Energy Safe Victoria and Australian Workers’ Union

[2020] FWC 6734

[2020] FWC 6734

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

Energy Safe Victoria and Australian Workers’ Union
(AG2020/3746 and AG2020/3850)

DEPUTY PRESIDENT COLMAN MELBOURNE, 15 DECEMBER 2020

Applications for an order relating to instruments covering non-transferring employees (s319)

[1] Ms Marnie Williams and the Australian Workers’ Union (AWU) have made applications under s 319 of the Fair Work Act 2009 (Act) for an order that the Energy Safe Victoria Enterprise Agreement 2020 (2020 Agreement) cover non-transferring employees of a successor to ESV, the Victorian Energy Safety Commission (VESC).

[2] On 1 January 2021 ESV will be abolished and replaced by the VESC. This change will occur by operation of the Energy Safety Legislation Amendment (Victorian Energy Safety Commission and Other Matters) Bill 2019 (Vic) (Amending Legislation), and its amendments to the Energy Safe Victoria Act 2005 (Vic), which take effect from 1 January 2021. The majority of ESV employees are currently covered by the Energy Safe Victoria Enterprise Agreement 2019 (2019 Agreement). In a decision dated 11 December 2020 ([2020] FWCA 6653), I approved the 2020 Agreement, which will commence to operate on 18 December 2020.

[3] Ms Williams and the AWU consider that there will be a transfer of business from ESV to VESC, and that the 2020 Agreement, which is a transferable instrument for the purpose of Part 2-8 of the Act, will cover the VESC and the employees of ESV who become employees of VESC (transferring employees). The purpose of the present applications is to ensure that the 2020 Agreement will also cover any non-transferring employees who perform work for the VESC. There are currently no non-transferring employees. Persons employed by the VESC on or after the transfer of business will be non-transferring employees and would be covered by the relevant modern award, the Victorian State Government Agencies Award 2015 (Award). In the absence of an order under s 319, the Award will apply to non-transferring employees (see s 314). The order sought by Ms Williams and the AWU under s 319 would provide that the 2020 Agreement will cover and apply to non-transferring employees.

[4] I note that s 319(2) relevantly provides that an application for an order under s 319 may only be made by the new employer or a person likely to be the new employer, by a non-transferring employee, or by an employee organisation covered by an enterprise agreement to which the application relates. Ms Williams has been appointed as Chair-designate of the VESC. Ms Williams made her application as or on behalf of the new employer. However, at a mention on 11 December 2020, I expressed to the parties some doubt as to whether it is possible for the VESC to make an application under s 319, given that it does not yet exist. Although there are arguments that the Amending Legislation allows this to occur, the safer course appeared to me to be for an application under s 319 to be made by a union party to the 2020 Agreement. Later that day, the AWU lodged its application under s 319, in terms substantively identical to Ms Williams’ application. There is no question about the AWU’s standing to make the application. I will therefore determine the AWU’s application. It will not be necessary to determine Ms Williams’ application.

[5] Part 2-8 of the Act provides for the Commission to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer (s 317). In my opinion, there will be a transfer of business from ESV to VESC, for the following reasons.

[6] Transitional provisions under the Amending Legislation relevantly provide that, with effect from 1 January 2021, the VESC will be ESV’s successor in law. The VESC will be substituted for ESV as a party in any contract or arrangement, and all rights, assets, property, liabilities and obligations of ESV will carry over to the VESC. Any employees of ESV will be taken to be employees of the VESC on the same terms and conditions, and with the same accrued entitlements, as those that applied to their employment with ESV. However, this does not affect arrangements under federal instruments.

[7] Under the Amending Legislation, employees will continue to perform the same, or substantially the same work for the VESC as they performed for ESV (transferring work). There will be a ‘connection’ between ESV and the VESC whereby the VESC will own or have the beneficial use of all of the assets of ESV that relate to the transferring work. In my assessment, these circumstances can be described as an ‘arrangement’ between the old employer and the new employer for the purposes of section 311(3) of the Act. In this regard, I concur with the views of Gostencnik DP in Applications by Block [2020] FWC 3428 at [29] to [42].

[8] Section 319(3) provides that, in deciding whether to make an order under s 319, the Commission must take into account certain matters.

[9] The views of the new employer and employees affected by the order (s 319(3)(a)): There are presently no non-transferring employees. This is a neutral consideration.

[10] Whether any employees would be disadvantaged (s 319(3)(b)): As the 2020 Agreement provides for more generous conditions than the Award that would otherwise apply to non-transferring employees, I do not consider that any employees would be disadvantaged by the proposed order. This weighs in favour of granting the application.

[11] The nominal expiry date of an enterprise agreement (s 319(3)(c)): The nominal expiry date of the 2020 Agreement is 30 June 2024. This is a neutral consideration.

[12] Whether the transferable instrument would have a negative impact on the productivity of the new employer’s worksite (s 319(3)(d)): It was contended that granting the application will mean that productivity reforms in the 2020 Agreement (including flexible rostering and a single-stream classification structure) are consistently applied to transferring and non-transferring employees of the VESC. I am required only to consider whether the instrument would have a negative impact on productivity. In my opinion, it will not do so. This supports the granting of an order under s 319.

[13] Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer (s 319(3)(e)): It was contended that the application of the 2020 Agreement will be to the VESC’s economic and other advantage, because if the order sought is not made, the VESC will face a material increase in administrative costs and inefficiencies in relation to the management of transferring and non-transferring employees on different terms and conditions. I am required only to consider whether application of the instrument would bring about significant economic disadvantage. There is no basis for me to draw such a conclusion. This weighs in favour of the application.

[14] The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer (s 319(3)(f)): It was submitted that the 2020 Agreement is adapted to the operations of ESV and the future VESC, whereas the Award has a broader coverage with respect to Victorian public sector agencies. I accept this but I am not persuaded that there is necessarily ‘business synergy’ between the 2020 Agreement and the Award (assuming that the latter can be said ‘already’ to cover the VESC). I find this to be a neutral consideration.

[15] The public interest (s 319(3)(g)): The VESC will assume the functions of ESV as the technical and safety regulator responsible for the safe generation, supply and use of electricity, gas and pipelines in Victoria. It was submitted that it is in the public interest that the industrial instruments that govern the employment of those charged with delivering the relevant services, as well as those whose employment supports the provision of those services, are consistent and appropriately adapted to meet the requirements of the regulator, because this will assist the VESC to deliver its services effectively. Section 319(3)(g) does not require the Commission to be satisfied that the order sought is ‘in the public interest’. However I consider the submissions above are relevant to ‘the public interest’ and weigh in favour of granting the order.

[16] The mandatory considerations in s 319 are either neutral or weigh in favour of making the order sought. Taking into account these matters, and all the circumstances, including the fact that the other union parties to the 2020 Agreement also support the application, I consider that it is appropriate to make the order. The order will take effect from the day of the transfer of business, namely 1 January 2021, and will apply to any non-transferring employee from 1 January 2021 or, if an employee is employed by the VESC after 1 January 2021, the date of the commencement of the employee’s employment with the VESC. An order giving effect to this decision is issued separately in PR725423.

DEPUTY PRESIDENT

Determined on the papers

Printed by authority of the Commonwealth Government Printer

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