Woolworths Group Limited T/A Woolworths
[2022] FWC 2530
•20 SEPTEMBER 2022
| [2022] FWC 2530 |
| 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 T/A Woolworths
(AG2022/3942, AG2022/3943, AG2022/3945, AG2022/3948, AG2022/3953, AG2022/3954)
Erskine Park Distribution Centre Enterprise Agreement 2022 AND OTHERS
| Storage services | |
| DEPUTY PRESIDENT EASTON | SYDNEY, 20 SEPTEMBER 2022 |
Applications for orders relating to instruments covering new employer and non-transferring employees to be employed by Woolworths Group Limited T/A Woolworths.
Woolworths Group Limited T/A Woolworths (Woolworths) has applied for orders under s.319(1)(b) of the Fair Work Act 2009 (the Act). A transfer of business will shortly occur and employees of three subsidiaries of Woolworths will become directly employed by Woolworths. Transferring employees will continue to be covered by the following enterprise agreements:
(a)Erskine Park Distribution Centre Enterprise Agreement 2022[1]:
(b)BIG W Hoxton Park Distribution Centre Enterprise Agreement 2022[2];
(c)Melbourne Liquor Distribution Centre Enterprise Agreement 2021-2024[3];
(d)Sydney National Distribution Centre Enterprise Agreement 2021[4];
(e)Woolstar Pty Limited Wodonga Regional Distribution Centre and the National Union of Workers Enterprise Agreement 2021-2024[5]; and
(f)Wyong Regional Distribution Centre Enterprise Agreement 2020[6] (the Agreements).
Woolworths has applied for orders that any non-transferring employee who performs the work contained within the classification structures of the Agreements will also be covered by the relevant Agreement.
In summary I am satisfied that:
a)transfers of businesses 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)new employees hired by the new employer will otherwise be covered by modern awards;
e)unless orders under made under s.319, new employees will not be covered by one of the Agreements (per s.314); and
f)it is appropriate to make orders under s.319 so that transferring employees and new employees performing the same work for the new employer are all covered by the same agreement.
The transfer of business
The relevant workers are currently employed by Philip Leong Stores Pty Ltd (Philip Leong Stores), HP Distribution Pty Ltd (HP Distribution) and Woolstar Pty Ltd (Woolstar). Woolworths is the parent company of Philip Leong Stores, HP Distribution and Woolstar.
Section 311(1) of the Act sets out the circumstances in which a transfer of business occurs:
“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).”
Woolworths submits that pursuant to s.311(1) of the Act, a transfer of business is about to occur:
a)the employment of the majority of employees of Philip Leong Stores, HP Distribution and Woolstar covered by the Agreements will terminate, and they will accept employment with Woolworths (“Transferring Employees”).
b)the work the Transferring Employees perform for the Woolworths is the same, or substantially the same as the work they performed for Philip Leong Stores, HP Distribution or Woolstar (“Transferring Work”) and;
c)there is a connection between Philip Leong Stores, HP Distribution, Woolstar and Woolworths as described in s.311(3) of the FW Act, because Woolworths is the parent entity of Philip Leong Stores, HP Distribution and Woolstar and there is a connection with the Transferring Work in accordance with an arrangement between Woolworths, Philip Leong Stores, HP Distribution and Woolstar (per s.311(6)).
The six Form F40s were accompanied by a Statement of 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” (per s.312(1)(a) of the Act).
Section 313(1)(a) of the Act provides:
“313 Transferring employees and new employer covered by transferable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee's employment with the old employer, then:
(a) the transferable 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 section 311 of the Act, I am satisfied that there will be transfers of businesses and the employees of the old employers are ‘transferring employees’ within the meaning of the Act. I am also satisfied that the Agreements are transferrable instruments that will cover Woolworths and the transferring employees (per s.313(1)(a)).
Section 314 of the Act also provides for a transferable instrument to cover other employees in certain circumstances:
“314 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).”
In this case there are modern awards that would otherwise apply to the non-transferring employees, being the Storage Services and Wholesale Award 2020 and the Manufacturing and Associated Industries and Occupations Award 2020 (the Awards). The condition in s.314(1)(d) is not satisfied and the Agreements will not otherwise cover non-transferring employees.
Woolworths is concerned that the Transferring Employees and any new employees who perform the same Transferring Work side by side at the same sites will have their minimum terms regulated by different instruments.
Woolworths seeks to apply the same minimum terms and conditions for all of its employees who perform Transferring Work and seek an order under s.319(1)(b) of the Act.
