Agilex Biolabs Pty Ltd
[2022] FWC 1308
•14 JUNE 2022
| [2022] FWC 1308 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Agilex Biolabs Pty Ltd
(AG2022/1155)
| COMMISSIONER SIMPSON | BRISBANE, 14 JUNE 2022 |
Application for an order relating to instruments covering new employer and transferring employees
An application has been made by Agilex Biolabs Pty Ltd (the Applicant) to the Fair Work Commission (the Commission) for an order pursuant to s.318 of the Fair Work Act 2009 (the Act).
This application relates to employees that were employed by The University of Queensland (UQ) at a business known as TetraQ. As a result of a transfer of business that occurred on 31 March 2021, these employees became employed by Agilex as transferred employees. At the time of this application, nine transferred employees remain employed. Agilex is seeking an order under section 318(1)(a) of the Act that The University of Queensland Enterprise Agreement 2018- 2021 (UQ Agreement) no longer covers it and the remaining transferred employees so as to allow the applicable modern awards to apply. These modern awards are the Professional Employees Award 2020 and the Health Professionals & Support Services Award 2020.
The Australian Municipal, Administrative, Clerical and Services Union (ASU), the National Tertiary Education Industry Union (NTEU) and the United Workers’ Union (UWU) were listed as the Employee Organisations involved in this matter. On 21 April 2022, the ASU advised my chambers that as none of the affected employees were members, they did not seek to make submissions on the matter. Subsequently on 27 April 2022, the NTEU and UWU also wrote to my chambers expressing that they had no objection to the making of the orders sought by the Applicant and also did not seek to be further heard in the matter.
The Applicant set out their submissions in the Form F40 Application, which was corroborated by the witness statement of Mr Jason Valentine.
Views of Agilex as the new employer
The Applicant submitted that the UQ Agreement terms and conditions were drafted for a university environment. UQ employs over 7,500 FTE continuing and fixed term staff (excluding casuals) across multiple campuses in Queensland. The UQ Agreement applies to Academic Staff, Professional Staff and TESOL Language Teachers employed in an exceedingly diverse range of roles. Agilex is a medium-sized private sector bioanalytical services company. Therefore, the Applicant submitted that the UQ Agreement is not relevant to Agilex. Agilex does not have an enterprise agreement for its employees and operates in accordance with applicable modern awards. The Applicant submitted that having all Agilex employees covered by applicable modern awards would allow for a more streamlined payroll system, and that it is inappropriate to have nine employees out of 160 employees covered by the UQ Agreement when the remaining employees are either covered by applicable modern awards or are award free.
Views of Transferred Employees
The Applicant’s evidence was that the views of transferred employees were sought in January 2022. The Applicant submitted that the transferred employees raised concerns about changes to their pay and conditions of employment as opposed to expressing a view about whether the application should be granted. Agilex submitted they have largely addressed these concerns by agreeing to all their requests (with the 2% pay increase payable in July 2022 and not January 2022) except for the provision of paid parental leave.
Additionally, my Directions issued to the parties on 5 May 2022 gave an opportunity for any transferring employees to provide any view by 13 May 2022. To date, no views have been received.
Whether any transferred employees would be disadvantaged by the order in relation to their terms and conditions of employment
Despite Agilex addressing many of the transferred employees’ concerns and thereby providing more beneficial terms and conditions of employment than the applicable modern awards, the Applicant submitted that there will be some terms and conditions of employment under the UQ Agreement that will not be continued thereby resulting in some disadvantage to employees.
In relation to full-time and part-time employees, there are terms and conditions of employment that will not be continued. While many of these terms and conditions of employment are non-monetary, the most notable monetary entitlements that will not be continued are paid parental leave and the more beneficial redundancy pay entitlements.
In relation to full-time and part-time transferred employees, Mr Valentine noted that the applicable UQ Agreement entitlements that will not be continued are as follows:
(a)Clause 21 ‘Professional Staff Part-Year Employment’ – Continuing or Fixed Term staff members - ability to receive pay on an annualised or worked basis;
(b)Clause 24 ‘Transfer and Travel Between University Locations’ – travel and transfer entitlements (Note: Travel and transport entitlements are available under the applicable modern awards - cl. 16.2 - Professional Employees Award 2020 and cl. 22(h) - Health Professionals & Support Services Award 2020);
(c)Clause 25 ‘Pre-Retirement Arrangements’ – All staff with at least a 50% employment arrangement may apply for a flexible pre-retirement contract;
(d)Clause 28 ‘Salary Packaging’ – ability to salary sacrifice a component of gross salary to superannuation;
(e)Clause 33 ‘Staff Development and Career Planning’ – commitment to professional development opportunities for staff members;
(f)Clause 42 ‘Medical Conditions Affecting Performance’ – medical examination at expense of the employer;
(g)Clause 45 ‘Certificate of Employment’ - provided upon termination of employment;
(h)Clause 47 ‘Consultation in Relation to Major Organisational Change’ – Applies where proposed major organisational change will result in continuing positions being excess to requirements and redundancies - detailed process of consultation involving justification, plans, recommendations and provision of a final proposal (Note: Standard consultation requirements apply under the applicable modern awards);
Clause 47.7 ‘Redundancy Payment’ – Continuing full-time and part-time staff members are entitled to 2 weeks severance pay for each year of continuous service subject to a minimum 12 weeks payment and a maximum of 64 weeks (Note: NES redundancy pay entitlements apply under the applicable modern awards);
(j)Clause 48 ‘Outsourcing’ – employer to consult with affected staff members prior to any final decision by the employer to take any steps to outsource;
(k)Clause 49 ‘Use of Contractors’ – limitation on the use of contractors and requirement for consultation if contractors are to be employed;
(l)Clause 50.7 ‘Purchased Leave’ – Full-time and part-time staff may purchase additional leave;
(m)Clause 50.11 ‘Defence Force Leave’ – a. All staff are entitled to unpaid leave; b. All staff, excluding casuals, with more than one year of cumulative employment, will be entitled to up to 4 weeks salary per financial year with up to 5 weeks for initial recruit training.
