Unitrans Asia Pacific Pty Ltd

[2014] FWC 4609

[2014] FWC 4609

FAIR WORK COMMISSION

DECISION

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

Unitrans Asia Pacific Pty Ltd
(AG2014/6583)

Storage services
COMMISSIONER ROE	MELBOURNE, 9 JULY 2014

Applications for orders relating to instruments covering new employer and non-transferring employees in agreements; Unitrans Enterprise Agreement 2013 - 2016.

[1] This is an application by Unitrans Asia Pacific Pty Ltd (the Applicant) for orders pursuant to Section 319(b) of the Fair Work Act 2009 (the Act) that the Unitrans Enterprise Agreement 2013 - 2016 (the Agreement) cover non-transferring employees. The Agreement was approved by me on 15 April 2014 [[2014] FWCA 2546].

[2] Ms Helen George, Group Human Resources Consultant, for Steinhoff Asia Pacific (Steinhoff) has provided detailed evidence in the form of a statutory declaration. Further material was provided in correspondence of 3 July 2014 in response to my queries. The Shop, Distributive and Allied Employees Association (SDA) is covered by the Agreement and its National Secretary, Mr De Bruyn, advised on 4 July 2014 that they support both the application and the submissions on behalf of the Applicant. I am satisfied by this material that:

● Steinhoff has been operating a storage and logistics business under the trading name Unitrans.
● The employees necessary for the conduct of the business trading as Unitrans are currently employed by Steinhoff.
● In or about July 2013 Steinhoff arranged to rename a new wholly owned subsidiary. That subsidiary is the Applicant.
● Steinhoff intends to operate the business known as Unitrans through the Applicant after transferring the operations of the business known as Unitrans from Steinhoff to the Applicant with effect from 1 July 2014.
● The Agreement covers Steinhoff in establishments where Steinhoff is trading as Unitrans.
● The transferring employees are the employees of Steinhoff who perform warehousing duties in those establishments.
● The nominal expiry date of the Agreement is 1 July 2016.
● The transferring employees will have their service with the Steinhoff considered as service with the Applicant.
● The transfer will start from 1 July 2014.
● There is a relevant connection between the Applicant and Steinhoff such that they are associated entities as that term is utilised in the Fair Work Act 2009 and defined in the Corporations Act 2001.
● Pursuant to Section 313 of the Act the Agreement will continue to apply to each transferring employee in their employment with the Applicant.
● There are no non-transferring employees employed by the Applicant at this stage and it is not the intention of the Applicant to engage any new employees in the business covered by the Agreement until after this application is finalised.
● If the application was not approved then the non-transferring employees would be covered by the Storage Services and Wholesale Award 2010 (the Award).
● The wages and conditions in the Agreement are considerably more beneficial to employees than the Award. For example, the base rates of pay under the Agreement are more than 20% higher than those under the Award.
● There are efficiency and productivity gains to the Applicant for all warehousing employees to be covered by the Agreement. There would be inefficiencies created if the Application was not granted and if the Applicant had to engage future employees under a different industrial instrument. There would also be additional administrative costs.
● The Agreement was designed to meet the needs of both the employees and the employer of the business.
● There is a lack of business synergy between the Agreement and the Award. There is a risk of industrial disharmony if the employees were to be engaged on different instruments.

[3] I am satisfied that there is a transfer of business as defined by Section 311 of the Act. At least some of the employees of the old employer are as of 1 July 2014 employed by the new employer and they continued to work in the same location performing the same or similar work.

[4] I am satisfied that the Agreement is a transferable instrument by virtue of section 312(1)(a) of the Act. Section 313 of the Act provides for the transferable instrument to, in effect, transfer to the Applicant as the new employer along with the employees who transferred. Therefore, the new employer and the transferring employees are covered by the Agreement.

[5] The new employer and the non-transferring employees are covered by the Storage Services and Wholesale Award 2010 (the Award) which is a modern award within the meaning of section 314(1)(d) of the Act. Section 314 of the Act has the effect of not permitting the Agreement to apply to non-transferring employees.

[6] However, section 314(3) of the Act provides that this can be altered by an order made by the Fair Work Commission under section 319(1).

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

“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.”

[8] I am satisfied that the Applicant can make the Application pursuant to Section 319(2)(a) of the Act. I am also satisfied that the Orders sought are of the type permitted by Section 319(1)(b) of the Act. I will deal with each of the requirements of section 319(3) in turn.

(i) Section 319(3)(a)(i) and (ii) - the views of the new employer and the employees who would be affected by the order

[9] The Applicant employer supports the Application. The SDA which is covered by the Agreement and represents the transferring employees and is likely to represent non-transferring employees also supports the Application.

[10] Transferring employees are indirectly affected by the proposed Order. In the circumstances of this particular case I consider that it is not necessary to consider the views of the transferring employees. I reach this conclusion because I cannot see any possible negative effect on transferring employees if the Application for non-transferring employees to be covered by the Agreement in future is granted. There is some obvious disadvantage to transferring employees if non-transferring employees were to be engaged on lesser wages and conditions which would be the case if the Application was not granted. The SDA has supported the submissions that it is desirable for non-transferring employees to be covered by the Agreement and it is doing so on behalf of those who are covered and who will be covered by the Agreement.

[11] It is not possible to seek the views of non-transferring employees because at this stage there are none.

(ii) Section 319 (3)(b) - whether any employees would be disadvantaged by the order

[12] I am satisfied that there are no employees who will be disadvantaged by the order. On the contrary non-transferring employees will be advantaged by the order.

(iii) Section 319 (3)(c) - expiry date of the enterprise agreement

[13] The Agreement has a nominal expiry date of 1 July 2016. This is a factor which stands in favour of the granting of the Application. The granting of the Application will have no negative impact on collective bargaining.

(iv) Section 319(3)(d) - any negative impact on the productivity of the new employer’s workplace

[14] I am satisfied that the granting of the Application will not have a negative impact on productivity. The opposite is likely to be the case.

(v) Section 319 (3)(e) - any significant economic disadvantage to the new employer

[15] I am satisfied that the granting of the Application will not result in any significant economic disadvantage to the Applicant.

(vi) Section 319(3)(f) - degree of business synergy

[16] I am satisfied that there is a lack of business synergy between employment under the Agreement and employment under the Award. Hours of work arrangements are different under the two instruments.

(vii) Section 319(3)(g) - the public interest

[17] The public interest is served by promotion of industrial harmony, enterprise bargaining and collective agreement coverage. These objectives will be facilitated by the granting of the Application in the circumstances of this case.

Conclusions

[18] Taking into account each of the matters set out in section 319(3) of the Act, I am satisfied on balance that the orders sought should be made.

[19] Orders in the terms provided will be issued to provide that the Agreement will also cover the non-transferring employees of the Applicant who perform or are likely to perform transferring work.

[20] In accordance with section 319(4) of the Act, the order comes into operation from the date of engagement by Unitrans Asia Pacific Pty Ltd of the first non-transferring employee.

COMMISSIONER

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