Woolworths Group Limited
[2023] FWC 2244
•12 SEPTEMBER 2023
| [2023] FWC 2244 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
Woolworths Group Limited
(AG2023/2771; AG2023/2772, AG2023/2773, AG2023/2774)
| COMMISSIONER CONNOLLY | MELBOURNE, 12 SEPTEMBER 2023 |
Application for an order relating to instruments covering new employer and non-transferring employees.
On 14 August 2023 (AG2023/2772) and 15 August 2023 (AG2023/2771, AG2023/2773, AG2023/2774), Woolworths Group Limited (Woolworths or Applicant) made four applications under section 319 of the Fair Work Act 2009 (Cth) (Act) in relation to the following enterprise agreements:
· Sydney Regional Distribution Centre Enterprise Agreement 2022 (AG2023/2771)
· Adelaide Regional Distribution Centre Enterprise Agreement 2022 (AG2023/2772)
· Melbourne National Distribution Centre Enterprise Agreement 2022 (AG2023/2773)
· Melbourne South Regional Distribution Centre Enterprise Agreement 2022 (AG2023/2774)
The applications state that on 25 September 2023, a transfer of business will occur and the majority of employees of the four subsidiaries of Woolworths will become directly employed by Woolworths. Transferring employees will continue to be covered by the enterprise agreements listed above.
Woolworths has applied for orders seeking that any non-transferring employee who performs the work contained within the classification structures of the Agreements also be covered by the relevant Agreement.
In summary, I am satisfied that:
a)transfers of business will shortly occur (as defined in s.311),
b)the Agreements are transferable instruments (as defined in s.312),
c)transferring employees will continue to be covered by the Agreements (per s.313),
d)unless orders are made under s.319, non-transferring and any new employees will otherwise be covered by the Storage Services and Wholesale Award 2020,
e)it is appropriate to make orders under s.319 so that transferring employees, non-transferring employees and any new employees performing the same work for the new employer are all covered by the same Agreement.
Relevant Legislation
Part 2-8 of Chapter 2 of the Act describes when a transfer of business occurs and s.312(1) of the Act provides for the transfer of enterprise agreements, certain modern awards and certain other instruments if there is a transfer of business from one employer to another employer.
Section 311 of the Act relevantly provides:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Sections 317 and 319 of the Act relevantly provide:
“317 FWC may make orders in relation to a transfer of business
This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.
…
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.”
The Transfer of Business
The Applicant submits that pursuant to s.311(1) of the Act, a transfer of business is about to occur and;
a)the employment of the majority of employees of the subsidiaries of Woolworths covered by the Agreements will terminate, and they will accept new employment with Woolworths (“Transferring Employees”);
b)the work the transferring employees perform for Woolworths will be the same, or substantially the same as the work they performed for those subsidiaries (“Transferring Work”); and
c)there is a connection between those subsidiaries and Woolworths as described in s.311(3) and s.311(6) of the Act, as Woolworths is the parent entity of the subsidiaries.
The four applications were accompanied by a Witness Statement from Ms Natalie Mooy (Workplace Relations Manager for Woolworths). In reliance on this uncontested evidence, I am satisfied that a transfer of business will shortly occur.
A “transferrable instrument” includes “an enterprise agreement that has been approved by the FWC” as provided by s.312(1)(a) of the Act, which states:
“313 Transferring employees and new employer covered by transferrable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employees employment with the old employer, then:
(a)the transferrable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer:”
Accordingly, pursuant to s.311 of the Act, I am satisfied that there will be a transfer of business and the employees of the old employers are “transferring employees” within the meaning of the Act.
I am also satisfied that each of the Agreements listed are transferrable instruments that will cover Woolworths and the transferring employees in accordance with s.313(1)(a).
Section 314 of the Act provides for a transferrable instrument to over other employees in certain circumstances as follows:
“314 New non-transferring employees of new employer may be covered by transferrable instrument
(1) If:
a)A transferrable instrument covers the new employer because of paragraph 313(1)(a); and
b)After the transferrable 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 transferrable 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).”
In this instance, the Storage Services and Wholesale Award 2020 would otherwise apply to the non-transferring employees. Therefore, the condition in s.314(1)(d) cannot be satisfied and the Agreements will not otherwise cover non-transferring employees.
The Applicant further submits that it is concerned that the Transferring Employees and any new employees who will perform the same Transferring Work side by side at the same sites will have their minimum terms and conditions regulated by different instruments.
Accordingly, Woolworths is seeking to apply the same minimum terms and conditions to all of its employees who perform Transferring Work by the means of these applications for Orders under s.319(1)(b) of the Act.
Consideration
Section 319(2) - Who may apply for an order?
The applications have been made by Woolworths Group Limited, the new employer. This meets the requirements of s.319(2) of the Act.
