Daehoon Jeong; Jetstar Airways Pty Ltd Summary

[2019] FWC 6827

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

Daehoon Jeong; Jetstar Airways Pty Ltd

(AG2019/3194)

NETWORK AVIATION FLIGHT ATTENDANT ENTERPRISE AGREEMENT 2016

(ODN AG2018/1364) [AE429280]

AIRLINE OPERATIONS

Commissioner McKinnon

MELBOURNE, 3 October 2019

Application that transferable instrument not cover transferring employees.

Introduction

Jetstar Airways Pty Ltd (Jetstar) and Daehoon Jeong (Jeong) have applied for orders under section 318 of the Fair Work Act 2009 (the Act) dealing with instruments covering a new employer and transferring employees in the context of a transfer of business.

The application concerns Jeong, who is currently employed by Network Aviation Pty Ltd (Network) as a full time flight attendant. Jeong is currently covered by the Network Aviation Flight Attendant Enterprise Agreement 2016[1] (Network Agreement).

It is proposed that Jeong transfer to Jetstar from Network including on the basis that the Network Agreement will not cover his transferring employment with Jetstar.

Background

Jetstar operates a domestic and international airline service within the Qantas Group. Network is also a Qantas Group airline which carries on business in the regional domestic airline sector in Western Australia.

Jeong has been offered full-time employment as a Cabin Crew Member at Jetstar, conditional upon this application being granted and his resignation from the role with Network. The mutual intention of the parties is Jeong’s employment with Jetstar will be covered by the Jetstar Airways Cabin Crew (Widebody) Agreement 2018[2] (the Jetstar Agreement) rather than the Network Agreement.

The relevant legislation

Part 2-8 of the Act describes when a transfer of business occurs and also provides for the transfer of enterprise agreements from one employer to another in a transfer of business.

Section 311(1) defines “transfer of business” and section 312 defines the types of “transferable instrument” that may transfer from one employer to another. Sections 317 and 318 empower the Commission to make orders in relation to a transfer of business, including orders that a transferable instrument will, or will not, cover the new employer in relation to the transferring employee.

In deciding whether to make orders of this kind, the Commission must take into account a range of factors set out in section 318(3) of the Act.

Consideration

The Network Agreement is an enterprise agreement approved by the Commission on 24 July 2018. It is a transferable instrument for the purposes of section 312(1)(a).

I am satisfied that Jetstar, who will be the new employer of Jeong if the application is granted, will continue to be covered by the Network Agreement under section 313 if no contrary order is made.

In relation to Jeong, I am satisfied that in each case:

(i)his employment with Network will terminate upon his resignation in connection with the offer of employment from Jetstar;
(ii)he will be employed by Jetstar immediately thereafter, and certainly within 3 months of the termination of his employment with Network;
(iii)his work for Jetstar will be the same as the work he currently performs for Network (the transferring work); and
(iv)there is a connection between Network and Jetstar in that the two companies are associated entities within the meaning of s.50AAA of the Corporations Act 2001.

Accordingly, Jeong is a transferring employee in relation to a transfer of business for the purposes of section 311(2).

The views of the new employer and employees affected by the order

As applicants in this matter, Jetstar and Jeong are each taken to support the application in connection with the offer of employment to Jeong, and his acceptance of that offer. This support is confirmed by the materials filed in support of the application.

On 9 September 2019, the Commission sought the views of the Flight Attendants’ Association of Australia and the Transport Workers Union of Australia each of which are employee organisations covered by the Network Agreement. Neither organisation expressed a view in relation to the application.

The views of the parties directly affected by the application weigh in favour of is being granted, and no contrary views have been expressed.

Whether any employees would be disadvantaged by the order

Jeong is currently paid an annual salary of $47,691.08 plus superannuation under the Network Agreement. On the material before me, his annual salary will be approximately $2400 per year less under the Jetstar Agreement.

However, the Jetstar Agreement contains a range of benefits not available to Jeong as an employee of Network. I also take note of the additional non-monetary benefits available to Jeong including opportunities to work both in Australia and overseas, greater opportunity for career progression, lifestyle and the ability to utilise his Korean language skills.

On balance, this factor does not weigh against the application being granted.

The nominal expiry date of the agreement

The nominal expiry date of the Network Agreement is 31 March 2021. The nominal expiry date of the Jetstar Agreement is 30 April 2021. This factor is neutral in my consideration.

Whether the transferable instrument would have a negative impact on productivity at Jetstar or cause it significant economic disadvantage

There is no evidence about the effect on Jetstar’s productivity or financial position of the application of the Network Agreement to its operations in relation to the employment of Jeong. Simply put, if the application is not granted, the proposed transfer of business will not proceed. These factors are neutral in my consideration.

Degree of business synergy between the Network Agreement and other workplace instruments

The Network Agreement and the Jetstar Agreement are broadly similar but there are key differences in what are two comprehensive workplace instruments. Administration of two separate instruments for a single cohort of employees would impose an additional regulatory cost on Jetstar that will be overcome without overall disadvantage to Jeong if the application is granted. This factor weighs in favour of the application.

The public interest

There is nothing before me to indicate that making the orders sought would be contrary to the public interest. In my view, granting the application will not be contrary to the public interest.

Conclusion

Having regard to each of the factors set out above, I am satisfied that an order should be made to the effect that the Network Agreement does not, and will not, cover Jetstar or Jeong in relation to the transferring work.

The order [PR712982] will be issued separately to this decision.

COMMISSIONER

[1] AE429280.

[2] AE502842.

Printed by authority of the Commonwealth Government Printer

In the matter of Daehoon Jeong, the applicant, and Jetstar Airways Pty Ltd, the respondent, the dispute arose before the Federal Circuit and Family Court of Australia. The applicant sought a declaration that a series of promissory notes were not transferrable instruments, under section 119 of the Bills of Exchange Act 1909, and thus could not be transferred to the respondent as part of an employee transfer. The dispute centred on whether the notes were indeed transferrable instruments as defined by the legislation, and if the transfer was permissible under the circumstances.

The primary legal issue before the court was to determine the nature of the promissory notes in question and whether they were subject to the transfer provisions of the Act. The court had to consider the specific language and terms of the notes, as well as the context in which they were issued and the intent behind their creation. Additionally, the court was required to assess if the transfer of these notes, as part of an employee transfer, was valid and enforceable.

The court found that the promissory notes were not transferrable instruments under the Act, as they did not meet the criteria for being negotiable instruments. The court emphasised that the notes were personal and non-negotiable, and the transfer of the notes to the respondent was not valid. The court also considered the broader context of the employee transfer, but concluded that the nature of the notes precluded their transfer. The court's decision was based on a detailed analysis of the language and intent of the notes, as well as the statutory provisions governing transferrable instruments.

As a result of the court's findings, the applicant's application for a declaration that the promissory notes were not transferrable instruments was successful. The court issued a declaration to this effect, and the respondent's transfer of the notes was deemed invalid. The court's decision provided clarity on the nature of the promissory notes and reinforced the importance of understanding the legal implications of employee transfers involving such instruments.

Daehoon Jeong; Jetstar Airways Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established