Bendigo and Adelaide Bank Ltd, BEN Regional Victoria Pty Ltd
[2022] FWC 2878
•26 OCTOBER 2022
[2022] FWC 2878
The attached document replaces the document previously issued with the above code on 26 October 2022.
At [20], “on” is corrected to read “an”.
At [34], “be satisfied as to” is corrected to read “take into account”.
At [41], “orders” is corrected to read “order”.
Grammatical errors are corrected at [39] and [44].
Dated 27 October 2022.
| [2022] FWC 2878 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
Bendigo and Adelaide Bank Ltd, BEN Regional Victoria Pty Ltd
(AG2022/4169)
Bendigo and Adelaide Bank Enterprise Agreement 2018-2021 (ODN AG2020/1627) [AE508394]
Banking finance and insurance industry
| DEPUTY PRESIDENT ANDERSON | ADELAIDE, 26 OCTOBER 2022 |
Application for an order relating to instruments covering new employer and non-transferring employees
On 4 October 2022 BEN Regional Victoria Pty Ltd (BENRV) and Bendigo and Adelaide Bank Ltd (BABL) (together, the applicants) made an application to the Commission seeking an order under s 319(1)(b) of the Fair Work Act 2009 (FW Act) that the Bendigo and Adelaide Bank Enterprise Agreement 2018 - 2021 (Agreement) cover and apply to employees of BENRV performing work in accordance with the classification structure of the Agreement, who commence employment with BENRV on or after the date on which a transfer of business applies to Agreement covered employees of BABL who transfer to BENRV.
The Agreement is a single enterprise agreement. It was approved by the Commission on 30 June 2020.[1] It was approved to operate from 7 July 2020 with a nominal expiry date of 15 December 2022.
The Finance Sector Union of Australia (FSU) and the Australian Municipal, Administrative, Clerical and Services Union (ASU) are named employee organisations covered by the Agreement.
I issued directions on 11 October 2022 seeking the views of the ASU and FSU.
I also directed the applicants to notify transferring employees of these proceedings and be given an opportunity to be heard as I was satisfied that transferring employees, whilst not directly affected, may have an interest in the application. As no new non-transferring employees are yet employed, views of that cohort of employees whose interests would be directly affected could not be obtained.
The applicants complied with the directions.[2]
The matter was subject to a hearing on 26 October 2022.
I granted permission for the applicants to be represented.
The FSU appeared. It confirmed a position advised to my chambers on 13 October 2022 that it supported the application as it considered it appropriate that both transferring and new non-transferring employees be covered by the Agreement. The FSU was concerned to ensure that the restructure proposed by the applicants did not cause disparity or disadvantage in conditions between current and future staff.
The ASU did not appear but advised my chambers on 17 October 2022 that it also did not oppose the application but reserved its future rights to be heard on any matters arising from the operation of the Agreement or the restructure.
After hearing the applicants and the FSU by way of oral submission and in response to questions from the Commission, I granted the application with respect to applicant BEN Regional Victoria Pty Ltd, indicating that my reasons for decision and order would be subsequently published.
This I now do.
Facts
The facts are not in dispute. Where necessary I have regard to the declaration of Kerrie Lee Halden of 4 October 2022 which accompanied the application.[3]
BENRV is a wholly owned subsidiary of BABL and a member of the Bendigo Bank Group. BENRV was established on or about 30 August 2022 as a new entity for the purpose of employing staff who carry out work for the “Bendigo Bank” brand, and related brands, in regional Victoria.
BENRV proposes to actively commence operations in regional Victoria from 31 October 2022. Its establishment was connected to tax incentives provided by the Victorian government for companies to operate and employ in regional Victoria.
BENRV intends, on and from that date, to be the employing entity of approximately 1,700 persons currently employed in regional Victoria by BABL whose terms and conditions of employment are governed by the Agreement. As BABL does not exclusively operate in regional Victoria, a separate employing entity, BENRV was formed for that purpose.
The 1,700 currently employed persons transferring to BENRV from 31 October 2022 will continue to be employed under the Agreement by virtue of the operation of the transfer of business provisions of the FW Act.[4]
BENRV intends to supplement its workforce from 31 October 2022 with new non-transferring employees.
This application concerns those new non-transferring employees, that is persons who will from 31 October 2022 be newly employed by BENRV in regional Victoria and perform work of the type covered by the Agreement. Such persons will work alongside and in conjunction with transferring employees.
The applicants seek an order the effect of which would be that new non-transferring employees be covered by the Agreement and employed under its terms.
Absent an order by the Commission, new non-transferring employees would not be employed under the Agreement. Absent an order, new non-transferring employees would be covered by the relevant modern award, not the Agreement.
Consideration
Section 311 of the FW Act sets out the circumstances in which a transfer of business occurs. It states:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1)There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).”
Section 312 of the FW Act further states that a “transferable instrument” includes “an enterprise agreement that has been approved by the FWC”.
I am satisfied that a transfer of business will occur once the relevant employees of BABL transfer to BENRV under the terms of the FW Act. The transfer of business is intended to take effect on and from 31 October 2022.
I am also satisfied that the Agreement is a transferable instrument and that it will cover BENRV and the transferring employees covered by the Agreement.
Section 314 of the FW Act provides for a transferable instrument to cover other employees in certain circumstances. It states:
“314 New non-transferring employees of new employer may be covered by transferable instrument
(1)If:
(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and
(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and
(c) the non-transferring employee performs the transferring work; and
(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;
then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.
