Jetstar Airways Pty Limited

[2015] FWCA 1382

[2015] FWC 1426

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 Pty Limited
(AG2015/1963)

COMMISSIONER JOHNS MELBOURNE, 3 MARCH 2015

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 On Airport Business Development Agreement (AaE/TWU) 2014 (AAE Agreement) not apply to Jetstar in relation to the employment of Mr Damien Prentice (Mr Prentice) who is likely to transfer his employment from Australian Air Express Limited (AAE) to Jetstar, both subsidiaries of Qantas. Jetstar makes the application in its capacity as the prospective new employer.

[2] Mr Prentice has been employed by AAE since 30 April 2011. He is currently covered by the AAE Agreement. Mr Prentice wishes to cease employment with AAE to take up employment with Jetstar. If Mr Prentice transfers his employment to Jetstar, his employment would be covered by the EGH Agreement 2010 (AE882729 / PR504784) (Jetstar Agreement). In its Form F40 - Application for Orders in relation to Transfer of Business, Jetstar stated it wishes to offer Mr Prentice employment in the position of Ground Crew. It is a pre-condition to Mr Prentice 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 Fair Work Act 2009 (Cth) (Act) sets on 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 despite enlivening the provisions of Part 2-8 of the FW Act,

there is no transfer of business that would cause the Commission concern. Further, Jetstar submits that proposed transfer of employment is voluntary. Furthermore, Jetstar submits that if the Commission declines to make the order it will not employ Mr Prentice because of the real likelihood that the AAE Agreement 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 Prentice filed a witness statement dated 19 February 2015. In that statement, Mr Prentice states that he supports the order being made. He states that it is in his interest for the order to be made because he does not enjoy his current position at AAE, he would enjoy greater career development opportunities at Jetstar and that he looks forward to excelling in his prospective employment at Jetstar.

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

[7] Jetstar submits that Mr Prentice will not be severely disadvantaged by the order in relation to the terms and conditions of employment. Under the Jetstar Agreement, Mr Prentice will receive a lower rate of pay than he currently receives under the AAE Agreement. Pursuant to the AAE Agreement, Mr Prentice currently earns $21.76/hour, whereas under the Jetstar Agreement he will earn $18.64/hour. Notwithstanding this, Mr Prentice wishes to actively pursue employment with Jetstar.

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

[8] The nominal expiry date of the AAE Agreement is 31 December 2017.

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 the transfer of the AAE Agreement to it with Mr Prentice’s

employment would have a negative impact on Jetstar’s business. Each instrument

(the AAE Agreement and the Jetstar Agreement) contains separate and distinct provisions that deal with matters that are particular to each company. Additionally, maintaining the AAE Agreement for just one employee will impose significant administrative and productivity burdens on Jetstar. Jetstar submits that the these reasons, the companies would not allow the transfer to take place if this Application is 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 due to the restrictions and difficulties that the transfer of the instrument would create (as identified at [9] above), if this Application were to be unsuccessful, the companies would not allow the transfer to take place.

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

Jetstar submits that there is very little to no business synergy between the AAE Agreement and Jetstar Agreement. The sectors of the aviation industry that each company operates within are very different and separate sectors. Whilst the work Mr Prentice will perform at Jetstar is the same or substantially the same as work he performed at AAE, each of the relevant Jetstar and AAE businesses operate in distinct operational spheres – Jetstar ground handling duties

are performed in the context of commercial passenger travel, whereas the AAE duties are performed within the context of the movement of commercial freight.

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

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

[12] Having read the application and the witness statement of Mr Prentice, 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.

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