Yaho Pty Ltd ATF Yahoo Trust T/A Bakers Delight Belconnen
[2018] FWC 3372
•4 JULY 2018
| [2018] FWC 3372 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318—Transfer of instrument
Yaho Pty Ltd ATF Yahoo Trust T/A Bakers Delight Belconnen
(AG2018/2073)
Australian Capital Territory | |
DEPUTY PRESIDENT KOVACIC | CANBERRA, 4 JULY 2018 |
Application for an order relating to instruments covering new employer and transferring employees - orders made that the Bakers Delight Certified Agreement (ACT) 2002 will not apply to any transferring employees and non-transferring employees.
[1] This decision concerns an application made pursuant to s.318 of the Fair Work Act 2009 (the Act) by Yaho Pty Ltd ATF Yahoo Trust T/A Bakers Delight Belconnen(the Applicant) seeking orders that:
• the Bakers Delight Certified Agreement (ACT) 2002 1(the Agreement) will not cover transferring employees; and
• the General Retail Industry Award 2010 2(the Award) will apply to all transferring and new employees.
[2] By way of background, the application arises in circumstances where the Applicant took over ownership of Bakers Delight Belconnen on 30 May 2018. The old employer was covered by the Agreement.
[3] The application was heard on 22 May 2018 with Ms Yanhong Pan, the owner of the Applicant, appearing for the Applicant.
Relevant legislation
[4] The relevant sections of the Act are ss.313 and 318 which provide as follows:
“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; and
...
(3) This section has effect subject to any FWC order under subsection 318(1).
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;
…
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.
[5] Before turning to consider each of the matters specified in s.318(3) of the Act, I note that the Applicant, as the new employer, has standing pursuant to s.318(2)(a) of the Act to make the application for the orders sought.
The views of the new employer s.318(3)(a)(i)
[6] The Applicant submitted that if the Agreement were to continue to apply, the application of differing terms and conditions to transferring employees compared to new employees who they worked alongside and in collaboration with may adversely impact morale, workplace harmony and productivity.
The views of the employees who would be affected by the order s.318(3)(a)(ii)
[7] On 22 May 2018 the Commission invited employees of the Applicant to provide a written statement or indicate an intention to be heard regarding the orders sought. Employees were given until 8 June 2018 to do so, with no employee subsequently contacting the Commission.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment s.318(3)(b)
[8] The Applicant contended that no employees would be disadvantaged by the Commission making the orders sought. The Applicant submitted that overall the transferring employees would receive similar terms and conditions of employment under the Award to those that they are entitled to under the Agreement.
[9] A comparison of the terms of the Agreement and the Award indicates that a number of provisions in the Award are more beneficial than the Agreement. Those provisions include:
• maximum ordinary hours on a day (i.e. 9 hours as opposed to 10 hours);
• casual loading of 25% for all employees (the Agreement provides for a 15% loading for sales staff and a 30% loading for production staff);
• higher redundancy pay for periods of continuous service above 5 years;
• junior rates for under 16 years of age (the Award provides for 45% compared with 40% in the Agreement);
• Sunday penalty rates in respect of sales staff (180% under the Award as opposed to 150% under the Agreement); and
• higher rates of pay for 1st and 3rd year apprentices.
[10] Conversely, less beneficial provisions in the Award when compared to the Agreement include:
• overtime in respect of production staff under the Agreement is paid at 175% for the first three hours and 200% thereafter (the Award provides for 150% for the first three hours and 200% thereafter);
• Saturday penalty rates in respect of production staff (150% under the Agreement compared to 125% under in the Award for full-time and part-time employees and 110% for casual employees);
• Sunday penalty rates in respect of production staff (200% under the Agreement compared with 180% under the Award);
• public holiday penalty rates in respect of production staff (250% under the Agreement compared with 225% under the Award);
• overtime for sales staff under the Agreement is paid at 150% for the first two hours and double time thereafter. (the Award provides for 150% for the first three hours and double time thereafter);
• the minimum engagement for casual production staff is four hours under the Agreement as opposed to three hours under the Award;
• ordinary hours of work are 38 per week under the Award as opposed to 37.5 per week under the Agreement;
• junior rates for production employees (80% for employees under 18 years of age under the Agreement, compared with the Award which provides for 45% for employees under 16, 50% for employees under 17 and 70% for employees under 18); and
• an increased span of hours.
