Network Turbine Solutions Pty Ltd
[2021] FWC 265
•22 JANUARY 2021
| [2021] FWC 265 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Network Turbine Solutions Pty Ltd
(AG2020/3900)
QANTAS AIRWAYS LIMITED (AWU, AMWU, CEPU) BRISBANE BASE MAINTENANCE AGREEMENT 5
Airline operations | |
DEPUTY PRESIDENT BEAUMONT | PERTH, 22 JANUARY 2021 |
Decision regarding application under s 318 of the Fair Work Act 2009 (Cth) for an order about instruments covering a new employer and transferring employees.
[1] Network Turbine Solutions Pty Ltd (Network Turbine)has applied for orders under s 318 of the Fair Work Act 2009 (Cth) (Act) relating to the transfer of two employees (Transferring Employees) from Qantas Airways Limited (Qantas) to its business.
[2] Over the course of the last few years (since 2017), Qantas has employed the Transferring Employees in the positions of Apprentice Aircraft Maintenance Engineer Mechanical. As such, those same employees are covered by the Qantas Airways Limited (AWU, AWMU, CEPU), Brisbane Base Maintenance Agreement 5 2018 1 (Qantas Agreement).
[3] The Qantas Agreement covers Qantas, aircraft maintenance engineers (including apprentices), aircraft workers and trade assistants working in any base maintenance facility in Brisbane employed by Qantas, the Australian Workers’ Union (AWU), The Automotive, Food, Metals and Engineering, Printing and Kindred Industries Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (collectively the Unions).
[4] The Transferring Employees have been offered, and have accepted, an Aircraft Maintenance Engineer (AME) position with Network Turbine. In light of the offer of employment, the Transferring Employees will commence employment with Network Turbine within three months after the termination of their employment with Qantas. Furthermore, the work that they will be performing with Network Turbine will be the same, or substantially the same, as the work they performed for Qantas. It should also be noted that Qantas and Network Turbine are associated entities within the meaning given by s 50AAA of the Corporations Act 2001 (Cth).
[5] When one considers the circumstances presented in light of s 311(1) of the Act, it is apparent that there is a transfer of business from Qantas to Network Turbine and it, therefore, follows that the Qantas Agreement is a ‘transferable instrument’ – a term that is defined in s 312(1) of the Act. As a consequence, if the orders sought are not made, the Qantas Agreement will cover Network Turbine and the Transferring Employees – Mr Cox and Mr Rooney, in relation to their work as AMEs with Network Turbine, rather than Network Turbine’s own enterprise agreement – the Network Turbine Solutions Engineering Enterprise Agreement 2016 2 (Network Agreement).
[6] Network Turbine now seeks the following orders under s 318(1) of the Act:
1) The Qantas Airways Limited (AWU, AMWU, CEPU) Brisbane Base Maintenance Agreement 5 2018 does not and will not cover Network Turbine Solutions Pty Ltd and:
a) Mr Michael Cox; and
b) Mr Benjamin Rooney,
in respect of their work as an aircraft maintenance engineer with Network Turbine Solutions Pty Ltd.
2) In accordance with s 318(4) of the Act, this Order shall come into operation:
a) in respect of Mr Cox, at the later of the time when Mr Cox becomes employed by Network Turbine Solutions Pty Ltd and the day on which this order is made;
b) in respect of Mr Rooney, at the later of the time when Mr Rooney becomes employed by Network Turbine Solutions Pty Ltd and the day on which this order is made.
[7] Upon receipt of the application, my Chambers contacted the Unions seeking confirmation it was in support of the orders sought. No objection was raised to the application, and with the understanding that Network Turbine was content for the application to be determined on the papers, I proceeded to do just that. It is observed that the application contained detailed grounds and submissions and was accompanied by witness statements from the Transferring Employees and a Mr Brenton Gale, the Line Maintenance Manager for Network Turbine, in addition to several attachments.
