Jetstar Airways Limited

[2014] FWC 9162

[2014] FWC 9162

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
(AG2014/10786)

COMMISSIONER JOHNS MELBOURNE, 16 DECEMBER 2014

Application that transferable instrument not cover transferring employees - Section 318 of the Fair Work Act 2009.

[1] This is an application pursuant to s.318 of the Fair Work Act 2009 (Act) by Jetstar Airways Limited (Jetstar) seeking an order from the Fair Work Commission (Commission) that a transferrable instrument, being the Qantas Ground Services Pty Limited Ground Handling Agreement 2013 (Qantas Ground Services Ground Handling Agreement) not apply to Jetstar in relation to the employment of Mr Venan Reddy (Mr Reddy) who is likely to transfer his employment from Qantas Airways Limited (Qantas) to Jetstar, which is a subsidiary of Qantas. Jetstar makes the application in its capacity as the prospective new employer.

[2] Mr Reddy has been employed by Qantas since on or around 20 April 2010. He is currently engaged as a Ground Crew Level 2 pursuant to the terms of the Qantas Ground Services Ground Handling Agreement. Mr Reddy wishes to cease employment with Qantas in order to take up employment with Jetstar. In its Form F40 - Application for Orders in relation to Transfer of Business, Jetstar stated it wishes to offer Mr Reddy employment in the position of Customer Service Officer. It is a pre-condition to Mr Reddy accepting employment with Jetstar that an order pursuant to section 318 of the Act be in place to ensure that no transfer of business can take place.

[3] Section 318 of the Act sets out the circumstances in which an order may be made by the Commission:

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.

[4] The Commission will now consider each of the matters it is required to consider under s.318(3).

s.318(3)(a)(i) - the views of the new employer

[5] Jetstar submits that if the order is made, a voluntary transfer of employment will occur, not a transfer of business. If the order is not made, Jetstar states it will not employ Mr Reddy because of the likelihood that the instrument from his employment with Qantas will transfer.

s.318(3)(a)(ii) - the view of the employees who would be affected by the order

[6] In support of the application, Mr Reddy filed a witness statement dated 10 December 2014. In that statement, Mr Reddy states that he supports the order being made. He states it is in his interests for the order to be made so that he can take up the employment opportunity with Jetstar. In accepting employment with Jetstar, Mr Reddy says this will improve his future employment prospects due to increased and ongoing opportunities to develop.

s.318(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[7] In its Form F40 - Application for Orders in relation to Transfer of Business, Jetstar states that Mr Reddy will receive a higher rate of pay under the Jetstar/ASU Agreement 2011 (Jetstar Agreement) than under the Qantas Ground Services Ground Handling Agreement.

s.318(3)(c) - if the order relates to an enterprise agreement—the nominal expiry date of the agreement

[8] The order relates to the Qantas Ground Services Ground Handling Agreement which nominally expires on 30 November 2015.

s.318(3)(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[9] Jetstar submits that a transfer of the Qantas Ground Services Ground Handling Agreement to Jetstar will have a negative impact on Jetstar’s business because the Qantas Ground Services Ground Handling Agreement contains separate and distinct provisions particular to Qantas’ business. For this reason, Jetstar would not allow the transfer to take place if their application was unsuccessful.

s.318(3)(e) - whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[10] Jetstar submits that it is because of the restrictions noted in paragraph [9] above that the order is sought.

s.318(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[11] Jetstar submits that the sectors of the aviation industry that it and Qantas operate in are separate and distinct. It submits there is very little to no business synergy between it and Qantas.

s.318(3)(g) - the public interest

[12] The Commission, as presently constituted, is satisfied that it is not against the public interest to grant the order sought by Jetstar and Mr Reddy.

[13] Having read the application and supporting documents, the Commission is satisfied that all the requirements of s.318 of the Act have been met. An order will be issued with this decision.

COMMISSIONER

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