Commonwealth Superannuation Corporation
[2017] FWC 5327
| [2017] FWC 5327 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Commonwealth Superannuation Corporation
(AG2017/4481)
| Deputy President Kovacic | CANBERRA, 16 OCTOBER 2017 |
Application for an order relating to instruments covering new employer and non-transferring employees in agreements – orders made that the Industry Services Agreement 2016 will not apply to any transferring employees and non-transferring employees who perform or are likely to perform the transferring work of the new employer.
This decision concerns an application made pursuant to s.318 of the Fair Work Act2009 (the Act) by the Commonwealth Superannuation Corporation (CSC) seeking orders that the Industry Fund Service Agreement 2016 [1](the IFS Agreement) does not and will not cover CSC or any transferring employees
By way of background the application arises in circumstances where CSC is moving the provision of financial planning services for its members in-house. The services were previously provided by Industry Fund Services Limited (IFS) under an outsourcing arrangement between it and CSC. CSC has subsequently engaged a number of IFS staff, with those employees performing the same, or substantially the same, work as they performed for IFS thereby enlivening s.318 of the Act. From 1 November 2017 the Applicant will directly employ three former IFS employees under common law contracts.
An affidavit by Mr Aaron Broadway, CSC’s Senior Manager, People Business Partnering, was provided in support of the application. Annexured to his affidavit was a comparison table identifying the different terms and conditions between the CSC contracts and the IFS Agreement. A supplementary affidavit by Mr Broadway was filed on 4 October 2017.
Relevant legislation
The relevant sections of the Act are ss.313 and 318 which provide as follows:
“313 Transferring employees and new employer covered by transferable 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
...
(3) This section has effect subject to any FWC order under subsection 318(1).
318 Orders relating to instruments covering new employer and transferring employees
Orders that FWC may make
(1) 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) 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;
…
Matters that FWC must take into account
(3) In deciding whether to make the order, 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.”
Before turning to consider each of the matters specified in s.318(3) the Act, I note that CSC, as the new employer, has standing pursuant to s.318(2)(a) of the Act to make the application for the orders sought.
The views of the new employer [s.318(3)(a)(i)]
CSC stated among other things in its application that not making the orders sought would create a barrier to the development of a harmonious workplace and result in confusion, reduced workplace cohesion and inefficiency.
Mr Broadway in his witness statement deposed that employees and the new employer would be unaffected by the orders sought.
The views of the employees who would be affected by the order [s.318(3)(a)(ii)]
The Fair Work Commission (the Commission) wrote to the transferring employees on 4 October 2017 inviting their views on the proposed orders. On 6 October Ms Nandita Marthur emailed the Commission advising that she consented to the terms and conditions of her CSC employment contract.
Attached to the supplementary affidavit file by Mr Broadway on 4 October 2017 were emails from each transferring employee confirming they consent to the orders sought.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment [s.318(3)(b)]
CSC submitted that no employees would be disadvantaged by the orders but noted that a number of entitlements contained in the IFS Agreement would no longer apply to the transferring employees.
Mr Broadway in his witness statement contended that any loss of benefits to the transferring employees was compensated by an increase in remuneration.
Further, attached to Mr Broadway’s witness statement was a table comparing the terms and conditions contained in the IFS Agreement and the common law contacts accepted by the transferring employees. It was clear from the table that there were variations in the terms and conditions provided for in the IFS Agreement and the common law contracts accepted by the transferring employees. Beyond this, material attached to Mr Broadway’s witness statement indicated that transferring employees would not be financially disadvantaged as a result of the orders sought.
The nominal expiry date of the agreement [s.318(3)(c)
The IFS Agreement has a nominal expiry of 31 December 2017.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace [s.318(3)(d) and s.319(3)(d)]
CSC submits that maintaining a minority of employees on the IFS Agreement would have a negative impact on productivity. In addition Mr Broadway deposed that applying the IFS Agreement to the three employees would create a diversion of resources to reconfigure CSC’s payroll to accommodate the different terms and conditions.
Any significant economic disadvantage to the new employer [s.318(3)(e)]
CSC submitted that it would incur additional administration costs if the three employees remained covered by the IFS Agreement.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer [s.318(3)(f)]
CSC submitted that the IFS Agreement would negatively impact the business synergy due to the significant differences between the terms and conditions.
The public interest [s.318(3)(g)]
The Applicant submitted that it was in the public interest for the transferring employees to remain in employment and for CSC to avoid unnecessary complications in its employment arrangements.
There is no evidence that it would be against the public interest to issue the order.
Conclusion
Taking into account each of the matters set out in s.318(3), I am satisfied that the orders sought should be made.
The orders (PR596817) will be issued to provide that the IFS Agreement does not and will not cover CSC or any transferring employees.
[1]AE422062
Printed by authority of the Commonwealth Government Printer
<Price code C, PR596816>
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