Express Freighters Australia (Operations) Pty Limited; John Hudson; Jetstar Airways Pty Ltd.

[2013] FWC 4742

[2013] FWC 4742

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318—Transfer of instrument

Express Freighters Australia (Operations) Pty Limited; John Hudson; Jetstar Airways Pty Ltd.
(AG2013/7232)

Airline operations
COMMISSIONER JOHNS	MELBOURNE, 23 JULY 2013

Application for orders re transfer of business.

Introduction

[1] This decision concerns an application by Express Freighters Australia (Operations) Pty Limited (EFA), Captain John Hudson and Jetstar Airways Pty Limited (Jetstar) for an Order under s.318 of the Fair Work Act 2009 (Act) which relates to instruments covering a new employer and transferring employees. The application is made in respect of Captain John Hudson who is currently employed as a Check and Training Captain by Jetstar Airways Limited and is a prospective employee of Express Freighters Australia (Operations) Pty Limited.

[2] Captain Hudson is currently employed under the Jetstar Airways Pilots Agreement 2008 (Jetstar Agreement). The terms of the Order are sought under s.318(1) of the Act and provide that the Jetstar Agreement, or any instrument that replaces it, will not cover Captain Hudson when he commences employment with EFA. The Order, it is sought, will operate from the date on which Captain Hudson commences employment with EFA until such time as his employment ceases, whether that be as a Captain or any other capacity. If the Order is issued, Captain Hudson will be covered by the Express Freighters Australia Operations Pty Limited Employee Collective Agreement 2009 (EFA Agreement).

[3] For the purpose of s.311(6) of the Act, EFA and Jetstar are associated entities by virtue of both being wholly owned subsidiaries of Qantas Airways Limited.

Background

[4] Captain Hudson commenced employment with Jetstar on 15 December 2004. On or about March 2013 Captain Hudson approached EFA seeking appointment to the position as a Management Pilot. In May 2013, EFA offered Captain Hudson a position as a B737 Captain and Management Pilot. The offer requires that EFA provide training and pay with the intention, subject to satisfactory performance, of appointing Captain Hudson in the Management Pilot role.

Relevant legislation

[5] Part 2–8 of the Act describes when a transfer of business occurs and provides for the transfer of enterprise agreements, certain modern awards and certain other instruments if there is a transfer of business from one employer to another.

[6] Section 311(1) of the Act contains the definition of transfer of business in a wider manner than the ordinary English or legal meaning of the term. The definition is:

“311 When does a transfer of business occur

Meanings of transfer of business, old employer, new employer and transferring work

(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:

(a) the employment of an employee of the old employer has terminated;

(b) within 3 months after the termination, the employee becomes employed by the new employer;

(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).”

[7] Sections 317 and 318 of the Act relevantly provide:

317 FWC may make orders in relation to a transfer of business

This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.

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.

Submissions

[8] The Commission is in receipt of a signed witness statement of Captain John Hudson, dated 29 May 2013 and a Form F40 Application signed by Mr Drew Richardson, Head of EFA; Captain John Hudson; and Ms Rene Saiti, Employee Relations Adviser at Jetstar. The Commission will examine each of the criteria set out in s.318(3) of the Act with reference to the submissions contained in the aforementioned documents.

(a) The views of the potential new employer

[9] Jetstar and EFA both support the Orders sought, submitting that the orders will facilitate the transfer. The employer(s) further submit that in the event Orders are not made, the employer(s) will not facilitate the transfer of Captain Hudson’s employment.

(b) The views of the employees

[10] Captain Hudson supports the making of the Orders as sought in the application.

(c) Whether employees will be disadvantaged by the order in relation to the terms and conditions of employment

[11] It is submitted that Captain Hudson will not on balance be disadvantaged if he were employed under the EFA Agreement rather than the Jetstar Agreement. Captain Hudson submits in his witness statement that while the new position will not increase his earning capacity, the new position will broaden his skill base and knowledge in areas of regulation and training and will allow for him to spend more time with his family. It is further submitted that the new position will provide Captain Hudson with valuable and marketable experience.

(d) If the order relates to an enterprise agreement - the nominal expiry date of the agreement

[12] The nominal expiry date of the Jetstar Agreement is 6 March 2013.

(e) Whether the transferable instrument would have a negative impact on the new employer’s workplace

[13] It is submitted that EFA could not operate under the terms and conditions contained within the Jetstar Agreement because of the distinctness between the 2 sectors in which EFA and Jetstar operate. It is submitted that the work rules and conditions within the freight service sector could not operate in the domestic flying sector. It is submitted that EFA will not accept Captain Hudsons employment if the Orders were not made.

(f) Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[14] There are no submissions provided on this point beyond the difficulties outlined under criterion (e) above.

(g) The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer.

[15] It is submitted that little to no synergy exists in this regard. It is submitted that the sectors in which EFA and Jetstar operate are distinct and the terms and conditions governing the employment of employees in one sector cannot be used in another as this will cause inefficiencies and economic loss.

(h) The public interest

[16] The applicants submit the application does not raise any public interest concerns.

[17] The Commission does not identify any public interest concerns.

Transfer of business

[18] Section 317 of the Act provides that an Order can be made under that Division in relation to a transfer of business, as defined in section 311 of the Act. The application before the Commission states, at paragraph 25(a) that “What takes place is a voluntary transfer of employment, not a transfer of business”. Accordingly, the Commission contacted the applicant and requested further submissions as to the Commission’s jurisdiction in making Orders where there has not been a transfer of business.

[19] Consequently, the Applicants submitted that intended meaning of the words contained in paragraph 25(a) of the application was that Captain Hudson was seeking to transfer from Jetstar to EFA voluntarily, rather than a situation where he was involuntarily forced.

[20] The Applicants submitted that the circumstances enliven s.311(1) of the Act. It is submitted that:

• Captain Hudson’s employment with Jetstar terminated on 6 July 2013.



• Captain Hudson will be employed by EFA within three months of his employment with Jetstar ceasing.



• Captain Hudson will continue to work as a pilot at EFA. It is acknowledged that Captain Hudson operated passenger aircraft during his employment with Jetstar and will be operating freight aircraft during his employment with EFA. However, the Explanatory Memorandum to the FW Act makes it clear that a broad reading of work that is “the same, or substantially the same” is to be taken.



• Jetstar and EFA are both members of the Qantas Group and are associated entities as described in s311(6) of the FW Act.

[21] The Commission is satisfied that this circumstance is a transfer of business within s.311 of the Act.

Conclusion

[22] The Commission has considered the factors set out in the Act, as are relevant to this application. The Commission is of the view that it is appropriate to make orders in relation to the transfer of Captain Hudson’s employment.

[23] For the reasons above the Commission will make an order that the Jetstar Agreement will not cover Captain Hudson during the period of his employment with EFA.

COMMISSIONER

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