V & K Business Holdings Pty Ltd

[2014] FWC 6433

[2014] FWC 6433

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

V & K Business Holdings Pty Ltd
(C2014/5572)

Fast food industry
COMMISSIONER SPENCER	BRISBANE, 15 SEPTEMBER 2014

Application for an order relating to instruments covering new employer and non-transferring employees.

[1] V & K Business Holdings Pty Ltd (the Applicant) has made an application pursuant to s.319 of the Fair Work Act 2009 (the Act) for an Order that the IPCA (QLD) Enterprise Agreement 2012 (the Agreement) cover non-transferring employees of the Applicant who perform, or are likely to perform, transferring work.

[2] In accordance with s.311(1) of the Act, a transfer of business has occurred. The Applicant purchased the business of Subway Warwick on 14 August 2013 from VBH Pty Ltd as trustee for the VBH Family Trust. On 14 August 2013, the Applicant employed 15 of the employees (transferring employees) previously employed by VBH Pty Ltd. Currently, four of those 15 employees are employed by the Applicant. These transferring employees are covered by the Agreement.

[3] The Applicant has employed 10 new employees (non-transferring employees) since 14 August 2013 and seeks Orders that all employees are covered by one industrial instrument, the Agreement. Currently, new (non-transferring) employees are covered by the Fast Food Industry Award 2010 (The Award).

Relevant legislation

[4] Section 319 of the Act 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.

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.”

Summary of Applicant’s submissions

[5] The Applicant filed a witness statement of the director of the Applicant and addressed the criteria in relation to s.319(3) of the Act in the application. In addition, the Applicant filed 10 employee statements of the non-transferring employees.

[6] The Applicant submitted that the Order sought will avoid some employees being covered by one industrial agreements and receiving better entitlements whilst other employees in the same workplace are covered by a different industrial instrument (the Award) with lesser entitlements.

[7] Further, the Applicant submitted that the Order sought will avoid the administrative challenges of applying two different industrial instruments to employees in a small workplace.

[8] The Applicant submitted that non-transferring employees have been given a copy of the agreement and that the non-transferring employees have expressed their wish to be covered by the agreement. The Applicant filed employee statements of the 10 non-transferring employees, which indicate that all of them would like to be covered by the Agreement. The employee statements indicate that that the employee has received a copy of the Agreement, has had explained to them how the terms of the Agreement would affect their employment and has had an opportunity to consider the terms of the Agreement.

[9] The Applicant submitted that the non-transferring employees will be better off under the Agreement than the Award as the Agreement has passed the better off overall test.

[10] The Agreement has a nominal expiry date of 23 April 2016.

[11] The Applicant submitted that the Agreement would not have a negative effect on productivity, as having employees in a small workplace on two industrial instruments which provide for different entitlements will lead to dissatisfaction amongst employees, particularly, non-transferring employees who receive lesser entitlements. Further, the Applicant submitted that if the Order is not granted, the business will incur administrative and operational inefficiencies arising from having to administer two industrial instruments in a small workplace.

[12] The Applicant submitted that no significant economic disadvantage would be suffered by the effect of the Agreement covering the Applicant as it is prepared to provide its non-transferring employees with the Agreement conditions which provide better off overall conditions of employment than the Award.

[13] The Applicant submitted that the modern award which would otherwise cover non-transferring employees has little business synergy with the Agreement as they provide for different minimum employment conditions.

[14] The Applicant submitted that the making of the Order would not offend the public interest.

Consideration

[15] I have taken into account the material provided by the Applicant in support of the application and the matters listed in s.319(3) of the Act. I am satisfied the Order should be issued.

[16] The Order, PR555477, will issue with this decision and take effect from 15 September 2014.

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