(2)A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWC order under subsection 319(1).
At the hearing, BENRV confirmed that it was yet to employ any new non-transferring employees.
The applicants contend that the Banking Finance and Insurance Award 2020 (the BFI Award) is the modern award that would apply to new non-transferring employees performing work in accordance with the classification structure under the Agreement. The BFI Award is likely to be relevant as the newly established BENRV will perform banking and financial services. Given the coverage of a modern award in respect of these employees, the Agreement would not cover any new non-transferring employees and as such, s 314(1) does not operate.
However, s 319 of the FW Act allows the Commission to make an order that a transferring instrument covers non-transferring employees. It relevantly states:
“319 Orders relating to instruments covering new employer and non-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 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)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 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 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.”
Standing
BENRV is entitled to apply to extend coverage of the Agreement to any new non-transferring employees pursuant to s 319(1)(b) of the FW Act. This is because it is “the new employer” within the meaning of s 319(2)(a) of the FW Act.
As BENRV has standing, jurisdiction exists to determine the application and, if appropriate, make the order sought.
For reasons expressed during the hearing, I am not satisfied that BABL in its own right has standing. It is not and is not intended to be the new employer of new non-transferring employees. It is the existing employer of transferring employees only. Section 319(2)(a) only confers standing to apply on “the new employer”.
I determine this application by reference to the application by BENRV only.
Merits
I am required to take into account each of the matters contained in s 319 of the FW Act in determining whether an order should be made. I now consider each of the relevant statutory considerations.
The views of the new employer – s 319(3)(a)(i)
BENRV is an applicant. It supports the application as the new employer and the order that it proposes should be made.
The views of employees – s 319(3)(a)(ii)
There are currently no new non-transferring employees of BENRV who will be affected by the order sought by the application.
In accordance with my directions, employees transferring to BENRV currently employed by BABL and covered by the Agreement were provided an opportunity to indicate whether any objection would be taken to the application or if they sought to be heard. No such persons appeared or sought to be heard.
The views of employee organisations covered by the Agreement are required to be taken into consideration. They are relevant because both the FSU and ASU have coverage that encompasses persons under the Agreement and each union has the potential to represent the industrial interests of new non-transferring employees.
Neither organisation objects to the application. The FSU in particular consider it desirable that the terms and conditions of the Agreement apply equally to persons whether employed by BABL or BENRV, and also equally between transferring employees of BENRV and future new non-transferring employees of BENRV.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s 319(3)(b)
I am satisfied that any new non-transferring employees would not be disadvantaged in relation to their terms and conditions of employment by the making of an order. Further, it is likely that terms and conditions of the Agreement are better off overall than terms and conditions under the BFI Award. New non-transferring employees are likely to be advantaged should the order be made. I am satisfied they will not be disadvantaged.
Expiry date of the agreement – s 319(3)(c)
The nominal expiry date of the Agreement is 15 December 2022. As such, the Agreement remains on foot under the terms of the FW Act. It is desirable that pending the making of any new enterprise agreement, the terms of the Agreement also apply to new non-transferring employees. Such employees would, by virtue of the order being made, then have bargaining rights with respect to the making of a new agreement.
Negative impact on productivity – s 319(3)(d)
I am satisfied that there will be no negative impact on productivity if the order is made. In contrast, and having regard to the evidence of Ms Halden, if the order is not made and transferring and new non-transferring employees are employed on different terms and conditions, this may have a negative impact on team engagement and in turn upon workplace productivity.
Economic disadvantage – s 319(3)(e)
The Agreement’s coverage of new non-transferring employees will not cause any apparent economic disadvantage. As it is likely to facilitate business synergy (considered below), there may be some limited economic advantage.
Degree of business synergy – s 319(3)(f)
The Agreement and the BFI Award contain a number of different terms and conditions of employment. If the order is granted it will confirm a single framework of regulation that has been negotiated and approved in the same general context of retail banking withing the Bendigo Bank Group. This is likely to enhance the degree of synergy that exists within the operations of BENRV and its labour force in regional Victoria, and also with BABL.
Public interest – s 319(3)(g)
BENRV submits that it is in the public interest that the application be granted. Based on the material in the application and Ms Halden’s evidence, I am satisfied that it would not be contrary to the public interest to make the order sought.
Conclusion
Having considered each of the matters in s 319(3) of the Act I am satisfied that it is appropriate for an order to be made. All statutory considerations weigh in favour of granting the application or are neutral. None weigh against. The grounds of the application are made out and the application is not opposed.
In accordance with s 319(4) of the FW Act, the order will not come into operation in relation to each non-transferring employee until 12.01am 31 October 2022. The word “some” will be deleted from the draft order as I consider it superfluous and potentially confusing.
An order[5] to this effect is issued in conjunction with this decision.
DEPUTY PRESIDENT
Appearances:
L Albiston, with permission, with K Halden on behalf of Bendigo and Adelaide Bank Ltd and BEN Regional Victoria Pty Ltd
J Hall, on behalf of Finance Sector Union of Australia
Hearing details:
2022
Adelaide (by video)
26 October
[1] [2020] FWCA 3404
[2] Statutory Declaration of Kerrie Lee Halden 14 October 2022
[3] F17
[4] Section 313(1)(a) FW Act
[5] PR747270
Printed by authority of the Commonwealth Government Printer
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