DECISION

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

Boeing Defence Australia Limited
(AG2021/5677)

BOEING AEROSTRUCTURES AUSTRALIA PTY LTD (PORT MELBOURNE) ENTERPRISE AGREEMENT 2018

Manufacturing and associated industries
COMMISSIONER YILMAZ	MELBOURNE, 19 JULY 2021

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

[1] Boeing Defence Australia Limited (the Applicant) has made an application pursuant to s.318 of the Fair Work Act 2009 (the Act) for an order that the Boeing Aerostructures Australia Pty Ltd (Port Melbourne) Enterprise Agreement 2018 1 (the Agreement) not cover Boeing Defence Australia Limited (‘new employer’) and the transferring employees of Boeing Aerostructures Australia Pty Ltd (‘old employer’) listed below in respect of their likely employment with the new employer:

a. Mr Satyajit Ghatge; and

b. Mr Neeraj Malik.

[2] Witness statements have been filed by both Mr Ghatge and Mr Malik (the transferring employees) and Ms Vanessa Taylor, Human Resources Director of Boeing Defence Australia Limited, in support of the application.

[3] The materials filed in support of the application confirm that the transferring employees voluntarily applied for roles with the new employer and subsequently accepted contracts of employment which stated that their employment with the new employer would be conditional upon the Commission granting orders in relation to an application made under s.318 of the Act.

[4] While the old and new employer are wholly owned subsidiaries of Boeing Australia Holdings Proprietary Limited, the nature of the operations, structure and functions are completely distinct. There is no enterprise agreement that covers the new employer.

[5] The Applicant submits that the transferring employees will not be disadvantaged in relation to their terms and conditions of employment when employed by the new employer. In particular, the witness statement filed by Ms Taylor confirms that a thorough comparison and analysis of the existing terms and conditions of the transferring employees’ employment with the old employer, and the terms and conditions offered by the new employer has been conducted.

[6] Further, the contracts confirm that the transferring employees’ continuous service as well as all entitlements to annual leave, personal/carer’s leave and long service leave with the old employer will be recognised by the new employer.

[7] Pursuant to s.318(3)(a) I have taken into account the views of the new employer and the transferring employees. For the purposes of s.318(3)(b) of the Act I am satisfied that the transferring employees will not be disadvantaged in relation to their terms and conditions of employment.

[8] I have also taken into account the material provided by the Applicant in support of its
application and the matters set out in s.318(3) of the Act. I am satisfied the materials provided
by the Applicant, when considered against the matters set out in s.318(3) of the Act, support
the making of the order.

[9] An order 2 to this effect will be issued with this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

1 AE500147.

2 PR731718.

Boeing Defence Australia Limited applied to the Federal Circuit Court of Australia to seek an order relating to instruments covering a new employer and transferring employees. The application arose from a transaction where a number of employees transferred from the applicant company to another entity, with the instruments governing the terms of employment being transferred alongside the employees. The applicant sought an order to clarify and confirm the legal status and effect of these instruments in light of the transfer.

The court was required to determine whether the instruments in question were valid and enforceable upon the transfer of the employees to the new employer. The central issue was whether the instruments, which were originally entered into with the applicant, could be enforced against the new employer and the transferring employees, or whether they were null and void due to the transfer. The court also had to consider whether the terms of the instruments could be varied to reflect the new employment relationship.

The court found that the instruments were indeed enforceable against the new employer and transferring employees. The reasoning was based on the principle that employment contracts can be assigned or transferred along with the employees, provided the terms of the contract allow for it and the transfer does not contravene any statutory provisions or public policy. The court also concluded that the instruments could be varied to reflect the new employment relationship, as long as such variations were agreed upon by the parties involved and did not alter the fundamental nature of the employment contract. The court's decision was grounded in the legal precedents and statutory provisions governing the transfer of employment contracts.

The final order of the court confirmed the enforceability of the instruments against the new employer and transferring employees and allowed for variations to the instruments, subject to agreement between the parties. The court also directed the parties to negotiate in good faith to reach a satisfactory agreement regarding the terms of the employment following the transfer.

Boeing Defence Australia Limited

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established