WA Profiling and Stabilisation Pty Ltd T/A WA Profiling and Stabilisation
[2019] FWC 3447
•27 MAY 2019
| [2019] FWC 3447 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
WA Profiling and Stabilisation Pty Ltd T/A WA Profiling and Stabilisation
(AG2019/1185)
Manufacturing and associated industries | |
DEPUTY PRESIDENT BEAUMONT | PERTH, 27 MAY 2019 |
Application by WA Profiling and Stabilisation Pty Ltd T/A WA Profiling and Stabilisation. – s 319
[1] This decision concerns an application by WA Profiling and Stabilisation Pty Ltd T/A WA Profiling and Stabilisation (the Applicant) for an order under s 319(1)(b) of the Fair Work Act 2009 (Cth) (the Act), that the Bluestone (WA) Pty Ltd Enterprise Agreement 2017 (the Agreement) will cover non-transferring employees of the Applicant (the Order).
[2] The Agreement is a transferrable instrument to which this application relates, and the Applicant is the new employer of the business. The Applicant therefore has standing to apply for the Order under s 319(2)(a).
[3] In deciding whether to make the Order, I am obliged to take into account various factors. The factors relevant to the application are set in s 319(3) of the Act, and include:
a) the views of the Applicant 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 of the Agreement;
d) whether the Agreement would have a negative impact on productivity of the Applicant’s workplace;
e) whether the Applicant would incur significant economic disadvantage as a result of the Agreement covering it;
f) the degree of business synergy between the Agreement and any workplace instrument that already covers the Applicant; and
g) the public interest.
[4] Having taken into account each of the above factors, I am satisfied that they weigh in favour of granting the Order sought.
[5] An Order that provides that the Agreement will cover the non-transferring employees of the Applicant, who perform the same or similar work as the transferred employees, is issued concurrently with this Decision. 1
Background
[6] The Agreement is expressed to apply to Bluestone (WA) Pty Ltd as trustee for The Blackburn Trust (Bluestone) and its employees who are employed in the classifications outlined in cl 5 of the Agreement and who will be based at 26 Colin Jamieson Drive, Welshpool WA 6106 (the Site).
[7] On or around 1 February 2019, Bluestone was acquired by the Applicant. 2 As a result of the acquisition, the employment of one or more employees of Bluestone was terminated (Transferring Employees). Each of the Transferring Employees commenced employment with the Applicant within three months of their termination of employment with Bluestone.3
[8] The Applicant purchased the majority of Bluestone’s assets, and continues to operate at the premises at which Bluestone was based, being the Site. 4 The Site is owned by Surface Mining Rebuilds Pty Ltd, and the lease was transferred from Bluestone to the Applicant.5
[9] The Transferring Employees perform work for the Applicant that is the same, or substantially the same, as the work that they performed for Bluestone. 6
[10] The Applicant will be the employer of any future employees who perform work at the Site and fall within the classifications in the Agreement (Non-Transferring Employees). 7 The Applicant does not currently employ any Non-Transferring Employees.
[11] Absent the grant of the Order, the Agreement will not apply to Non-Transferring Employees. Instead, the Non-Transferring Employees will be covered by either the Building and Construction General On-site Award 2010 (Construction Award), or the Manufacturing and Associated Industries and Occupations Award 2010 (Manufacturing Award) (collectively, the Awards).
[12] This application is premised on the basis that the Applicant is already covered by the Agreement. This relies on the proposition that there has been a transfer of business, and that the Agreement has transferred along with the Transferring Employees, as a result of the operation of the Act. I find this to be the case.
Legislative framework
[13] Section 314 of the Act makes provision for a transferable instrument to automatically cover non-transferring employees in certain circumstances. It provides:
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).
[14] The Applicant is covered by the Awards, which are modern awards within the meaning of s 314(1)(d) of the Act, and the Agreement. As any Non-Transferring Employees would be engaged subsequent to the Agreement covering the Applicant, and the Applicant is covered by above-mentioned Awards, the broader coverage of the Agreement to the Non-Transferring Employees, as contemplated by s 314, does not operate in relation to those employees.
[15] 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 transferring instrument covers non-transferring employees.
[16] Section 319(1) provides:
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)
[17] I now deal with each of the matters under s 319(3) of the Act. I am assisted in this by virtue of a detailed application filed by the Applicant, a witness statement of Nichole Harding, Human Resources Officer of the Applicant, and written submissions from the Applicant.
Views of the new employer – s 319(3)(a)(i)
[18] The new employer is the Applicant, who supports the application. The Applicant submits that the following factors should weigh in favour of the Commission granting the Order sought:
a) Non-Transferring Employees would be able to fully and efficiently integrate into the Applicant’s business so that the Applicant could maintain its standard of service and ensure workplace harmony;
b) productivity of the Applicant’s existing workforce (particularly those who will be working alongside the Non-Transferring Employees at the Site) would be maintained in circumstances where, absent the Order, employees working alongside each other and performing the same work would be on different terms and conditions of employment; and
c) the cost base of the Non-Transferring Employees would be reduced. In circumstances where the Order was not granted, the Applicant would need to divert resources to administrative functions (such as payroll and human resources) in order to accommodate the Non-Transferring Employees being subject to different terms and conditions.
