SB&G (Rialto) Hotel Pty Ltd and Others

[2016] FWC 4150

[2016] FWC 4150

FAIR WORK COMMISSION

DECISION

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

SB&G (Rialto) Hotel Pty Ltd and Others
(AG2016/3455; AG2016/3456; AG2016/3458; AG2016/3460; AG2016/3461)

DEPUTY PRESIDENT SAMS SYDNEY, 24 JUNE 2016

Application for orders relating to instruments covering new employers and non-transferring employees.

[1] This decision deals with five applications, filed pursuant to s 319 of the Fair Work Act 2009 (the ‘Act’), seeking orders from the Fair Work Commission (the ‘Commission’). The applications are filed by:

• SB&G (Rialto) Hotel Pty Ltd;



• SB&G (Canberra) Hotel Pty Ltd;



• SB&G (Potts Point) Hotel Pty Ltd;



• SB&G (Spencer Street) Hotel Pty Ltd; and



• SB&G (Coogee Beach) Hotel Pty Ltd (collectively, the ‘applicants’).

[2] The applications are made in the context of the applicants acquiring five hotel businesses in Sydney, Canberra and Melbourne from entities in the Eureka Funds Management Group (Eureka). The transactions were completed on 10 December 2015. The applicants seek orders that the following instruments will cover non-transferring employees of the applicants who perform, or who are likely to perform, transferring work for the applicants:

• InterContinental Melbourne The Rialto Enterprise Agreement 2011-2012 [AE885354];



• IHG Canberra Enterprise Agreement 2011-2012 [AE885372];



• Holiday Inn Potts Point Enterprise Agreement 2011-2012 [AE885374];



• Crowne Plaza Melbourne Enterprise Agreement 2011-2012 [AE885355]; and



• Crowne Plaza Coogee Beach Enterprise Agreement 2011-2012 [AE885373] (collectively, the ‘Agreements’).

These employees would otherwise be covered by the Hospitality Industry (General) Award 2010 [MA000009] (the ‘Award’). Relevantly, United Voice (the ‘Union’) is covered by each of the Agreements.

The applicable legislation

[3] 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.

[4] The applications were accompanied by a statutory declaration of Mr Peter Wade, Area Director of Human Resources for InterContinental Hotels Group (IHG). He deposed that following the purchase of the hotel businesses, the applicants had employed the employees at each of the hotels and they carry out the same, or substantially the same work, that they had carried out previously. While the applicants continued to operate the relevant businesses in the same manner, each hotel continued to be managed by IHG and Eureka provided asset management services.

[5] Mr Wade said that there were 135 non-transferring employees performing transferring work in the five hotels. He put that they would not be disadvantaged overall by the orders sought and he drew particular attention to the incorporation of shift loadings and weekend penalty rates into higher base rates of pay, paid parental leave, paid community service leave and a paid ‘green day’ to perform volunteer work. He went on to say that cl 4.1.12 provided for an audit and reconciliation for each employee’s pay, with an adjustment payment made to an employee if it was found that had been paid less than under the Award. IHG and the applicants would continue to recognise and apply this arrangement. Non-transferring employees had been provided with copies of the relevant Agreement and the Award, a summary comparing terms and conditions of the relevant instruments and a form in which the employee could indicate whether they would prefer to be covered by the Agreement or the Award. All of the non-transferring employees had indicated their preference to be covered by the relevant Agreement.

[6] Mr Wade submitted that if the orders sought were not made, there would be adverse impacts on productivity for the businesses. The maintenance of different terms and conditions arising under different industrial instruments would impose a significant administrative, payroll and rostering burden on the applicants. There was a risk of industrial disharmony.

[7] At a hearing of the application on 17 June 2016, Mr T Davey, Solicitor, appeared with permission granted pursuant to s 596 of the Act, with Mr P Wade for the applicants and Mr H Pararajasingham appeared for the Union. Mr Wade explained that while the Agreements had reached their nominal expiry date, the applicants would continue to provide for increases to rates of pay in accordance with the Commission’s Minimum Wage Review Decisions. Mr Pararajasingham did not oppose the application.

[8] Having considered the materials filed by the applicants, I intend to make the orders sought. In doing so, I have taken all of the matters in s 319(3) into account; in particular, the views of the applicants, the employees and the Union. I am satisfied that there is no significant disadvantage to the employees if the orders are granted and, conversely that there would be a negative impact on the productivity of the applicant’s workplace should the orders not be granted. For the sake of completeness, I am satisfied that granting the orders would not be contrary to the public interest (s 319(3)(g)). Orders giving effect to my conclusions are published contemporaneously with this decision.

DEPUTY PRESIDENT

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