Altus People Pty Ltd
[2025] FWC 316
•4 FEBRUARY 2025
| [2025] FWC 316 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to transferable instruments
Altus People Pty Ltd
(AG2024/5245)
| COMMISSIONER PERICA | MELBOURNE, 4 FEBRUARY 2025 |
Application for an order relating to instruments covering new employer and transferring employees
On 19 December 2024, Altus People Pty Ltd (Altus People), made an application for the following orders.
· By 318(1)(a), the Aaction Traffic Pty Ltd Enterprise Agreement 2013 (Aaction Traffic Agreement) does not, and will not, cover Altus People Pty Ltd (Altus People) or the traffic management employees of Aaction Traffic Pty Ltd (Aaction Traffic) who have transferred their employment to Altus People.
· By 318(1)(b), the Downer Traffic Management Enterprise Agreement 2021 (the Downer Agreement) covers the traffic management employees of Aaction Traffic who have transferred their employment to Altus People.
· By s 318(4), the orders come into operation on and from the date they are made.
For the reasons I give below; after considering the matters I must take into account under s 318(3), I exercise my discretion under s 318(1) to make the orders sought.
The material filed is comprehensive. It includes a detailed application, a witness statement of Ms. Clare Agnew, the Executive General Manager – People of Altus Traffic, and a witness statement of Mr. Simon Buchan, who is a casual Traffic Management Implementer employed by Altus People.
A short mention hearing was held on 8 January 2025. I directed Altus People to e-mail a copy of the directions to employees affected by the application that day. Any opposition to the orders sought was to be filed in the Commission by 15 January 2025. Those directions noted, in the absence of any notification that any person opposed the proposed orders, the application would be decided on the papers.
The Commission received no correspondence opposing the orders sought. On that basis, I will decide this matter on the papers filed by the Altus People.
Background
Altus Group
Altus People is part of Altus Group Holdings Pty Ltd (Altus Group). Altus Group provides a range of traffic management services, including traffic control, event management, traffic engineering and provisioning, training services and equipment hire.
Aaction Traffic
Aaction Traffic was established in 1998. Aaction Traffic operates a road traffic management business that services various customers across metropolitan, regional and rural Queensland.
Aaction Traffic was acquired by Altus Group on 30 August 2024. Altus Group acquired 100% of the shares in Aaction Traffic and all assets of the business. As a result of the acquisition, Aaction Traffic is a subsidiary of Altus Group and an associated entity of Altus People. The Altus Group intends to fully integrate Aaction Traffic’s operations into its Queensland operations, commencing with the transfer of all employees to employment with Altus People.
At the time of the acquisition of Aaction Traffic, it employed approximately 173 traffic management employees, all based in Queensland. The employees of Aaction Traffic were bound by the terms of the Aaction Traffic Agreement. The Aaction Traffic Agreement commenced operation on 30 January 2014, has a nominal expiry date of 23 January 2018 and is expressed to cover Aaction Traffic and its traffic management employees.
Altus People
Altus People was established in or around February 2022, when Altus Group acquired the traffic management assets of Downer EDI Works Pty Ltd (Downer).
Associated with the purchase of the assets, traffic management employees of Downer transferred their employment to Altus People (Downer Employees) within 3 months of their employment ending at Downer. In their employment with Downer, the Downer Employees were covered by the terms of the Downer Agreement. The Downer Agreement commenced operation on 19 November 2021 and has a nominal expiry date of 12 November 2025.
There was a transfer of business from Downer to Altus People. On 16 November 2024 I made orders that employees who perform traffic management work for Altus People are covered by the Downer Agreement.
Aaction Traffic employees transfer to Altus People
On 25 September 2024, consultation commenced with Aaction Traffic’s traffic management employees in Queensland regarding the transfer of their employment to Altus People and the proposal to have the Downer Agreement apply to them.
On 10 October 2024, following consultation with Aaction Traffic’s traffic management employees, Altus People confirmed that it would make offers of employment to those employees.
On or around 21 October 2024, Altus People issued each of Aaction Traffic’s 173 traffic management employees with an offer of employment. The offer of employment confirmed that, for individuals who accepted the offer, their employment with Altus People would commence on 28 October 2024 on the following basis:
· Employment in the same position as they were currently employed at Aaction Traffic;
· The work performed at Altus People would be the same, or substantially the same, as the traffic management work they performed for Aaction Traffic;
· The Aaction Traffic Agreement would initially apply to their employment, but Altus People intended to apply to the Commission for an order, the effect of which (if granted by the Commission) would be that their employment with Altus People would be covered by the Downer Agreement;
· If the Commission granted the order sought by Altus People, Altus People would preserve all conditions and entitlements under the Aaction Traffic Agreement that are more favourable than under the Downer Agreement;
· If the Commission did not grant the order sought by Altus People, the employees’ employment with Altus People would continue to be governed by the Aaction Traffic Agreement until that agreement is replaced or terminated;
· The employees’ prior employment with Aaction Traffic would be recognised for the purpose of all service-related entitlements;
· Employees would be taken to have resigned from their employment with Aaction Traffic with effect from the commencement date of their employment at Altus People; and
· Altus People would require the employees to advise of their acceptance of the offer.