(n)Clause 50.14 ‘Special Paid or Unpaid Leave’ – Special leave is available in cases of pressing necessity at the discretion of the employer;
(o)Clause 50.15 ‘Domestic and Family Violence Leave’ – all staff are entitled to up to 10 days paid leave. Additional special paid or unpaid leave may be approved;
(p)Clause 50.17b. ‘Paid Parental Leave’ - Fixed-term or Continuing staff who have completed 12 months continuous service are entitled to 26 weeks paid parental leave;
(q)Clause 51 ‘Transfer on Return from Parental Leave’ – A staff member who elects to return from parental leave on a part-time basis but cannot be accommodated may request a transfer;
(r)Clause 62.2 ‘Supervisors of Staff’ – Supervisors responsible for the work of other staff are not to be appointed to a level less than the highest level of staff member being supervised;
(s)Clause 71 ‘Professional Staff Workloads’ – management and consultation about workloads;
(t)Schedule 11 – First Aid Allowance - $31.64 per fortnight - if required to hold a current St. Johns Ambulance First Aid Certificate and Locality Allowance – Staff member located outside radius of 400 klms from Brisbane GPO - $30.95 per fortnight.
In relation to casual transferred employees, Mr Valentine provided that the applicable UQ Agreement entitlements that will not be continued are as follows:
(a)The more beneficial entitlements of clause 24 ‘Transfer and Travel Between University Locations’;
(b)Clause 25 ‘Pre-Retirement Arrangements’;
(c)Clause 33 ‘Staff Development and Career Planning’,
(d)Clause 42 ‘Medical Conditions Affecting Performance’,
(e)Clause 45 ‘Certificate of Employment’,
(f)The more beneficial consultation requirements of Clause 47 ‘Consultation in Relation to Major Organisational Change’;
(g)Clause 48 ‘Outsourcing’;
(h)Clause 49 ‘Use of Contractors’;
(i)Clause 50.11 ‘Defence Force Leave’ a. (unpaid);
(j)Clause 50.14 ‘Special Paid or Unpaid Leave’;
(k)Clause 50.15 ‘Domestic and Family Violence Leave’;
(l)Clause 62.2 ‘Supervisors of Staff’;
(m)Clause 71 ‘Professional Staff Workloads’; and
(n)Schedule 11 – First Aid Allowance - if required to hold a current St. Johns Ambulance First Aid Certificate and Locality Allowance – located outside a radius of 400 klms from Brisbane GPO.
The Applicant emphasised that it is important to note that when full-time and part-time employees were employed by Agilex they were employed pursuant to rolling maximum term contracts. Agilex has instead provided these full-time and part-time employees with permanent employment. Further, one casual employee employed by UQ has since been employed by Agilex as a permanent part time employee. The Applicant emphasised that permanent employment is a significant advantage that should be given favourable consideration.
Nominal expiry date of the UQ Agreement
The nominal expiry date of the Agreement is 30 June 2021.
Whether the UQ Agreement would have a negative impact on the productivity of Agilex’s
Workplaces
The Applicant submitted that the UQ Agreement is having a negative impact on the productivity of Agilex’s workplaces as it is restricting the flexibility to incentivise staff with performance based remuneration. Further, the non-application of the UQ Agreement to Agilex would provide terms and conditions of employment that are consistent, clear and certain across its workforce. It would also reduce the risk of discrepancies with the application of the UQ Agreement and the applicable modern awards.
Whether Agilex would incur significant economic disadvantage as a result of the UQ Agreement covering Agilex as the new employer
In June 2021, Agilex engaged Genesis Advisory Services to conduct an independent review of the TetraQ business. It concluded that the continued adoption and adherence to the UQ Agreement is inefficient and uneconomical to administer. It found that the UQ Agreement creates operational barriers to maximising labour force efficiency to meet the operational needs of the combined businesses.
Further to this report, it is also noted that Agilex is required to compete with other private sector businesses who are not subject to the UQ Agreement. The UQ Agreement is therefore causing Agilex economic disadvantage.
The degree of business synergy between the UQ Agreement and the applicable modern awards that already covers Agilex
The Applicant submitted that there is very little, if any, business synergy between the UQ Agreement and the applicable modern awards being the Professional Employees Award 2020 and the Health Professionals & Support Services Award 2020.
The UQ Agreement was drafted for the university environment of a higher education institution involving the undergraduate and postgraduate teaching and research and more specifically for the particular operational needs and workplace contexts of UQ. Whereas the applicable modern awards were drafted for the information technology, medical research, quality auditing or telecommunications services industries, and health industry respectively.
The applicable modern awards have less restrictive work practices that better allow for Agilex’s operational requirements.
Public interest
The Applicant submitted that there are no public interest considerations that would prevent the making of this order.
Statutory provisions
Section 318 of the Act relates to the application sought by the Applicant. Section 318(3) of the Act sets out those matters the Commission must have regard to in determining if the orders sought should be granted.
Section 318 provides 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;
(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;
(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.
I have reviewed the application documentation and the accompanying material. These documents outline the circumstances which have given rise to the application. Further, the submissions contained in the application address the relevant legislative requirements which are asserted to provide for a proper basis for the making of the order sought.
I am satisfied that the requirements of s.318 of the Act have been met. The Applicant nominated 1 July 2022 as the date for the Order to take effect from. I consider that to be an appropriate date for the Order to take effect. This is reflected in the Order.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<PR741999>
0
0
0