Australian and International Pilots Association; Qantas Airways Limited; Jetstar Airways Pty Ltd
[2012] FWA 3771
•3 MAY 2012
[2012] FWA 3771 |
|
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements
Australian and International Pilots Association; Qantas Airways Limited; Jetstar Airways Pty Ltd
(AG2012/4997)
Airline operations | |
VICE PRESIDENT WATSON | SYDNEY, 3 MAY 2012 |
Application in relation to a transfer of business - transferrable instrument - application that transferrable instrument not cover transferring employees – conditional offer of employment – application not opposed - Qantas Airways Limited - Fair Work Act 2009 ss 311, 312, 313, 317 and 318.
Introduction
[1] This decision concerns an application by Australian and International Pilots Association (AIPA), Qantas Airways Limited (Qantas) and Jetstar Airways Pty Ltd (Jetstar) for an order under s.318 of the Fair Work Act 2009 (the Act) which relates to instruments covering a new employer and transferring employees in the context of a transfer of business.
[2] The instruments that are the subject of the application are the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006, 1 the Qantas Airways Limited Flight Crew ( Short Haul) Workplace Agreement 2007 2 and the Jetstar Airways Pilots Agreement 2008 3 (transferable instruments).
[3] The application is made in relation to pilots employed by either Qantas or Jetstar (the employers) who will transfer their employment between these two companies by resigning from one company and accepting an employment offer from the other. For the purpose of ss.311(5) and 311(6) of the Act, Qantas and Jetstar are either associated entities or have a connection by virtue of their status as related bodies corporate, as that term is defined by s.50 of the Corporations Law 2001.
[4] The terms of the order are sought pursuant to s.318(1) of the Act and provide that where a pilot transfers from Qantas to Jetstar or vice versa (transferring employee), the transferable instrument that would, or would be likely to cover the new employer and the transferring employee, will not apply. Rather the industrial instrument in place at the new employer will apply and cover the transferring employee from the time that his or her employment commences with the new employer.
Background
[5] Qantas is the owner of a number of fully and partially owned subsidiaries which together comprise the Qantas Group. Jetstar is a fully owned subsidiary of Impulse Airlines Holdings Pty Limited, which is a fully owned subsidiary of Qantas.
[6] The services that both Qantas and Jetstar provides are distinct in that Qantas provides premium international and domestics services while Jetstar provides low cost international and domestic services. It is submitted by both Qantas and Jetstar that the day to day running of each business is preformed separately. As a result Qantas and Jetstar have their own industrial instruments that regulate the work and the pay and conditions of pilots.
[7] The recruitment process of pilots in the aviation industry is cyclical with no fixed recruitment pattern. Recruitment takes place as needed to deal with demand, which can vary, due to factors such as increased flying, additions to fleets and reduction in numbers due to natural attrition.
[8] Following a plebiscite, on or around 3 November 2004, a memorandum of understanding (MOU) was entered into between Qantas and Jetstar pilots, Qantas, Jetstar and the Jetstar Policy Council ( an unregistered association of the Jetstar pilots).
[9] The MOU is designed to assist the transfer of pilots between Qantas and Jetstar on certain terms and conditions after certain requirements have been met, in order to facilitate career opportunities for Qantas and Jetstar pilots. The MOU therefore operates to reserve ghost seniority numbers within Qantas and Jetstar’s seniority pilot lists who were employed by the companies prior to 4 November 2004.
[10] The orders sought in this matter are in substantially the same terms as orders made in January 2010 and May 2011. They effectively renew those orders to provide ongoing effect to the position bought about by these orders.
The relevant legislation
[11] Part 2-8 of the Act describes when a transfer of business occurs and provides for the transfer of enterprise agreements, certain modern awards and certain other instruments if there is a transfer of business from one employer to another employer.
[12] Section 312(1) of the Act defines what a transferable instrument is. It reads:
“312 Instruments that may transfer
Meaning of transferable instrument
(1) Each of the following is a transferable instrument:
(a) an enterprise agreement that has been approved by FWA;
(b) a workplace determination;
(c) a named employer award.”
[13] Section 312(1) of the Act was amended by Schedule 11, item 8 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) to include a new subclause (d) which reads:
“(d) a transitional instrument (other than a workplace agreement or a workplace determination that has not yet come into operation and other than a State reference common rule).”
