Greater Western Water Corporation
[2022] FWC 581
| [2022] FWC 581 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Greater Western Water Corporation
(AG2022/529)
| DEPUTY PRESIDENT MANSINI | MELBOURNE, 21 MARCH 2022 |
Application for orders relating to a transferable instrument.
Greater Western Water Corporation has applied for orders pursuant to section 318 of the Fair Work Act 2009 (Cth) (Act) in relation to the Western Water Enterprise Agreement 2017[1] (WW Agreement) and the City West Water Enterprise Agreement 2019[2] (CWW Agreement).
On 1 July 2021, by virtue of ministerial determinations made under sections 87 and 88 of the Water Act 1989 (Vic):
all functions, duties and powers of the Western Region Water Corporation t/a Western Water (Western Water) were transferred to the City West Water Corporation; and
all (197) employees of Western Water were transferred to employment with City West Water Corporation (Transferring Employees).
On 1 January 2022, City West Water Corporation adopted a business name of Greater Western Water.
The orders sought would have the effect that the WW Agreement would not cover, and the CWW Agreement would cover, the Transferring Employees in their employment with Greater Western Water.
The application was either supported, or not opposed, by the organisations covered by both the WW Agreement and the CWW Agreement.
Consideration
Section 318(1) of the Act provides that the Commission may, on application by a person or organisation identified in section 318(2), 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.
The power to make orders under section 318 is premised on the Commission being satisfied that there has been, or that there is likely to be, a transfer of business pursuant to section 311 of the Act. On the evidence before the Commission, I am satisfied that there has been a transfer of business from Western Water to the entity now known as Greater Western Water (named City West Water Corporation at the time of transfer) because:
The employment of the Transferring Employees terminated and within three months of termination the Transferring Employees became employees of the entity now known as Greater Western Water (section 311(1)(a) and (b));
The work performed by the Transferring Employees for the entity now known as Greater Western Water is the same or substantially the same as the work they performed for Western Water (section 311(1)(c)); and
There is a “connection” between the entity now known as Greater Western Water and Western Water as described in section 311(3) (section 311(1)(d)).
Section 318(3) provides that, in deciding whether to make an order under s.318(1), the Commission must take into account certain matters - considered in turn as follows:
The views of the new employer and affected employees – section 318(3)(a)
The Commission must take into account the views of the new employer and the employees who would be affected by the orders.
As the applicant and new employer, Greater Western Water naturally supports the making of the orders. It submitted that the CWW Agreement, and not the WW Agreement, should cover and apply to the Transferring Employees for reasons summarised as:
a)Full integration of the Transferring Employees into Greater Western Water, so that all employees are performing the same work under harmonised, equivalent and applicable terms and conditions;
b)Reduction of the administrative burden of operating two separate systems; and
c)Resolution of differences in remuneration parity.
There was evidence that the Transferring Employees were informed about the proposed application and a majority of Transferring Employees support the making of the orders. Specifically, the application was accompanied by a statutory declaration of a Ms Maree Lang, Managing Director of Greater Western Water. Ms Lang’s evidence was that:
a)Greater Western Water undertook significant consultation with the Transferring Employees which included: the creation of an intranet site, a series of employee briefing sessions, provision of information documents (produced as annexures to her witness statement and including letters to each Transferring Employee outlining their proposed classification under the CWW Agreement), discussions with the Staff Consultation Committee, forums for people leaders to provide updates on the progress of discussions and opportunity to provide feedback; and
b)The Transferring Employees were asked to vote through an online ballot as to whether they support or oppose the application. Of the Transferring Employees: 131 supported the application, 17 opposed the application and 49 did not respond.
The Commission also took steps to ascertain the views of the Transferring Employees:
a)The Australian Municipal, Administrative, Clerical and Services Union (ASU) and the Association of Professional Engineers, Scientists and Managers, Australia (Professionals Australia), being organisations covered by both the WW Agreement and the CWW Agreement and entitled to represent the industrial interests of the Transferring Employees, were served with the application and invited to attend an initial mention. The mention was attended by Greater Western Water and the ASU and advised that it represented current members who are Transferring Employees; and
b)The Commission subsequently issued directions on 4 March 2022, requiring service of the application and directions on the Transferring Employees. The ASU, Professionals Australian and the Transferring Employees were invited to provide their views directly to the Commission. The ASU confirmed its support of the application; no other views were provided.
The views of the new employer; the evidence of the views of the Transferring Employees; and, to the extent that it represents Transferring Employees, the views of the ASU, weigh in favour of the making of the orders.
Whether any employee will be disadvantaged by the orders in relation to their terms and conditions of employment – section 318(3)(b)
The Commission must consider whether any employee would be disadvantaged by the orders in relation to their terms and conditions of employment.
