SRG Leisure Retail Pty Ltd
[2012] FWA 7397
•29 AUGUST 2012
[2012] FWA 7397 |
|
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements
SRG Leisure Retail Pty Ltd
(AG2012/10504)
Retail industry | |
COMMISSIONER SPENCER | BRISBANE, 29 AUGUST 2012 |
Background
[1] This matter was filed on 17 August 2012 by SRG Leisure Retail Pty Ltd (the Applicant), and concerns an application pursuant to s.318(1) of the Fair Work Act 2009 (the Act) for orders relating to an instrument covering a new employer (the Applicant) and the transferring employees. The Applicant’s representative has standing to make the application pursuant to s.318(2)(d).
[2] The Applicant submitted that it had entered into an Agreement with Benchatty Pty Ltd ATF The Binks Family Trust (the old employer) for the purchase of a business trading as Camping World Mackay. The sale of the business was completed on 22 August 2012. As a result of the sale, 4 of the employees (the transferring employees) of the old employer are now engaged by the Applicant.
[3] In accordance with s.311(1) of the Act, a transfer of business has occurred. The transferring employees were covered by the ARL (QLD) Enterprise Agreement 2012 being an enterprise agreement approved by a Decision of Fair Work Australia (FWA) on 13 June 2012. 1 An enterprise agreement is a transferable instrument by operation of the Act s.312(1)(a). Section 313(1) provides that a transferrable instrument that covered the old employer and the transferring employees immediately before the termination of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant (the new employer) would be covered by the ARL (QLD) Enterprise Agreement 2012 in relation to the transferring employees, however s.313(3) operates subject to s.318(1). Pursuant to s.318(1), the new employer has sought that the enterprise agreement that covers its existing workforce also cover the 4 new transferring employees.
[4] The Applicant applies for an Order pursuant to s.318(1) to displace the operation of s.313(1) in relation to the ARL (QLD) Enterprise Agreement 2012 and further to ensure that the transferring employees are covered by the existing industrial instrument, the Super Retail Group Enterprise Agreement 2012, which currently covers the Applicant’s employees, being some 8,500 employees.
Relevant legislation
[5] Section 313 provides:
313 Transferring employees and new employer covered by transferable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately 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; and
....
(3) This section has effect subject to any FWA order under subsection 318(1).
[6] Section 318 provides:
318 Orders relating to instruments covering new employer and transferring employees
Orders that FWA may make
(1) FWA 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) FWA 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 FWA must take into account
(3) In deciding whether to make the order, FWA 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.
Consideration
[7] The Applicant was requested to provide further materials in support of the application particularly referencing those matters that FWA must take into account by virtue of s.318(3). Ms Corrina Dowling, Senior Workplace Advisor of the National Retail Association, on behalf of the Applicant filed material and submissions in support of the application, statements in support of the Orders by three of the four transferring employees, a comparison schedule of the general entitlements of the two instruments and a comparison of expected earnings of the four transferring employees between the two instruments.
[8] The material is considered below in relation to each of the matters in s.318(3).
Section 318(3)(a)(i): the views of the new employer
[9] The Applicant, as the new employer, seeks that the transferable instrument not cover or apply to it. Several reasons were advanced for this including reasons relating to the disparity which may arise between members of the Applicant’s workforce by having employees in the same workplace covered by different industrial instruments and receiving different entitlements. The Applicant also pointed to inefficiencies in payroll processes that may arise as a result of having their existing workforce, some 8,500 employees, covered by one industrial instrument and the four transferring employees on another.
Section 318(3)(a)(ii): the views of the employees prospectively affected by any order
[10] The Applicant provided transferring employee statements. These statements indicate that the transferring employees are agreeable to the Order being issued.
Section 318(3)(b): any disadvantage to the employees
[11] The Applicant has provided a comparison of the general entitlements and expected earnings between the two industrial instruments. While some entitlements would appear to be less generous under the Super Retail Group Enterprise Agreement 2012 (eg overtime) a majority of the conditions are more favourable to the transferring employees including the expected earnings.
Section 318(3)(c): the nominal expiry date of the transferable instrument (the Agreement)
[12] The nominal expiry date of the ARL (QLD) Enterprise Agreement 2012 is 20 June 2013. The nominal expiry date of the Super Retail Group Enterprise Agreement 2012, the Agreement sought to cover the transferring employees, is 15 July 2015.
Section 318(3)(d): any negative impact on the employer’s workplace
[13] As set out above, the Applicant identified some potential impacts on the workplace if the Order was not issued. It was submitted that having employees on two different agreements, providing for different entitlements may lead to dissatisfaction among employees who may be required to undertake similar if not the same duties side by side while receiving different entitlements. While it is not uncommon for employees to work in close proximity earning different entitlements the submission in this respect is understandable particularly in what would appear to be such a small workplace.
[14] The Applicant also identified certain operational inefficiencies that would arise from having to administer the terms of an additional agreement for four employees out of 8,500.
Section 318(3)(e): any significant economic disadvantage to the employer
[15] The Applicant did submit that “significant difficulties” would be suffered by the Applicant in relation to this point but the matters raised were more relevant to the consideration of s.318(3)(d) and (f), in terms of administering the payroll for an additional agreement.
Section 318(3)(f): business synergy between the transferable instrument and the existing agreement
[16] The Applicant identified that both agreements were drafted to apply in a retail environment and the entitlements were “similar”. However, the operational inefficiency for an employer to adhere to two agreements, for the same workforce is recognised.
Section 318(3)(g): the public interest
[17] There is no evidence that the public interest is agitated in this matter.
CONCLUSION
[18] On balance, taking into account each of the matters stipulated at s.318(3), I am satisfied that the Order sought should be granted.
[19] A separate Order will issue [PR528459]. The Order will come into operation, in accordance with s.318(4).
COMMISSIONER
Appearances:
On the papers.
1 Application by Associated Retailers Ltd [2012] FWAA 5074.
Printed by authority of the Commonwealth Government Printer
<Price code C, AE895711 PR528458 >
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