AustralianSuper Pty Ltd

[2015] FWC 2257

[2015] FWC 2257

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees

AustralianSuper Pty Ltd
(AG2015/2015)

Banking finance and insurance industry
COMMISSIONER LEE	MELBOURNE, 1 APRIL 2015

Application for an order relating to instruments covering new employer and transferring employees - application granted.

[1] An application has been made by AustralianSuper Pty Ltd (the Applicant) to the Fair Work Commission (the Commission) for an order pursuant to section 318 of the Fair Work Act 2009 (the Act).

[2] The application seeks an order that the IFS Agreement 2012 1 will not cover transferring employees and that the AustralianSuper Pty Ltd Enterprise Agreement 2012-20162 will cover the transferring employees during their employment with the Applicant, until that agreement is terminated or replaced in accordance with the Act.

[3] The application was served on the Finance Sector Union (the FSU). The application consisted of Form F40 - Application for Orders in Relation to Transfer of Business, a Draft Order and a statutory declaration of Susan Lowe, Remuneration and Services Manager of the Applicant.

[4] On 13 March 2015, I wrote to the Applicant’s representative (Minter Ellison Lawyers) and the FSU. The correspondence advised the parties that I had reviewed the application and supporting documents and that I was inclined to grant the application based on the information provided and the statutory declaration of Ms Lowe. I asked that should the FWU or any affected employee wish to be heard, they were to advise my chambers by no later than 20 March 2015. I directed the Applicant to provide a copy of my correspondence to each transferring employee (as set out in Schedule 1 to the application).

[5] On 16 March 2015, the FSU advised that they did not propose to contest the application.

[6] I did not receive any correspondence or contact from any transferring employees.

Legislation

“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.”

Background

[7] The Applicant is the trustee of the AustralianSuper superannuation fund (the Fund). As part of its service offering, the Applicant provides financial advice to members of the Fund (known as Financial Advice Work). Financial Advice Work is currently performed by employees of IFS under an agreement between the Applicant and IFS.

[8] The Applicant and IFS are negotiating an agreement which, if concluded on the terms currently contemplated by the parties, would result in the Applicant bringing in-house the Financial Advice Work currently provided to members of the Fund by IFS.

[9] If the Proposed Transaction goes ahead, the Applicant will offer to employ the 15 IFS employees who currently perform the Financial Advice Work.

Transferrable instrument

[10] Section 311 of the Act sets out when a transfer of business occurs. On the evidence before me, it is likely that there will be a transfer of business within the meaning of section 311(1) of the Act if the proposed transaction goes ahead.

[11] Section 312 of the Act details instruments that may transfer:

“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 the FWC;

(b) a workplace determination;

(c) a named employer award.

Meaning of named employer award

(2) Each of the following is a named employer award:

(a) a modern award (including a modern enterprise award) that is expressed to cover one or more named employers;

(b) a modern enterprise award that is expressed to cover one or more specified classes of employers (other than a modern enterprise award that is expressed to relate to one or more enterprises as described in paragraph 168A(2)(b)).

Note: Paragraph 168A(2)(b) deals with employers that carry on similar business activities under the same franchise.”

[12] The IFS Agreement 2012 was approved by the Fair Work Commission on 3 August 2012 and pursuant to section 312(1) of the Act is a transferrable instrument.

Who may apply for an order

[13] The application has been made by the new employer (the Applicant). The requirements of section 318(2) have been met.

Matters the Fair Work Commission must take into account (s.318(3))

Section 318(3)(a) - the views of the new employer and the employees who would be affected by the order

[14] The new employer is the applicant for this order and it supports the making of the order.

[15] The transferring employees who will be affected by the order if granted were provided with a letter explaining the Applicant’s intention to make this application, together with a comparison table comparing the key benefits under each agreement, as well as a copy of each agreement. One affected employee was not provided with this letter, as the proposed transaction had been discussed with that employee during his interview process earlier this year.

[16] The transferring employees were also provided with an election form to indicate whether they would prefer to be covered by the IFS Agreement 2012 or the AustralianSuper Pty Ltd Enterprise Agreement 2012-2016. Ms Lowe stated in her statutory declaration that all of the transferring employees indicated a preference to be covered by the AustralianSuper Pty Ltd Enterprise Agreement 2012-2016. Copies of the election forms were submitted with the application.

[17] As outlined above, transferring employees were provided with an opportunity to be heard in relation to this application. No request to be heard was received.

[18] As detailed above, the Finance Sector Union of Australia advised that they did not seek to contest this application.

Section 318(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[19] The Applicant submits that the transferring employees will not, on an overall basis, be disadvantaged in relation to their terms and conditions of employment if the Commission makes the proposed order.

[20] The application was supported by a comparison table which detailed the relevant benefits and related arrangements provided for in both agreements. The statutory declaration of Ms Lowe contained further information regarding the effect on transferring employees.

[21] Having considered all of the material before me, I am satisfied that the transferring employees will not be disadvantaged by an order in relation to their terms and conditions of employment.

Section 318(3)(c) - if the order relates to an enterprise agreement—the nominal expiry date of the agreement

[22] The nominal expiry date for the IFS Agreement 2012 is 9 August 2015.

[23] The nominal expiry date for the AustralianSuper Pty Ltd Enterprise Agreement 2012-2016 is 30 June 2016.

[24] The expiry date of the AustralianSuper Pty Ltd Enterprise Agreement 2012-2016 is one year later than the IFS Agreement 2012. This is not of great significance and is a neutral factor.

Section 318(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[25] The Applicant submits that applying the IFS Agreement 2012 to the transferring employees would require the establishment of separate administrative processes to ensure the Applicant meets its obligations to the transferring employees, separately to other employees of the Applicant who perform work at the same classification level.

[26] The Applicant submitted that the imposition of additional administrative processes would result in operational inefficiency for the Applicant.

[27] The Applicant submitted that if the IFS Agreement 2012 transferred to the Applicant, it could create disharmony in the workplace because transferring employees and employees of the Applicant who perform work at the same classification level would be subject to different terms and conditions of employment.

Section 318 (e) - whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;

[28] The Applicant submits that applying the IFS Agreement 2012 to the transferring employees would impose an economic disadvantage on the Applicant. The Applicant submitted that separate administrative processes would impose an administrative and cost burden on the Applicant.

Section 318 (f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;

[29] The Applicant submitted that there are a number of provisions of the IFS Agreement 2012 that are different to the equivalent provisions, or do not have equivalent provisions in the AustralianSuper Pty Ltd Enterprise Agreement 2012-2016.

[30] Whilst the Applicant made no specific submissions regarding business synergy between the transferrable instrument and the workplace instrument that already covers the Applicant, the Applicant did note the difficulties of compliance with different instruments.

Section 318 (g) the public interest

[31] The Applicant submitted that the making of the proposed order was in the public interest.

[32] The Applicant submitted that the Applicant had engaged with the transferring employees consistent with the legislative object of the Act and that it was in the public interest to give effect to that object by making the proposed order.

[33] The Applicant submitted that it had held an open communication process with the transferring employees, and submitted that the transferring employees had chosen to be covered by the AustralianSuper Pty Ltd Enterprise Agreement 2012-2016.

Conclusion

[34] It is apparent that the circumstances relevant to most matters weigh towards the grating of the application sought, while some are a neutral consideration. Taking into account each of the matters set out in section 318(3) of the Act, I am satisfied that the order as sought should be granted.

[35] An Order [PR562679] will be issued concurrently with this decision.

COMMISSIONER

 1   AE895859

 2   AE898074

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<Price code C, AE895859  PR562664 >