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

Wettenhalls Services Pty Ltd Trading AS Wettenhalls

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

• [1] Wettenhalls Services Pty Ltd (Wettenhalls Services) has applied for orders pursuant to s.318 of the Fair Work Act 2009 (Cth) (the Act) to simplify the coverage of industrial instruments in relation to three employees (transferring employees) currently employed by DRW Investments Pty Ltd trading as Wettenhalls (DRW Investments). The Application consists of a Form F40, statement by Ms Jayni Shah, Human Resource Manager and statements from each of the Transferring Employees.

• [2] The Transferring Employees are currently covered by the Wettenhalls National Enterprise Agreement 2020 (Wettenhalls National Agreement) (non-transferring agreement) with a nominal expiry date of 31 March 2024. The Wettenhalls National Agreement covers employees employed by DRW Investments who fall within the classifications at clause 8. The Transferring Employees operate B-Double trucks performing local work within a 250km radius from the 90 Yarrawa St, Prestons, NSW site. In accordance with Clause 8: Classifications, the transferring employees are classified as Grade 8 Drivers.

• [3] Wettenhalls Services also operates out of the same depot and employs four employees performing the same work as the Transferring Employees. Therefore, DRW Investments determined to transfer its local work being performed out of the Prestons' depot to the new employer Wettenhalls Services. DRW Investments advises there will be a transfer of business as contemplated by s.311 of the Act.

• [4] Under the terms of the transfer of business the DRW Investments Transferring Employees will be employed by Wettenhalls Services and covered by the Wettenhalls Services Enterprise Agreement 2023 (Wettenhalls Services Agreement) which has a nominal expiry date of 30 November 2027_._

• [5] DRW Investments seeks an order that the Transferring Employees will not be covered by the Wettenhalls National Agreement and that the Wettenhalls Services Agreement will instead cover the Transferring Employees employment with Wettenhalls Services.

• [6] Wettenhalls has offered employment to the Transferring Employees conditioned on the approval of its application. Upon lodgement, each of the Transferring Employees submitted statements in support of the transfer of their employment because they will receive more favourable conditions under the Wettenhalls Services Agreement.

• [7] Section 318 provides:

"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;

• [8] I now turn to the matters I am required to take into account.

Section 318(3)(a)(g)

• [9] In her statement Ms Shah submits that under the current arrangements there are two Agreements covering employees performing the same work at the same location and it has become an issue applying two sets of conditions. In addition, the Transferring Employees are currently receiving less beneficial pay rates and conditions than they would receive under the proposed arrangements.

• [10] The Agreements also have fundamentally different treatment of hours of work and overtime, and this has become an administrative burden which Ms Shah submits is wholly inefficient.

• [11] There are two Agreements covering employees who are performing the same work. The two Agreements have vastly different working arrangements which negatively impacts productivity and business synergy. I note the non-transferring Agreement has passed its nominal expiry date of 23 March 2024, however the Wettenhalls Services Agreements nominal expiry date is 30 November 2027.

• [12] The TWU are covered by both the non-transferring Agreement and the Wettenhalls Services Agreement. The TWU do not oppose the application.

• [13] The Application was also accompanied by the witness statements of the three Transferring Employees, Mr Kevin Brodie, Mr Rajwinder Singh and Mr William Campbell. The Transferring Employees support that application because they would prefer to receive the more beneficial terms of the Wettenhalls Services Agreement.

• [14] I consider the nominal expiry date of the Agreements to be a neutral consideration. It is however evident that the new arrangements proposed and supported by the Transferring Employees would result in an economic advantage to the Transferring Employees which weighs in favour of granting the order sought. It is also evident that the continuation of the present circumstances would continue to negatively impact the administrative burden of the Applicant. It would also continue to negatively impact the Transferring Employees who are presently disadvantaged having to work alongside others performing the same tasks under better conditions. It would therefore be in the public interest for the order to be made.

• [15] Having regard to each of the considerations in s.318 of the Act, I am satisfied that I should exercise my discretion to grant the application and make an order.

• [16] The Order[1] to be issued in conjunction with this decision is to the effect that the Wettenhalls National Enterprise Agreement 2020 will not cover Wettenhalls Services or the Transferring Employees in relation to the transferring work and that the Wettenhalls Services Agreement 2023 covers the Transferring Employees who are employed at the 90 Yarrawa St, Prestons, NSW site employed in relation to the transferring work.

[1] PR788608.

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