Bank of Queensland Limited
[2024] FWC 3328
•29 NOVEMBER 2024
| [2024] FWC 3328 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Bank of Queensland Limited
(AG2024/4510)
BOQ ENTERPRISE AGREEMENT 2022
| Banking finance and insurance industry | |
| DEPUTY PRESIDENT DOBSON | BRISBANE, 29 NOVEMBER 2024 |
Application for an order relating to instruments covering transferring employees.
This decision concerns an application by Bank of Queensland Limited (the Applicant) for orders pursuant to s.318(1)(b) of the Fair Work Act 2009 (the Act) that the BOQ Enterprise Agreement 2022[1] (the Agreement) will cover transferring employees who perform transferring work for the Applicant.
By way of background, the Applicant, Bank of Queensland Limited has made a decision to move from a franchise model where 85% of its branches that have operated as a “owner-managed” branch (OMB) structure and the other 15% as corporate branches. In the past the OMBs have directly engaged their own employees through a corporate entity. Consequently, where the Applicant engaged in making new Enterprise Agreements as they expired, the existing OMBs did not engage in making those new Enterprise Agreement. The end result is that some OMBs have continued to engage employees under the previous BOQ Enterprise Agreement 2014[2] (BOQ 2014 EA) or the BOQ Enterprise Agreement 2018[3] (BOQ 2018 EA).
On 22 August 2024, BOQ Group released a statement to the ASX in relation to its operations. The Statement announced that the organisations digital transformation strategy had enabled BOQ to simplify its retail distribution channels and as a result, changes would be made to the franchise model which involved converting the existing OMBs to corporate branches owned and operated directly by the Applicant. This process is due to be completed by 1 March 2025.
To facilitate the implementation of the new model, the Applicant has offered employment to all of the OMB Employees in the same or similar roles to those held by them during their employment with the Owner Managers. An expression of interest process was used with merit based decisions to fill the vacant roles. Employees were provided with information about the Agreement that would apply to their employment if they accepted the transfer to the Applicant. Those employees were provided with detailed information about the impact on their remuneration, terms and conditions transferring from the BOQ 2014 EA or the BOQ 2018 EA as applicable to the Agreement. This included a comparison document showing the different terms.
The Applicant consulted with the Finance Sector Union (FSU) who relevantly cover the affected employees and the FSU does not object to this application for orders that the BOQ 2014 EA nor the BOQ 2018 will not transfer with affected employees and that instead the Agreement will cover all transferring staff.
New transferring employees of new employer to be covered by the Agreement
I am satisfied that the Agreement is a transferable instrument within the meaning of s.312 of the Act, and I observe that the Applicant accepts that the Agreements are transferable instruments. I note that the two companies are associated entities. Section 313 of the Act sets out when transferring employees may be covered by a transferring instrument. The clause provides:
“Transferring employees and new employer covered by transferable instrument
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 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 FWC order under subsection 318(1).”
Consideration of section 318
Section 318 of the Act sets out the matters the Commission must have regard to in determining if the orders sought should be granted.
Section 318 provides as follows:
“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 a person 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 non-transferring employee before the later of the following:
(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;
(b) the day on which the order is made.”
The application in relation to the matters to be taken into account
Section 318(3)(a)(i) – Views of the new employer
The Applicant is the new employer, who seeks, and is supportive of, the order.
Section 318(3)(a)(ii) – views of the employees who would be affected by the order
I am satisfied that the Applicant provided an opportunity for the affected employees to provide their views to them and I have reviewed written feedback from 3 of those employees supporting the orders sought. Further, I caused employees to be given an opportunity to provide feedback direct to my chambers. One employee wrote to my chambers and supports the orders sought. Further I note the Finance Sector Union are also in support of the orders sought.
Section 318(3)(b) – whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
The Applicant submits that the Agreement is more beneficial overall than the transferrable instrument, with higher base salaries generally, increased and new leave entitlements, more beneficial superannuation contributions, working conditions and other benefits, except in respect of the spread of ordinary hours, retrenchment entitlements and minimum salaries for particular classifications.[4] The Applicant notes that the change in the spread of ordinary hours is unlikely to affect the relevant employees given the operating hours of those Branches. Further the Applicant notes that all Transferring employees will not receive a lower salary than that which they are currently receiving and finally that the more beneficial retrenchment benefits will be honoured.
Section 318(3)(c) – the nominal expiry date of the agreement
I note that the transferring instruments have both passed their nominal expiry dates of 30 September 2017 and 30 September 2021 respectively and consider that the granting of the proposed orders would not disadvantage employees given the commitments given by the Applicant and the ongoing operation of the Agreement.
Section 318(3)(d) – whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
The Applicant submits, that the proposed order will have a positive impact in that it will ensure a reduction in administrative complexity, clear and consistent terms for all employees and a boost in morale as a result of employees being treated fairly and equitably.
I am satisfied that there will be no negative impact on productivity upon making the order sought.
Section 318(3)(e) – whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
The Applicant submitted there will be no significant economic disadvantage in making the order.
I consider that if the order sought were made, the Agreement’s coverage of transferring employees will not cause any significant economic disadvantage.
Section 318(3)(f) – the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
The Applicant submits that the transferable instrument currently covers transferring employees and that if the order is not made there will be three classes of employees performing the same work, one class which is paid in accordance with the Agreement and another in accordance with each of the two transferring instruments. Further the Applicant submits that this would have a negative impact on administration of payroll, leave entitlements and loadings.
On the basis of the material before me, I am satisfied that the requirement of s.319(3)(f) is met based on a consideration of the materials before me.
Section 318(3)(g) – the public interest
The Applicant submits that industrial harmony would be served by transferring employees working under the same terms and conditions of employment as transferring employees and existing employees of the new employer. Having regard to all the material before me, I am not of the view there are public interest reasons that weigh against making the Order sought.
Conclusion
Having taken into the account the material provided by the Applicant in support of its application and the matters set out in s.313 and 318 of the Act, I am satisfied that that it is appropriate to grant the order pursuant to s.318(1), that a transferable instrument that covers, or is likely to cover the new employer, because of a provision of this Part, will not cover the new employer and the transferring employees and instead the Agreement will cover the transferring employees.
An order[5] to this effect will be issued together with this decision.
DEPUTY PRESIDENT
[1] [AE520571].
[2] [AE414061].
[3] [AE503321].
[4] Statement of Emma Burbery 14 November 2024 at 68-69.
[5] PR781874.
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