United Workers’ Union
[2023] FWC 1351
•9 JUNE 2023
| [2023] FWC 1351 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
United Workers’ Union
(AG2023/1363)
| Pharmaceutical industry | |
| DEPUTY PRESIDENT BEAUMONT | PERTH, 9 JUNE 2023 |
Application for an order relating to instruments covering new employer and non-transferring employees
This decision concerns an application by the United Workers’ Union (the Applicant) for an order under s 319(1)(b) of the Fair Work Act 2009 (Cth) (the Act) that the Pfizer (Perth) and the United Workers Union (UWU) Pharmaceutical Operator Agreement 2022 (the Pfizer EA)[1] will cover any non-transferring employees of Bridgewest Perth Pharm Pty Ltd trading as NovaCina (the Respondent).
On 3 April 2023, the Respondent acquired the business assets of Pfizer (Perth) Pty Ltd (Pfizer). These assets included the property and plant of the Bentley pharmaceutical manufacturing facility which was previously owned and operated by Pfizer. The Respondent made offers of employment to those Pfizer employees who were covered by the Pfizer EA. The employees who had accepted the offer of employment from the Respondent resigned immediately from Pfizer and commenced employment with the Respondent in or around 3–4 April 2023 (the transferring employees).[2]
Due to the operation of Part 2-8 of the Act, new employees who are employed by the Respondent in classifications contained within the Pfizer EA after the transition date (the transition date being the completion date for sale of the business from Pfizer to the Respondent) will not be covered by the Pfizer EA. These employees who perform, or are likely to perform, ‘transferring work’[3] for the Respondent, are, under the Act, considered to be ‘non-transferring employees’.
It is accepted that s 317 empowers the Commission to make certain orders, including orders under s 319 of the Act, if there is, or is likely to be, a transfer of business from an old employer to a new employer. In this case, the Applicant seeks orders under s 319(1)(b) of the Act. That section of the Act empowers the Commission to make an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of Part 2-8, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.
The Pfizer EA was approved by the Fair Work Commission on 18 November 2022 and has a nominal expiry date of 30 June 2025. The Pfizer EA is expressed to cover, amongst others, all pharmaceutical operators employed by Pfizer.[4] The non-transferring employees which the Pfizer EA would cover, should an order be made, are any new pharmaceutical operators employed by the Respondent.
The Applicant has articulated the order sought in the following terms:
a) Pursuant to s 319(1)(b) of the FW Act, the Commission orders that the Pfizer (Perth) and the United Workers Union (UWU) Pharmaceutical Operator Agreement 2022 covers, or will cover, any non-transferring employees who perform, or are likely to perform, the transferring work for Bridgewest Perth Pharma Pty Ltd.
b) In accordance with section 319(4) of the FW Act, this Order shall take effect in respect of each non-transferring employee on and from the date of this Order or the date from which employment of each of the non-transferring employees commences with Bridgewest Perth Pharma Pty Ltd.
It is uncontroversial that the Applicant and the Respondent are supportive of the orders sought, and in that respect the Applicant has, in part, relied upon some of the materials filed by the Respondent.
In deciding whether to make the order, I am obliged to consider whether the Applicant has standing under s 319(2) of the Act to apply for the order and to take into account various factors. Briefly stated, I am satisfied that there has been a transfer of business and that the Applicant has standing to make the application under s 319(2)(c).
The factors relevant to the consideration of whether to grant the order sought are set out in s 319(3) of the Act, and include:
a) the views of the Respondent and the employees affected by the order;
b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;
c) the nominal expiry date of the Pfizer EA;
d) whether the Pfizer EA would have a negative impact on productivity of the Respondent’s workplace;
e) whether the Respondent would incur significant economic disadvantage as a result of the Pfizer EA covering it;
f) the degree of business synergy between the Pfizer EA and any workplace instrument that already covers the Respondent; and
g) the public interest.
Having taken into account each of the above factors, I am satisfied that they weigh in favour of granting the order sought.
An Order[5] that provides that the Pfizer EA will cover the non-transferring employees of the Respondent who perform the same or similar work as the transferring employees is issued concurrently with this decision. My detailed reasons follow. It is noted that the application was determined on the papers with the consent of both the parties.
Background
The broader context and events leading to the application have been comprehensively detailed in the witness statements of:
a) Mr Paul Bergesio, Industrial Officer employed by the Applicant; and
b) Mr Scott Dassira, Vice President of Human Resources for the Respondent.
