AG2013/733, Transcript of Proceedings [2013] FWCTrans 279 (17 April 2013)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 1047806-1

COMMISSIONER CARGILL

AG2013/733

s.319 - Application for an order re instruments covering new employer and non-transferring employees in agreements

Application by Leighton Contractors Pty Limited
(AG2013/733)
Enpower Solutions Pty Ltd Single Enterprise Agreement 2012

(ODN AG2012/3175)
[AE891764 Print PR520375]]




Sydney

2.02PM, TUESDAY, 9 APRIL 2013

PN1

THE COMMISSIONER: Can I have appearances please?

PN2

MR B. GEE: Good afternoon, if the commission pleases, my name is Gee, initial B, solicitor. I seek leave to appear for the applicant, Leighton Contractors Pty Ltd. With me this afternoon is MS BOWE, also seeking leave. Not making an appearance this afternoon but with me on behalf of the applicant is MR VINCE DI STEFANO, the deponent of Mr Jamie Bolton and to my right, MR ANDREW MCCOURT of the applicant.

PN3

THE COMMISSIONER: Thanks Mr Gee. There is no one to oppose your appearance so go ahead.

PN4

MR GEE: If the commission pleases, this is an application to the commission for the making of orders under two sections of the Fair Work Act being an order under section 319(1) (b) and an order under section 320(2) of the Fair Work Act. I’ll turn to the application on the grounds and reasons shortly but to deal with matters of housekeeping, the affidavit of Mr Vince Di Stefano was filed along with the application. I seek leave to have that affidavit read and tendered at this time please.

PN5

THE COMMISSIONER: Do you want it marked?

PN6

MR GEE: Yes Commissioner.

PN7

THE COMMISSIONER: I’ll mark that as Leighton 1.

MFI #LEIGHTON 1 AFFIDAVIT OF MR VINCE DI STEFANO

PN8

MR GEE: At paragraph 26 of that affidavit, Leighton 1, Mr Di Stefano deposes that each of the transferring employees will be informed of the application before the completion date. I am instructed that that has been achieved. I am instructed that of the 22 employees who are covered by the enterprise agreement, the subject of the application, 21 of that group have returned signed offers of employment and we are told that the 22nd document has been signed and returned to the vendor and will make its way to the applicant shortly. The only change or comment I wish to make about the affidavit otherwise, is that at paragraph 13 of the affidavit, Mr Di Stefano deposed that at the time he made the affidavit, you will see at the end of the paragraph his evidence was that completion of the sale was due to take place on or about 3 or 4 April 2013. That has slipped a little bit. Completion will in fact take place this Friday and under the terms of the offers, that has been accepted by those transferring employees, their employment with the applicant will commence this Friday, 12 April.

PN9

THE COMMISSIONER: Hence the reference to that date in the draft orders.

PN10

MR GEE: Yes Commissioner.

PN11

THE COMMISIONER: Because I was wondering about that.

PN12

MR GEE: That was the very next topic I was intending to turn to. We’ve taken the liberty of providing draft orders. I’m in your hands as to whether you have those documents marked or I simply return to those at the end of my submission.

PN13

THE COMMISSIONER: You can just go back to them later, Mr Gee.

PN14

MR GEE: My submission is that we rely on the application for grounds and reasons in the application and the affidavit, Leighton 1 in their entirety in support of the orders sought. I’ll turn to the affidavit in very summary form. I turn first to paragraph 14 where Mr Di Stefano deposes that under the business sale agreement the applicant will in effect become the beneficial owner of all of the assets used or engaged in the business, the subject of the transaction and in my submission that would satisfy the necessary jurisdictional requirement in section 311, subsection (3) to establish a transfer of business with respect to the transferring employees which allows the applicant to then make the application pursuant to 319.

PN15

From paragraph 6 onwards, Mr Di Stefano describes the proposed acquisition.
This is in effect a move by the applicant to create a new business and directly perform work that it had previously subcontracted and while the commission may be aware that the applicant will have a number of enterprise agreements, as it has not previously self performed electrical contracting work that is covered by the Enpower agreement, none of their existing agreements can cover the work that’s being performed currently by the transferring employees. As a consequence of which and what Mr Di Stefano deposes from paragraph 20 onwards, any new non transferring employee who was to be engaged by the applicant would have their terms and conditions covered by the modern award and not the enterprise agreement or another enterprise agreement that the applicant is a party to and you will see at paragraph 21 through to 22, Mr Di Stefano has undertaken the task of making appropriate inquiries within the organisation to verify that that is the case.

PN16

At paragraph 27, Mr Di Stefano gives evidence that the applicant at this time does not directly employ any person to perform work that could be covered by the Enpower agreement. It is fair to say that subject to this application being granted, that situation can be expected to change but at this point in time there are no offers pending to any non transferring employees. The affidavit otherwise goes to the matters required to be taken into account by the commission under section 319 subsection (3). I will turn to that now very briefly.

PN17

Subsection (a) of 319(3) requires the commission to take into account the views of the applicant. It’s clear from the application that the applicant moves for the order sought under section 319(1). There are no employees at this point in time that would be affected by the order. I simply make the observation that an inference may be drawn that if a non transferring employee was made aware of the opportunity to be completely covered by the award or the Enpower agreement, commonsense suggests that that employer would choose the Enpower agreement when one compares the terms. Subsection (b); we say that there are no employees who would be disadvantaged by the order in relation to their terms and conditions of employment. Mr Di Stefano’s evidence clearly establishes that the transferring employee’s terms and conditions of employment would not be affected and for any non transferring employee, my previous observation would apply.

