Jetstar Airways Limited

[2015] FWC 3689

[2015] FWC 3689

FAIR WORK COMMISSION

DECISION

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

Jetstar Airways Limited
(AG2015/2839)

Airline operations
VICE PRESIDENT WATSON	MELBOURNE, 1 JUNE 2015

Application for an order in relation to transfer of business - Transferrable instrument - Application that transferrable instrument not cover transferring employee - Conditional offer of employment - Application not opposed - Fair Work Act 2009, ss. 311, 312, 317 and 318.

Introductions

[1] This decision concerns an application by Jetstar Airways Limited (Jetstar) 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] The application concerns Mr Piero Bortoli who is employed by Qantas Airways Limited (Qantas) under the Qantas Airways Limited (AWU/United Voice) Enterprise Agreement 10 (the Qantas Agreement). The terms of the order are sought under s.318(1) and provide that in relation to Mr Bortoli, where there is a transfer of business from Qantas to Jetstar within the meaning of Division 2, Part 2-8 of the Act, the Qantas Agreement will not cover Jetstar.

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

Background

[4] Mr Bortoli has been employed by Qantas since 17 March 2010. He is currently engaged as an Aircraft Worker (Level 4) under the Qantas Agreement. Mr Bortoli wishes to pursue employment in a ‘back of house’ baggage handling role with Jetstar.

[5] Jetstar wishes to offer Mr Bortoli employment in a baggage handler role in Melbourne. It is a pre-condition to Mr Bortoli accepting employment with Jetstar that an order pursuant to s.318 of the Act be in place to ensure that no transfer of business can take place.

[6] Mr Bortoli wishes to accept the offer of employment with Jetstar and each of Mr Bortoli, Qantas and Jetstar request that the Commission make the orders sought in this application.

The relevant legislation

[7] 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.

[8] Section 311(1) contains the definition of transfer of business in a wider manner than the ordinary English or legal meaning of the term. 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).”

[9] 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 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) 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) 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 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;

(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.”

Transfer of the Qantas Agreement

[10] In relation to the factors set out in s.318(3) of the Act, Jetstar submits that the proposed orders should be made in order to facilitate the transfer of Mr Bortoli. It submits that despite enlivening the provisions of Part 2-8 of the Act, there is no transfer of business that would cause the Commission concern, and the proposed transfer of employment is voluntary.

[11] In support of the application, Mr Bortoli filed a witness statement dated 29 May 2015 in which he states that he supports the order being made. Mr Bortoli states that it is in his interests for the order to be made so that he can take up the employment opportunity with Jetstar, which will improve his career development opportunities and long-term employment prospects.

[12] Jetstar submits that Mr Bortoli will not be severely disadvantaged by the order in relation to the terms and conditions of employment. While Mr Bortoli will receive a lower rate of pay than he currently receives under the Qantas Agreement, Mr Bortoli wishes to actively pursue employment with Jetstar and will be given the opportunity to continue his career path by entering into employment with Jetstar.

[13] Jetstar submits that the application of the Qantas Agreement at its workplace would have a negative impact on its business because each instrument contains separate and distinct provisions that deal with matters that are particular to each company. Additionally, maintaining the Qantas Agreement for just one employee will impose significant administrative and productivity burdens on Jetstar and has the potential to cause significant economic damage due to the difficulties outlined in this paragraph. Jetstar would therefore not allow the transfer to take place if this application were unsuccessful.

[14] Jetstar submits that there is very little to no business synergy between the Qantas Agreement and the Jetstar Agreement. The sectors of the aviation industry that each company operates within are very different and separate sectors.

[15] As the order sought relates to an enterprise agreement, I have had regard to the nominal expiry date of the Qantas Agreement, which is 31 December 2018. I have also taken into consideration any matters concerning the public interest.

[16] I am satisfied that the Qantas Agreement is a transferable instrument as described in s.312 of the Act and this circumstance is a transfer of business within s.311 of the Act as commencing employment with Jetstar may be regarded as the termination of employment with Qantas. The application has been made pursuant to s.318(1) of the Act. The matters that I am required to take into account when considering whether to grant an order in the terms sought are prescribed by s.318(3) of the Act, as set out above.

[17] I have considered the factors set out in s.318(3). I am of the view that it is appropriate to make an order in relation to the transfer of Mr Bortoli’s employment. I have given weight to the fact that Mr Bortoli will undertake the transfer voluntarily, the transfer provides him with career development opportunities and long-term employment prospects and he supports the application. It is also significant that Qantas and Jetstar operate in distinct sectors of the aviation industry and that efficiency would be compromised if the Qantas Agreement was to apply to Jetstar. I am satisfied that it is not against the public interest to grant the order sought.

Conclusion

[18] For the reasons above I will make an order that the Qantas Agreement will not cover Mr Bortoli during the period of his employment with Jetstar.

VICE PRESIDENT

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