Electricity Networks Corporation T/A Western Power

[2013] FWC 9715

[2013] FWC 9715

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318—Transfer of instrument

Electricity Networks Corporation T/A Western Power
(AG2013/11808)

COMMISSIONER WILLIAMS PERTH, 11 DECEMBER 2013

Transfer of instrument.

[1] This is an application, pursuant to s.318 of the Fair Work Act 2009 (the Act), made by Electricity Networks Corporation T/A Western Power (Western Power) which seeks orders from the Commission that a transferrable instrument, being the Transfield Services (Australia) Pty Limited Transmission and Distribution Collective Agreement 2010 - 2014 (the Transfield Services Agreement)[AE881536] not cover Western Power in relation to the employment of any transferring employee formerly employed by Transfield Services (Australia) Pty Limited (Transfield Services)and that the Western Power and CEPU Enterprise Agreement 2013 (the Western Power Agreement)[AE404229]cover Western Power and all future transferring employees previously employed by Transfield Services. Western Power applies in its capacity as a person who is likely to be the new employer of the affected employees (s.318(2)(a) of the Act).

[2] Section 318 sets out the circumstances in which such orders may be made by the Commission, as follows:

“318 Orders relating to instruments covering new employer and 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 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) 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 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 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 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.”

Background

[3] Western Power and Transfield Services entered into an Alliance Agreement in 2008 (the Alliance Agreement) under which Transfield Services performs work and services on the south-west interconnected grid in Western Australia. The Alliance Agreement will expire in April 2014 and Western Power has chosen not to renew the Alliance Agreement with Transfield Services nor with any other contractor. Instead Western Power has decided that it will itself undertake the provision of the works and services previously performed under the Alliance Agreement.

[4] Currently there are approximately 240 wages employees employed by Transfield Services to provide the works and services under the Alliance Agreement.

Consideration

[5] A comprehensive affidavit sworn by Mr Daniel Scasserra (Mr Scasserra), the Employee Relations Manager of Western Power, has provided the Commission with a significant amount of factual background to the application and has addressed the statutory considerations in s.318 of the Act and in particular those matters that the Commission must take into account when deciding whether to make such an order as prescribed in s.318(3) of the Act. I accept the evidence provided by Mr Scasserra in his affidavit.

[6] The view of the likely new employer, Western Power, is that the Commission should make the orders sought.

[7] With regards to the views of the employees who would be affected by the order the evidence is that as part of the extensive consultation process undertaken by both Western Power and Transfield Services the affected employees have on a number of occasions been made aware that Western Power would make this application to the Commission, the reasons for this application being made and the effect of the application if it is granted. Those presentations have also provided considerable detail to employees about the similarities and differences between theTransfield Services Agreement and the Western Power Agreement.

[8] The evidence is that the vast majority of those employees who would be affected have responded positively to the presentations by Western Power and have chosen to complete a formal expression of interest which they have given to Western Power asking to be considered for employment thus demonstrating the majority of employees do accept the merit of this application.

[9] Separately before the Commission 1is a document signed by Mr Fiala the Lead Organiser for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the Union) confirming that with respect to this application Western Power has consulted with the Union and has informed the Union of the orders to be sought and the Union has consulted with their members in relation to this application and the Union does not oppose nor object to the proposed application.

[10] Approximately 181 employees from Transfield Services will be or have already been offered employment with Western Power, that future employment commencing sometime in 2014 and being subject to this application being granted by the Commission.

[11] The evidence is that of those, 107 affected employees will be better off overall under the terms of the Western Power Agreement than under the Transfield Services Agreement.

[12] A further 74 affected employees however will suffer some disadvantage if these orders were granted. In response to this Western Power is prepared to provide an undertaking to the Commission to the effect that it will provide those employees with a no disadvantage payment. This payment will be paid in two separate instalments the first being on the date that the disadvantaged transferring employee commences employment with Western Power and the second payment would be made to that employee after they have completed six months service with Western Power. The full details of all of these undertakings are provided in paragraphs 60 to 65 of Mr Scasserra affidavit (Western Power’s No Disadvantage Payment Undertaking).

[13] I note that there are a remaining 12 affected employees who are identified as being labourers that Western Power is not willing to provide any undertaking to given in their view the rates these employees are currently enjoying are well in excess of the market rate for such employees. I further note that these 12 employees have been advised of Western Power’s position and have individually confirmed in writing that they do wish to continue with the expression of interest process for employment with Western Power expressly on the understanding that they would be remunerated under the rates of pay of the Western Power Agreement and will not receive any transition payments to remove any relative disadvantage compared to their current rates of pay with Transfield Services.

[14] The Western Power Agreement does not expire until August 2017 whereas the Transfield Services Agreement will expire in June 2014.

[15] I am satisfied based on the evidence that the transferable instrument would have a negative impact on the productivity of Western Power. I also accept the evidence that Western Power would incur some economic disadvantage if the transferable instrument was to cover them for the future.

[16] Finally I accept the evidence and submissions and that there is little or no business synergy between the transferable instrument which was negotiated and designed for a contractor with the existing Western Power Agreement that already applies to Western Power’s workplace.

[17] There is obviously some public interest benefit in the Commission making these orders because it will allow a significant number of employees to move across to be employed with Western Power when the Alliance Agreement ends in 2014 rather than these employees and Western Power being involved in a large recruitment process with all the attendant costs and uncertainties for both employer and employees.

[18] Taking in to account all of the matters to be considered in s.318(3) of the Act, based on the evidence before the Commission and accepting Western Power’s No Disadvantage Payment Undertaking I am satisfied that it is appropriate that this application be granted and orders to that effect will be issued in conjunction with this decision.

COMMISSIONER

 1   Attachment DS-6 to the affidavit of Mr Daniel Scasserra.

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