International Express Pty Ltd T/A BCD Travel
[2022] FWC 718
| [2022] FWC 718 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
International Express Pty Ltd T/A BCD Travel
(AG2022/145)
| Banking finance and insurance industry | |
| COMMISSIONER MATHESON | SYDNEY, 31 MARCH 2022 |
Application for an order relating to instrument covering new employer and transferring employees.
International Express Pty Ltd T/A BCD Travel (Applicant) has made an application under s.318 of the Fair Work Act 2009 (Cth) (Act). The Applicant has engaged three individuals who were employed the Commonwealth Bank of Australia (ABN 48 123 123 124) (Old Employer) and who were made redundant by the Old Employer on 15 December 2021 (Transferring Employees). The application seeks an order from the Fair Work Commission (Commission) that the Commonwealth Bank Group Enterprise Agreement 2020 (Transferable Instrument) does not, and will not, cover the Applicant and the Transferring Employees.
In deciding whether or not to make an order pursuant to s.318(1) of the Act, the Commission must take into account the matters set out in s.318(3) of the Act.
Legislation
Part 2-8 of Chapter 2 of the Act describes when a transfer of business occurs and s.312(1) of the Act provides for the transfer of certain instruments if there is a transfer of business from one employer to another employer.
Section 311 of the Act relevantly provides:
“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).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
….
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
….”
Section 313 of the Act provides:
“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; …
(3) This section has effect subject to any FWC order under subsection 318(1).”
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.”
Initial matters
Based on the material before the Commission, I am satisfied that:
· The employment of the Transferring Employees with the Old Employer was terminated on 15 December (s.311(1)(a) of the Act).
· The three Transferring Employees became employed by the Applicant on 6 January 2022 and are transferring employees for the purposes of s.311(2) of the Act. This is within three months after the termination of their employment with the Old Employer (s.311(1)(b) of the Act).
· The work the Transferring Employees perform for the Applicant is substantially the same as the work they performed for the Old Employer in that it involved advising on and booking travel for corporate clients in the capacity of a corporate travel consultant (s.311(1)(c) of the Act).
· There is a connection between the Old Employer and the Applicant as the Old Employer decided to outsource the transferring work to the Applicant, which involved work undertaken by in-house travel consultants who supported and managed travel and group bookings for the employees of the Old Employer (ss.311(1)(d) and 311(4) of the Act).
· The Transferring Employees are transferring employees in relation to the transfer of business (s.311(2) of the Act).
· The Transferable Instrument covered the Old Employer and Transferring Employees immediately before the termination of the Transferring Employee's employment with the old employer.
· The Transferable Instrument covers the Applicant and the Transferring Employees in relation to the transferring work subject to any order of the Commission under s.318(1) of the Act (s.313 of the Act).
· The Applicant has standing to apply for the orders it seeks pursuant to s.318(2) of the Act.
The views of the Applicant (new employer)
The Applicant supports the order sought. By way of summary, the Applicant’s stated reasons for making the application include challenges in administration and compliance and differences between the Applicant’s business and the business of the Old Employer that negotiated the Transferable Instrument, including in terms of systems processes and resources.
The views of the Applicant weigh in favour of the making of the order.
The views of the employees who would be affected by the order
The Transferring Employees emailed the Commission to advise that they do not oppose the application.
The Applicant has submitted that it has undertaken consultation with employees so that they understand why the Applicant is making the application.
The views of the Transferring Employees weigh in favour of the making of the order.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
The Applicant submits that the Transferring Employees will not be disadvantaged by the order in relation to their terms and conditions of employment for reasons including:
· The Transferable Instrument provides that ordinary hours may be worked between 7am and 10pm (clause 13.1). In contrast, the Applicant offers employees negotiable ordinary hours between a span of 6am and 8pm with an ability to negotiate flexible working arrangements.
· All Transferable Employees have been offered pay rates that are above the minimum rates of pay for their classification under the Transferable Instrument.
· The Applicant is recognising the Transferring Employees’ service from the Old Employer for the purposes of calculating long service leave as well as any unused personal leave.
· The Applicant offers its employees a full work from home option and does not require attendance at the office, as required by clause 22 of the Transferable Instrument.
· The Applicant affords greater flexibility in relation to leave requests than what is provide by the Transferable Instrument. While the Applicant encourages as much notice to be provided as possible, it does not impose the requirements prescribed by clause 23 of the Transferable Instrument.
· The Applicant provides more generous benefits when employees volunteer to work public holidays compared to the Transferable Instrument.
The Applicant submits that the Clerks - Private Sector Award 2022 (Award) is the instrument that would otherwise apply to the Transferring Employees.
Having regard to the above matters and having considered the differences between the Award and Transferable Instrument, I consider this to be a neutral consideration.
The nominal expiry date of the agreement
The Transferable Instrument expires on 30 June 2022. The Applicant notes that the Transferable Instrument does not provide for pay increases in 2022. The Applicant also notes that this contrasts with the Award which will be adjusted in line with the Commission’s annual wage review process.
I consider this to be a neutral consideration.
Whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace
The Applicant submits that the Transferable Instrument places a significant burden on the productivity of the Applicant including because of differences in ordinary hours among team members covered by the different instruments and added payroll complexity.
I accept that the administration of multiple instruments across the 3 Transferring Employees and the other 72 non-transferring employees would create additional payroll complexity giving rise to additional administrative activities that would have some negative impact on the productivity of the Applicant’s workplace.
This weighs in favour of the making of the orders.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
The Applicant submits that it would incur significant economic disadvantage for reasons which include:
· The Transferable Instrument requires the Transferring Employees to be paid more frequently than the rest of the Applicant’s workforce. This results in the need to maintain an additional pay run for the Transferring Employees resulting in additional administrative overheads.
· There are a number of provisions in the Transferable Instrument relating to the calculation of entitlements that are significantly more complex than the Award and National Employment Standards and these provisions disproportionately increase the administrative work required by the Applicant in order to calculate the entitlements and comply with them. This includes a requirement for manual calculations each pay run which requires additional resources and increases risk of error.
I accept that the Applicant will incur economic disadvantage as a result of having to administer the more complex requirements of the Transferable Instrument to what is a relatively small portion of its workforce however it cannot be established based on the material before me that this is significant.
I consider this to be a neutral consideration.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
The Applicant submits that there is no business synergy between the Transferable Instrument and the Award that applies to the Applicant’s employees that do similar work. The proper functioning of the Transferable Instrument relies upon references to a number of the Old Employer’s policies which the Applicant does not have access to and are not designed for the Applicant. The Applicant also points to certain aspects of the Transferable Instrument that are designed for the Old Employer and which the Applicant cannot implement.
I accept that there is little business synergy between the Transferable Instrument and Award and this consideration weighs in favour of the proposed order being made.
The public interest
The notion of public interest refers to matters that might affect the public as a whole.[1] 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 order being made.
Conclusion
Having taken into account the considerations in s.318(3) of the Act, I consider that the following order should be made:
“The Commonwealth Bank Group Enterprise Agreement 2020 will not cover International Express Pty Ltd T/A BCD Travel and the following transferring employees in respect of their employment with International Express Pty Ltd T/A BCD Travel:
(a)Mark Bowden;
(b)Stephanie Constance; and
(c)Hagar Darko.”
For the purposes of s.318(4) of the Act, the order will come into operation on 1 April 2022. The order giving effect to this decision will be issued separately in [PR739881].
COMMISSIONER
[1] Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34, [23].
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