Consideration
Section 319 provides:
“319 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.”
I am satisfied that Woolworths has standing to bring the applications (per s.319(2)(a)).
Section 319(3)(a)(i) – the views of the new employer
Woolworths, being the new employer, supports the making of the Orders.
Section 319(3)(a)(ii) - the views of the employees who will be affected by the order
Ms Mooy’s witness statement provides that a transfer of business will occur on 24 October 2022 (“Transfer Date”) when the employment of the majority of the Transferring Employees will terminate and they accept new employment with Woolworths. Any employees who are on leave on the Transfer Date and who do not expressly consent to the employment with Woolworths before 24 October 2022 will transfer on the earlier of:
a)the Monday following express consent of employment with Woolworths; or
b)the Monday following their return to work after 24 October 2022.
Any employees who are not on leave and not rostered between 17 October 2022 to 24 October 2022 will accept new employment with Woolworths on their first shift on or after the Transfer Date and will transfer to Woolworths on the Monday following the date of their first shift.
The United Workers’ Union (UWU) was a bargaining representative for the following Agreements and are covered by the Agreement:
- Erskine Park Distribution Centre Enterprise Agreement 2022
- BIG W Hoxton Park Distribution Centre Enterprise Agreement 2022
- Melbourne Liquor Distribution Centre Enterprise Agreement 2021-2024
- Sydney National Distribution Centre Enterprise Agreement 2021
- Woolstar Pty Limited Wodonga Regional Distribution Centre and the National Union of Workers Enterprise Agreement 2021-2024
- Wyong Regional Distribution Centre Enterprise Agreement 2020
The Shop, Distributive and Allied Employees Association (SDA) was a bargaining representative for the following Agreements are covered by the Agreements:
- BIG W Hoxton Park Distribution Centre Enterprise Agreement 2022
- Melbourne Liquor Distribution Centre Enterprise Agreement 2021-2024
- Woolstar Pty Limited Wodonga Regional Distribution Centre and the National Union of Workers Enterprise Agreement 2021-2024
Woolworths has provided correspondence from Mr Sam Roberts (Director of UWU) and Mr Gerard Dwyer (National Secretary of the SDA) advising that they support the applications and do not oppose the matter being heard on the papers.
As there are currently no non-transferring employees, it is not possible to obtain their views.
Section 319(3)(b) - whether any employees would be disadvantaged
I am satisfied that the non-transferring employees would not be disadvantaged in relation to their terms and conditions of employment by the making of the Orders.
Section 319(3)(c) - the nominal expiry date of the agreements
The nominal expiry date of the Agreements are:
- 31 July 2024 – Erskine Park Distribution Centre Enterprise Agreement 2022 and BIG W Hoxton Park Distribution Centre Enterprise Agreement 2022.
- 1 June 2024 – Melbourne Liquor Distribution Centre Enterprise Agreement 2021-2024
- 17 July 2025 – Sydney National Distribution Centre Enterprise Agreement 2021
- 31 August 2024 – Woolstar Pty Limited Wodonga Regional Distribution Centre and the National Union of Workers Enterprise Agreement 2021-2024
- 30 March 2023 – Wyong Regional Distribution Centre Enterprise Agreement 2020
Section 319(3)(d) - whether negative impact on the productivity of the new employer
I am satisfied that there will be no negative impact on productivity if the Orders are made. In contrast, if the Orders are not made and transferring and non-transferring employees are on different terms and conditions of employment, this may have a negative impact on worker engagement and workplace productivity.
Section 319(3)(e) - whether the new employer would incur significant economic disadvantage
The Agreements’ coverage of non-transferring employees will not cause any significant economic disadvantage.
Section 319(3)(f) - the degree of business synergy
The Agreements and the Awards 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. This is likely to enhance the degree of synergy that exists within the acquired business. That is, granting the orders will result in a greater degree of synergy for both Woolworths and the relevant employees who perform the transferring work.
Section 319(3)(g) - the public interest
Based on the material contained in the Form F40 applications and Ms Mooy’s statement, 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.
Conclusion
Having considered each of the matters in s.319(3) of the Act I am satisfied that it is appropriate for the Orders to be made.[7]
In accordance with s.319(4) of the Act, the Orders will not come into operation in relation to each non-transferring employee until 24 October 2022.
DEPUTY PRESIDENT
[1] AE514990.
[2] AE515616.
[3] AE514519.
[4] AE514297.
[5] AE514239.
[6] AE509145.
[7] PR746065.
Printed by authority of the Commonwealth Government Printer
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