Wittner Retail Australia Pty Ltd T/A Wittner

[2021] FWC 4094

[2021] FWC 4094

FAIR WORK COMMISSION

DECISION

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

Wittner Retail Australia Pty Ltd T/A Wittner
(AG2021/5862)

WITTNER ENTERPRISE AGREEMENT 2013

Retail industry
DEPUTY PRESIDENT HAMILTON	MELBOURNE, 13 JULY 2021

S.318 - Application for an order relating to instruments covering new employer and transferring employees.

Introduction

[1] On 29 June 2021, Wittner Retail Australia Pty Ltd trading as Wittner Australia (the Applicant) made an application pursuant to s.318 of the Fair Work Act 2009 (the FW Act) for an Order that the Wittner Enterprise Agreement 2013 will not cover the Applicant and any ‘transferring employees’ as defined in Part 2-8 of the FW Act, being employees currently employed by Wittner’s Australia Pty Ltd in retail stores (but who are proposed to be employed by the Applicant subject to this application being granted). The Order sought was requested to come in to operation from the later of 1 August 2021 or when the abovementioned employees commence employment with the Applicant.

[2] On 30 June 2021, my Chambers listed the matter for non-attendance hearing on 8 July 2021. The employer was directed to provide a copy of the Notice of Listing to all employees affected by the application as soon as practicable and by no later than close of business Tuesday, 6 July 2021 and to advise the Commission as to how it has complied with this direction. Persons were asked to contact Chambers if they wished to be heard in the matter.

[3] On 6 July 2021, the applicant advised that it had taken the following actions:

“(1) The Applicant has provided copies of the following documents to the employees who stand to be affected by the Application (being the Store-Based Employees as defined in the Form F40):

(a) the Notice of Listing for an e-Hearing at 9:00am on 8 July 2021;

(b) the Form F40 – “Application for orders in relation to a transfer of business”; and

(c) all of the accompanying materials attached to the Form F40.

(2) The documents have been provided via Wittner’s internal communications platform and team member portal, ‘The Box’, which is the primary method of communication with staff. Specifically, a mandatory notice was posted on The Box about the documents and the notice contains direct links to access the documents.”

[4] No person requested to be heard and no opposition to the application was received from or on behalf of any persons.

[5] There are no employee organisations identified as being covered by the Enterprise Agreement.

Background

[6] The Form F40 - Application for orders in relation to a transfer of business sets out the background of this matter as follows:

“1. Wittner is an Australian footwear retailer, with approximately 312 retail employees currently working in its stores, in the roles of Style Consultants, Assistant Managers and Store Managers (Store-Based Employees).

2. Currently, the Store-Based Employees are employed by Wittner’s Australia Pty Ltd (Wittner’s Australia) and covered by the Wittner Enterprise Agreement 2013 (2013 EA), which passed its nominal expiry date on 30 August 2017. Note that Wittner’s NSW Pty Ltd is also a party to the 2013 EA, but no longer employs any Store-Based Employees.

3. Recently, a private investor has bought into the business and as a result, a new entity, Wittner Retail Australia Pty Ltd, the Applicant in this matter, has been established. It is intended that the Applicant will employ all of the Store-Based Employees and will generally take over the operations currently conducted by Wittner’s Australia.

4. As a result, the Store-Based Employees would cease to be employed by Wittner’s Australia, and would instead be employed by the Applicant, performing the same or substantially the same work. For completeness, the Applicant will, among other things, have beneficial use and/or ownership of some or all of the assets (tangible/intangible) that Wittner’s Australia currently owns or has beneficial use of and that relate to or are used in connection with the ‘transferring work’.

a. Offers of employment from the Applicant, on terms and conditions which are no less favourable overall compared to existing terms and conditions and with full recognition of continuous service, have been (or will be) made to all Store-Based Employees. The Applicant will also ensure that no-one receives a reduction in their overall take-home pay, as a result of this process.

b. The offers are (or will be) effective on and from 1 August 2021 and are contingent on the Commission granting the Order sought in this Application.

5. When the Store-Based Employees commence employment with the Applicant, a transfer of business in accordance with section 311(1) of the FW Act will occur (by virtue of the matters outlined at paragraph 4 above).

6. The 2013 EA is a transferrable instrument by operation of section 312(1)(a) of the FW Act. Section 313 of the FW Act provides that a transferrable instrument that covered the old employer (Wittner’s Australia) and the transferring employees immediately before the termination of the employment, will cover the new employer (being the Applicant). The operation of these sections means that the Applicant will be covered by the 2013 EA in relation to any transferring employees, subject to any Order of the Commission made pursuant to section 318 of the FW Act. Whilst transferring employees will be covered by the 2013 EA, any new non-transferring employees that the Applicant may seek to employ in the future, will not be covered by the 2013 EA and instead, will be covered by the General Retail Industry Award 2020 (Award). This poses a number of potential issues for the Applicant, which are summarised under the heading ‘Statutory Criteria’ below, including, by way of example, that:

a. having transferring employees and new employees undertaking essentially the same work side-by-side but receiving different entitlements, will create inconsistency in the workplace and potentially lead to an atmosphere of discontent. This is of particular concern given the number of improvements made to the Award in recent years, including, by way of example, the introduction of evening rates and overtime for casual employees. This would see the minimum terms and conditions of employment for new non-transferring employees being largely better than those for the original transferring-employees;

b. there is little business synergy between the two industrial instruments, with different minimum rates of pay, different rostering conditions and different ordinary hours, among other things; and

c. there would be a substantial administrative and operational burden on the Applicant in administering the two industrial instruments, including additional administrative, human resources and payroll costs associated with maintaining two very different sets of conditions (from a rostering and payroll perspective) for employees performing essentially the same work side-by-side.

7. The Applicant seeks an Order pursuant to section 318(1)(a) of the FW Act (on the terms set out in section 2.2 above), to displace the operation of section 313(1) of the FW Act. The effect of such an Order is that the Applicant and any transferring employees would instead be covered by the Award (as would any non-transferring employees that the Applicant may employ in the future). The intention is for this transfer of business (and employees) to take effect on and from 1 August 2021 and in these circumstances, the Applicant respectfully requests that this Application be determined as soon as possible, and in any event, before Friday, 30 July 2021.”

The Act

[7] Section 318 of the FW Act provides:

“318 Orders relating to instruments covering new employer and transferring employees

Orders that FWC may make

(1) 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 transferring employee because of paragraph 313(1)(a) does not, or will not, cover the new employer and the transferring employee;

(b) an order that an enterprise agreement or a named employer award that covers the new employer covers, or will cover, the transferring employee.

Who may apply for an order

(2) 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 transferring employee, or an employee who is likely to be a transferring employee;

(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 FWC must take into account

(3) In deciding whether to make the order, 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 transferring employee before the later of the following:

(a) the time when the transferring employee becomes employed by the new employer;

(b) the day on which the order is made.”

Consideration

[8] Overall I am satisfied that an order should be made pursuant to s.318. I am satisfied that the applicant may make an application pursuant to s.318(2), and that the orders sought may be issued pursuant to s.318(1). I have taken into account the material provided by the applicant in support of its application and the matters set out in s.318(3) of the Act. That material was not contradicted by any party. I have taken into account all the matters I am required to pursuant to s.318 of the Act. I am satisfied on the basis of the materials filed by the applicant that the matters set out in s.318(3) of the Act support the making of the order.

[9] An order to this effect will be issued with this decision.

DEPUTY PRESIDENT

Hearing details:

Melbourne

8 July

2021

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<AE405119  PR731628>