165 Aaction Traffic employees accepted the offer to transfer to Altus People, a 95% acceptance rate.
Legislative framework for orders under s 318
The discretion to make the orders sought by the Applicant under s 318(1) will only be exercised after the factors set out in s 318(3) are considered.[1] These factors, which must be read having regard to the objects of Part 2.8, are intended to enable the Commission to balance appropriately the protection of employees’ entitlements under certain instruments with the need for some flexibility to depart from the default rules about coverage of instruments following a transfer of business.[2]
The objects of this Part 2.8 of the Act, are:
309 Object of this Part
The object of this Part is to provide a balance between:
(a) the protection of employees’ terms and conditions of employment under enterprise agreements, certain modern awards, and certain other instruments; and
(b) the interests of employers in running their enterprises efficiently.
if there is a transfer of business from one employer to another employer.
Section 318 sets out the circumstances where the proposed orders can be made: that Altus Traffic Agreement will not cover Transferring Altus Traffic employees; and the Downer Agreement will cover those employees in respect of their work at Altus People.
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.
Can Altus People apply for these orders?
Altus People, as the new employer, has standing to bring this application pursuant to s 318(2)(a) of the Act.
Has there been a transfer of business of the Altus Traffic Agreement and the Downer Agreement?
It is clear there was a ‘transfer of business’ from Aaction Traffic to Altus People within the meaning of s 311 of the Act and the Aaction Traffic Agreement is a transferable instrument under s 312. It follows that the transferrable instrument covers Altus People under s 313.
Given Altus People can make this application and the relevant agreement is a “transferrable instrument” under s 318(1), the next step is to consider each of the matters which I must take into account under s 318(3).
Consideration of the matters that must be taken into account under s 318 (3)
The views of Altus People - s 318(3)(a)(i)
Altus People submits the Aaction Traffic Agreement should not apply to the Transferring Aaction Traffic Employees. It favours the Downer Agreement to cover Transferring Aaction Traffic Employees.
The reasons for this view include:
· The orders sought would ensure the terms and conditions of employment for all traffic management employees of Altus People are nationally standardised and consistent;
· It would help maintain productivity across the business operations of Altus People and would avoid employee dissatisfaction and confusion because of inconsistent terms and conditions between the relevant employees;
· If the orders are made Altus People would avoid the costs and rostering difficulties associated with simultaneously implementing and managing separate industrial instruments across its traffic management workforce;
· It would provide Transferring Aaction Traffic Employees with the opportunity to work on other Altus Group projects, including asphalt road maintenance work for Downer and Fulton Hogan, under terms and conditions that are better suited to that asphalting work;
· If the orders are not made, Altus People will be required to continue operating two payroll systems: one for those employees currently covered by the Downer Agreement, and another for employees who were employed by Aaction Traffic and are currently covered by the Aaction Traffic Agreement. Operating two pay roll systems involves a significant cost.
Views of the employees who would be affected by the order - s 318(3)(a)(ii)
The material before me provides evidence of extensive consultations and interactions with staff concerning the proposed orders. This is confirmed in the Statements of Ms. Claire Agnew and Mr. Simon Buchan. Ms. Agnew was responsible for leading the consultation with the Transferring Aaction Traffic Employees and sets out the consultation process in her Statement.[3] Mr. Buchan gives evidence of the material he received during the consultation as well as details of the offer of employment he received and accepted.[4]
The 165 Transferring Aaction Traffic Employees have each accepted offers of employment with Altus People on terms which make it clear that if Altus People is successful in obtaining the orders sought, the Aaction Traffic Agreement will cease to apply to their employment with Altus People, and they will instead be covered by the Downer Agreement. Ms. Agnew argues the decision of the 165 employees to accept the employment offer reflects support for the Downer Agreement applying to them, as well as supporting the order sought that the Aaction Traffic Agreement ceases to apply to them.
It should be noted in my directions, I invited the relevant employees to indicate opposition to the orders sought by Altus People. This did not produce any responses. I infer the relevant employees do not oppose the orders sought.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment - s 318(3)(b)
Altus People argues I should be satisfied the Transferring Aaction Traffic Employees will not be financially disadvantaged if the orders sought by Altus People are made.
This submission is based on the contractual guarantee Altus People has given the Transferring Aaction Traffic Employees that if the orders sought are made, Altus People will preserve all conditions and entitlements under the Aaction Traffic Agreement that are more favourable than under the Downer Agreement.
The nominal expiry date of the enterprise agreements - s 318(3)(c)
The Aaction Traffic Agreement passed its nominal expiry date more than six years ago on 23 November 2018. The nominal expiry date of the Downer Agreement is 12 November 2025.
