[2021] FWC 3473
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

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

SRG Global Integrated Services Pty Ltd
(AG2021/4104)

COMMISSIONER WILLIAMS

PERTH, 21 JUNE 2021

Transfer of instrument.

[1] This is an application made pursuant to section 318 of the Fair Work Act 2009 (Cth) (the Act) by the SRG Global Integrated Services Pty Ltd (SRG Integrated or the Applicant). The application seeks orders that the GCS Industrial Services Enterprise Agreement 2013 [AE404719] (the 2013 Agreement) not cover the Applicant and the transferring employees and that the GCS Integrated Services Maintenance and Services Enterprise Agreement 2018 [AE502772] (the 2018 Agreement) will cover the transferring employees.

[2] The Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU) representing members who are employees that would be affected by the order sought objected to the order being made. Consequently, the matter was listed for a hearing to be held on 16 June 2021 and directions issued.

[3] The Applicant and the CFMMEU filed materials as directed.

[4] On 11 June 2021, the CFMMEU advised that it was withdrawing its objection to the application and no longer wished to be heard in relation to the orders sought by the Applicant.

[5] The Commission advised that in the circumstances the application would determined on the papers.

Introduction

[6] The Applicant filed a witness statement from the Applicant’s Human Resources Manager -West, Ms Shanelle Zanazzi (Ms Zanazzi). Ms Zanazzi’s statement is not contested and I accept her evidence.

[7] The evidence is that SRG Integrated is part of the SRG Group of companies. As the result of a merger with Global Construction Services Limited in 2018, the SRG Group acquired a complex corporate structure comprising 62 corporate entities. A complex and inefficient way of doing business resulted which involved four different enterprise resourcing systems, three different human resources systems, three different payroll systems and various resourcing, administrative, financial and governance burdens to manage each company.

[8] Consequently, SRG Group decided to streamline operations by reducing the number of corporate entities. SRG Industrial Services Pty Ltd (SRG Industrial) was an entity selected for winding up, as it held no contracts for any client and performed no other function other than the employment of staff. At the time of the merger, the employees of SRG Industrial were covered by the 2013 Agreement.

[9] Following the decision to wind up SRG Industrial, no further employees were engaged by SRG Industrial. All new employees commenced employment with SRG Integrated and are covered by the 2018 Agreement.

[10] In February 2021, SRG Industrial commenced a consultative process with the 114 blue-collar employees who remained employed by SRG Industrial and who may be impacted by the order sought in the application. These employees were offered new employment with SRG Integrated. As a result, more than 90 employees (79% of the cohort) have accepted new employment with SRG Integrated.

[11] Employees who have accepted new employment offers were advised that they would be able to access the superior terms and conditions of employment under the 2018 Agreement

[12] Consequently, I am satisfied that a transfer of business between SRG Industrial Services Pty Ltd and the Applicant is occurring.

[13] The Applicant applies in its capacity as a person who is the likely new employer (section 318(2)(a) of the Act).

[14] Section 318 sets out the circumstances in which such orders may be made by the Commission, as follows:

318 Orders relating to instruments covering new employer and transferring employees

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 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) 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).

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;

(e) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace;

(d) 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.”

Consideration

[15] The statement of Ms Zanazzi addressed in detail the relevant considerations in section 318 of the Act.

The matters in section 318(3) of the Act

Section 318(3)(a)

[16] The Applicant employer strongly supports the order being issued.

[17] I accept the fact that more than 79% of the employees who would be affected have accepted the offer of employment with the Applicant means a majority of affected employees support the application.

Section 318(3)(b)

[18] I accept that the 2018 Agreement generally has better terms and conditions than the 2013 Agreement. If the order is to be made the employees will not be disadvantaged in relation to their terms and conditions of employment.

Section 318(3)(c)

[19] The nominal expiry date of the 2013 Agreement has passed however the nominal expiry date of the 2018 Agreement is 4 April 2023.

Section 318(3)(d)

[20] I accept the evidence is that retaining the 2013 Agreement would continue the negative impacts on the Applicant’s workplace which currently exist and that these problems can be resolved if the order was granted.

Section 318(3)(e)

[21] I also accept the evidence that the Applicant would continue to incur significant economic disadvantages if the 2013 Agreement continued to operate.

Section 318(3)(f)

[22] Whilst there is some business synergy between the 2013 Agreement and the 2018 Agreement there are limitations to this given the differential level of entitlements.

Section 318(3)(g)

[23] There do not appear to be any public interest considerations.

[24] Taking into account the matters to be considered in section 318(3) of the Act, I am satisfied that it is appropriate that this application be granted and an order [PR730780] to that effect will be issued in conjunction with this decision.

al of the Fair Work Commission with member's signature.

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