UE & Multinet Pty Ltd
[2016] FWC 6705
•16 SEPTEMBER 2016
| [2016] FWC 6705 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
UE & Multinet Pty Ltd(AG2016/5345)
COMMISSIONER CIRKOVIC | MELBOURNE, 16 SEPTEMBER 2016 |
Application for an order relating to instruments covering new employer and transferring employees - Application for an order relating to instruments covering new employer and non-transferring employees.
[1] An application has been made by UE & Multinet Pty Ltd (Applicant) to the Fair Work Commission (Commission) for an order pursuant to sections 318 and 319 of the Fair Work Act 2009 (Act).
[2] The application was supported by a statutory declaration of Ms Kathryn Green, Head of People, Culture and Resources for the Applicant.
[3] The application seeks an order that the Jemena Asset Management Agreement (Vic) 2013 will not cover the Applicant or transferring employees or non-transferring employees.
Legislative scheme
[4] Sections 318 and 319 of the Act sets out the circumstances in which an order may be made by the Commission:
“318 Orders relating to instruments covering new employer and 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 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) 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 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 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 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.
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.
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) 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.”
Background
[5] Between 2011 and 2014 the Applicant ceased outsourcing certain functions to companies within the Jemena Group. A number of employees who had been performing this work at Jemena Group transferred to the Applicant. The Applicant and the transferring employees will be subject to the transferring instrument the Jemena Asset Management Agreement (Vic) 2013 (Agreement)pursuant to s.313(1) of the Act. The Applicant and the non-transferring employees (who perform the transferring work) will be subject to the transferring instrument the Agreement pursuant to s.314(1) of the Act.
[6] The Applicant submits that it, the transferring employees and non-transferring employees (who perform the transferring work), do not wish the instrument to transfer. The Applicant conducted a vote of the employees covered by the Agreement, of the 20 employees who are covered by the Agreement, 14 employees cast a valid vote and all of those 14 employees voted to cease being covered by the Agreement. The statutory declaration provided by Ms Green supports this view as does the attached copies of the executed written contracts of employment.
Transferrable instrument
[7] Section 311 of the Act sets out when a transfer of business occurs. On the evidence before me, it is likely that there will be a transfer of business within the meaning of section 311(1) of the Act.
[8] Section 312 of the Act details instruments that may transfer:
“312 Instruments that may transfer
Meaning of transferable instrument
(1) Each of the following is a transferable instrument:
(a) an enterprise agreement that has been approved by the FWC;
(b) a workplace determination;
(c) a named employer award.
Meaning of named employer award
(2) Each of the following is a named employer award:
(a) a modern award (including a modern enterprise award) that is expressed to cover one or more named employers;
(b) a modern enterprise award that is expressed to cover one or more specified classes of employers (other than a modern enterprise award that is expressed to relate to one or more enterprises as described in paragraph 168A(2)(b)).
Note: Paragraph 168A(2)(b) deals with employers that carry on similar business activities under the same franchise.”
[9] The Jemena Asset Management Agreement (Vic) 2013 was approved by the Commission on 23 August 2013 and pursuant to section 312(1) of the Act is a transferable instrument.
Who may apply for an order
[10] The application has been made by the new employer. The requirements of section 318(2) have been met.
Matters the Commission must take into account (s.318(3) and s.319(3))
s.318(3)(a) and s.319(3)(a) – the views of the new employer and the employees who would be affected by the order
[11] The new employer is the Applicant for this order and it supports the making of the order.
[12] The majority of transferring employees and non-transferring employees (who perform the transferring work) voted to cease being covered by the Agreement. All but three of the transferring employees and non-transferring employees (who perform the transferring work) have executed written contracts of employment that will commence on the date the Commission makes the order sought in this application, if the Commission makes the order. Of the three that have not executed written contracts, two are currently on annual leave and the third, to the best of Ms Green’s, of the Respondent, knowledge intends to sign the contract.
s.318(3)(b) and s.319(3)(b) – whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
[13] The Applicant submits that the transferring employees and non-transferring employees (who perform the transferring work) will not, on an overall basis, be disadvantaged in relation to their terms and conditions of employment if the Commission makes the proposed order.
[14] The Applicant submits that it went through a lengthy process with the employees, employee representatives and an independent solicitor to satisfy that the employees that they would not be disadvantaged should the Agreement no longer apply to them.
[15] Having considered all the material before me, I am satisfied that the transferring employees will not be disadvantaged by an order in relation to their terms and conditions of employment.
s.318(3)(c) and s.319(3)(c) – if the order relates to an enterprise agreement – the nominal expiry date of the agreement
[16] The nominal expiry date for the Jemena Asset Management Agreement (Vic) 2013 is 31 December 2014.
s.318(3)(d) and s.319(3)(d) – whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
[17] The Applicant submits that the transferable instrument would have a negative impact on the productivity of the Applicant’s workplace because it creates:
- the need to maintain a number of distinct and disparate employment systems;
- the potential for disparity, dissatisfaction and a less cohesive workplace culture as the employees and other employees of the Applicant who are not covered by the Agreement, perform broadly similar duties and are treated differently; and
- operational inefficiencies arising from having to administer the terms of an enterprise agreement for 20 employees out of a workforce of 340 employees.
- and s.319(3)(e) – whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
[18] The Applicant submits that it has, and will continue to, incur an economic disadvantage due to the application of the Agreement. It submits that there are costs and administrative difficulties caused by the disparate terms and conditions of employment, including for employees who perform the same work.
s.318(3)(f) and s.319(3)(f) – the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
[19] The Applicant submits that there is very little business synergy between its common law contracts and the Agreement. It submits that the Agreement was formulated and implemented to suit the specific needs of the entities within Jemena Group who are parties to the Agreement. It submits that there are a number of terms in the Agreement that have no or very little relevance to the Applicant’s business.
s.218(3)(g) and s.219(3)(g) – the public interest
[20] The Applicant submits that it is in the public interest to make the order.
Conclusion
[21] Having considered the application and the materials filed in support of the application, I am satisfied that all the requirements of s.318 of the Act have been met. An order will be issued with this decision.
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