Gladstone Ports Corporation Limited
[2009] FWA 904
•30 OCTOBER 2009
[2009] FWA 904 |
|
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements
(AG2009/13910)
Port and harbour services | |
SENIOR DEPUTY PRESIDENT RICHARDS | BRISBANE, 30 OCTOBER 2009 |
Summary: application for order s.318 of the Act that a transferable agreement not apply to new employees – Queensland Government sale of assets – Port Of Brisbane Corporation.
[1] This matter, which was filed on Monday 19 October 2009, concerns an application for an order relating to an instrument covering a likely new employer and likely transferring employees under s.318(1) of the Fair Work Act 2009 (“the Act”).
[2] Division 3 of Part 2-8 of the Act invests Fair Work Australia (“FWA”) with a power to make such orders. The relevant provisions are set out below.
[3] The background to this Application is as follows:
(a) Both the Gladstone Ports Corporation Limited (“the Applicant”) and the Port of Brisbane Corporation are Queensland Government Owned Corporations established under the Government Owned Corporations Act and Regulations 1993 (Queensland), and are Port Authorities under the Transport Infrastructure Act 1994 (Qld).
(b) The Port of Brisbane Corporation operates the ports, lands and facilities at the Port of Brisbane and Port of Bundaberg.
(c) The Queensland Government proposes to transfer the operation and assets (inclusive of the employees) of the Port of Bundaberg to the Applicant (“the Transfer”) effective from 1 November 2009.
(d) The Queensland Government intends to divest itself of the Port of Brisbane Corporation but does not intend to do so in relation to the Port of Bundaberg, which is currently owned and managed by the Port of Brisbane Corporation.
[4] As a consequence of the Transfer, the Applicant will be a “new employer” and for the purposes of this application the Applicant is a “likely new employer” (within the meaning of s.308 of the Act and s.311(1) of the Act).
[5] Further, as a result of the Transfer those employees currently engaged by the Port of Brisbane Corporation who are subsequently engaged by the Applicant to perform substantially the same work as they performed whilst engaged by the Port of Brisbane Corporation will be “transferring employees” (within the meaning of s.308 of the Act and s.311(2) of the Act).
[6] The applicable transferring instrument is the Port of Brisbane Corporation – Bundaberg Union Collective Agreement 2008 (“the Agreement”). The Agreement applies to the Port of Brisbane Corporation’s employees engaged to work at the Port of Bundaberg.
[7] The Applicant seeks orders that if there is a transfer of business (of the kind described below), the Agreement will not cover the Applicant and any transferring employees.
[8] Those orders as sought read as follows:
“That the Port of Brisbane Corporation – Bundaberg Union Collective Agreement 2008 not cover Gladstone Port Corporation Limited and any employees of Gladstone Port Corporation Limited formerly engaged by Port of Brisbane Corporation.”
[9] By virtue of sub item 2(3), Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (“the Transitional Act”), the Agreement is a transitional instrument. 1
[10] In ordinary circumstances (and but for this application), the transferable instrument should arguably apply to the (likely) new employer and (likely) transferring employees, for purposes of s.313 of the Act:
“313 Transferring employees and new employer covered by transferable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:
(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and
(b) while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.
(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee’s employment with the old employer.”
[11] Despite section 313(1) and s.313(2) of the Act, s.313(3) of the Act reads as follows:
“(3) This section has effect subject to any FWA order under subsection 318(1).”
[12] Section 318(1) of the Act relevantly reads:
“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.”
[13] I note that the exercise of the FWA’s conditioned discretion is also framed within the objects of the Part, which state as follows:
“309 Object of this Part
The object of this Part is to provide a balance between:
(a) the protection of employees’ terms and conditions of employment under enterprise agreements, certain modern awards and certain other instruments; and
(b) the interests of employers in running their enterprises efficiently;
if there is a transfer of business from one employer to another employer.”
