Treasury Wine Estates Vintners Limited T/A Treasury Wine Estates

[2019] FWC 8230

[2019] FWC 8230

FAIR WORK COMMISSION

DECISION

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

Treasury Wine Estates Vintners Limited T/A Treasury Wine Estates
(AG2019/4265)

Wine industry
COMMISSIONER PLATT	ADELAIDE, 24 DECEMBER 2019

Application for an order relating to instruments covering new employer and transferring employee – order made.

Background

[1] Treasury Wine Estates Vintners Limited T/A Treasury Wines Estates (TWE) has made an application to the Fair Work Commission pursuant to s.318 of the Fair Work Act 2009 (Cth) (the Act) for an order in relation to a transfer of business.

[2] Section 318 of the Act empowers the Commission to make an order that a transferable industrial instrument that would likely cover a new employer will not do so, and that an enterprise agreement that covers the new employer will cover the transferring employee.

[3] Sections 318(2) of the Act provides who may make such an application and s.318(3) of the Act details what the Commission must take into account.

[4] TWE owns and operates winery and packaging businesses at various locations including the Nuriootpa Winery and Packaging Centre (with work performed at this location being subject to the Treasury Wines Estates Barossa Wineries Agreement 2017 and the Treasury Estates Barossa Wineries Maintenance Enterprise Agreement 2017). Southcorp Wines Pty Ltd operate the Bilyara Winery (where the work is subject to the Treasury Wine Estates Wolf Blass Enterprise Agreement 2017-2020).

[5] TWE has recently acquired the business assets of Southcorp Wines Pty Ltd (Southcorp). TWE advises there was a transfer of business as contemplated by s.311 of the Act.

[6] As part of a rationalisation process, TWE will close the Nuriootpa Winery and Packaging Centre on 20 December 2019 and relocate those assets to the Bilyara Winery. The two premises are about 6 kilometres apart.

[7] In October 2019 TWE consulted with impacted employees and advised that the Nuriootpa site would cease operations on 20 December 2019. As part of the redundancy mitigation TWE has offered employment at the Bilyara Winery.

[8] TWE seeks an order that employees who transfer from the Nuriootpa Winery and Packaging Centre to the Bilyara Winery will not be covered by the Treasury Wine Estates Barossa Wineries Enterprise Agreement 2017 or the Treasury Wine Estates Barossa Wineries Maintenance Enterprise Agreement 2017 but will be covered by the Treasury Wine Estates Wolf Blass Enterprise Agreement 2017-2020.

[9] This matter was heard on 29 November 2019. Submissions were received from the Applicant and evidence was received from Mr Cunningham, the only transferring employee, in support of the application.

Statutory provisions

[10] Section 318 of the Act provides as follows:

“318 Orders relating to instruments covering new employer and transferring employees

Orders that FWC may make

(1) 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) 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 FWC must take into account

(3) In deciding whether to make the order, 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.”

[11] I also note that the exercise of the discretion given to the Fair Work Commission in this regard is also undertaken within the objects of this Part of the Act, which states as follows:

“309 Object of this Part

The object of this Part is to provide a balance between:

(a) the protection of employees’ terms and conditions of employment under enterprise agreements, certain modern awards and certain other instruments; and

(b)the interests of employers in running their enterprises efficiently;

if there is a transfer of business from one employer to another employer.”

[12] This application was filed prior to the transfer of business taking place. TWE appears to fall within the requirements of s.318(2) and is thus able to make the Application.

[13] I now turn to the matters I am required to take into account.

Section 318(3)(a)(i): the views of TWE as the new employer

[14] TWE have made this application on a number of grounds as set out in the affidavit of Mr Christopher Ramage, Human Resources Manager.

[15] These grounds relate to:

•  avoiding the confusion of the application of multiple industrial instruments;

•  the benefit of having a single industrial instrument apply to the employment of the majority of employees at the Bilyara Winery; and

•  the undesirability of having different employment arrangements for persons working side by side.

[16] I have received evidence from Mr Cunningham who is the only person impacted who has been provided with a comparison of the old and new employment arrangements and who has made an informed choice to support the application.

[17] It appears to me that whilst there are some areas of disadvantage, when looked at globally the new arrangement does not result in significant economic disadvantage.

[18] The continuation of the transferable instruments would result in a negative impact to productivity as a result of added complexity and different arrangements for persons who work side by side.

[19] There is a limited business synergy between the transferable instruments and the new employer.

[20] The public interest (in the provision of employment to persons who would otherwise become redundant) supports the public interest.

Conclusions and orders

[21] Having regard to all of the considerations raised by s.318 of the Act, I am satisfied that I should exercise my discretion to grant the application and to make an order.

[22] The Order 1 to be issued in conjunction with this decision is to the effect that the Treasury Wine Estates Barossa Wineries Enterprise Agreement 2017 or the Treasury Wine Estates Barossa Wineries Maintenance Enterprise Agreement 2017 will not cover TWE and its employees who transfer to the Bilyara Winery and that TWE and the transferring employees will be covered by the Treasury Wine Estates Wolf Blass Enterprise Agreement 2017-2020.

[23] The Order will apply on and from 20 December 2019 or the date of the transfer whichever is the later.

COMMISSIONER

Appearances:

Mr C Ramage for the Applicant.

Hearing details:

2019.

Adelaide:

November 29.

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