Australian Central Credit Union Ltd
[2011] FWA 3451
•2 JUNE 2011
[2011] FWA 3451 |
|
DECISION |
Fair Work Act 2009
s.318—Transfer of instrument
Australian Central Credit Union Ltd
(AG2011/7631)
Banking finance and insurance industry | |
COMMISSIONER STEEL | ADELAIDE, 2 JUNE 2011 |
Transfer of business - certain employees not to be covered.
[1] This matter concerns an application for orders relating to a transferable instrument which now covers a new employer and transferred employees under s.318(1)(a)of the Fair Work Act 2009 (the Act) and an order relating to the same transferable instrument covering the new employer and non-transferring employees under s.319(1)(a)of the Act.
Background
[2] The applicant organisation, the Australian Central Credit Union Ltd (ACCU) has its own enterprise agreement, the Australian Central Collective Agreement 2007 (the ACCA) covering generally all employees falling within the scope of that agreement up to a specific salary range. Above that range those employees are governed by common law contracts and the statutory minimum requirements of the Act as they are employed in positions that are award and agreement free.
[3] On 1 December 2009 the ACCU merged with the Savings and Loans Credit Union (SA) Ltd (SLCU). That organisation operates its own current agreement, the Savings and Loans Credit Union (SA) Ltd Collective Agreement 2008 (SLCUCA). That agreement covers all employees including award free staff referred to as “packaged employees”. On 1 December 2009 the employees of SLCU became employees of ACCU as ACCU became the legal entity for the merged body.
[4] It is not contentious that the merger and transfer of SLCU employees to ACCU is a transfer of business pursuant to s.311 of the Act. Accordingly the two enterprise agreements the ACCA and the SLCUCA both operate in respect to ACCU employees.
[5] The applicant is this matter is seeking that the SLCUCA now not operate in relation to those staff that are identified as “packaged employees” and they be released such that they can be offered contracts on a common approach with their peers, being the other award free staff who are generally managerial in nature within the merged organisation. There are 39 “packaged staff” in consideration which is 8.14% of the currently 479 SLCU staff covered by the SLCUCA.
[6] The applicant does not want managerial staff to be covered by two different industrial approaches and seeks the nominated orders to provide that the transferable instrument, (the SLCUCA) not apply to the nominated transferred employees or non-transferred employees of the applicant. It is not contentious that all other staff currently operating under the two agreements (the ACCA and the SLCUCA) shall in the near future be negotiating a single agreement to cover all such staff.
The application
[7] The applicant seeks the following orders:
1. That pursuant to s.318(1)(a) of the Act that the SLCUCA not cover the ACCU in relation to the following transferring employees named in the application and defined as:
1.1 General Managers;
1.2 Senior Managers; and
1.3 Managers who directly report to the Managing Director, a General Manager or a Senior Manager.
2. That pursuant to s.319(1)(a) of the Act that the SLCUCA not cover any new employee of ACCU engaged after 1 December 2009 defined as a:
2.1 General Manager;
2.2 Senior Manager; and
2.3 Managers who directly report to the Managing Director, a General Manager or a Senior Manager
who would otherwise have been covered by the SLCUCA due to the operation of s.314(1) of the Act.
Jurisdictional references
[8] In relation to transfer of business, s.309 of the Act reads as follows:
“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.”
[9] Chapter 2, Part 2-8, Division 3 of the Act provides the power for FWA to make such orders, prescribes who can apply for such orders and the matters that FWA must take into account in deciding to exercise the discretion to make such orders.
“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.
...
319 Orders relating to instruments covering new employer and non-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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;
(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.
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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(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.”
[10] Section 320(1), (2) and (3) of the Act further provides an alternative approach, by varying a transferable instrument to remove terms incapable of meaningful operation, correct ambiguities or uncertainties or to enable the transferable instrument to operate in a way that is better aligned to the working arrangements of the new employer’s enterprise.
[11] It is persuasive that the criteria for consideration by FWA in determination of the orders in regard to transferable employees, non-transferable employees and variations to transferable instruments all have the identical criteria (see ss.318(3) 319(3) and 320(3) of the Act). It is also noted that the provisions of ss.318 and 319 are available to applicants in situations where “there is or likely to be a transfer of business,” and s.320 where a “transferable instrument that covers or is likely to cover the new employer.” On that basis there is no bar to the applicant seeking to use ss.318 and 319 when the transferable instrument in question now covers the applicant and has done so for some period of time.
Submissions
[12] Mr Austin for the applicant provided submissions in support of the application. Ms Donaghy, for members of the Australian Services Union (ASU), indicated that the union had membership amongst the “packaged staff” employees concerned. The union did not oppose the application for the orders sought.
Consideration in regard to ss.318(3) and 319(3)
[13] The applicant is seeking to have removed from a transferable instrument a selected workforce of staff who are otherwise recognised as managerial and award free. In doing so such staff are thereafter on common arrangements with other managerial staff within the merged organisation. The employees concerned form a small proportion of the applicant’s total employees and there are obvious benefits in such an approach, for efficiency, administration, harmony, integration and workplace culture. The relevant employees will be offered new contractual arrangements.
[14] The submissions provided support that the process involved by the applicant provided adequate consultation, information and feedback to employees. The employees concerned (39) have all been given the opportunity to be represented and attend the hearing of this matter but none have taken up that offer. The tribunal acknowledges that representation for employees has also been available through membership of the ASU.
[15] In terms of disadvantage to the employees concerned, on the evidence provided as to comparisons between the intended arrangements to be offered and the existing SLCUCA the tribunal considers on balance that there is no identified disadvantage to the relevant employees. The mentioned enhanced remuneration and minor condition changes have been evaluated and accepted by the relevant employees in a vote recording 34 of 39 employees in favour.
[16] The nominal expiry date of the SLCUCA is 30 June 2011 and the employees concerned shall not lose any accrued benefits in term of a recently negotiated agreement.
[17] In relation to the question of negative impact upon the employer’s productivity the tribunal considers that there are benefits and efficiencies for the enterprise of having a standardised approach to managerial staff and the avoidance of multiple instruments and their administration. There is also economic benefit in terms of clarity of activities, planning and objectives and the operations of the applicant. Further, the relevant staff have access through their contracts to a bonus scheme intended to increase and maintain motivation and productivity which provides an attraction and retention strategy.
[18] In terms of any significant disadvantage that would be experienced by the applicant, it was submitted that the inability to provide the bonus scheme strategy to all managerial staff would ultimately affect staff retention.
[19] In regard to the question of business synergy between the two approaches to the relevant staff, it was submitted that there is a lack of business synergy between the two approaches and there is a need to remove the dichotomy of standards and contrasting provisions for like staff working within the same organisation.
[20] Finally, in terms of the public interest consideration, given the submission of the parties, the tribunal can find no offence to the public interest in this application given the guidance of the object of this legislation in s.309 of the Act.
[21] The tribunal therefore considers, with due regard to the requirements of the Act, that it is in the interests of the applicant, their existing employees and their likely future non-transferable employees that this application for orders pursuant to ss.318 and 319 be granted.
[22] The tribunal so orders. The orders shall have an operative date of 24 May 2011 on the submission that the applicant has not employed any non-transferable employee on the work covered by the SLCUCA since the merger of the organisations.
COMMISSIONER
Appearances:
Mr B Austin with Mr Z Costi for the applicant
Ms F Donaghy for the Australian Municipal, Administrative, Clerical and Services Union
Hearing details:
2011:
Adelaide
24 May
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