[11] Against that background, the Commission wrote to the Applicant on 15 June 2018 seeking further information in respect of a number of issues. The Commission’s questions and the Applicant’s answers are set out in the table below.
Question | Answer |
Are casual production and sales employees paid the Saturday and Sunday penalty rates as set out in schedule 3, part 5 of the Agreement? | Referring to Schedule 3, Part 4, Yes, casual sales employees are paid 134.22% of casual rate on Saturday and 150% on Sundays. Production employees 150% on Saturday and 200% Sunday, although it is rare to have casual bakers in the store. |
Are casual Production and Sales employees paid the Public Holiday loadings as set out in Schedule 3, Part 6 of the Agreement? | Yes |
Are casual employees paid the after 6pm on Friday loading as set out in Schedule 3, Part 7 of the Agreement? | Yes |
How much overtime do production and sales staff work? | Ideally we do not run the store to have overtime hours for production. Approximately 10hrs per week relates to casual sales staff. |
How many hours do production and sales staff work on weekends and public holidays on average? | We have 3 bakers and 2 sales staff working on Saturdays & Sundays, and 2 Bakers & 2 Sales staff on public holidays. |
[12] The above analysis points to sales staff gaining the most from their terms and conditions of employment being governed by the Award with production staff disadvantaged in several respects. As a result on 4 July 2018 the Commission sought a more detailed breakdown of the Applicant’s work force. The Applicant advised on the same day as follows:
“We have
Sales: one fulltime on salary, two part time, 7 casuals
Productions: 1 part time, one full time on salary, three full time.”
[13] In circumstances where minimal overtime appears to be worked by employees and no casual production staff are currently employed by the Applicant the main disadvantage that would flow from the orders sought stems from the lower weekend and public holiday loadings which would apply to production staff under the Award when compared to the Agreement. This would potentially affect the three full time and one part time production staff (on the basis that the salaried production staff member’s salary would encompass these payments). However, production staff would potentially benefit from the lower maximum ordinary hours that apply under the Award. On the other hand all sales staff (but the salaried sales employee) would benefit were the Award to apply as a result of the higher weekend and public holiday loadings and higher casual loading provided for by the Award relative to the Agreement.
[14] Regarding the orders sought, and having regard to the fact that no employees raised any concerns when invited to do so by the Commission, on balance I consider the fact that 9 out 13 (excluding the salaried employees) will be advantaged by the Award applying favours the making of the orders sought.
The nominal expiry date of the agreement s.318(3)(c)
[15] The Agreement has a nominal expiry of 18 December 2005. This factor is therefore neutral consideration in deciding whether or not to make the orders sought as employees would have the opportunity to bargain for a new agreement irrespective of whether or not the orders sought are made.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace s.318(3)(d)
[16] The Applicant contended that the Agreement applying to the transferring employees and the Award applying to new employees would create administrative inefficiencies and unnecessary complexities in the maintenance and administration of applying two different sets of terms and conditions of employment. This favours the making of the orders sought.
Any significant economic disadvantage to the new employer s.318(3)(e)
[17] The Applicant submitted that it will not incur significant economic disadvantage as a result of the orders sought as both the Agreement and the Award contain similar remuneration rates.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer s.318(3)(f)
[18] The Applicant is not covered by another workplace instrument and submitted that as such this consideration was not relevant. However I note that as a result of the Applicant taking over the business on 30 May 2018 it is possible that the Award would apply to any employees engaged after that date.
The public interest s.318(3)(g)
[19] There is no material before the Commission which points to the public interest being enlivened in this case.
Conclusion
[20] Based on the material before the Commission and having considered each of the matters set out in s.318(3)(a)-(g) of the Act, on balance, I am satisfied that it would be appropriate to make the orders sought. The orders will be issued in conjunction with this Decision.
Appearances:
Y. Pan for the Applicant
Telephone hearing:
2018
Canberra
May 22
1 AG820462
2 MA000004
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