Whether the enterprise agreement would have a negative impact on the productivity of the Altus People workplace - s 318(3)(d)
Altus People submits the application of the Aaction Traffic Agreement will negatively impact the productivity of Altus People’s business in various ways. Ms Agnew articulates, in some detail, the basis of this submission.[5] It includes the following:
· Its managers, sales team, rostering team, payroll, and human resources functions will require substantial training for Altus People to understand the differences between the Aaction Traffic Agreement and the Downer Agreement;
· Its rostering teams will be required to comply with the rostering principles that are prescribed by the two different industrial instruments. This complexity will increase the risk of potential over-staffing or under-staffing of clients, as well as the likelihood of errors and misapplication of rostering principles in the different instruments;
· The application of two industrial instruments is likely to create significant resourcing and productivity issues for Altus People’s payroll function; and
· Morale amongst the traffic management employees will be adversely impacted from two industrial instruments applying to employees who are performing the same or substantially the same work.
Whether Altus People would incur significant economic disadvantage as a result of the Altus People Agreement or Downer Agreement covering it – s 318(3)(e)
Altus People argues it would suffer significant economic disadvantage if the Aaction Traffic Agreement were to apply to the Transferring Aacton Traffic Employees. Ms. Agnew in her statement argues the significant economic advantage would arise from[6]
· Training and resourcing costs;
· The risk of non-compliance resulting in overpayment and underpayments due to the application of two separate industrial instruments;
· The cost of licensing and subscription to two separate pay roll processing system; and
· Loss of economic opportunities because the Aaction Traffic Agreement is less suited to different types of traffic management work such as asphalting work.
The degree of business synergy between the transferrable instrument and any workplace instrument already covering Altus People - s 318(3)(f)
Altus People argue there is little business synergy between the Downer Agreement and the Aaction Traffic Agreement. Ms. Agnew sets out the basis of this argument in her statement, including:
· The terms of the Aaction Traffic Agreement are different to the terms of the Downer Agreement, particularly in relation to the payment of casual employees, allowances, hours of work, overtime entitlements, rostering requirements and redundancy obligations.
· The difference in terms will cause significant operational difficulties for Altus People in administering the industrial instruments, particularly in respect of rostering, payroll and compliance.
· The degree of business synergy will be enhanced if all of Altus People’s traffic management employees are covered by the same enterprise agreement, compared to the alternative scenario where they could be covered by two disparate industrial instruments, despite performing the same or similar work. This is particularly the case with respect to the development of rosters.
· Downer is Altus Group’s largest single client nationally. The Transferring Aaction Traffic Employees will have the opportunity to perform work on a variety of Downer projects. It follows there are significant commercial synergies having all of Altus People’s traffic management workforce performing work under a single standardised set of national terms and conditions.
· The terms and conditions contained in the Downer Agreement are suited to the asphalting road maintenance work that Altus Group performs for other clients such as Fulton Hogan. In contrast, the terms and conditions contained in the Aaction Traffic Agreement are less suited to this type of asphalt road maintenance work, noting that a primary source of business for Aaction Traffic has been local council work that does not involve asphalt maintenance.
The public interest - s 318(3)(g)
Altus People argues the orders it seeks are in the public interest because the proposed orders would promote the objects of Part 2.8 of the Act. It would promote the protection of employee’s terms and conditions of employment and the interests of Altus People in running their business efficiently.
It also argues the proposed orders will allow for the Transferring Aaction Traffic Employees to be afforded the benefit of superior terms and conditions of employment than they would otherwise receive.
Consideration
The arguments made by Altus People are compelling. The workers who would be covered by these orders, and Altus People, would be significantly disadvantaged if I did not make the orders. The proposed orders provide protection of employees’ terms of employment and assist Altus People in running their business efficiently.
The business synergy between the terms and conditions of Altus People’s biggest client, Downer and the terms of conditions of Altus People’s own employees is an important consideration. Also, the complexity of applying two industrial instruments is significant.
Lastly, the terms and conditions of employment of the former Aaction Traffic employees who now work for Altus People, would in almost all respects, be improved by the making of the orders. With respect to the terms of the Aaction Traffic Agreement that are superior, Altus People has contracted with each of these employees that the superior terms will be preserved.
Conclusion
After consideration of all the material filed and taking into account each of the matters in s 318(3), I am satisfied I should exercise my powers under s 318.
Under s 318 (1)(a), I will order the Aaction Traffic Agreement does not, and will not, cover Altus People or the Transferring Aaction Traffic Employees.
Under s 318(1)(b), I will order the Downer Agreement will cover the Transferring Aaction Traffic Employees.
These orders will come into operation on and from today, 4 February 2025 under s 318(4)(b). I will publish the order[7] together with this decision.
COMMISSIONER
[1] Explanatory Memorandum of the Fair Work Bill 2008 (Cth) [1259].
[2] Ibid.
[3] Digital Commission Book at 21-22.
[4] DCB at 85-90.
[5] DCB 23-27.
[6] DCB at 27-29.
[7] PR783982.
Printed by authority of the Commonwealth Government Printer
<PR783981>
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