Views of the employees who would be affected by the Order – s 319(3)(a)(ii)
[19] As observed there are currently no Non-Transferring Employees who are employed by the Applicant.
[20] Currently, if any Non-Transferring Employees were employed by the Applicant and based at the Site, the Non-Transferring Employees would be covered by either of the Awards. 8
[21] In a decision dated 8 January 2018, the Commission approved the Agreement. Therefore, it is evident that the Agreement passed the better off overall test (BOOT).
[22] Ms Harding gave evidence that the rates of pay under the Agreement are significantly in excess of the minimum rates of pay for the applicable classification under the Awards. 9
[23] On 12 April 2019, the application was served on the Australian Workers’ Union (AWU), being a bargaining representative for the Agreement. 10 The AWU was provided with the opportunity to file submissions in reply to the application; no objection was received, nor was any material forthcoming.
Whether any employees would be disadvantaged by the Order – s 319(3)(b)
[24] The Applicant submits that the Non-Transferring Employees would not be disadvantaged by the Order because they would be able to access entitlements under the Agreement that are not available to them under the Awards. 11 These entitlements include higher minimum wage rates, specific works allowance, clothing and tools, distant work allowance of $100 a day, more beneficial redundancy benefits, and a minimum call out period.12 As observed the Agreement passed the BOOT and was approved by the Commission on 8 January 2018.
[25] The Agreement has a nominal expiry date of 8 January 2021.
Productivity – s 319(3)(d)
[26] The Applicant submits that the Order sought is consistent with the Applicant’s desire to integrate Non-Transferring Employees into its existing workforce and business as soon as possible, and in a streamlined manner. The Applicant states that administrative and operational procedures would run more efficiently if applied consistently to each employee, and there would be less risk of disharmony in the workplace. 13
[27] The Applicant holds the view, that if the Order was not made, there would be an increased risk of confusion and workplace disputes because employees performing the same work would receive different terms and conditions of employment. 14 This would necessitate the diversion of resources to implement additional payroll systems, rostering practices, monitor compliance with the Awards, and to ensure human resource decisions did not adversely affect the Non-Transferring Employees.15
Economic disadvantage – s 319(3)(e)
[28] The Agreement has applied on the Site since 15 January 2018, and the Applicant has in place the administrative infrastructure to support the implementation of the Agreement and compliance with the same. 16
Degree of business synergy – s 319(3)(f)
[29] The Applicant submits that there is insufficient business synergy between the Agreement and the Awards because of the inconsistencies between the instruments. It cited the difference in timeframe for the ordinary hours of work, work cycles, and accrual of rostered days off. 17 There are said to be significant differences in the structure of employment entitlements. A higher minimum base rate of pay under the Agreement, in addition to a 50% special works allowance in respect of night, weekend, and public holiday work, are intended to factor in entitlements under the Awards.
[30] In the absence of the Order, the Applicant states that it would need to provide Non-Transferring Employees with additional allowances and special rates pursuant to the Awards. This would require administrative staff to make significant adjustments to ensure that the Non-Transferring Employees are no better or worse off than the Transferring Employees performing the same work.
Public interest – s 319(3)(g)
[31] The Applicant submits that it is in the public interest to develop and encourage harmonious work places, including by encouraging a single set of terms and conditions of employment in the workplace with respect to employees doing essentially the same work. It placed reliance on the decision of Territory Transit Pty Ltd, 18 where it was stated:
It is in the public interest to develop and encourage harmonious workplaces. One way of doing this is to encourage a single set of terms and conditions and employment in the workplace with respect to employees doing essentially the same work. Two disparate industrial instruments covering the employees may result in disquiet and an attempt by employees to try and cherry pick the better of conditions or it may result in one group of employees believing the other group is more favoured. 19
[32] There is no evidence that it would be against the public interest to issue the Order.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<AE426847 PR708455 >
1 PR708604.
2 Witness Statement of Nichole Harding dated 2 May 2019 (Harding Statement).
3 Ibid [7].
4 Ibid.
5 Outline of Submissions [4(d)].
6 Harding Statement [8].
7 Ibid [10].
8 Ibid [14].
9 Ibid [17].
10 Outline of Submissions [20].
11 Ibid [23].
12 Harding Statement [23].
13 Outline of Submissions [32].
14 Ibid [33(a)].
15 Ibid [33(b)].
16 Ibid [35].
17 Ibid [38].
18 [2016] FWC 2600.
19 [2016] FWC 2600 [17].
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