National Australia Bank Limited

[2014] FWC 5060

[2014] FWC 5060

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318—Transfer of instrument

National Australia Bank Limited
(C2014/4137)

Banking finance and insurance industry
COMMISSIONER LEE	MELBOURNE, 22 AUGUST 2014

Application for an order relating to instruments covering new employer and transferring employees in awards.

[1] An application has been made by National Australia Bank Limited (the Applicant) to the Fair Work Commission (the Commission) for an order pursuant to section 318 of the Fair Work Act 2009 (the Act).

[2] The Application seeks an order that the Suncorp Enterprise Agreement 2011 will not cover transferring employees and that the NAB Enterprise Agreement 2011 (or any agreement that may replace it) will cover the transferring employees during their employment with the Applicant.

[3] The Application is supported by the Finance Sector Union of Australia. 1

Legislation

“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.”

Background

[4] In September 2013, the Applicant and Suncorp Custodian Services Pty Ltd entered into an agreement to transfer investment and custody services work for the Suncorp Group to NAB (the facilitation agreement). 2

[5] Fifteen employees who were offered employment by NAB pursuant to the facilitation agreement had accepted NAB’s offer of employment and have or will transfer to NAB this year. 3 All the transferring employees are covered by the Suncorp Group Enterprise Agreement 2011.4

Transferrable instrument

[6] The facilitation agreement transferred investment and custody services work for the Suncorp Group to the Applicant, indicating that a transfer of business has occurred pursuant to section 311(1) and 311(4) of the Act.

[7] Section 312 of the Act details instruments that may transfer:

“312 Instruments that may transfer

Meaning of transferable instrument

(1) Each of the following is a transferable instrument:

(a) an enterprise agreement that has been approved by the FWC;

(b) a workplace determination;

(c) a named employer award.

Meaning of named employer award

(2) Each of the following is a named employer award:

(a) a modern award (including a modern enterprise award) that is expressed to cover one or more named employers;

(b) a modern enterprise award that is expressed to cover one or more specified classes of employers (other than a modern enterprise award that is expressed to relate to one or more enterprises as described in paragraph 168A(2)(b)).

Note: Paragraph 168A(2)(b) deals with employers that carry on similar business activities under the same franchise.”

[8] The Suncorp Group Enterprise Agreement 2011 was approved by the Fair Work Commission on 24 December 2010 and pursuant to section 312(1) of the Act is a transferrable instrument.

Who may apply for an order

[9] The application has been made by the new employer (the Applicant). The requirements of section 318(1) have been met.

Matters the Fair Work Commission must take into account (s.318(3))

Section 318(3)(a) - the views of the new employer and the employees who would be affected by the order

[10] The new employer is the applicant for this order and it supports the making of the order.

[11] The transferring employees who will be affected by the order if granted have all accepted an offer of employment with the Applicant. The offer of employment foreshadowed to each employee that the Applicant intended to make this application. 5

[12] The Applicant submitted letters of support from each of the employees affected. 6

[13] Further, the Finance Sector Union of Australia supports the application. 7

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

[14] The application was accompanied by a detailed analysis of the terms and conditions of the transferring employees and the terms and conditions provided for in the NAB Enterprise Agreement 2011. The analysis was conducted by Senior Consultant for the Applicant, Jenny Brett and the application was accompanied by a statutory declaration from Ms Brett.

[15] The Applicant submits that the employees will have more favourable terms and conditions of employment if the order is made.

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

[16] The nominal expiry date for the Suncorp Enterprise Agreement 2011 is 23 December 2014.

[17] The nominal expiry date for the NAB Enterprise Agreement 2011 is 31 December 2013. As at the date of the application, the agreement continued to operate.

[18] The Applicant submitted that should the orders be made, the transferring employees would be able to participate in bargaining and/or vote on any new agreement which proposes to replace the NAB Enterprise Agreement 2011.

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

[19] The Applicant submitted that the transferring employees would be integrated into the existing “NAB Asset Servicing team”. The Applicant submitted that the making of the orders would have a positive impact on the new employers workplace as it would mean existing and new employees performing the same work would do so on common terms and conditions.

[20] The Applicant submitted that having to comply with different instruments when calculating payroll could lead to administrative challenges and increased costs of administration.

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

[21] The Applicant submitted that there was no significant economic disadvantage to the new employer should the orders be made.

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

[22] The Applicant made no submissions about the business synergy between the transferrable instrument and the workplace instrument that already covers the employer, but did note the administrative difficulties and possible costs of compliance with different instruments.

Section 318 (g) the public interest

[23] The Applicant submitted that “maintaining a cohesive, harmonious and productive workplace is a matter of public interest”.

[24] The Applicant submitted that it would not be contrary to the public interest for the orders to be made.

Conclusion

[25] Taking into account each of the matters set out in section 319(3) of the Act, I am satisfied that the order as sought should be granted.

[26] An Order [PR541479] will be issued concurrently with this decision.

COMMISSIONER

 1   See attachment H to statutory declaration of Jenny Brett

 2   Outline of Submissions - Background to the Application, [1]

 3   Outline of Submissions - Background to the Application, [2]

 4   Outline of Submissions - Background to the Application, [3]

 5   Outline of Submissions - Background to the Application, [8]

 6   See attachment G to statutory declaration of Jenny Brett

 7   See attachment H to statutory declaration of Jenny Brett

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