Westfield Limited

[2013] FWC 850

[2013] FWC 850

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318—Transfer of instrument

Westfield Limited
(AG2012/12109)

Building, metal and civil construction industries
COMMISSIONER GOOLEY	MELBOURNE, 7 FEBRUARY 2013

Application for an order relating to instruments covering new employer and transferring employees in agreements.

[1] Westfield Limited (the Applicant) made application to the Fair Work Commission for orders pursuant to section 318 of the Fair Work Act 2009 (the FW Act) that the AMP Capital Shopping Centres Enterprise Agreement 2007 (the Agreement) not cover the Applicant and the employees of AMP Capital Shopping Centres Pty Limited (AMP) who was offered and accepted employment with the Applicant (the transferring employees). Further, the Applicant sought orders that the transferable instrument not cover the Applicant and employees who are non-transferring employees within the meaning of section 314(2) of the FW Act.

Background

[2] A related body corporate of the Applicant entered into an arrangement with a related body corporate of AMP which provided that the Applicant would take over the management of certain shopping centres currently managed by a related body corporate of AMP. The arrangement took effect on 25 October 2012.

[3] The Applicant offered employment to a number of AMP employees and six employees accepted employment (the transferring employees). The Applicant also intends employing new employees to perform similar work to the transferring employees (non transferring employees).

[4] Prior to commencing employment with the Applicant the transferring employees were covered by the Agreement which had a nominal expiry date of 28 December 2010.

[5] The Applicant submitted that by reason of section 313 of the FW Act the Agreement covers it and the transferring employees and by reason of section 314 of the FW Act the Agreement covers the non transferring employees.

[6] If the orders sought by the Applicant are made then no enterprise agreement will apply to the employees. The Applicant offered employment to the transferring employees on terms and conditions no less favourable than the Agreement. The non transferring employees are employed on the same terms and conditions as the Applicant currently employs award based centre management employees in Australia.

[7] The Applicant identified some terms and conditions in the Agreement which are less favourable than those currently applying to Applicant’s employees. However there are some terms of the Agreement which are more favourable particularly redundancy pay, personal leave, paid parental leave, long service leave and superannuation.

[8] The application was heard on 19 November 2012 and copies of the Application and notice of listing was provided to the transferring employees prior to the hearing. No employees attended the hearing to oppose the application.

[9] The Agreement is a transitional instrument. By virtue of Part 3 of Schedule 11 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) sections 318 and 319 of the FW Act apply.

[10] Sections 318(3) and 319(3) provide that the Fair Work Commission, in making an order, must have regard to:

(a) the views of the new employer or a person who is likely to be the new employer;

[11] The Applicant is the new employer.

(b) the views of the the employees who would be affected by the order;

[12] No transferring employees have supported or opposed the application. It is not clear if there were any non-transferring employees employed at the time the application was made. If there were, they did not either support or oppose the application.

(c) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;

[13] The transferring employees will in part be advantaged by the orders sought as the Agreement contains some terms and conditions less favourable that the relevant modern awards. However it also contains some provisions which are more favourable. The Applicant has advised that each transferring employee was offered employment on terms which were no less favourable than the Agreement. Mr Charles Power (the Applicant’s representative) explained that this is applied on a term by term comparison and not on an overall basis, i.e. the transferring employees would have each of the more favourable conditions in the Agreement applied to them. However, the transferring employees’ rights should the order be made, would be contractual rights, not rights arising under the FW Act.

[14] The non transferring employees would suffer the same advantages and disadvantages if employed under the Agreement. However unlike the transferring employees, the non-transferring employees were not offered employment on the basis that the more favourable terms of the Agreement would apply to them.

(d) if the order relates to an enterprise agreement - the nominal expiry date of the agreement;

[15] The nominal expiry date of the Agreement is 28 December 2010.

(e) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace;

[16] No submissions were made on this criterion.

(f) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;

[17] No submissions were made on this criterion in relation to transferring employees. However the Applicant submitted in correspondence to the Commission that it would incur significant economic disadvantage if it was required to provide the more favourable conditions to all of its remaining Australian award-based centre management employees. It is not clear how this is said to occur.

[18] Section 314(1) of the FW Act only applies the Agreement to non-transferring employees if “no other enterprise agreement or modern award covers the new employer and the non-transferring employees.” As the employees referred to are award based employees the Agreement would not apply to these employees unless an order were made to that effect and no one has applied for such an order.

[19] If there were non-transferring employees within the scope of the Agreement who are award free then the Agreement would apply to them.

(g) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;

[20] The only workplace instruments that apply at the workplace are the General Retail Industry Award 2010 and the Clerks-Private Sector Award 2010. No submissions were made on this criterion.

(h) the public interest.

[21] The Applicant submits that is in the public interest that the Agreement which undercuts the safety net apply to as few employees in the Australian workforce as possible. It was submitted that the Agreement could not be made today as it would not pass the better off overall test.

Consideration

[22] That the Agreement undercuts the safety net, is an important consideration. The Agreement rates of pay are currently below the modern award minimum rates of pay. However by reason of Schedule 9 Part 4 item 13 of the Transitional Act the minimum rates from the modern awards must be paid to the employees.

[23] The minimum call for casual employees is less than provided in the modern award and employees who earn more than $55,000 are not entitled to payment or time in lieu or other benefits for working overtime, weekend hours. Some of the allowances are less than the modern awards. In addition, there is no annual leave loading, shift loadings, flexibility provisions, consultation provisions, nor is there any right to representation in the dispute settlement procedure.

[24] On the other hand the Agreement contains benefits significantly above the modern award and some of the National Employment Standards.

[25] In circumstances where the Agreement has passed its nominal expiry date, where the transferring employees are entitled to both the better of the Agreement and the modern award, where no transferring employees oppose the application, I have determined to make orders that the Agreement not apply to the transferring employees.

[26] It is not clear that any of the classifications of the Agreement are not picked up by classifications in the modern awards. There was no evidence before the Tribunal that there are or will be any award free non transferring employees who would but for the making of an order under section 391(1)(a) be covered by the Agreement. The employees who are covered by a modern award are not non transferring employees and therefore the Agreement does not apply to these employees. Further there was no evidence that the Applicant employed any non transferring employees.

[27] Therefore I do not consider it necessary to make orders about non transferring employees.

COMMISSIONER

Appearances:

C Power for the Applicant.

Hearing details:

2012.

Melbourne:

November 19.

Printed by authority of the Commonwealth Government Printer

<Price code A, AC312149  PR533862 >