Spicers Australia Pty Ltd T/A Spicers

[2021] FWC 549

[2021] FWC 549

FAIR WORK COMMISSION

DECISION

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

Spicers Australia Pty Ltd T/A Spicers
(AG2020/2676)

Manufacturing and associated industries
COMMISSIONER HARPER-GREENWELL	MELBOURNE, 5 FEBRUARY 2021

Application for an order relating to instruments covering new employer and transferring employees – Qld Storeworkers.

[1] This matter involves an application by Spicers Australia Pty Ltd T/A Spicers Australia (Spicers Australia or the Applicant) under section 318 of the Fair Work Act 2009 (the Act). The application seeks an order from the Fair Work Commission (the Commission) relating to two non-management Queensland (Qld) based Storeworkers who were employees of Wilmaridge Pty Ltd as Trustee for the O’Neill Family Trust trading as Direct Paper Supplies (Direct Paper), identified as employee number 40 and 41 in Attachment 2 to the application (the Transferring Employees).

[2] Spicers Australia is seeking an order that the Direct Paper Supplies Enterprise Agreement 2010 1(the Direct Paper Agreement or the transferable instrument) does not cover Spicers Australia and any of the Transferring Employees, and that the Spicers Australia Pty Limited (Queensland) – Agreement 20192 (Spicers Agreement) will cover Spicers Australia and each of the Transferring Employees.

[3] The application contained detailed grounds and submissions and documents in support of the application, including a wages and classification table, comparison of terms and copy of the proposal letter sent to the Transferring Employees.

[4] The background to the Application being that the Transferring Employees were employed by Direct Paper under the terms of the Direct Paper Agreement, which reached its nominal expiry date on 21 January 2015. On 1 March 2020, Spicers Australia acquired Direct Paper, which was considered a transfer of business in accordance with section 311(1)(a)–(d) and section 311(3) (a) – (d) of the Act. The Transferring Employees commenced employment with Spicers Australia on 1 March 2020.

[5] The Transferring Employees work in a warehouse located in Pinkenba, Queensland. Spicers Australia also employs a team of Storeworkers who are based at a warehouse in Hendra, Queensland and are covered by the Spicers Agreement, which has a nominal expiry date of 16 September 2022.

[6] Spicers Australia intends for both Qld warehouse teams to work together at one site in future and wish to align employment conditions across the two teams both from a practical operational perspective as well as to ensure unity and harmony in working conditions and relationships between these teams.

[7] Spicers Australia submits the Spicers Agreement contains employment terms and conditions that are far more beneficial to the Transferring Employees than the Direct Paper Agreement, and the Transferring Employees will not be disadvantaged by the order sought.

[8] Spicers Australia submits they consulted with the two Transferring Employees in regard to their proposal to have them covered by the Spicers Agreement, and the Transferring Employees agreed to the order sought.

[9] Spicers Australia wants to ensure that a ‘two-tier’ workforce does not exist in Queensland which would disadvantage the Transferring Employee’s, when compared to all other current or future Storeworkers employed in the state, through continued coverage under the Direct Paper Agreement; such disharmony within the team is counter-productive to the business and QLD Storeworkers achieving required outcomes.

[10] Spicers Australia further submits continuing the current arrangement poses additional operational burden on Spicers Australia, as there are increased administrative requirements associated with enforcing two Agreements which contain different conditions, and the productivity of the combined QLD Storeworker team and all management and HR functions that support the monitoring and administration of employment conditions for this team will be enhanced through the application of the Spicers Agreement to the Transferring Employees.

[11] While the Direct Paper Agreement is more economically advantageous to Spicers Australia, the Applicant has budgeted for the additional financial impact associated with providing the Transferring Employees with more favourable employment conditions under the Spicers Agreement.

[12] Further the nature of work and hours performed by the Transferring Employee under the Direct Paper Agreement is compatible with the conditions of the Spicers Agreement, and the coverage clause covers the Transferring Employee.

[13] The Direct Paper Agreement is a transferable agreement pursuant to s.312(1)(a) of the Act, and pursuant to s.313(1) of the Act the Transferring Employees from Direct Paper are still covered by that Agreement.

[14] Directions were issued on 8 October 2020 and the matter listed for Hearing on 20 November 2020. No response in opposition to the Application was received by the Commission.

[15] Section 318 of the Act sets out the circumstances in which an order such as that sought by Spicers may be made by the Commission:

“318 Orders relating to instruments covering new employer and 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 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) 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 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 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 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.”

[16] I have reviewed the application documentation and the accompanying material. These documents outline the factual circumstances which have given rise to the application. Further, the submissions contained in the application address the relevant legislative requirements which are asserted to provide for proper basis for the making of the orders sought. I am satisfied that by virtue of the operation of the Act, if the orders sought were not made, the Transferring Employees would continue to be covered by the Direct Paper Agreement.

[17] Having examined and considered the application and the accompanying materials, and submissions made at the hearing, I have taken into account the provisions of paragraphs (a) to (g) of subsection 318(3) of the Act and am satisfied that it is appropriate to make the orders sought under s.318(1) and (b) of the FW Act.

[18] In accordance with section 318(4) of the FW Act, the order 3 shall have effect from the time when the Transferring Employees become employed by Spicers Australia or the date of the order, whichever is the later.

COMMISSIONER

Appearances:

K Woodman with D Martin and D O’Neill from the Applicant

Hearing details:

2020.
Melbourne (by video link via Microsoft Teams):
November 20.

Printed by authority of the Commonwealth Government Printer

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