On or around 27 January 2023, the Respondent sent letters to employees of Pfizer who were covered by the Pfizer EA, advising:
a) the Respondent had entered into an agreement with Pfizer for the sale of the pharmaceutical manufacturing facility and operations at 15 Brodie Hall Drive Bentley, WA (the Site); and
b) the Respondent was making an offer of employment with the Respondent, to the employee, subject to the employee remaining in Pfizer's employment as at the date of transfer of business from Pfizer to the Respondent;
c) the terms and conditions of their employment would be those described in the letter of offer, and as per the Pfizer EA; and
d) the employee will commence employment with the Respondent on the transition date and that the employee will be deemed to have resigned from their employment with Pfizer.[6]
In accordance with a contract for the sale of business assets and property between Pfizer, the Respondent and other associated entities of the Respondent, between 3–4 April 2023:
a) the Respondent acquired Pfizer's business assets, which included the property and plant of the Bentley pharmaceutical manufacturing facility which was owned and operated by Pfizer; and
b) those employees who had accepted the offer of employment from the Respondent resigned immediately from Pfizer and commenced employment with the Respondent.[7]
Mr Dassira gave evidence that as of 3 April 2023, and by virtue of the contract of sale between Pfizer and the Respondent, the Respondent and its associated entities now own or have the beneficial use of the assets associated with the transferring work performed by the employees covered by the Pfizer EA.[8]
Mr Dassira stated that the Respondent had not employed anyone in any of the classifications covered by the Pfizer EA since 3 April 2023.[9]
Mr Dassira added that the Respondent was aware of the discussions between the bargaining representatives of Pfizer and the Applicant at the time the Pfizer EA was negotiated and did not consider that the Pfizer EA would have any negative impact on its productivity given there were no employees of the Respondent who were already performing the transferring work.[10]
For the sake of completeness, Mr Dassira noted that the Respondent has other employees who were previously employed by Pfizer and are either:
a) covered by a different transferable agreement, namely the Pfizer (Perth) General Agreement 2012;[11] or
b) not covered by any enterprise agreement, by virtue of the nature or seniority of their roles have not been traditionally covered by awards (s 143(7) of the Act).[12]
Transfer of business
Section 311 of the Act sets out the circumstances in which a transfer of business occurs.
Section 312 of the Act indicates that a ‘transferable instrument’ includes ‘an enterprise agreement that has been approved by the FWC’.
It is understood that the work carried out by the transferring employees for the Respondent is the same, or substantially the same, as the work that they carried out for Pfizer within the three months prior to their employment ending with Pfizer and commencing with the Respondent.
The Applicant asserts that there has been a transfer of business within the meaning of s 311(1) of the Act. It contends that:
a) the transferring employees ceased employment with Pfizer as required by s 311(1) on or by 3 April 2023;
b) the transferring employees commenced employment with the Respondent on 3–4 April 2023, this being within the three months prescribed by s 311(1)(b);
c) the transferring employees perform the same or substantially the same work for the Respondent as they did for Pfizer as required by s 311(1)(c); and
d) the Respondent owns or has the beneficial use of the assets previously owned by Pfizer as per section s 311(3) of the Act.
I am satisfied that there was a transfer of business and that the transferring employees transferred to the Respondent under the terms of the Act. I am, in addition, satisfied that the Pfizer EA is a transferrable instrument[13] to which this application relates, it is evident that the Respondent is the new employer, and that the Applicant is covered by the Pfizer EA. As such, I consider the Applicant has standing to make the application under s 319(2)(c).
Legislative framework regarding transferable instruments
Section 314 of the Act makes provision for a transferable instrument to automatically cover non-transferring employees in certain circumstances. It provides:
314 When 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 FWC order under subsection 319(1).
The Respondent is covered by the Pharmaceutical Industry Award 2020 (the Award),[14] which is a modern award within the meaning of s 314(1)(d) of the Act. Therefore, the coverage of the Pfizer EA to the non-transferring employees, as contemplated by s 314, does not operate in relation to those employees.
However, the operation of s 314 is subject to s 319, which allows for the Commission to make an order notwithstanding the provisions of s 314, that a transferable instrument covers non-transferring employees.
Section 319(1) provides:
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.
