The Club Group Pty Limited as Trustee for The Club Group Trust

[2012] FWA 10474

[2012] FWA 10474

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.319 - Application for an order re instruments covering new employer and non-transferring employees in agreements

The Club Group Pty Limited as Trustee for The Club Group Trust
(AG2012/13776)

Health and welfare services
COMMISSIONER DEEGAN	CANBERRA, 12 DECEMBER 2012

Application for an order regarding an instrument covering new employer and non-transferring employees - application granted

[1] This is an application pursuant to s.319 of the Fair Work Act 2009 (the Act) by The Club Group Pty Limited as Trustee for the Club Group Trust (the Applicant)

[2] The Act relevantly provides as follows in relation to transfer of business.

“311 When does a transfer of business occur

Meanings of transfer of business, old employer, new employer and transferring work

(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:

(a) the employment of an employee of the old employer has terminated;

(b) within 3 months after the termination, the employee becomes employed by the new employer;

(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).

Meaning of transferring employee

(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.

Transfer of assets from old employer to new employer

(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:

(a) the old employer or an associated entity of the old employer; and

(b) the new employer or an associated entity of the new employer;

the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):

(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and

(d) that relate to, or are used in connection with, the transferring work.

(4)...

[3] On the information supplied in the application I am satisfied that there has been a transfer of business from Fitness First Australia Pty Ltd to the Applicant.

[4] The Act does make provision for a transferrable instrument to automatically cover other employees in certain circumstances. Section 314 of the Act provides as follows:

“314 New non-transferring employees of new employer may be covered by transferable instrument

(1) If:

(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and

(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and

(c) the non-transferring employee performs the transferring work; and

(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;

then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.

(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.”

(3) This section has effect subject to any FWA order under subsection 319(1).

[5] I am satisfied that the circumstances of s.314 do not apply to new non-transferring employees of the Applicant given that the Applicant is covered by the Fitness Industry Award 2011 [MA000094](the Award).

[6] Section 319 of the Act provides as follows:

“319 Orders relating to instruments covering new employer and non-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 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.

Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.

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 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 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 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.

[7] The application for the order has been made by the new employer. The Applicant seeks an order in the terms of s.319(1)(b). The Applicant prefers that all employees who are performing the same work at the premises formerly operated by Fitness First Australia Pty Ltd are covered by the same industrial instrument.

[8] I am satisfied that the Applicant currently has no employees who will be affected by the order. Having considered the terms of the Fitness First Certified Agreement (AG846779) (the Agreement) and the terms of the Award, which would otherwise cover the new non-transferring employees, I am satisfied that no employees will be disadvantaged by the order in relation to the terms and conditions of their employment.

[9] As the nominal expiry date of the Agreement (12 July 2012) has passed it is open to the employees covered by it to seek to renegotiate the terms of that Agreement, or request its termination should it fall behind the Award.

[10] This application is made by the new employer. I am satisfied, therefore, that the order will not have a negative impact on productivity and that the new employer will not incur significant economic disadvantage. The Applicant claims that there is no “business synergy” between the terms of the Agreement and that of the Award.

[11] In the circumstances where the transferring employees will be covered by the Agreement I am satisfied that it is in the public interest for any new non-transferring employees to also be covered by the Agreement.

[12] In accordance with s.319(4) of the Act the order will commence operation on the date that it is made and will apply to new non-transferring employees from the commencement of their employment.

COMMISSIONER

Appearances:

S Harris of the Confederation of A.C.T. Industry

Hearing details:

2012

December 11

Printed by authority of the Commonwealth Government Printer

<Price code C, AG846779  PR532290 >