[14] Section 313 of the Act provides when a transferable instrument will cover a transferring employee and the new employer. It reads:
“313 Transferring employees and new employer covered by transferable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:
(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and
(b) while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.
(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee’s employment with the old employer.
(3) This section has effect subject to any FWA order under subsection 318(1).”
[15] Sections 317 and 318 of the Act relevantly provide:
“317 FWA may make orders in relation to a transfer of business
This Division provides for FWA to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.
318 Orders relating to instruments covering new employer and transferring employees
Orders that FWA may make
(1) FWA 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) FWA 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 FWA must take into account
(3) In deciding whether to make the order, FWA 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.”
Submissions of AIPA, Qantas and Jetstar
[16] In relation to the factors set out in s.318(3) of the Act, AIPA, Qantas and Jetstar submit that the proposed orders should be made, as Qantas and Jetstar are distinct businesses operating in different market shares. In conjunction with the MOU, the orders sought will facilitate the transfer of pilots from one employer to the other and ensure that the interests of the pilots and the employers are realised. If the orders are not made, the employers submit they will not facilitate the transfer of pilots because of the risk and real likelihood that the industrial instrument from the previous employer will transfer and apply.
[17] In relation to the views of the employees, AIPA submits that the order is in interests of the transferring employees and thus AIPA supports and consents to the orders being made. The employers submit that the orders will only apply to transferring employees who have made a voluntary decision to transfer and that the orders will provide a greater opportunity for pilots to pursue personal and professional goals.
[18] Qantas and Jetstar submit that the orders will not disadvantage transferring employees in relation to their terms and conditions of employment. Current industrial arrangements are in place at each company that provide protections for the pilots employed under them. AIPA submits that the decision to transfer is made voluntarily and that the prospect of greater career acceleration or opportunities will outweigh any reduction in income that results from a transfer.
[19] Qantas and Jetstar submit that the transfer of the instruments to the new employer would have a negative effect on the new employer’s business as, because Qantas and Jetstar operate in specific sectors of the aviation industry, the work rules contained in the transferable instruments are distinct to those sectors and are therefore non transferable.
[20] Qantas and Jetstar submit that if the orders are not granted, restrictions and difficulties would arise as a result of a transferable instrument applying to a transferring employee and therefore the companies submit that they would not allow the transfer to take place.
[21] As a result of the specific sectors of the aviation industry that Qantas and Jetstar operate in, they submit that there is little or no business synergy between the transferable instrument and any workplace instrument that already covers the new employer.
[22] Qantas and Jetstar submit that they are unaware of any public interests issues that may arise as a result of the application. Apart from the reasons set out in the application, it is submitted that AIPA is unaware of any public interest issues that may arise.
[23] AIPA, Qantas and Jetstar have indicated that the nominal expiry date of the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006, the Qantas Airways Limited Flight Crew ( Short Haul) Workplace Agreement 2007 and the Jetstar Airways Pilots Agreement 2008 is 31 December 2010, 31 August 2012 and 5 March 2013 respectively.
Consideration
[24] By virtue of Schedule 3, item 2 of the Transitional Act, I am satisfied that the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006, the Qantas Airways Limited Flight Crew (Short Haul) Workplace Agreement 2007 and the Jetstar Airways Pilots Agreement 2008 are transitional instruments. Thus they will also be considered transferable instruments under s.312(1)(d) of the Act which will enliven the transfer of business provisions in the Act, in particular s.313.
[25] The circumstances of the proposed transfer, as set out above, appear to constitute a transfer of business as defined by s.311 of the Act. The matters that I am required to take into account when considering whether to grant an order in the terms sought are prescribed by s.318(3) of the Act, as set out above.
[26] I have considered the factors set out in s 318(3). I am of the view that it is appropriate to make orders in relation to the transfer of the transferring employees’ employment. I have given weight to the fact that the transferring employees will make the transfer voluntarily. It is also of significance that Qantas and Jetstar operate in distinct sectors and that business efficacy and workability would be comprised if a transferable instrument was to apply to the new employer.
Conclusion
[27] For the reasons above, I find that the transferring employees should not be covered by the transferrable instrument upon the commencement of their employment at either Qantas or Jetstar. I will issue orders to that effect.
VICE PRESIDENT WATSON
1 AC309500.
2 AC313283.
3 AG844026.
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