Star Millenium Pty Ltd

[2015] FWC 3896

[2015] FWC 3896

FAIR WORK COMMISSION

DECISION

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

Star Millenium Pty Ltd
(AG2015/2161)

Hospitality industry
DEPUTY PRESIDENT SAMS	SYDNEY, 11 JUNE 2015

Application for an order re instruments covering new employer and non-transferring employees in agreements.

[1] This is an application filed by Star Millenium Pty Ltd (the ‘applicant’), pursuant to s 319 of the Fair Work Act 2009 (the ‘Act’). The applicant seeks orders from the Fair Work Commission (the ‘Commission’), pursuant s 319(1)(b), that the Holiday Inn Sydney Airport Enterprise Agreement 2011-2012 [AE885378] (the ‘Agreement’) cover non-transferring employees engaged by the applicant. Relevantly, United Voice (the ‘Union’) is covered by the Agreement, which passed its nominal expiry date on 31 December 2012.

[2] These orders are sought in the context of a transfer of business to Silversea Investments Pty Ltd, an associated entity of the applicant, after entering into a business and asset sale agreement with Schwartz Family Co Pty Limited, an entity previously covered by the Agreement. Accordingly, the applicant is covered by the Agreement in relation to the transferring employees. The applicant sought that its non-transferring employees be covered by the Agreement for reasons of business synergy, administrative convenience and industrial harmony.

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 application was accompanied by a statutory declaration of Ms L Ugarte, Director of Human Resources - Australasia, employed by IHG Management (Australia) Pty Ltd, which is responsible for the day to day management of the Hotel, subject to an arrangement with the applicant. Ms Ugarte set out the details of the business and asset sales agreement between Schwartz and Silversea, which was completed on 30 January 2015. All of the employees of Silversea who performed work under the Agreement were employed, with continuous service, by the applicant.

[5] Ms Ugarte explained that the applicant’s operations would otherwise be covered by the Hospitality Industry (General) Award 2010 [MA000009] in relation to non-transferring employees and submitted that these employees would be ‘better off overall’ under the Agreement. She noted that the Agreement provided for enhanced parental leave, payment for community service leave (other than jury service leave) and a paid ‘green day’ to perform volunteer work. The Agreement loads a number of shift and weekend loadings and penalties into a base rate of pay. Additionally, Ms Ugarte put that it was desirable that all of the applicant’s employees be covered by a common industrial instrument for reasons of business synergy, administrative efficiency and industrial harmony.

[6] At a hearing of the application on 4 May 2015, Mr Z Costi, Solicitor, appeared with Ms L Ugarte and Mr G Long of the applicant. Mr M Vance appeared for the Union. Mr Costi outlined the background to the application and submitted that the orders sought by the applicant should be made by the Commission. Mr Vance noted that the Agreement had passed its nominal expiry date and sought clarification from the applicant as to the rosters under which the relevant employees would be working. Having reviewed the rosters provided by the applicant, Mr Vance subsequently communicated with my chambers to advise that the Union was satisfied that its members would better off under the Agreement than under the Award.

[7] Having considered the submissions of the parties and upon reviewing the application, the statutory declaration of Ms Ugarte and the terms of the Agreement, I see no impediment in making the orders in the terms sought by the applicant. In doing so, I have taken all of the matters in s 319(3) into account; in particular the views of the employer and the employees (as expressed through their Union), the fact that the employees are ‘better off’ under the Agreement and the desirability of business synergy and industrial harmony in the applicant’s workplace. For the avoidance of doubt, I consider that making the orders sought would be in the public interest. These orders will be published contemporaneously with this decision.

DEPUTY PRESIDENT

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