s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

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

• [1] Kmart Australia Limited (the Applicant or Kmart) has made an application to the Fair Work Commission (the Commission) pursuant to s.319 of the Fair Work Act 2009 (the Act) for an order in relation to a transfer of business.

• [2] The Applicant seeks an Order for the Toll Global Logistics and United Workers Union Enterprise Agreement 2024 (the Agreement)[1] to cover any non-transferring employees who are employed by the Applicant from 6 October 2025 and perform transferring work within the scope of the Agreement at 2-12 Banfield Court, Truganina Victoria (Truganina Facility). It seeks an order that would come into operation in relation to each non-transferring employee from the later of the date of this Order and the date the non-transferring employee starts to perform the transferring work for the Applicant. The Applicant filed a witness statement of Ms Christina Candiloro, Senior Advisor for the Applicant.

• [3] If the Order sought is not granted, new non-transferring employees, who are subsequently engaged by the Applicant in roles within classifications in the Agreement, will otherwise be covered by the Storage Services and Wholesale Award 2020 (the Award).

• [4] Clause 3 of the Agreement relevantly states that Agreement will apply to: "(a) Toll Transport Pty Limited; (b) all employees who are employed by Toll and are covered by this Agreement, in accordance with clause 4; (c) the United Workers Union". As outlined in the decision[2] issued by Deputy President Slevin on 22 January 2025, the United Workers Union (the UWU) is covered by the Agreement pursuant to s.201(2) of the Act.

• [5] 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.

• [6] Section 311 of the Act relevantly provides:

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).

(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.

(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer."

• [7] 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

(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.

(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).

(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 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;

• [8] The Applicant operates more than 300 retail stores across Australia. As part of its operation, the Applicant has a number of distribution centres which support the distribution of stock to those stores, including the Truganina Facility.

• [9] The work performed at the Truganina Facility (Transferring Work) has until now been outsourced to Toll Transport Pty Ltd (Toll). At the time of the making of this application 240 employees were employed by Toll at the Truganina Facility and were covered by the Agreement. The Applicant decided to cease the outsourcing arrangement with Toll, and insource the work performed at the Truganina Facility from 6 October 2025. As part of insourcing this work:

a) The Applicant has made offers of employment to the employees employed by Toll at the Truganina Facility that are covered by the Agreement (Transferring Employees), to commence employment with Kmart effective 6 October 2025;

b) the Transferring Employees were to cease their employment with Toll immediately prior to commencing employment with the Applicant on 6 October 2025; and

c) The Applicant intends to employ additional employees from 6 October 2025 who will perform work at the Truganina Facility as it requires (New Non-Transferring Employees).

• [10] As it is an enterprise agreement that was approved by the Commission on 22 January 2025, the Agreement is a transferable instrument pursuant to s.312(1)(a) of the Act.

• [11] Section 314 of the Act provides that the Agreement covers the Applicant and any non-transferring employees, subject to any order of the Commission under s.319(1) of the Act.

• [12] The application has been made by Kmart, the new employer. This meets the requirements of s.319(2) of the Act.

• [13] The Applicant seeks an order that the Agreement covers it and any non-transferring employees pursuant to s.319 of the Act.

Matters that the Commission must take into account - Section 319(3)

Section 319(3)(a) the views of the new employer or a person who is likely to be the new employer and the employees who would be affected by the order

• [14] The Applicant, the new employer, has made the application under s.319 of the Act and support the making of the order sought.
• [15] The Applicant submits that having one set of terms and conditions would avoid dissatisfaction from employees arising from inconsistent conditions or employees and avoid costs to the Applicant in relation to the administrative resources required to implement two sets of wages and conditions at the Truganina Facility.

• [16] The Applicant states that if they were required to apply both the Agreement and the Award this would pose a number of challenges for the managers at the Truganina Facility who are responsible for rostering employees. It would also require additional training to ensure that managers understood the differences between the Agreement and the Award and avoid breaching either instrument. Further, the Applicant has not had the time and attendance systems established for the Award, such that there would be additional resources and costs incurred to pay team members in accordance with the Award.

• [17] In her statement Ms Candiloro stated that as of 18 September 2025, there were no new non-transferring employees. It is noted that on 12 September Ms Candiloro emailed Transferring Employees to update them on the insourcing and notify them of Kmart's intention to file this application. As of 18 September 2025, no employees had provided any views to Ms Candiloro.

• [18] Having regard to the matters raised in relation to s.319(3)(a), I have formed the view that they weigh in favour of granting the order sought.

