Mr Nathan Dix; Express Freighters Australia (Operations) Pty Limited

[2016] FWC 2908

[2016] FWC 2908

FAIR WORK COMMISSION

DECISION

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

Mr Nathan Dix; Express Freighters Australia (Operations) Pty Limited
(AG2016/3110)

VICE PRESIDENT WATSON MELBOURNE, 13 MAY 2016

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.

Introduction

[1] This decision concerns a joint application by Mr Nathan Dix and Express Freighters Australia (Operations) Pty Limited (Express Freighters) 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] This application concerns Mr Dix who was employed by Eastern Australia Airlines Pty Limited (Eastern) until he resigned on 11 March 2016 with effect from 8 April 2016. At the time of his resignation he was covered by the Eastern Australia Airlines Pty Limited Pilots Enterprise Agreement 2015 1(Eastern Agreement). Mr Dix and Express Freighters seek an order that the Eastern Agreement not cover Mr Dix and Express Freighters in respect of Mr Dix’s employment with Eastern Freighters.

[3] For the purpose of s.311(6) of the Act, Eastern and Express Freighters are associated entities as that term is defined in s.50AAA of the Corporations Act 2001.

Background

[4] After resigning from his employment with Eastern, Mr Dix commenced B737-300/400 type training at Qantas Flight Training on 11 April 2016. The training is scheduled to be completed on or about 24 May 2016. Mr Dix is not employed by Eastern and does not earn any income during the training.

[5] Express Freighters has offered to employ Mr Dix. However, Express Freighters is only prepared to employ Mr Dix within 3 months of his employment with Eastern ending if the Fair Work Commission issues an order under s.318 of the Act that the Eastern Agreement will not apply to Mr Dix or Express Freighters during Mr Dix’s employment with Express Freighters.

[6] Given the above, Express Freighters has offered Mr Dix employment as a B737-300/400 type rated First Officer commencing on 24 May 2016, subject to the successful completion of his training and the Commission issuing an order that the Eastern Agreement will not apply to Mr Dix or Express Freighters in respect of Mr Dix’s employment with Express Freighters.

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 Eastern Agreement

[10] Mr Dix and Express Freighters note the decision in Lend Lease Engineering Pty Ltd and others 2 has cast doubt on the Commission’s ability to issue s.318 orders in circumstances in which there has been a conditional offer of employment.

[11] Mr Dix and Express Freighters submit that there is nothing in s.318 of the Act or in the context of the related provisions in Part 2-8 of the Act that warrants any limitation on the matters the Commission may have regard to in determining whether Express Freighters is likely to be the new employer and Mr Dix is likely to be a new employee of Express Freighters. Mr Dix and Express Freighters submit that if the Commission is satisfied it is likely that it will make the order, it can then be satisfied that there is ‘likely’ to be a transfer of business. It is submitted that this is sufficient, and all that is required, to establish the necessary jurisdictional fact for the Commission to make the order.

[12] Mr Dix and Express Freighters submit that to adopt the reasoning in Lend Lease would not give effect to the objects of Part 2-8 of the Act and would not be consistent with other provisions of the Act, for instance the exception in s.341(5) that excludes prospective employees from being protected from adverse action in circumstances in which a prospective employer refuses to employ them because they would be entitled to the benefit of Part 2-8 relating to transfer of business.

[13] In relation to the factors set out in s.318(3) of the Act, Mr Dix and Express Freighters submit that the proposed orders should be made in order to facilitate the employment of Mr Dix with Express Freighters prior to three months elapsing since the termination of his employment with Eastern. It is submitted 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 employment is voluntary.

[14] In support of the application, Mr Dix has filed a witness statement dated 6 May 2016 in which he states that he supports the order being made. Mr Dix states that it is in his interests for the order to be made as it will facilitate his career and personal interests. It will allow him to operate a jet aircraft and provide him with future promotional opportunities that are not available to him at Eastern, and it will also allow him to return to his home state.

[15] Express Freighters submit that Mr Dix will not be disadvantaged by the order in relation to the terms and conditions of his employment. While Mr Dix will receive a slightly lower base salary compared with that which he would receive if the Eastern Agreement applies, it is only a minimal difference and is likely to be a relatively short term issue given the likelihood of career progression at Express Freighters. It is submitted that if the order is made, it will give Mr Dix the opportunity to fly jet aircraft which significantly improves his future career opportunities and future earning capacity.

[16] Express Freighters submits that the transfer of the Eastern Agreement to Express Freighters would have a negative impact on Express Freighter’s business because the Eastern Agreement contains separate and distinct work rules that are particular to the Regular Passenger Transport sector of the industry and are not suited to the air freight sector that Express Freighters operates in. It submits that Express Freighters would not be able to roster Mr Dix to perform duties in an efficient manner, or at all, due to the restrictions contained in the Eastern Agreement and their interaction with the rostering requirements of the Express Freighters Australia Operations Pty Ltd Enterprise Agreement 2014 (Express Freighters Agreement).

[17] Express Freighters submits that there is no or very little business synergy between the Eastern Agreement and the Express Freighters Agreement given the different rostering practices adopted by the transferable instruments.

[18] The Commission has power to make an order if there is, or there is likely to be, a transfer of business from an old employer to a new employer. If Mr Dix becomes employed by Express Freighters as he and Express Freighters intend, the circumstances will fall within the definition of a transfer of business in s.311. It is common for employees within the Qantas group of companies to transfer between entities. Since the enactment of the Fair Work Act this has been contingent on applications of the type now before me being granted. Orders arising from applications have been commonly made.

[19] I am satisfied that the Eastern Agreement is a transferable instrument as described in s.312 of the Act. The circumstance is a transfer of business within s.311 of the Act as Mr Dix and Express Freighters intend for Mr Dix to commence employment with Express Freighters within 3 months of the termination of his employment with Eastern. It is clear in my view that there is likely to be a transfer of business within the expanded definition of that term in s.311. The Commission therefore has the power to make the order sought.

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

[21] The matters 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. I have considered the factors set out in s.318(3) and am of the view that it is appropriate to make an order in relation to the transfer of Mr Dix’s employment.

Conclusion

[22] For the above reasons I will make an order that the Eastern Agreement will not cover Mr Dix during the period of his employment with Express Freighters.

VICE PRESIDENT

 1   AE415939.

 2   [2014] FWC 5499.

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