Sealanes (1985) Pty Ltd

[2021] FWC 2338

[2021] FWC 2338

FAIR WORK COMMISSION

DECISION

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

Sealanes (1985) Pty Ltd
(AG2021/4586)

COMMISSIONER PLATT ADELAIDE, 30 APRIL 2021

Application for orders in relation to a transfer of business.

Background

[1] Sealanes (1985) Pty Ltd (Sealanes) has made an application to the Fair Work Commission pursuant to s.318 of the Fair Work Act 2009 (Cth) (the Act) for an order in relation to a transfer of business.

[2] Section 318 of the Act empowers the Commission to make an order that a transferable industrial instrument that would likely cover a new employer will not do so, and that an enterprise agreement that covers the new employer will cover the transferring employee.

[3] Sections 318(2) of the Act provides who may make such an application and s.318(3) of the Act details what the Commission must take into account.

[4] Sealanes owns and operates businesses that provide seafood distribution and supply services. Sealanes employees are currently covered by Sealanes (1985) Pty Ltd (Transport) Enterprise Agreement 2019 and Sealanes (1985) Pty Ltd Warehousing Enterprise Agreement 2017.

[5]  Sealanes has recently acquired the foodservice business arm from KB Seafood Company Pty Ltd (KB Seafood). Sealanes advises there was a transfer of business as contemplated by s.311 of the Act.

[6]  Employment has been offered by Sealanes to the employees who are transferring from KB Seafood.

[7] Sealanes seeks an order that transferring employees will not be covered by the Kalis Bros Pty Ltd- Food Processing and Food Services – Enterprise Agreement 2015 but will be covered by the Sealanes (1985) Pty Ltd (Transport) Enterprise Agreement 2019 and Sealanes (1985) Pty Ltd Warehousing Enterprise Agreement 2017.

[8]  This matter was heard on 21 April 2021. Submissions were received from the Applicant in respect of the consultation between the transferring employees and Sealanes and the explanation provided regarding how a possible transfer would affect them.

Statutory provisions

[9] Section 318 of the Act provides as follows:

“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.”

[10]  I also note that the exercise of the discretion given to the Fair Work Commission in this regard is also undertaken within the objects of this Part of the Act, which states as follows:

“309 Object of this Part

The object of this Part is to provide a balance between:

(a) the protection of employees’ terms and conditions of employment under enterprise agreements, certain modern awards and certain other instruments; and

(b)the interests of employers in running their enterprises efficiently;

if there is a transfer of business from one employer to another employer.”

[11] This application was filed prior to the transfer of business taking place. Sealanes appears to fall within the requirements of s.318(2) and is thus able to make the Application.

[12]  I now turn to the matters I am required to take into account.

Section 318(3)(a)(i): the views of Sealanes as the new employer

[13]  Sealanes have made this application on a number of grounds as set out in the Application Form F40 completed by Ms Bambi Scholes-Miller, National Human Resources Manager.

[14]  These grounds relate to:

•   transferring employees will be better off overall under the existing industrial instruments rather than the Kalis Bros Pty Ltd - Food Processing and Food Services – Enterprise Agreement 2015;

•   the relevant transferring employees have been consulted and the majority of them support an order for them to be covered by the existing industrial instruments;

•   significant economic disadvantage and lost productivity to Sealanes if there was no order made; and

•   it would be against the public interest to negatively impact the ongoing commercial sustainability of the company, given the employment opportunities they provide the broader community.

[15]  Ms Scholes-Miller provided my Chambers with the contact details of all transferring employees, and my Associate asked for their views in relation to the proposed order. Of the transferring employees who responded to the email, all of them were in favour of the order being made.

[16]  It appears to me that when looked at globally the new arrangement results in an economic advantage to the transferring employees.

[17] The continuation of the transferable instruments would result in a negative impact to productivity as a result of added complexity and different arrangements for persons who work side by side.

[18] The public interest (in the support of allowing a business who supports the broader community to run their systems effectively and sustainably) supports the order being made.

Conclusions and orders

[19] Having regard to all of the considerations raised by s.318 of the Act, I am satisfied that I should exercise my discretion to grant the application and to make an order.

[20]  The Order 1 to be issued in conjunction with this decision is to the effect that the Kalis Bros Pty Ltd- Food Processing and Food Services – Enterprise Agreement 2015 will not cover Sealanes and its employees who have transferred from KB Seafood and that Sealanes and the transferring employees will be covered by the Sealanes (1985) Pty Ltd (Transport) Enterprise Agreement 2019 and Sealanes (1985) Pty Ltd Warehousing Enterprise Agreement 2017.

[21]  The Order will apply on and from 29 April 2021.

COMMISSIONER

Appearances (by telephone):

B Scholes-Miller for the Applicant

Hearing details:

2021.
Adelaide:
April 21.

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