems, low productivity from the workforce through perceived pay inequality and difficulty in attracting employees on the award rates and conditions.
Degree of business synergy – s.319(3)(f)
The Applicant submits that having all employees performing the same or similar work under a single instrument will promote business synergy.
I am satisfied that if the sought order is granted, it will confirm a single framework of regulation that has been negotiated and approved in the context in which it has and will continue to apply.
Public interest – s.319(3)(g)
The Applicant submits that the Order sought will not be against public interest. Rather, it considers that the public interest is served by facilitating employment opportunities in Victoria.
Conclusion
Having considered each of the matters in s.319(3) of the Act, I am satisfied that it is appropriate for an order to be made. In accordance with s.319(4) of the Act, the Order will come into operation for all non-transferring employee on the day on which the order is made.
An Order [PR776955] will be issued to this effect.
COMMISSIONER
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