Navitas Limited

[2017] FWC 1777

[2017] FWC 1777

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

Navitas Limited
(AG2017/706)

COMMISSIONER JOHNS SYDNEY, 2 MAY 2017

Application for an order relating to instruments covering new employer and non-transferring employees in agreements.

[1] This decision concerns an application by Navitas Limited (applicant/Navitas) for an Order under s.319 of the Fair Work Act 2009 (the Act) which relates to instruments covering a new employer and non-transferring employees. In particular, an Order is sought under s.319(1)(b) that the following enterprise agreements cover the applicant and non-transferring employees:

● University Programs Division (UPD) WA Staff Enterprise Agreement 2015,

● Melbourne Institute of Business and Technology Pty Ltd Employee Collective Agreement 2011,

● La Trobe Melbourne Enterprise Agreement 2015,

● Queensland Institute of Business and Technology Pty Ltd Enterprise Agreement 2015-2018,

● CELUSA Agreement 2009, and

● Eynesbury College Academy of English Agreement 2010.

(Enterprise Agreements)

[2] Further to the application, Navitas also filed an affidavit of Rob Lourey, Group General Manager, Human Resources.

Background

[3] By way of background the applicant submitted that:

“It (Navitas) is the parent company of a group of companies that together operate the education business known as Navitas. Navitas includes a number of discrete education streams including Colleges that provide University Pathway courses to allow students to qualify for their preferred tertiary courses (Navitas UPA). Navitas UPA operate Colleges in Australia…
Until around 17 April 2017, each College will have operated as a subsidiary of Navitas, and a separate employer of the teaching and non-teaching employees in that College

Navitas are currently restructuring its operations across Navitas UPA in Australia, and key aspects of the restructure include:

a) transferring the employment of teaching and non-teaching employees in the Colleges from a number of group companies to Navitas;

b) an outcome that Navitas is to become the consolidated employer of College employees in Australia, which Navitas intends will be effecting from 17 April 2017 in the case of employees who are paid fortnightly, and 1 May 2017 in the case of employees who are paid for monthly (Transfer Date); and

c) Navitas will operate a streamlined human resources administration across all Colleges, including payroll, reporting, leave and other human resource processes.”

[4] On 13 March 2017 the Commission directed that:

a) by 20 March 2017 the applicant must email a copy of the directions, the application and the proposed Orders to transferring employees, anticipated transferring employees, the Independent Education Union (IEU) and the National Tertiary Education Union (NTEU).
b) by 27 March 2017 any employee or any organisation which opposed the making of the proposed Orders must file in the Commission and serve on the applicant submissions, written statements and documents they relied upon in opposition to the proposed Orders; and
c) the applicant must file a statutory declaration confirming compliance with direction (a).
d) if no opposition was received to the proposed Orders, the matter would be determined on the papers.

(Directions)

[5] On 21 March 2017 Ms Paula Bayliss, Head of Human Resources at Navitas, filed a statutory declaration confirming that the applicant had complied with direction (a).
[6] On 24 March 2017 the IEU South Australia Branch emailed the Commission advising that, with respect to the South Australian entities (CELUSA and Eynesbury College Academy of English) the IEU is generally supportive of the application and would be willing to agree on the basis that the applicant provided undertakings about:

a) consultation and negotiation with staff and the IEU around any proposed standard terms and conditions of employment; and
b) a longer period of transition of employment to allow for all individual offers to be confirmed as being accurate.

[7] On 27 March 2017 the NTEU emailed the Commission advising that it was generally supportive of the application, however supported the IEU’s request for undertakings.
[8] On 28 March 2017 the applicant emailed the Commission and noted the following regarding the responses filed by the IEU and NTEU:

a) both unions generally supported the application,

b) neither of the unions set out any objection to the application or the proposed Orders,

c) neither of the unions raised matters or concerns which traverse the matters the Commission must take into consideration under s.319(3) of the Act,

d) the undertakings requested by the unions are not relevant to any matter the Commission must take into consideration under s.319(3) of the Act, and

e) the unions did not file any submissions, written statements or other material they could have relied upon in opposition to the application.

[9] The applicant submitted that because neither union filed any material in opposition to the application, it relied on the original application and affidavit of Mr Lourey.
[10] On 28 March 2017 the Commission emailed the parties and acknowledged the correctness of the matters raised by the applicant on 28 March 2017. The Commission directed that, unless any objection was raised by close of business Wednesday, 29 March 2017, the Commission, as presently constituted, intended to grant the application on the papers.
[11] No opposition was received.
[12] On 5 April 2017 the applicant emailed the Commission advising that some of the material facts to the application had changed. It advised that the transfer of employees under the CELUSA Agreement 2009 and Eynesbury College Academy of English Agreement 2010 was to be postponed to a date later than 17 April 2017, however that date had not yet been determined.
Relevant legislation
[13] Section 319(3) sets out the matters that the Commission must take into account when issuing an order pursuant to s.319.