PN18

The nominal expiry date being a date in February, 2016, in my respective submission would be favourably considered in taking into account the application.
The evidence of Mr Di Stefano would suggest that in the absence of the order there would be a negative impact on productivity of the new venture. That deals with section 319(3) (d). His evidence can also support an observation that there would be some economic disadvantage to the applicant if the order were not made which addresses section 319(3) (e) and in my respectful submission in respect of the degree of business synergy described in subparagraph (f), Mr Di Stefano’s evidence is clearly to the effect that there is a significant business synergy in being able to engage non transferring employees under the terms of this agreement as opposed to the award.

PN19

We say that there is no public interest matter that is in this application that would go against the granting of the application and when one takes into account the prior approach of this commission in respect of applications of this type, we say the public interest is in favour of granting the application. I don’t intend to refer to any cases, only the one in this instance and that is a decision of Sams, DP in Starhill Hotel Pty Ltd 2012 FWA 7561. I have a copy of that decision. All I will say in respect of that decision is that it relates to a different industry sector but the circumstances of the applicant in that matter were entirely apposite to the circumstances of the applicant here and in particular I rely on his Honour, the Deputy President’s observations on page 3 of that decision and would equally submit they apply in this matter.

PN20

Those are my submissions in respect of the application for an order under 319(1) (b). I’ll turn very briefly to the application for an order under section 320(2) (a) and or section 320(2) (c) for an order to vary the Enpower Solutions Pty Ltd Single Enterprise Agreement by in effect, amending the definition of company depot in clause 2 in the terms sought in that order.
If we turn to Mr Di Stefano’s affidavit and again I won’t repeat but from paragraph 6 onwards Mr Di Stefano sets out the establishment of this new line of business and the intention of that new venture and I’ll adopt paragraph 6 all the way through to paragraph 12 and I note that at the end of paragraph 12, Mr Di Stefano notes that the business as being acquired provides a small base from which Leighton’s can grow. It is simply a matter of pragmatism that we ask that the definition of company depot be amended so that in the event in future during the nominal term of this agreement, if the applicant is successful in winning additional work to a point where it would prefer to establish a permanent depot away from the original Albury depot, there is not the disadvantage and dislocation to the employees affected. It can employ a permanent workforce at that depot and have them covered by the terms of this condition rather than regard them as living away from home employees if you like.

PN21

That is the pragmatic basis of the reason for the application there and in my respectful submission the affidavit Mr Di Stefano provides the requisite evidentiary basis for the granting of that application. If the commission requires some support in that respect, I can safely submit that similar decisions have been approved by this commission in recent times. There was a decision of Watson, DP in relation to an application by Allied Mills with respect to the Grain Products Australia Tamworth Enterprise Agreement that was approved by way of a similar order in March of this year. I don’t have the matter number. I can provide it to the commission in very short order if you would require it.

PN22

THE COMMISSIONER: That’s all right, Mr Gee.

PN23

MR GEE: Unless the commission has any particular questions about aspects of the application, those are my submissions and we ask for the orders to be made in terms put forward this afternoon.

PN24

THE COMMISSIONER: And the draft order just goes to those two aspects and Friday being the date of the transfer.

PN25

MR GEE: It does and we’ve suggested that date as the operative date of the order for that reason.

PN26

THE COMMISSIONER: Well if that’s what’s being sought it seems to make sense that it come in to that date but just firstly on the basis of the material that’s before me, in particular the submissions that you have made today, Mr Gee, and also the fairly extensive grounds and particulars that have been set out in the application together obviously with Mr Di Stefano’s affidavit which forms the basis for those submissions. I am satisfied firstly that I should grant the application under section 319 that there be an order that the Enpower Solutions Pty Ltd Single Enterprise Agreement 2012 cover any non transferring employee who commences employment with Leighton Contractors Pty Ltd on or after 12 April 2013 in the particular classifications set out in that agreement. I have regard to the matters that I must take into account that are set out in section 319(3) and Mr Gee, to that end I don’t intend to go through in detail each of those. I accept the submissions that you have put in relation to each of those factors and obviously the evidence that supports those submissions, particularly Mr Di Stefano’s evidence on those points.

PN27

Similarly in relation to the application under section 320, I will grant the application that there be a variation to the agreement to change the fourth dot point appearing in clause 2 which at present just refers to a single location company depot. The change will have the effect that it will be that depot and any other depot or site established for the purpose of any contract project or operation which an employee is engaged or based to perform work under this agreement. I’ve just actually noticed there’s a typographical error there but I’m sure we can correct it. Perform is incorrectly spelt in the draft order but don’t worry, Mr Gee we can correct that.

PN28

It makes abundant sense that if further work is gained at a location that’s not particularly proximate to the Albury depot that the agreement provide for those other locations to also be considered to be company depots for the purpose of the agreement and once again in coming to that view, I’ve taken into account the matters that are required in this case in section 324 of the 320 subsection (4) of the Act and as sought, the orders in each instance will come into effect from Friday, 12 April 2013 which is the transfer date. Unless there is anything further, Mr Gee?

PN29

MR GEE: No Commissioner.

PN30

THE COMMISSIONER: Thank you very much and the matter is now adjourned.

<ADJOURNED INDEFINITELY [2.20PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

MFI #LEIGHTON 1 AFFIDAVIT OF MR VINCE DI STEFANO PN7