Consideration of factors in s 319(3)
The discretion to make the order sought by the Applicant under s 319(1)(b) of the Act will only be exercised after taking into account the matters set out in s 319(3) of the Act. These factors, which must be read having regard to the objects of the Part, are intended to enable the Commission to balance appropriately the protection of employees’ entitlements under certain instruments with the need for some flexibility to depart from the default rules about coverage of instruments following a transfer of business.[15] I now deal with each of the matters under s 319(3) of the Act.
Views of the new employer – s 319(3)(a)(i)
Expanding upon the information detailed in the background of this Decision, the Respondent supports the application.
Views of the employees who would be affected by the Order – s 319(3)(a)(ii)
The Applicant and Respondent submitted that at the time of making the application there were no non-transferring employees who would be affected by the order sought.
Whether any employees would be disadvantaged by the order – s 319(3)(b)
The Pfizer EA was approved by the Fair Work Commission on 18 November 2022 and it is therefore appropriate to presume that the Pfizer EA provides terms that are better off overall in comparison to the Award, which would otherwise cover the non-transferring employees.
The nominal expiry date of the agreement (s 319(3)(c))
The Pfizer EA has a nominal expiry date of 30 June 2025. It is therefore the case that if the Commission makes the order sought, the non-transferring employees will have the benefit of established terms and conditions of employment set in place until, at least, that date. The Applicant notes that in the negotiations for the Pfizer EA, there were periods of protected industrial action. The Applicant submits that if the order was not made, the Applicant would consider bargaining with the Respondent, which could involve further protected industrial action. According to the Applicant, the granting of the order would preclude protected industrial action until 1 July 2025, at the earliest.
Productivity – s 319(3)(d)
The Applicant and Respondent appear to agree that there would be no negative impact on the productivity of the Site.
Economic disadvantage – s 319(3)(e)
The Applicant pressed that there would be no significant economic disadvantage as a result of the proposed order being granted, because the Respondent would, in any event, employ non-transferring employees on the same terms and conditions as the existing workforce.
Degree of business synergy – s 319(3)(f)
The Applicant submits that there will be a higher degree of business synergy if transferring and non-transferring employees are engaged in accordance with the same employment conditions under the Pfizer EA.
If the proposed order is granted, it will, in my view, confirm a single framework of regulation that has been negotiated and approved in the same general context in which it has applied and will continue to apply. This will likely enhance the degree of synergy that exists within this part of the Respondent’s business.
Public interest – s 319(3)(g)
The public interest in this context is influenced by the objects of this Part of the Act in s 309 and those adopted by the Act more broadly.
It is not apparent that it would be against the public interest to issue the order sought. The evidence before me points to the proposed order allowing for non-transferring employees to be afforded the benefit of increased minimum terms and conditions of employment under the Pfizer EA than they would otherwise receive if covered by the Award.
This may lead to a conclusion that the public interest in this matter is served by facilitating arrangements that permit the maintenance of the presently approved employment conditions that apply to the transferring employees to extend to the non-transferring employee(s), pending the making of any new instrument that might apply in the years to come.
Conclusion
I have considered the material provided by the Applicant in support of its application and the matters set out in ss 314 and 319 of the Act. I am satisfied the materials provided by the Applicant, when considered against the matters set out in s 319(3) of the Act, support the making of the Order.[16]
In accordance with s 319(4) of the Act, the Order will not come into operation in relation to each non-transferring employee until the later of the following:
a) the time when the non-transferring employee starts to perform the transferring work for the new employer; or
b) the day on which the Order is made.
DEPUTY PRESIDENT
Matter determined on the papers.
[1] AE518225 (Pfizer EA).
[2] Witness Statement of Scott Dassira, [6] (Dassira Statement).
[3] Fair Work Act 2009 (Cth) s 311(1)(c).
[4] Pfizer EA (n 1) cl 1.3.
[5] PR762912.
[6] Dassira Statement (n 2) [5].
[7] Ibid [6].
[8] Ibid [9].
[9] Ibid [10].
[10] Ibid [11].
[11] AE898159.
[12] Dassira Statement (n 2) [12].
[13] Fair Work Act 2009 (Cth) s 312(1)(a).
[14] MA000069.
[15] Explanatory Memorandum, Fair Work Bill 2008 (Cth) [1259].
[16] PR749348.
Printed by authority of the Commonwealth Government Printer
<AE518225 PR762911>
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