“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.”

[14] In his affidavit, Mr Lourey addressed the matters that I am required to consider when issuing an Order under s.319.

Views of the new employer - s.319 (3)(a)(i)

[15] With respect to the views of the new employer, Mr Lourey submitted that:

“26. Navitas has a strong preference for the Enterprise Agreements covering any non-Transferring Employees. If the Enterprise Agreements covered non-Transferring Employees it would provide a degree of industrial stability and certainty, when compared to the alternative of having the same classification of employee employed under the Enterprise Agreement or modern award depending on whether they were employed before or after the transfer. Granting the order sought would ensure the existing pay and other conditions continue in each College. If Navitas’ HR and Administration team had to operate two different industrial instruments, this would create more work for Navitas human resources.

27. Navitas also recognises that differing terms for employees performing the same work has the potential to cause discontent or disputed in the workplace, which could divert our focus and resources away from our primary purpose of delivering services to College students. I am concerned about the extra administrative time and resources that may be required to accommodate the non-Transferring Employees if they were covered by an Award and not the relevant Enterprise Agreement. While I am not in a position to precisely estimate the actual cost of this additional time and resources, based on my management experience I have no doubt it would impose extra time and cost and impact our productivity and divert our focus away from ways and means of delivering excellence in our pathways education programs to students, as well as building staff engagement in order to improve the quality of those education services.”

Views of the employees who would be affected by the order – s.319 (3)(a)(ii)

[16] Between 13 March 2017 and 17 March 2017 the applicant emailed a copy of the Directions to each employee covered by the Enterprise Agreements. The Directions invited any employee to file material if it opposed the application. No opposition from any employee was received.
[17] Noting that the proposed Orders related to non-transferring employees (i.e eventually future employees) it is not surprising that no submission was received from that cohort. In this respect s.319(3)(a)(ii) is not relevant to this application.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment - s.319 (3)(b)

[18] With respect to whether any employee would be disadvantaged if the proposed Orders were issued, Mr Lourey submitted that:

“28. I am not aware of any circumstances where a non-Transferring Employee would be better off not being covered by the Enterprise Agreement that covers the Transferring Employees in each of the Colleges.

29. Based on my experience…I consider that the process required to ensure compliance with two separate industrial instruments would cause significant disadvantage…including by increasing the human resources and administration costs associated with complying and conducting business consistently with the requirements of two industrial instruments.”

Expiry date of the agreement - s.319 (3)(c)

[19] The Expiry date for the Enterprise Agreements are listed below:

Agreement	Expiry Date
University Programs Division (UPD) WA Staff Enterprise Agreement 2015,	30/06/2018
Melbourne Institute of Business and Technology Pty Ltd Employee Collective Agreement 2011,	31/01/2014
La Trobe Melbourne Enterprise Agreement 2015,	30/06/2017
Queensland Institute of Business and Technology Pty Ltd Enterprise Agreement 2015-2018,	31/12/2018
CELUSA Agreement 2009	30/06/2012
Eynesbury College Academy of English Agreement 2010	30/06/2012

Productivity – s.319 (d)

[20] Mr Lourey submitted that making the proposed Order would not negatively impact the productivity of Navitas or that non-transferring employees would be less productive if covered by the relevant Enterprise Agreements.

Economic disadvantage - s.319 (3)(e)

[21] Mr Lourey submitted that Navitas was aware of and consents to any economic disadvantage suffered, and would not regard the disadvantage as “significant”.

Degree of business synergy - s.319 (3)(f)

[22] With respect to the degree of business synergy, Mr Lourey submitted:

“32. If the Orders are not granted, a non-Transferring Employee employed by Navitas at a Navitas UPA College would most likely be covered by either the Educational Services (Post-Secondary Education) Award 2010, or at the Eynesbury High School in Adelaide either the Educational Services (Schools) General Staff Award 2010 or the Educational Services (Teachers) Award 2010.

33. ... these Awards do not cover the Transferring Employees, who are covered by the Enterprise Agreement in place at their respective Colleges. While the Award is designed for employers and employees in the education sector, there is no obvious business synergy between the Enterprise Agreements and the Award.”

Public interest - s.319 (3)(g)

[23] The applicant submitted that to the extent that the administrative restructure being undertaken by Navitas will trigger the transfer of business provisions in the Act, the Act ought to facilitate a smooth restructure which will preserve and not disturb the minimum terms and conditions of employment.

Conclusion

[24] Taking into account each of the matters set out in s.319(3) the Commission, as presently constituted, is satisfied that the Order sought should be granted.
[25] An Order to that effect will be issued with this decision.

COMMISSIONER

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