Samgist Pty Ltd and others

[2016] FWC 2365

[2016] FWC 2365

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 319 - Application for an order relating to instruments covering new employer and non-transferring employees

Samgist Pty Ltd and others
(AG2016/800)

DEPUTY PRESIDENT SAMS SYDNEY, 18 APRIL 2016

Application for an order relating to instruments covering new employer and non-transferring employees.

[1] This is an application filed by Samgist Pty Ltd, Silkdaze Pty Ltd, Kulin Holdings Pty Ltd, Dollone Pty Ltd and Laoplea Pty Ltd t/a Dogrow Partnership (collectively, the ‘applicants’), pursuant to s 319 of the Fair Work Act 2009 (the ‘Act’), seeking an order from the Fair Work Commission (the ‘Commission’) that the Employment Innovations Pty Ltd Enterprise Agreement 2010 (the ‘EI Agreement’) will cover non-transferring employees of the applicants who perform, or are likely to perform, transferring work at The 3 Wise Monkeys Hotel (the ‘Hotel’) in George Street, Sydney. The relevant non-transferring employees would otherwise be covered by the Hospitality Industry (General) Award 2010 [MA000009] (the ‘Award’).

The applicable legislation

[2] The following provisions of the Act are relevant to my determination of this application:

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.

…

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.

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.

[3] The application is accompanied by a statutory declaration of Mr J Traynor, Hotel Licensee. Mr Traynor explained that on 8 May 2014 the Hotel entered into a services agreement with HRO Initiatives Pty Ltd (‘HRO’) whereby HRO provided a number of outsourced employees to perform work at the Hotel. On 3 April 2016, the Hotel terminated the services agreement with HRO and a transfer of business took place whereby the transferring employees accepted employment directly with the Hotel. Mr Traynor noted that, as a result of the transfer of business, the EI Agreement, as a transferring instrument, now applies to the transferring employees whereby any new employees employed by the Hotel, on or after 3 April 2016, will be covered by the Award. Mr Traynor said that at the time this application was made, the Hotel has not employed any new employees. Mr Traynor further said that the existing arrangement would impact considerably upon the degree of business synergy when operating with two categories of employees under each respective instrument as they provide for different minimum employment conditions. As a result, the arrangement may result in some economic disadvantage to the Hotel. If the order is granted, Mr Traynor said that it would not have a negative impact on the productivity of the workplace and would not be contrary to the public interest.

[4] The EI Agreement has passed its nominal expiry date on 29 July 2014. Mr Traynor said that the Hotel is currently giving active consideration to options regarding employment terms and conditions, including the negotiation of a new enterprise agreement. Mr Traynor said that the process of bargaining will be made more complex, if two industrial instruments apply to the same group of employees.

[5] Having considered the materials filed by the applicants and the statutory declaration of Mr Traynor, I intend to make the order sought. In doing so, I have taken into account all of the matters in ss 319(3) and in particular, the views of the applicants. I note that as there are no current non-transferring employees, it is not possible to seek their views. I am satisfied that there is no significant disadvantage to the employees if the order is granted and that granting the order would not be contrary to the public interest. An order giving effect to my conclusions is published contemporaneously with this decision. The order will take effect on 18 April 2016.

DEPUTY PRESIDENT

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