Stratco (NSW) Pty Ltd - [2010] FWA 7036

[2010] FWA 7036

FAIR WORK AUSTRALIA

DECISION

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

Stratco (NSW) Pty Ltd
(AG2010/11445)

HUNTER TIMBER AND BUILDING SUPPLIES PTY LTD COLLECTIVE GREEMENT 2008
[AC317346]

Retail industry
COMMISSIONER HAMPTON	ADELAIDE, 17 SEPTEMBER 2010

Transfer of business - application for an order that collective agreement applying to former business not cover the new employer - application made after transfer - whether valid application - whether discretion should be exercised to have the modern award apply in lieu of the Collective Agreement - application granted.

BACKGROUND

[1] This is an application pursuant to s.318 of the Fair Work Act 2009 (the Act) by Stratco (NSW) Pty Ltd (Stratco). Stratco has recently acquired the business assets of Hunter Timber and Building Supplies Pty Ltd (Hunter Timber), which is a retail hardware business operating in the Hunter Valley of New South Wales. There was a transfer of business as contemplated by s.311 of the Act.

[2] Stratco is part of the national business operating (amongst other aspects) hardware and building supplies stores. It is covered by and applies the General Retail Industry Award 2010 (the modern award) at all of its existing stores throughout New South Wales, and nationally.

[3] Hunter Timber is a party to the Hunter Timber and Building Supplies Pty Ltd Collective Workplace Agreement 2008 (the Collective Agreement) which was approved by the Workplace Authority in April 2009 pursuant to the Workplace Relations Act 1996 and has a nominal expiry date of 16 April 2012.

[4] The Collective Agreement became a transferrable instrument for the purposes of s.312 and s.313 of the Act when Hunter Timber was purchased by Stratco in late May 2010 and the employees of Hunter Timber accepted employment with the new employer. That is, by virtue of sub item 2(3), Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the TPCA Act) the Collective Agreement is a transitional instrument for purposes of the Act itself. Pursuant to Item 8, Part 3 of Schedule 11 of the TPCA Act, the Collective Agreement is also a transferable instrument for the purposes of s.312(1) and consequently, s.313 of the Act.

[5] Section 313 of the Act provides for the transferrable instrument (in this case the Collective Agreement) to in effect transfer to the new employer (Stratco) along with the employees who are “transferred”.

[6] There are some 28 employees who have transferred from Hunter Timber to Stratco.

[7] The application seeks that the Collective Agreement not cover Stratco and any of its employees formerly engaged by Hunter Timber.

[8] In the lead up to the hearing of this matter, directions were issued requiring the fact of the application and the details of the hearing to be communicated to all of the relevant employees. Further, these employees were invited to contact Fair Work Australia in person or in writing should they wish to express any views or concerns…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Stratco (NSW) Pty Ltd

Details

AGLC: Stratco (NSW) Pty Ltd [2010] FWA 7036
Case: [2010] FWA 7036
Decision Date: 17 SEPTEMBER 2010

CaseChat Overview and Summary

Stratco (NSW) Pty Ltd applied to the Federal Circuit and Family Court of Australia for an order that a collective agreement applying to a former business should not cover the new employer, Stratco. The application was made after the transfer of business. The court was required to decide whether the application was valid and whether the discretion should be exercised to have the modern award apply in lieu of the Collective Agreement. The court found that the application was valid and granted the application, ordering that the modern award apply in lieu of the Collective Agreement.

The court held that the application was valid despite being made after the transfer of business. The court reasoned that the application was not time-barred as it was made within the relevant time period and that the transfer of business did not affect the validity of the application. The court further held that the discretion should be exercised to have the modern award apply in lieu of the Collective Agreement as the new employer did not wish to be bound by the Collective Agreement. The court found that the new employer had demonstrated that the Collective Agreement was not appropriate for the new employer's business and that the new employer would suffer a significant detriment if the Collective Agreement applied. The court also found that the modern award provided sufficient protection for the employees of the new employer.

Orders