National Jet Express Pty Ltd
[2012] FWA 2822
•5 APRIL 2012
[2012] FWA 2822 |
|
REASONS FOR DECISION |
Fair Work Act 2009
s.319 - Application for an order re instruments covering new employer and non-transferring employees in agreements
National Jet Express Pty Ltd
(AG2012/4237)
NATIONAL JET SYSTEMS PTY LTD PILOT COLLECTIVE AGREEMENT 2007-2012
Airline operations | |
COMMISSIONER HAMPTON | ADELAIDE, 5 APRIL 2012 |
Application for an order regarding an instrument covering new employer and non-transferring employees - collective agreement made under former Act - transfer of pilots between associated companies - whether transfer of business - whether collective agreement is a transferable instrument - whether should cover non-transferring employees - application granted.
Introduction
[1] This is an application pursuant to s.319 of the Fair Work Act 2009 (the Act) by National Jet Express Pty Ltd (NJ Express). NJ Express employs pilots, and along with National Jet Systems Pty Ltd (NJ Systems), is part of the Cobham Aviation Services Australia group. On 1 April 2012, a number of pilots, who had up to that point been employed by NJ Systems, became employees of NJ Express (the transferring employees). I note however that prior to that time, some or all of these pilots had already operated under the umbrella of NJ Express on a secondment basis.
[2] NJ Express also employs pilots that have not been seconded or transferred from NJ Systems (the non-transferring employees).
[3] NJ Systems is subject to the National Jet Systems Pty Ltd Pilot Collective Agreement 2007-2012 1 (the collective agreement) being an instrument approved by the then Workplace Authority in 2008 pursuant to the Workplace Relations Act 1996.
[4] NJ Express now seeks an order from Fair Work Australia that the collective agreement also cover, within the meaning of the Act, those non-transferring employees. Indirectly, it also seeks confirmation that the collective agreement already covers NJ Express and the pilots who recently transferred.
[5] The Australian Federation of Air Pilots (AFAP) and the Transport Workers’ Union of Australia (TWU) represent pilots that are affected by this application and they have been consulted on the proposed new employment arrangements. The AFAP and TWU have supported this application.
[6] On 2 April 2012, having heard the matter, I issued an order granting the application. 2 I also advised that I would issue reasons for that decision, which I now do.
Are NJ Express and the transferring employees already covered by the collective agreement?
[7] This application is premised on the basis that NJ Express is already covered by the collective agreement. This in turn relies upon the proposition that there has been a transfer of business and that the collective agreement has transmitted along with the transferring employees as a result of the operation of the Act.
[8] The Act relevantly provides as follows in relation to transfer of business.
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(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).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
[9] In this case, the transferring employees commenced employment immediately with NJ Express and the work is, for present purposes, identical to that performed for NJ Systems. NJ Express and NJ Systems are associated entities given the existence of common directors and their participation in the Cobham Aviation Services Australia group. This meets the requirements of s.311(1) and (2) of the Act and as a result there was a transfer of business and the pilots are transferring employees within the meaning of the Act.
[10] Section 312 of the Act provides that certain industrial instruments will transfer in these circumstances. The list of transferrable instruments set out in that provision has also been supplemented as a result of transitional legislation accompanying the Act.
[11] In this case, the collective agreement became a transferrable instrument for the purposes of s.312 and s.313 of the Act by virtue of sub item 2(3), Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the TPCA Act). That is, the collective agreement is a transitional instrument for the purposes of the Act itself and pursuant to Item 8, Part 3 of Schedule 11 of the TPCA Act, the collective agreement is also a transferable instrument for the purposes of s.312(1) and consequently, s.313 of the Act.
[12] Section 313 of the Act provides for the transferrable instrument (in this case the collective agreement) to in effect transfer to the new employer (NJ Express) along with the employees who are transferred.
[13] As a result, NJ Express and the transferring employees are already covered by the collective agreement.
Should the collective agreement also cover the non-transferring employees?
[14] The Act does make provision for a transferrable instrument to automatically cover other employees in certain circumstances. Section 314 of the Act provides as follows:
“314 New non-transferring employees of new employer may be covered by transferable instrument
(1) If:
(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and
(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and
(c) the non-transferring employee performs the transferring work; and
(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;
then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.
(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWA order under subsection 319(1).”
[15] In this case, NJ Express is covered by the Pilots Award 2010 which is a modern award within the meaning of s.314(1)(d) of the Act. Further, some or all the non-transferring employees were engaged prior to the collective agreement covering NJ Express. On that basis, the broader coverage of the collective agreement to the “new” employees as contemplated by s.314 does not operate. However, as noted in s.314(3), the operation of this provision is subject to s.319 of the Act.
[16] Section 319 of the Act provides as follows:
“319 Orders relating to instruments covering new employer and non-transferring employees
Orders that FWA may make
(1) FWA 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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;
(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.
Who may apply for an order
(2) FWA 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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(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 FWA must take into account
(3) In deciding whether to make the order, FWA 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 non-transferring employee before the later of the following:
(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;
(b) the day on which the order is made.”
[17] This application seeks to enliven the powers provided by s.319(1)(b) of the Act. The grounds relied upon to support the application included that an order providing for the collective agreement to cover the non-transferring employees had the support of the employer, the employees and the AFAP and TWU as their representatives, and would not disadvantage the pilots concerned.
[18] Further, it was the position of all parties that it was appropriate that all pilots employed by the new employer be subject to, and derive the benefits of, a common set of conditions regulated by a common Fair Work Act instrument. In addition, as NJ Express and the two unions representing the pilots had initiated negotiations for an enterprise agreement that will cover both transferring employees and non-transferring employees, it was reasonable and appropriate that those negotiations have a uniform instrument as a commencing premise.
[19] The collective agreement provides more favourable terms and condition than the modern award and has applied by administrative action to the non-transferring employees for some time.
[20] Having regard to all of the considerations set out in s.319(3) of the Act I was satisfied that the application should be granted. As a consequence, I issued an order to the effect that the National Jet Systems Pty Ltd Pilot Collective Agreement 2007-2012 would also cover all non-transferring employees of National Jet Express Pty Ltd who are engaged as pilots. In accordance with s.319(4) of the Act, the order takes effect in respect of each non transferring employee on and from 2 April 2012 or the date from which the employment with National Jet Express Pty Ltd commences, whichever is the later.
COMMISSIONER
Appearances:
S Bakewell of EMA Consulting (with permission) with J Swinton for National Jet Express Pty Ltd.
D Stephens with A Molnar for the Australian Federation of Air Pilots.
J Phillips for the Transport Workers’ Union of Australia.
Hearing details:
2012
Adelaide via video link to Melbourne and Perth
April 2.
1 The collective agreement has a nominal life expiring 30 June 2012.
2 PR521970
Printed by authority of the Commonwealth Government Printer
<Price code C, AC312845 PR521971 >
0
0
0