Section 319(3)(a)(i) - Views of the new employer.
Woolworths Group Limited, being the new employer, has made the applications under s.319 of the Act and supports the making of the Orders sought.
Section 319(3)(a)(ii) - Views of the employees who will be affected by the order.
Ms Mooy’s statement in support of the applications, lodged with the form F40s, indicates that as the Transfer has not taken place, there are currently no Non-Transferring Employees and therefore, it is not possible to seek their views. Ms Mooy further states that as the Agreement was approved by a valid majority of Transferring Employees in 2022, this may be taken as indication that the Agreement contains terms and conditions which are relevantly appropriate to apply to the new Non-Transferring Employees.
On 22 August 2023, my Chambers issued Directions seeking the Applicant to provide a copy of its submissions to any Union and/or employees impacted by the applications and request any party who had views regarding the application to advise my Chambers by 1 September 2023.
On 25 August 2023, the Applicant filed a witness statement authored by Ms Mooy indicating that the Directions had been complied with.
The SDA was a bargaining representative for the Agreements that are subject to these applications and is covered by the Agreements.
The UWU was a bargaining representative for the Agreements that are subject to these applications and is covered by the Agreements.
Woolworths has provided correspondence from Mr Gerard Dwyer (National Secretary - Treasurer of the SDA) and Mr Sam Roberts (Director – Logistics of the UWU) advising that they support the applications and do not oppose the matter being heard on the papers.
I am satisfied that there are no current non-transferring employees from whom I can receive views on in considering the applications.
Having regard to these matters, I have formed the view that this factor weighs in favour of granting the Orders.
Section 319(3)(b) - Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment.
Woolworths submits that no transferring employees will be disadvantaged by the Order sought and equally, that no non-transferring employees would be disadvantaged because there are currently none. Further, it submits that any employees hired in the future will be better off overall as the Agreements provide terms and conditions that are more beneficial than the relevant applicable Award.
I have also had regard to the fact that each of the four Agreements were approved respectively by the Commission.
Having considered all the material before me, including the four Agreements, I am satisfied that the non-transferring employees will not be disadvantaged by the Orders in relation to their terms and conditions of employment and therefore, this factor weighs in favour of granting the Orders sought.
Section 319(3)(c) - If the order relates to an enterprise agreement—the nominal expiry date of the agreement.
The nominal expiry date of the Agreements are:
· Sydney Regional Distribution Centre Enterprise Agreement 2022 (AG2023/2771) – 3 August 2026.
· Adelaide Regional Distribution Centre Enterprise Agreement 2022 (AG2023/2772) – 30 June 2026.
· Melbourne National Distribution Centre Enterprise Agreement 2022 (AG2023/2773) – 30 June 2026.
· Melbourne South Regional Distribution Centre Enterprise Agreement 2022 (AG2023/2774) – 31 August 2023.
These facts do not weigh against the granting of the Orders sought.
Section 319(3)(d) - Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace.
Woolworths submits that having the Agreements will not negatively impact on the productivity in the workplace. It also submits that if the Orders are not made and transferring and non-transferring employees are left on different terms and conditions of employment, this may have a negative impact on worker engagement and workplace productivity.
I am persuaded by the merits of these submissions and have formed the view that this factor weighs in favour of granting the Orders.
Section 319(3)(e) - Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer.
Woolworths submits that there would be no economic disadvantage as a result of the transferable instrument covering the new employer as the old employer was procured from within by the new employer. I consider this to weigh in favour of granting the Orders sought.
Section 319(3)(f) - The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer.
The Agreements and the relevant Award contain a number of different terms and conditions of employment. If the Orders are granted, it will confirm a single framework of regulation that has been negotiated and approved in the same general context in which it has applied and will continue to apply. Woolworths submits that this will enhance the degree of synergy that exists within the acquired businesses. Further, that the granting of the Orders will result in a greater degree of synergy for both Woolworths and the relevant employees who perform the transferring work.
I consider this factor weighs in favour of granting the Orders sought.
Section 318(3)(g) - the public interest.
Based on the materials contained in the Form F40 applications, and the additional materials provided to me, including the Statements of Ms Mooy, I am satisfied that it would not be contrary to the public interest to make the Orders sought and that the granting of the Orders would provide more certainty and consistency in relation to employment conditions for both employees and employer.
Conclusion
Having considered each of the matters outlined in s.319(3) of the Act and the material that has been filed, I am satisfied that orders pursuant to s.319(1)(b) of the Act should be made in respect of the 4 applications. The orders[1] will be issued concurrently with this decision.
COMMISSIONER
[1] PR766100, PR766103, PR766105 and PR766106.
Printed by authority of the Commonwealth Government Printer
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