Jetstar Airways Pty Ltd

[2015] FWC 6232

[2015] FWC 6232

FAIR WORK COMMISSION

DECISION

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

Jetstar Airways Pty Ltd
(AG2015/4853)

Airline operations
COMMISSIONER CRIBB	MELBOURNE, 14 SEPTEMBER 2015

Application for an order relating to instrument covering new employer and transferring employee.

[1] Jetstar Airways Pty Ltd (Jetstar, the Applicant, new employer) has lodged an application under section 318(1) of the Fair Work Act 2009 (the Act) for an order that the transferring employee (Mr G Ashford) no longer be covered by the Australian Services Union (Qantas Airways Limited) Agreement 10 1 (the Qantas Agreement) which currently applies to him. This is in the event that Mr Ashford ceases employment with Qantas Airways Ltd (Qantas) and, within three months, commences employment with Jetstar.

[2] In the detailed application, it was stated that the work that the transferring employee will perform at Jetstar (the new employer) is arguably the same or substantially the same as the work they performed for the old employer - Qantas. It is a precondition of the offer of employment with Jetstar that an order, under section 318 of the Act be made. The transferring employee will commence employment with the new employer (Jetstar) within three months of the termination of his employment with Qantas as his current role at Qantas is being made redundant in the near future.

[3] The transferring employee is covered by the Qantas Agreement, being an enterprise agreement approved by a decision 2 of the Fair Work Commission on 1 November 2013. An enterprise agreement is a transferable instrument by the operation of the Act at section 312(1)(a).

[4] Section 313(1) provides that a transferable instrument (the Qantas Agreement) that covered the old employer (Qantas) and the transferring employees, immediately before the termination of employment, will cover the new employer (Jetstar). The operation of this section therefore means that the Qantas Agreement covers the transferring employee and Jetstar (the new employer)

[5] Jetstar is seeking an order under section 318(1)(a) that the Qantas Agreement, that would cover Mr Ashford and Jetstar (because of section 313(1)(a)), will not cover Mr Ashford and Jetstar.

1. Relevant legislation

[6] 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; and

b) while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.

(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee’s employment with the old employer.

(3) This section has effect subject to any FWC order under subsection 318(1).”

[7] Section 318 of the Act provides:

“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.”

2. Considerations

[8] A very detailed application was filed by Jetstar. Accompanying it was a sworn witness statement, dated 2 September 2015, from Mr Ashford, who is the transferring employee.

Section 318(3)(a)(i): the views of the new employer

[9] The applicant, as the new employer, seeks that the transferrable instrument (the Qantas Agreement) not cover or apply to it. Several reasons for this were advanced including that the proposed transfer is voluntary. Further, it was stated that, due to the restrictions and difficulties that the transfer would create, if the order is not made, the companies would not allow the transfer to take place.

Section 318 (3)(a)(ii): the views of the employees

[10] As indicated above, Mr Ashford has provided a sworn witness statement to the effect that his role is being made redundant at Qantas with limited opportunities there to continue in his chosen career path. Mr Ashford wishes to pursue his chosen career in the Jetstar role that has been offered. The Jetstar role is conditional on the order being made.

Section 318(3)(b): any disadvantage to the employees

[11] On the basis of the information provided by both the applicant and Mr Ashford, it would appear that there is no disadvantage to Mr Ashford, in terms of his salary, of transferring to Jetstar.

Section 318(3)(c): the nominal expiry date of the transferable instrument

[12] The nominal expiry date of the Qantas Agreement is 30 June 2016.

Section 318(3)(d): any negative impact on the employer’s workplace

[13] It was submitted by Jetstar that the transfer of the Qantas Agreement would have a negative impact on Jetstar’s business. This was on the basis that the Qantas Agreement contains separate and distinct provisions that deal with matters particular to Qantas. In addition, it was argued that, maintaining the Qantas Agreement for one employee at Jetstar, will impose significant administrative and productivity burdens on Jetstar. These burdens were such that, if an order is not issued, the transfer will not take place.

Section 318(3)(e): any significant economic disadvantage to the employer

[14] It was submitted by Jetstar that the restrictions and difficulties were of such a magnitude that, if the application is not granted, the transfer will not take place.

Section 318(3)(f): business synergy between the transferrable instrument and existing agreement

[15] Jetstar contended that there is very little or no business synergy between Qantas and Jetstar. In addition, each company was said to operate within very different and separate sectors of the aviation industry.

Section 318(3)(g): the public interest

[16] There is no evidence that the public interest is agitated in this matter.

3. Conclusion

[17] On balance, taking into account each of the matters stipulated in section 318(3) of the Act, I am satisfied that the order sought should be granted. The order 3 will be issued separately.

[18] The order will come into operation, in accordance with section 318(4) of the Act, namely, the later of:

• the time when the transferring employee becomes employed by the new employer, or



• the day on which the order is made.

 1   AE405031

 2   [2013] FWCA 8454

 3   PR571697

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<Price code C, AE405031  PR571689 >