Section 318(3)(a)(i): the views of the new employer
[14] The Applicant seeks that the transferable instrument not apply to any former employees of the Port of Brisbane Corporation who may be engaged by the Applicant to carry out the same work that the employees previously carried out whilst engaged by the Port of Brisbane Corporation. The principal reason for this is that the Applicant seeks to standardise its employment conditions, reduce administration costs, promote the transfer of employees across the business and encourage a single workplace culture. The transferring employees would represent some 2.0% of the total workforce of the Applicant. 2
Section 318(3)(a)(ii): the views of the employees prospectively affected by any order
[15] There are 14 transferring employees. On 7 October 2009, 13 of the 14 transferring employees voted in support of the Agreement not applying to their new employment. One transferring employee did not vote. 3
Section 318(3)(b): any disadvantage to the employees
[16] The Applicant currently engages employees under the Central Queensland Ports Authority Certified Agreement 2005 (AG870405) or the Central Queensland Ports Authority Certified Agreement 2005 (AG846615). As a consequence of the Transfer, the terms and conditions of the transferring employees’ employment will be regulated by these Certified Agreements. On the evidence before me, there will be no disadvantage to the transferring employees arising from the Transfer. 4
[17] Further, the Applicant will recognise the transferring employee’s service with the outgoing employer and will receive a superior level of remuneration. 5
[18] I note that the Applicant has recently negotiated a new enterprise agreement, the Gladstone Ports Corporation Collective Agreement 2009 (“2009 Agreement”) which its employees have approved and the Applicant intends to file an application for Fair Work Australia to approve the agreement shortly.
[19] Should the 2009 Agreement be approved, I note additional evidence from the Applicant and the written correspondence from Australian Maritime Officers’ Union that supports a finding that the transferring employees will not be disadvantaged in relation to their terms and conditions of employment.
Section 318(3)(c): the nominal expiry date of the transferable instrument (the Agreement)
[20] The Agreement expires on 30 June 2010; leaving 8 months until the nominal expiry date of the transferable instrument is reached. 6
Section 318(3)(d): any negative impact on the employer’s workplace
[21] As is discussed below, there are misalignments between the Agreement and the instruments that cover the Applicant’s employees and if the Agreement was to apply it would undermine sustained efforts by the Applicant over time to standardise employment conditions. Higher transaction costs generally would also be a consequence if the instrument were transferred. 7
Section 318(3)(e): any significant economic disadvantage to the employer
[22] There is no evidence before me concerning the damage that might flow from the transference of the transferable instrument that would constitute “significant economic disadvantage” to the Applicant. The 14 employees will only be a small proportion of the 645 employees employed by the Applicant.
Section 318(3)(f): business synergy between the transferable instrument and the existing agreement
[23] There appears to be little synergy between the employment modes in the Applicant’s industrial instruments and the Agreement. The reason for this, amongst other things, is that the classification systems and hours provisions in the agreements differ considerably and there is a misalignment, as I see it, in the focus on the business performance indicators between the instruments. 8
Section 318(3)(g): the public interest
[24] There is no evidence that the public interest is agitated in some manner by this application.
CONCLUSION
[25] On balance, and having given account to each of the matters stipulated at s.318(3) of the Act, I have concluded, by order:
“That the Port of Brisbane Corporation – Bundaberg Union Collective Agreement 2008 not cover Gladstone Port Corporation Limited and any employees of Gladstone Port Corporation Limited formerly engaged by Port of Brisbane Corporation.”
[26] Any order I might make is subject to s.318(4) of the Act, which reads:
“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.”
[27] I have discussed the implication of this section of the Act in the earlier decision to which reference was made above. Given that discussion, I consider it prudent to give effect to this order as of today’s date: 30 October 2009.
SENIOR DEPUTY PRESIDENT
1 I have examined previously the status of such instrument in these circumstances. See my decision in the Application by Queensland Nickel Pty Ltd [2009] FWA 335.
2 Affidavit of Mr Craig Walker sworn 26 October 2009 at PN 34-39
3 Affidavit of Mr Craig Walker sworn 26 October 2009 at PN 29
4 Affidavit of Mr Craig Walker sworn 26 October 2009 at PN 32
5 Affidavit of Mr Craig Walker sworn 26 October 2009 at PN 32-33
6 Affidavit of Mr Craig Walker sworn 26 October 2009 at PN 40
7 Affidavit of Mr Craig Walker sworn 26 October 2009 at PN 34-39
8 Affidavit of Mr Craig Walker sworn 26 October 2009 at PN 41-42
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