Johnson Controls Australia Pty Ltd T/A Johnson Controls Australia

[2021] FWCA 6578

[2021] FWCA 6578

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.320 - Application to vary a transferable instrument - agreement

Johnson Controls Australia Pty Ltd T/A Johnson Controls Australia
(AG2021/7838)

Electrical contracting industry
DEPUTY PRESIDENT EASTON	SYDNEY, 5 NOVEMBER 2021

Application to vary a transferable instrument - agreement

[1] Johnson Controls Australia Pty Ltd T/A Johnson Controls Australia (“Johnson Controls”/Applicant) has applied to the Fair Work Commission under s.320 of the Fair Work Act 2009 (Cth) (FW Act) to vary the Systems Integration Australia Pty Ltd and ETU Enterprise Agreement 2017-2021 (the Agreement).

[2] The application arises in circumstances where employees engaged by Systems Integration Australia Pty Ltd (Systems Integration) will be transferred to the new employer Johnson Controls as a result Systems Integration being liquidated. The application seeks that the Agreement be varied to replace the reference to the previous company name of “Systems Integration Australia Pty Ltd” to “Johnson Controls Australia Pty Ltd”.

[3] Section 320 of the FW Act provides as follows:

320 Variation of transferable instruments

Application of this section

(1) This section applies in relation to a transferable instrument that covers, or is likely to cover, the new employer because of a provision of this Part.

Power to vary transferable instrument

(2) The FWC may vary the transferable instrument:

(a) to remove terms that the FWC is satisfied are not, or will not be, capable of meaningful operation because of the transfer of business to the new employer; or

(b) to remove an ambiguity or uncertainty about how a term of the instrument operates if:

(i) the ambiguity or uncertainty has arisen, or will arise, because of the transfer of business to the new employer; and

(ii) the FWC is satisfied that the variation will remove the ambiguity or uncertainty; or

(c) to enable the transferable instrument to operate in a way that is better aligned to the working arrangements of the new employer's enterprise.

Who may apply for a variation

(3) The FWC may make the variation only on application by:

(a) a person who is, or is likely to be, covered by the transferable instrument; or

(b) if the application is to vary a named employer award--an employee organisation that is entitled to represent the industrial interests of an employee who is, or is likely to be, covered by the named employer award.

Matters that the FWC must take into account

(4) In deciding whether to make the variation, 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 transferable instrument as varied;

(b) whether any employees would be disadvantaged by the transferable instrument as varied in relation to their terms and conditions of employment;

(c) if the transferable instrument is an enterprise agreement--the nominal expiry date of the agreement;

(d) whether the transferable instrument, without the variation, 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, without the variation;

(f) the degree of business synergy between the transferable instrument, without the variation, and any workplace instrument that already covers the new employer;

(g) the public interest.

Restriction on when variation may come into operation

(5) A variation of a transferable instrument under subsection (2) must not come into operation before the later of the following:

(a) the time when the transferable instrument starts to cover the new employer;

(b) the day on which the variation is made.

[4] Ms Anita Libut (Senior Human Resources Business Partner of Johnson Controls) indicated in the Form F41 Application that Johnson Controls would like to vary the agreement by updating and correcting the legal entity in the agreement.

[5] On 19 October 2021 and 26 October 2021, the Commission sought the views of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) who is a party bound by the agreement. Ms Annie Thatcher (Industrial Admin Facilitator) advised that the CEPU did not have any objections to the variation.

[6] I am satisfied that Johnson Controls as the new employer and the CEPU on behalf of the employees support the proposed variations to the transferrable instrument (per s.320(4)(a)).

[7] The variation sought is to amend the name of parties in the Agreements to reflect that the employing entity has changed. I am satisfied that there will be no disadvantage at all to affected employees (per s.320(4)(b)).

[8] The transferrable instrument is a single enterprise agreement with a nominal expiry date of 31 March 2021. The transferrable instrument has passed its nominal expiry date and weighs against the variation sought. In the usual course, the employer should take steps to negotiate a new enterprise agreement with its employees. Ms Libut provides in the Form F41 that the CEPU is not ready to negotiate, and Johnson Controls would like to remove any ambiguity regarding the legal entity employing the group of employees at this stage (per s.320(4)(c)).

[9] The application does not address any inefficiencies or negative impacts on productivity should the Agreement not be varied. Intuitively though if the applicable instrument for a person’s employment does not identify their employer, this may be a cause for ambiguity. In the absence of any direct submission from Johnson Controls this is a neutral consideration (per s.340(4)(d)).

[10] Similarly, there is no direct claim of any disadvantage to Johnson Controls should the application not be granted. The same intuitive view can be taken as above and similarly, in the absence of any direct submission from Johnson Controls this is a neutral consideration (per s.340(4)(e)).

[11] Johnson Controls did not point to any issues in respect of this consideration other than reiterating the ambiguity created by the new employer being covered by the Agreement without currently being named in the Agreement.

[12] Based on the material contained in the Form F41 Application, I am satisfied that termination of the Agreement is not contrary to the public interest (per s.320(4)(g) and that it is appropriate to vary the agreement in the circumstances.

[13] In this matter some factors weigh in favour of the application and others are neutral. No evidence has been put before me of opposition to the application.

[14] I am satisfied that it is appropriate to vary the Agreement as sought. The application by Johnson Controls is granted.

[15] The variations will operate from the date of this decision. An Order will be issued to this effect. 1

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<AE429387 PR735543>

 1   PR735544