Section 319(3)(b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

• [19] The Applicant does not believe non-transferring employees will be disadvantaged if the application is granted because the Agreement provides for better wages and conditions when compared to the Award. The Applicant submits the following more beneficial terms under the Agreement: higher base rates; a classification structure which provides for greater opportunities; an ability to accrue time towards an Accrued Day Off; additional terms in relation to job security; and more beneficial entitlements in relation to 'severance pay' where an employee's employment is terminated for reason of redundancy where they are employed for more than 3 years.

• [20] Having regard to these matters, I have formed the s.319(3)(b) consideration does not weigh against the making of the order sought.

Section 319(3)(c) if the order relates to an enterprise agreement - the nominal expiry date of the agreement

• [21] I note the Agreement has a nominal expiry date of 30 June 2027 and consider this to be a neutral consideration.

Section 319(3)(d) whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace

• [22] The Applicant submits that the granting of the order will provide certainty to employees around their terms and conditions of employment and will maintain a productive and harmonious workplace. In her statement, Ms Candiloro expressed the view that if the Award were to apply to new non-transferring employees this would negatively impact productivity as there would be increased tension amongst the workforce due to the application of different wages and conditions. In addition, she proffered that there would be administrative issues arising from the introduction of another set of wages and conditions.

• [23] I have formed the view these factors weigh in favour of making an order. I do not apprehend the Agreement would have a negative impact on the productivity of the Applicant's workplace.

Section 319(3)(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

• [24] The Applicant submits that the implementation and administration of two industrial instruments at the Truganina Facility would require significant payroll system updates and incur additional resourcing in their administration team as well as the cost of training required for managers and support staff to be able to administer two sets of terms and conditions.

• [25] I note that having a single instrument apply to transferring and non-transferring employees is likely to result in the promotion of consistency in the Applicant's employment arrangements. Further, I consider there would be benefits derived from having a single instrument applying to transferring and non-transferring employees and this would likely to result in some economic advantage, including by removing the potential for operational inefficiencies and decreasing the administrative burden associated with applying different instruments to employees performing the same sort of work. I am satisfied that this would not result in a significant disadvantage to the Applicant because I accept the proposition that any economic disadvantage that might arise as a result of the more beneficial terms and conditions having to be applied under the Agreement would be ameliorated by the benefits of consolidation. I have formed the view that s.319(3)(e) weighs in favour of granting the order sought.

Section 319(3)(f) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

• [26] The Applicant submits that there are significant differences between the Agreement and the Award including inconsistencies in how and when ordinary hours can be arranged and worked, different arrangement for shift work, penalties and when overtime applies.

• [27] I am satisfied there would be a degree of synergy between the Agreement and the Award, just as there are some differences. However, as outlined above, I consider affording the Applicant a single framework of regulation would facilitate consistency in its employment arrangements, remove operational inefficiencies and reduce the administrative burden associated with applying the different instruments. I am therefore satisfied this factor does not weigh against the granting the order sought.

• [28] The Applicant contends that the public interest is satisfied by the objects of Part 2-8 of the Act as they relate to the orders sought and submits that granting of this application would be consistent with the objects set out in s.309, in that it would balance the protection of employee's terms and conditions of employment and the interests of the Applicant running the Truganina Facility efficiently.

• [29] I am satisfied that there are no public interest reasons weighing against making of an order that operates in accordance with s.319(4) of the Act and have observed that it was stated by Ms Candiloro that upon speaking with a representative of the UWU about the application, the UWU representative did not raise any matters.

• [30] Having considered each of the matters set out in s.319(3) of the Act, I am satisfied that the following order should be made, with effect according to the terms of s.319(4):

• Further to the Decision (PR793725) issued on 28 November 2025, and pursuant to s.319(1)(b) of the Fair Work Act 2009 (Cth) (the Act), the Fair Work Commission orders that the Toll Global Logistics and United Workers Union Enterprise Agreement 2024, a transferable instrument that will cover the Applicant pursuant to the Act, will cover each non-transferring employee who performs the transferring work for the Applicant and undertakes their work at 2012 Banfield Court, Truganina Victoria.

• In accordance with s.319(4) of the Act, the order will take effect in relation to each non-transferring employee on and from the date of this Order, or from the date on which the non-transferring employee commences performing the transferring work as an employee of the Applicant, whichever is the later date.

• [31] An Order[3] to this effect will be issued along with this decision.

[2] [2025] FWCA 237.

[3] PR794290.

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