ALL 10 permanent staff at the former Mildura Target store will receive a one off payment as they transition to a new contract agreement with the new Kmart store at Mildura Central.
Both Target and Kmart Australia Limited are part of the Wesfarmers Limited corporate group and are therefore associated entities.
Target decided not to renew the lease of the Mildura store and the Wesfarmers Group has decided to convert it to a Kmart store.
In order to facilitate that change, Kmart offered employment to all 10 permanent Target employees of the Mildura store, while it has also offered employment to casual staff.
Kmart Australia Limited sought through the Fair Work Commission to have the employees brought under the one Kmart employer agreement.
The commission was told Target and Kmart had different span of hours, overtime penalties, weekend penalties and minimum part time hours which would pose challenges for store managers and line managers at Mildura who are responsible for rostering and “would not be viable operationally”.
Fair Work Commission heard that five of the 10 full time Target team members would have an average positive variance of $33.77 over the nominal life of the Target Agreement, while the other five would not be better off under the Kmart Agreement, with an average negative variance of $87.36 over the nominal life of the Target Agreement.
In the “worst-case scenario”, the highest negative variance was determined to be $309.12 over the nominal life of the Target Agreement, if that team member continued to work the same roster based on the current rates of pay, the commission heard.
Fair Work Commission Commissioner Mark Perica said that in order to deal with the potential outcome that some of the permanent team members would be worse off should they be covered by the Kmart Agreement, Kmart included a one-off payment of $350 for all 10 permanent team members which, in the submission of Kmart, “exceeds the worst-case scenario modelled with an additional buffer”.
Mr Perica said even after taking into account the one-off payment, the 10 permanent team members would be, at best, only marginally better off under the Kmart Agreement.
“However, this must be balanced against the benefit of the continuity of employment Kmart has agreed to provide, and the considerable benefit of ongoing employment in a regional centre,” Mr Perica said.
“The marginal improvement in the conditions of transferring employees must be balanced against the gross inefficiencies and problems that would be experienced by Kmart in the application of two enterprise agreements at the Mildura store,” he said.
Mr Perica said the complexity of applying two industrial instruments for payroll, rostering and other systems would be significant.
The commissioner ordered that the Kmart Agreement cover the transferring Target employees go into effect from August 4.
