GHD Pty Ltd

[2014] FWC 3543

[2014] FWC 3543

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.318—Transfer of instrument

s.319—Transfer of instrument

GHD Pty Ltd
(AG2014/6148)

Electrical power industry
COMMISSIONER WILLIAMS	PERTH, 30 MAY 2014

Application for orders in relation to transfer of business.

[1] This application is made by GHD Pty Ltd (GHD), pursuant to s.318 and s.319 of the Fair Work Act 2009 (the Act), concerning a transferable instrument, the Horizon Power / ASU Salaried Employee Enterprise Agreement 2013 (the Agreement).

[2] GHD seeks orders that the Agreement 2013 will not cover:

(a) GHD Pty Ltd; or

(b) employees of GHD Pty Ltd who transferred their employment from Horizon Power to GHD Pty Ltd as a result of the transfer of business which will become effective on 30 June 2014; or

(c) employees of GHD Pty Ltd who commenced employment with GHD Pty Ltd after the date of the transfer of business and who were not, immediately prior to the date of the transfer of business, employees of Horizon Power and who perform the transferring work; or

(d) employees of GHD that are currently employed who are award free and perform the transferring work.

[3] Section 318 and s.319 set out the circumstances in which such orders may be made by the Fair Work Commission (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.

319  Orders relating to instruments covering new employer and non-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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;

(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.

Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.

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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(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 non-transferring employee before the later of the following:

(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;

(b) the day on which the order is made.”

Background

[4] Horizon Power are outsourcing engineering, procurement and project management services to GHD and intend to transfer Horizon Power’s 18 staff presently performing these services (the Transferring Employees) to GHD.

[5] GHD employees who currently perform similar work to the Transferring Employees are employed on common law contracts. A majority of those GHD employees’ terms and conditions are underpinned by the Professional Employees Award 2010 (the Award)with the balance of those GHD employees being award-free.

[6] GHD seeks that the transferable instrument, the Agreement,not apply to Transferring Employees when they are employed by GHD to carry out the same work that they previously carried out whilst engaged by Horizon Power. GHD also seeks that the Agreement not apply to employees who commence with GHD after the transfer of business who then carry out the same work.

[7] The grounds for this application as set out in the affidavit of Mr Anthony Ackland, People Manager Western Australia for GHD.

[8] These grounds principally relate to GHD’s intention to have all its employees employed pursuant to the same industrial instrument, the costly and inefficient practice of having to implement and maintain two significantly different employment arrangements and the difficulty with ensuring compliance with the different arrangement for Transferring Employees who will be a minority group. Further, if the Orders were granted, they would facilitate the purchase and integration of the Horizon Power operations into GHD’s business and provide an appropriate balance between the protection of the entitlements of the Transferring Employees and operational efficiency.

Consideration

[9] A comprehensive affidavit sworn by Mr Ackland has provided the Commission with a significant amount of factual background to the application and has addressed the statutory considerations in s.318 and s.319 of the Act and in particular those matters that the Commission must take into account when deciding whether to make such an order. I accept the evidence provided by Mr Ackland in his affidavit.

[10] The view of the likely new employer, GHD, is that the Commission should make the orders sought.

[11] With regards to the views of the transferring employees who would be affected by the order the evidence is that as part of the consultation process undertaken by GHD the affected employees have been provided considerable detail regarding the similarities and differences between theAgreement and the employment arrangements to be offered by GHD.

[12] The evidence is that the vast majority of those employees, 14 out of 18, who would be affected have responded positively to GHD’s offer and support this application and importantly acknowledge they will not be disadvantaged with respect to their terms and conditions of employment. On the evidence provided I am also satisfied that objectively there is no disadvantage to these employees.

[13] With respect to non-transferring employees, because such persons have not yet been engaged to do the transferring work their views are not a consideration.

[14] The Agreement does not expire until February 2017.

[15] The context is that GHD employs approximately 3000 persons nationwide and so this group will be a small part of their operations. I am satisfied based on the evidence that the transferable instrument, the Agreement, would have a negative impact on the productivity of GHD. I also accept the evidence that GHD would incur some economic disadvantage if the transferable instrument was to cover them for the future and therefore were required to maintain a separate administration and payroll arrangement for this group.

[16] I also accept the evidence and submissions that there is little or no business synergy between the transferable instrument, which was negotiated and designed specifically for Horizon Power, and GHD’s workplace instrument, the Award, in the context where GHD operates as a consultant with a range of customers in a variety of different market sectors.

[17] There is obviously some public interest benefit in the Commission making these orders because it will allow Horizon Power to change its operation in a manner it views as advantageous with no disadvantage to the affected employees.

[18] Taking in to account all of the matters to be considered in s.318 and s. 319 of the Act, based on the evidence before the Commission I am satisfied that it is appropriate that this application be granted and consequently an order to that effect will be issued in conjunction with this decision.

COMMISSIONER

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