Treasury Wine Estates Vintners Ltd T/A Treasury Wine Estates

[2021] FWC 5220

[2021] FWC 5220

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 Ltd T/A Treasury Wine Estates
(AG2021/6846)

COMMISSIONER PLATT ADELAIDE, 24 AUGUST 2021

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

[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 (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 TWE Barossa Winery/Packaging Centre (with work performed at this location being subject to the Treasury Wine Estates Wolf Blass Enterprise Agreement 2017-2020).

[5] TWE also owns and operates the Nurioopta Winery and Packaging Centre (with work performed at this location being subject to the Treasury Wine Estates Barossa Wineries Enterprise Agreement 2020 and the Treasury Wines Estates Barossa Wineries Maintenance Enterprise Agreement 2020), which has approximately 155 employees, of which the majority were employed by Southcorp Wines Pty Limited (Southcorp).

[6] Mr Milenko Tajnikar, an employee of Southcorp, has expressed interest in a vacant role at the TWE Barossa Winery/Packaging Centre and has been successful in obtaining a conditional offer of employment with TWE.

[7] Southcorp are not bound by the Treasury Wine Estates Wolf Blass Enterprise Agreement 2017-2020 and therefore has no capacity to direct its employees to perform work at the TWE Barossa Winery/Packaging Centre with another employer.

[8] Given that Mr Tajnikar is employed by Southcorp and seeks to accept an offer of employment with TWE, TWE submits that a transfer of business situation has occurred as contemplated by s.311 of the Act.

[9] TWE seeks an order that if Mr Tajnikar ceases employment with Southcorp for any reason, and within 3 months of ceasing his employment with Southcorp, he commences employment with TWE, then he will not be covered by the Treasury Wine Estates Barossa Wineries Enterprise Agreement 2020 or the Treasury Wine Estates Barossa Wineries Maintenance Enterprise Agreement 2020 but will be covered by the Treasury Wine Estates Wolf Blass Enterprise Agreement 2017-2020.

[10] In support of this Application, I have received written submissions from TWE, as well as a statutory declaration from Ms Rachel Longhurst (Head of Human Resources, TWE) and a statement in support from Mr Tajnikar. The matter was determined on the papers.

Statutory provisions

[11] 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.”

[12] 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.”

[13] 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.

[14] 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

[15] TWE have made this application on a number of grounds as set out in the statutory declaration of Ms Longhurst.

[16] These grounds relate to:

•  avoiding the confusion arising out 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 TWE Barossa Winery/Packaging Centre;

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

•  avoiding the practical difficulties of meeting certain historical undertakings contained in the transferring instruments that are not suited to the new workplace.

Section 318(3)(a)(ii): the views of the employees who would be affected by the order

[17] I have received evidence from Mr Tajnikar, 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.

Section 318(3)(b): whether any employees would be disadvantaged by the order

[18] It appears that there are potential areas of disadvantage to Mr Tajnikar if the order is to be made, including clauses relating to:

•  Union membership

•  Paid Paternity Leave

•  Remuneration

•  Sick leave requirements

•  Transfer of employees to a new position

•  Redundancy payments

[19] TWE have provided undertakings in respect of each of these possible disadvantages to ensure that Mr Tajnikar is not disadvantaged by the order being made. On the basis of these undertakings, I am satisfied that Mr Tajnikar will not be disadvantaged by the order being made.

[20] 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.

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

[22] I am satisfied that the fact that an order will support efficiency of TWE’s operations and is supported by the affected employee suggests that the order is in the public interest.

Conclusions and orders

[23] 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.

[24] The Order 1 to be issued in conjunction with this decision is to the effect that in the event that Mr Milenko Tajnikar ceases employment with Southcorp, and within 3 months of ceasing employment with Southcorp commences employment with TWE, the Treasury Wine Estates Barossa Wineries Enterprise Agreement 2020 or the Treasury Wine Estates Barossa Wineries Maintenance Enterprise Agreement 2020 will not cover TWE and Mr Tajnikar, and TWE and Mr Tajnikar will instead be covered by the Treasury Wine Estates Wolf Blass Enterprise Agreement 2017-2020.

[25] The Order will apply on and from 24 August 2021 or the date of the transfer whichever is the later.

COMMISSIONER

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