Fair Work Act 2009

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

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

• [1] This matter involves an application by Hot Wok Food Makers Pty Ltd (Hot Wok) under s. 318 of the Fair Work Act 2009 (the Act).

• [2] Hot Wok is seeking an order that the Staff Services Pty Ltd Certified Agreement 2000[1] (Staff Services Agreement) does not cover employees who are currently employed by Staff Services Employment Pty Ltd (Staff Services) and who may become transferring employees employed by Hot Wok. Hot Wok is also seeking that the Hot Wok Food Makers Pty Ltd (ABN 15 058 494) Workplace Agreement 2021[2] (the Agreement) covers all future transferring employees who transfer from Staff Services to Hot Wok.

• [3] The application contained detailed grounds and submissions and was accompanied by a witness statement of Mr Darren Latham, Chief Human Resource Officer of Hot Wok, in support of the orders sought. The application and statement addressed matters relevant to the application before the Commission. Its contents are not in dispute and are accepted by me for the purpose of determining the application.

• [4] Directions were issued on 6 January 2022 requiring Hot Wok to serve a copy of a Statement prepared by the Commission to any transferring employee and any potentially transferring employee covered by the Staff Services Agreement. The Statement informed affected employees that I had formed a provisional view based on the witness statement of Mr Latham and the evidence provided in support of the order being made, however in deciding whether to make the order sought, the Commission must also take into account the views of employees who would be affected by the order. The affected employees were invited to make submissions for my consideration by 12 January 2022. No response in opposition to the Application was received by the Commission.

• [5] Hot Wok currently employs a total of five employees and may, in future, employ staff who transfer from Staff Services and who will have been covered by the Staff Services Agreement prior to transferring. The Staff Services Agreement has a nominal expiry date of 31 December 2012 but has continued to remain in force.

• [6] It is Hot Wok's intention that the transferring employees will be terminated by Staff Services and employed by Hot Wok within 3 months of their termination. Hot Wok does not wish for the outdated Staff Services Agreement to continue to apply to transferring employees after they have transferred to Hot Wok. If Hot Wok are successful in their application those employees identified would be covered by the Hot Wok Agreement.

• [7] Mr Latham submits Staff Services and Hot Wok are Associated entities and that the work the transferring employees would be performing for Hot Wok is substantially the same work they performed for Staff Services.

• [8] Hot Wok submits it understands that the vast majority of employees who would be affected by the order will be in favour of it. It submits that Hot Work currently has five employees, and that the existence of differing employment conditions for different employees performing the same work under the same conditions would have a negative impact on its productivity. Mr Latham submits should the order not be granted, Hot Wok would experience additional administrative burdens and suffer inefficiencies.

• [9] Mr Latham submits that the transferring employees and Hot Wok would not be disadvantaged by the order in relation to their terms and conditions. Hot Wok would not incur any significant economic disadvantage if an order in the terms sought was to be made. Mr Latham submits the order sought would have the likely effect that Hot Wok would be able to achieve industrial harmony and transferring employee's pay and conditions would be improved. Therefore, Hot Wok submits, it is in the public interest for the order to be made.

• [10] Section 318 of the Act sets out the circumstances in which an order such as that sought by Hot Wok may be made by the Commission:

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

(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.

(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 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).

(3) In deciding whether to make the order, the FWC must take into account the following:

(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;

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;

• [11] I have reviewed the application and the accompanying material and have considered the witness statement of Mr Latham. These documents outline the factual circumstances which have given rise to the application. Further, the submissions contained in the application address the relevant legislative requirements which are asserted to provide a proper basis for the making of the orders sought.

• [12] Having examined and considered the application and the accompanying materials, I am satisfied there will be no disadvantage to affected employees.

• [13] I am satisfied that by virtue of the operation of the Act, if the order sought was not made, the transferring employees would continue to be covered by the Staff Services Agreement.

• [14] I have taken into account the provisions of paragraphs (a) to (g) of sub-s. 318(3) of the Act and I am satisfied that it is appropriate to make the order sought under s. 318(1)(a)-(b) of the Act.

• [15] Pursuant to s. 318 of the Act I intend to order that the Staff Services Agreement does not cover and will not cover Hot Wok or the Staff Services transferring employees, and that the Hot Wok Agreement will cover employees who were previously employed or who are currently employed by Staff Services Employment Pty Ltd and have been or may in the future be employed by Hot Wok Food Makers Pty Ltd.

• [16] In accordance with s. 318(4) of the Act, the order shall have effect from the time when the transferring employees become employed by Hot Wok or the date of the order, whichever is the later.

• [17] An order[3] will be issued concurrently with this decision.

[3] PR738263.

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