Commonwealth of Australia (represented by and acting through the Department of Education, Employment and Workplace Relations)

[2011] FWA 6358

[2011] FWA 6358

FAIR WORK AUSTRALIA

DECISION

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

Commonwealth of Australia (represented by and acting through the Department of Education, Employment and Workplace Relations)
(AG2011/11949)

COMMISSIONER DEEGAN CANBERRA, 19 SEPTEMBER 2011

Decision accompanying order relating to instruments covering new employer and transferring employees.

[1] The matter arises from an application filed on 8 September 2011 under s.318 of the Fair Work Act 2009 (the Act) by the Department of Education, Employment and Workplace Relations (the Department or the new employer) for an order that the TVET Australia Ltd Enterprise Agreement 2010 (the transferable instrument) not cover the new employer or any employees of the new employer formerly engaged by TVET Australia Ltd (the relevant employees or transferring employees).

[2] The Department seeks an order that the terms and conditions of transferring employees be governed by the DEEWR Collective Agreement 2009-2011 (the DEEWR Agreement).

[3] The background to this application is set out at Grounds 1 and 2 of the application:

“1. Technical and Vocational Education and Training Australia Limited (TVET) is a company limited by guarantee that is incorporated under the Corporations Act 2001. The members of the company are various Commonwealth, State and Territory Ministers. TVET was established to conduct certain publicly-funded business and commercial activities with the intention of improving the qualify (sic) of education and training related activities of interest to the jurisdictions represented by the member Ministers.

2. It has been agreed between the Ministerial Council for Tertiary Education and Employment (MCTEE) and the Commonwealth that the secretariat functions of TVET would transfer to the Commonwealth to be performed in DEEWR. Some TVET employees will follow these functions to DEEWR. It is envisaged that TVET employees covered by the TVET EA and transferring to DEEWR will be engaged pursuant to a determination to be made under s.72(1)(d) of the Public Service Act 1999. The transition will occur on 1 October 2011.”

[4] The National Tertiary Education Union (NTEU), an organisation covered by the TVET Agreement, was represented at the hearing of the application

[5] Section 318(1) of the Act relevantly provides:

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.

[6] Each matter that Fair Work Australia must take into account when deciding whether to make an order under s.318 was addressed in the FWA Form 40 (Application for Orders in Relation to Transfer of Business) and documentation filed in support of the application. Additional information was provided at the hearing. On the basis of the information provided I reached a number of conclusions about those matters in s.318.

Section 318(3)(a): The views of the new employer (or a person who is likely to be the new employer) and the employees who would be affected by the order

[7] As noted above it is the new employer’s preference to have only one agreement applying to its workforce and that it should not be covered by the transferable instrument. Separate applications were made by 14 employees of TVET who intend to take up employment with DEEWR for orders that their employment with DEEWR not be covered by transferable instrument. The order was not opposed by the NTEU.

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

[8] Given the relative terms of the transferable instrument and the DEEWR Agreement and the additional information provided by DEEWR I am satisfied that no transferring employee would be disadvantaged in relation to their terms and conditions of employment if an order in the terms sought was made. Salary maintenance has been offered to transferring employees whose salaries under the DEEWR Agreement would otherwise be less than the salary provided under the TVET Agreement. In addition, many conditions of the DEEWR Agreement are more favourable than corresponding entitlements under the transferable instrument. The representative of the NTEU agreed that transferring employees would not be disadvantaged if covered by the DEEWR Agreement.

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

[9] The nominal expiry date of the DEEWR Agreement is 17 November 2011. The nominal expiry date of the TVET Agreement is 7 April 2013. The application notes that DEEWR is currently negotiating an enterprise agreement but, unless the order sought is made, any new agreement will not cover a transferring employee until the TVET Agreement has passed its nominal expiry date. It was also noted that a transferring employee would not be able to take part in the negotiations for the new DEEWR agreement in the absence of an order in the terms sought by the Department.

Section 318(3)(d): Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[10] The new employer claims, and I have no reason not to accept the claim, that the application of the TVET Agreement to a part of its workforce would have a negative impact on productivity given that the TVET Agreement has no link between salary advancement and productivity.

Section 318(3)(e): Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;

[11] It is apparent that the new employer would incur costs if the transferable instrument were to apply, although it is unlikely to amount to 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

[12] I accept that there is a low degree of business synergy between the transferable instrument and the DEEWR Agreement as the DEEWR Agreement reflects the core values of the Australian Public Service while the TVET Agreement was designed for the private sector.

Section 318(3)(g): The public interest

[13] I accept the DEEWR submission that the matter does not raise any issues of public interest.

Conclusion

[14] Having taken into account all those matters set out in s.318 of the Act, I have decided to make an order that the transferable instrument will not apply to the new employer or a transferring employee and that the DEEWR Agreement will cover a transferring employee.

[15] An Order [PR514663] giving effect to this decision is published separately.

COMMISSIONER

Appearances:

Ms Catherine Mann, Australian Government Solicitor, for the Applicant.

Ms Sarah Wright, Australian Government Solicitor, for the Applicant.

Mr Rhidian Thomas, National Tertiary Education Union.

Hearing details:

2011.
Canberra:
September, 15.

Printed by authority of the Commonwealth Government Printer

<Price code A, PR514665>