Express Freighters Australia (Operations) Pty Ltd; Eastern Australia Airlines Pty Limited; First Officer Jeffory Fairbrother
[2012] FWA 6288
•26 JULY 2012
[2012] FWA 6288 |
|
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements
Express Freighters Australia (Operations) Pty Ltd; Eastern Australia Airlines Pty Limited; First Officer Jeffory Fairbrother
(AG2012/9699)
VICE PRESIDENT WATSON | SYDNEY, 26 JULY 2012 |
Application in relation to a transfer of business - transferrable instrument - application that transferrable instrument not cover transferring employees – conditional offer of employment – application not opposed - Qantas Airways Limited - Fair Work Act 2009 ss.311, 317 and 318.
Introduction
[1] This decision concerns an application by Express Freighters Australia (Operations) Pty Limited (EFA), Eastern Australia Airlines Pty Limited (Eastern) and First Officer Jeffory Fairbrother (the applicants) for an Order under s.318 of the Fair Work Act 2009 (the Act) which relates to instruments covering a new employer and transferring employees in the context of a transfer of business.
[2] The application concerns First Officer Fairbrother who is employed by Eastern under the Eastern Australia Airlines Pty Limited Pilots Enterprise Agreement 2010 1 (the Eastern Agreement). The terms of the Order are sought under s.318(1) and provide that in relation to First Officer Fairbrother, where there is a transfer of business from Eastern to EFA within the meaning of Division 2, Part 2-8 of the Act, the Eastern Agreement will not cover EFA.
[3] For the purpose of s.311(6) of the Act, Eastern and EFA are associated entities or have a connection by virtue of their status as related bodies corporate, as that term is defined by s.50 of the Corporations Act 2001.
Background
[4] EFA operates a fleet of four B737-300 Freighter aircraft and one B767-300 Freighter aircraft in the Australian and Trans Tasman air freight market. Eastern does not operate B373 or B767 aircraft.
[5] First Officer Fairbrother has been offered employment as a First Officer with EFA and has indicated that he wishes to accept the offer. As a result, he must terminate his employment with Eastern. Accepting such an employment offer with Eastern will enable First Officer Fairbrother to increase his annual salary by a certain percentage after designated periods of service as well as have the benefit of being entitled to a 5% annual bonus.
[6] Accepting employment with EFA will enable First Officer Fairbrother to advance his career in a manner that is not available to him at Eastern as he will be able to undergo training for and gain valuable market experience as a First Officer on a B737 aircraft.
[7] In addition, accepting employment with EFA will also enable First Officer Fairbrother the opportunity to further progress his career as he will be able to complete First Officer training on a B767 aircraft and in the future, have the opportunity of undertaking command training for the position of Captain on EFA’s B737 or B767 aircraft (subject to satisfactory performance).
The relevant legislation
[8] 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 employer.
[9] Section 311(1) contains the definition of transfer of business in a wider manner than the ordinary English or legal meaning of the term. The definition is:
“(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).”
[10] Sections 317 and 318 of the Act relevantly provide:
“317 FWA may make orders in relation to a transfer of business
This Division provides for FWA 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 FWA may make
(1) FWA 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) FWA 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 FWA must take into account
(3) In deciding whether to make the order, FWA 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.”
Transfer of the Eastern Agreement
[11] In relation to the factors set out in s.318(3) of the Act, the applicants submit that the proposed orders should be made in order to facilitate the transfer of First Officer Fairbrother and ensure the interest of all the applicants are realised. The applicants submit that despite enlivening the provisions of Part 2-8 of the Act, there is no transfer of business that would cause a concern by way of a reduction in terms and conditions of employment. Rather what is taking place is a voluntary transfer of employment as distinct from a transfer of business.
[12] It is submitted that First Officer Fairbrother supports and consents to the orders being made and that the transfer is in his interests as it will facilitate his career aspirations. The decision to transfer between Eastern and EFA is a decision he has made voluntarily.
[13] It is submitted, on balance, that First Officer Fairbrother will not be disadvantaged if the orders are made. It is further submitted that EFA has an industrial agreement, the Express Freighters Australia Operations Pty Limited Collective Agreement 2009 2(the EFA Agreement), in place that provides comprehensive protections for pilots, is current and updated regularly.
[14] The applicants submit that the application of the Eastern Agreement to EFA would have a negative impact on EFA’s business. This is because the EFA Agreement contains different work rules and conditions particular to EFA’s sector in the aviation industry, that being freight services. It is submitted that the work rules and conditions are not transferable as freight services have little commonality with domestic regional flying services (the sector in which Eastern operates). The differences between the sectors is due to the configuration of the aircraft used in each sector. The applicants submit that the work rules and conditions that regulate domestic regional flying, which uses turbo propeller aircraft, are distinct from and cannot be used efficiently or economically in the Australian and overseas freight market which is serviced by narrow and wide body freighter jet aircraft. The applicants therefore submit that due to the difficulties and restrictions that the transfer of instrument would create, the transfer would not be permitted to take place.
[15] The applicants submit that there is very little business synergy between the Eastern Agreement and the workplace instruments that already cover EFA. The sectors of the aviation industry that each operates in are separate and the work rules and conditions governing performance of work in each of the sectors will become inefficient if transferred to EFA. It is submitted that the Eastern Agreement has a nominal expiry date of 30 June 2013.
[16] I am satisfied that the Eastern Agreement is a transferable instrument as described in s.312(1)(d) of the Act 3 and this circumstance is a transfer of business within s.311 of the Act as commencing employment with EFA may be regarded as the termination of employment with Eastern. The application has been made pursuant to s.318(1) of the Act. The matters that I am required to take into account when considering whether to grant an order in the terms sought are prescribed by s.318(3) of the Act, as set out above.
[17] I have considered the factors set out in s 318(3). I am of the view that it is appropriate to make orders in relation to the transfer of First Officer Fairbrother’s employment. I have given weight to the fact that First Officer Fairbrother will undertake the transfer voluntarily, the transfer provides him with career progression opportunities and he supports the application. It is also significant that Eastern and EFA operate in distinct sectors of the aviation industry; efficiency would be compromised if the Eastern Agreement was to apply to EFA and that the transfer is conditional on the non-coverage of the Eastern Agreement.
Conclusion
[18] For the reasons above I will make an order that the Eastern Agreement will not cover First Officer Fairbrother during the period of his employment with EFA.
VICE PRESIDENT WATSON
1 AE886985.
2 AC325514.
3 As amended by Schedule 11, item 8 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.
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