The WW Agreement contains certain benefits that would not apply to the Transferring Employees if the application is granted. However, a review of the CWW Agreement reveals that there are substantially more favourable conditions that would apply to the Transferring Employees if the application is granted, including:
a)A 3% salary increase in July 2022;
b)A remuneration increase of between 1 and 27% for most Transferring Employees (save for a small number of employees whose salary will be maintained);
c)An entitlement to 15 days’ personal leave per year (rather than 12);
d)More generous allowances;
e)Access to more generous annual and parental leave entitlements;
f)Access to a range of additional leave provisions (naturalisation ceremonies, military, graduation, grandparent leave, religious or cultural ceremonies); and
g)A range of flexibility and career development support.
Further, if the application is granted, Greater Western Water has committed to and will:
a)Honour pay frequency, availability and overtime payments and rostered days off/work life balance days; and
b)Adopt parental leave entitlements to 16 (rather than 14) weeks’ paid parental leave,
being conditions that Transferring Employees would have been entitled to under the WW Agreement.
Having regard to the above matters, on an overall basis, I do not consider that the Transferring Employees will be disadvantaged if the orders are made. They will receive various more favourable conditions under the CWW Agreement and certain conditions will continue to be honoured. This factor weighs in favour of the application being granted.
The nominal expiry date of the agreement – section 318(3)(c)
The WW Agreement nominally expired on 30 November 2021, whereas the CWW Agreement nominally expires on 30 June 2023.
If the application is granted, the CWW Agreement remains in operation prior to its expiry for approximately 15 months whereas the WW Agreement has already passed its nominal expiry date. The Transferring Employees will be delayed in commencing to bargain for new terms and conditions but will also gain the benefit of certainty of terms and conditions over the period until 30 June 2023. I consider this to be a neutral consideration.
Negative impact on productivity – section 318(3)(d)
The Act requires the Commission to consider whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace.
Greater Western Water contended that a negative impact on productivity would arise if the orders sought were not made. It is apparent from the evidence of Ms Lang that, if both Agreements were to cover and apply to the Greater Western Water, then it would require Greater Western Water to maintain two distinct employment systems, which will give rise to operational inefficiencies. There are also administrative, compliance, cultural and other operational issues that would arise from the application of two different enterprise agreements with different terms and conditions. In all of the circumstances, I accept that there would be a negative impact on productivity of the Greater Western Water workplace if the orders were not made.
Accordingly, this factor weighs in favour of the application being granted.
Whether the new employer will incur significant economic disadvantage – section 318(3)(e)
Greater Western Water contended that, as a Victorian public entity, it is accountable to the Victorian Government with respect to its budget and service standards and it is therefore preferable for resources and funds to be directed toward improving the important services it provides than expend additional administrative costs or investment in duplicate systems. It did not contend that there would be a significant economic disadvantage in relation to the entire Greater Western Water enterprise.
I consider this factor to be a neutral consideration in this case.
The degree of business synergy – section 318(3)(f)
The Commission is required to consider the degree of business synergy between the transferrable instrument and any workplace instrument that already covers the new employer.
Greater Western Water contended that while both organisations are Victorian Water Corporations, they have adopted industrial instruments that were constructed differently over time due to:
a)the operational environments of each separate organisation and the requirements negotiated by the various parties over time; and
b)the pre-modern awards the organisations were historically covered by.
I accept that there is little business synergy between the two instruments and that this consideration weighs in favour of the proposed orders being made.
Public interest – section 318(3)(g)
Section 318(3)(g) requires the Commission to consider “the public interest”. It does not specify whether this consideration is concerned with the question of whether the application is in the public interest or not contrary to the public interest.
Greater Western Water submitted that it would not be contrary to the public interest to make the orders sought and, as it provides a service to the Victorian community, there is a public interest in ensuring that its business is able to efficiently operate without unnecessary complications in its employment arrangements. In support, it cited the decision in Australian Laboratory Services Pty Ltd.[3]
The notion of public interest refers to matters that might affect the public as a whole.[4] Having regard to those matters, there are no public interest considerations that would militate against making the orders sought. This weighs in favour of the orders being made.
Conclusion
The mandatory considerations in section 318 are either neutral or weigh in favour of making the orders sought. Taking into account these matters and all the circumstances, including the fact that the organisations covered by both instruments either supported or did not oppose the application, I consider that it is appropriate to make the orders.
For the purposes of section 318(4) of the Act, the orders will come into operation on 23 March 2022. The orders giving effect to this decision will be issued separately in PR739457.
DEPUTY PRESIDENT
[1] AE500194.
[2] AE505871.
[3] [2015] FWC 7916 at [45].
[4] See Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 at [23].
Printed by authority of the Commonwealth Government Printer
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