James Thorne; Jetstar Airways Pty Ltd

[2019] FWC 5651

[2019] FWC 5651

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees

James Thorne; Jetstar Airways Pty Ltd
(AG2019/2794)

Airline operations
COMMISSIONER YILMAZ	MELBOURNE, 14 AUGUST 2019

Application by Jetstar Airways Pty Ltd and Mr James Thorne – Transferrable instruments – Application that transferrable instrument will not cover transferring employees – Fair Work Act 2009, ss.311, 317 and 318.

Introduction

[1] This decision concerns an application by Jetstar Airways Pty Ltd (Jetstar) and Mr James Thorne (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] This application relates to Mr James Thorne who was employed as a Captain by Eastern Australia Airlines under the Eastern Australia Airlines Pty Limited Pilots Enterprise Agreement 2015 1. Mr Thorne applied for and was offered a full-time position as First Officer at Jetstar subject to an order from the Fair Work Commission that the transferable instrument would not apply to Mr Thorne’s employment at Jetstar.

[3] The circumstances in which the Applicants seek such an order are where the employee has voluntarily resigned from employment at Eastern Australia Airlines to accept an offer of employment from Jetstar that clearly specifies that upon commencement of employment, the Jetstar Airways Pilots’ Enterprise Agreement 2015 2 will apply to Jetstar and the employee.

[4] For the purpose of s.311(6) of the Act, Jetstar and Eastern Australia Airlines are associated entities or have a connection by virtue of their status as related bodies corporate associated as that term is defined in s.50 of the Corporations Act 2001.

Background

[5] Jetstar is a domestic and international airline, while Eastern Australia Airlines Pty Ltd operates a regional domestic airline business. Mr Thorne has been employed by Eastern Australia Airlines since 22 April 2013, most recently as a Captain.

[6] Mr Thorne applied for a full-time position as a First Officer at Jetstar and submits the position at Jetstar is attractive for a number of reasons including career development and job security.

[7] The offer of employment at Jetstar was a conditional offer, subject to Jetstar applying for an order from the Commission that the transferable instrument (the Eastern Australia Airlines Pty Limited Pilots Enterprise Agreement 2015), not cover Mr Thorne when he commences employment with Jetstar and ceases employment with Eastern Australia Airlines.

[8] At the time of making the application, Mr Thorne, the transferring employee understood the terms and conditions of the offer from Jetstar, including the potential application of the Jetstar Airways Pilots Agreement 2015 and difference in salary.

[9] Mr Thorne submitted a Witness Statement 3 in support of his application for orders in relation to the transfer of business.

The relevant legislation

[10] 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.

[11] Section 311(1) contains the definition of transfer of business. 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).” 4

[12] Sections 317 and 318 of the Act provide:

“317 FWC may make orders in relation to a transfer of business:

This Division provides for 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 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;

(c) a transferring employee, or an employee who is likely to be a transferring employee;

(d) 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 FWC must take into account

(3) In deciding whether to make the order, 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;

(e) 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;

(f) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;

(g) 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.” 5

Consideration

[13] I am satisfied that the Eastern Australia Airlines Pty Limited Pilots Enterprise Agreement 2015 is a transferable instrument as described in s.312(1)(a) of the Act and the circumstances in this matter is a transfer of business within the meaning of s.311 of the Act. The circumstances meet the definition pursuant to s.311(1)(a),(b),(c) and (d).

[14] In making an order, I have taken into account the provisions of ss.317 and 318. I have considered the matters in s.318(3).

[15] Mr Thorne voluntarily applied for the position at Jetstar and an offer of employment was made and accepted. Conditional offers of employment for transferring employees between associated entities are a general practice among the Qantas Group of Companies. Applications pursuant to s.318 are known to the Commission.

[16] Jetstar submits that the proposed orders will provide Jetstar with the certainty, consistency and efficiency in respect of its application of industrial instruments to its operation. Granting orders, Jetstar submits will also recognise Jetstar’s need to operate its business in the market in which it operates.

[17] While the transferring employee, Mr Thorne, will experience a reduction in salary in commencing as a First Officer, the drop is likely to be a temporary measure as career opportunities at Jetstar are more likely to arise. In any event, the acceptance of employment at Jetstar presents to the Applicant opportunities that better meet his personal and professional requirements. Mr Thorne submits his personal requirements include career development, to fly internationally, lifestyle opportunities and greater job security. Further, it is submitted that the conditions of employment, other than salary are broadly similar.

[18] I note the nominal expiry date of the Eastern Australia Airlines Pty Limited Pilots Enterprise Agreement 2015 is 31 December 2018. Having considered the matters in s.318(3), I am of the view that it is appropriate and not contrary to the public interest to make an order in relation to the transfer of Mr Thorne’s employment.

[19] For the above reasons I am satisfied that the order sought by Jetstar and Mr Thorne ought to be made. I will make the order as sought in the application which will be issued separately in PR711330.

COMMISSIONER

<AE415939  PR711318 >

Printed by authority of the Commonwealth Government Printer

 1   AE415939.

 2   AE413585.

 3   Witness Statement of Mr James Thorne filed 31 July 2019.

 4   Fair Work Act 2009 (Cth) s.311(1).

 5 Ibid ss.317, 318.