[8] In short, I have reviewed the application documentation and the accompanying material. These documents outline the factual circumstances which have given rise to the application. Further, the submissions contained in the application address the relevant legislative requirements which provide a proper basis for the making of the orders sought.
[9] As noted, I am satisfied this circumstance is a transfer of business and that the Qantas Agreementis a transferable instrument. If the order under s 318(1)(a) was not made, then by virtue of s 313(1)(a) the Qantas Agreement would cover the Transferring Employees notwithstanding their employment with Network Turbine. I have considered all the factors set out in s 318(3) and have concluded that it is appropriate and not contrary to the public interest to make orders sought under ss 318(1)(a)..
[10] In accordance with s 318(4), the orders 3 shall have effect from the time when the Transferring Employees become employed by Network Turbine or the date of the orders, whichever is the later. My detailed reasons for granting the orders follow.
Legislative framework
[11] Section 318 of the Act sets out the circumstances in which an order such as that sought by Network Turbine may be made by the Commission:
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.
Consideration of matters that the Commission must take into account
[12] By way of background, Network Turbine is a wholly owned subsidiary of Qantas. 4 It operates alongside Network Aviation Australia Pty Ltd (Network Aviation), which is another wholly-owned Qantas subsidiary.5 Together, Network Aviation and Network Turbine operate regular passenger transport and air charter flight services out of Perth to regional Western Australia. Network Turbine is responsible for aircraft servicing, maintenance, and ground operations (including baggage handling and fleet presentation) and other logistical activities. Whereas, Network Aviation is responsible for the management and operation of pilots, cabin crew and other support staff.
[13] Network Turbine conducts line maintenance activities on two types of aircraft. 6 Mr Gale explained that line maintenance work is considered to be any maintenance work under an ‘A Check’. An ‘A Check’ is an inspection carried out periodically on an aircraft once it has completed 750 flight hours of 121 days. Line maintenance includes identifying incoming faults, undertaking periodic servicing, and completing any unplanned maintenance work.7
[14] In contrast to the work performed by Network Turbine, the Engineering Operations at Qantas’ Brisbane Airport, service both Qantas’ ‘mainline’ fleet of aircraft (‘branded’ fleet of larger aircraft that conduct international flying), as well as certain aircraft for other international airlines. 8 The work undertaken includes ‘base maintenance’. This type of maintenance comprises the most significant and complex aircraft maintenance work. It involves completion of an aircraft’s most extensive inspections, preventative maintenance tasks and complex repairs. Often the work requires the complete or substantial disassembly of an aircraft or part of an aircraft, and can often take up to three months to complete.9
The views of Network and the Transferring Employees
[15] Network Turbine expressed that the orders sought should be made as they would provide Network Turbine with certainty, consistency and efficiency in respect of the application of industrial instruments to its operations.
[16] Mr Gale gave detailed evidence of the differences in the roster arrangements between Network Turbine and Qantas. The differences were perhaps unsurprising given that the two airlines have different volumes and type of aircraft and therefore, maintenance requirements. These factors gave rise to distinct rostering arrangements under the Qantas Agreement and Network Agreement. The differences in rostering arrangements were not insignificant. Mr Gale expressed:
[I]f the order is not made, the transfer of the Qantas EA to Network Turbine would have a negative impact on Network Turbine’s business because the Qantas EA contains separate and distinct rostering and work rules that are more complex and not suited to the maintenance demands for operating local flights on smaller aircraft within regional Western Australia. 10
[17] The viability of employing the Transferring Employees was also touched on. Network Turbine urged that if the proposed orders were not granted, it would be extremely difficult to apply the Qantas Agreement in its current form to the work undertaken at Network Turbine. The effect of this – the possibility of not continuing the employment of the Transferring Employees.
[18] Evidence was given that the Transferring Employees had accepted employment with Network Turbine in full knowledge that the Network Agreement would need to apply to their employment. Both completed witness statements supporting the application and spoke of why the position with Network Turbine was an attractive proposition. 11 Factors referred to included the opportunity for career progression, an increase in salary, continued employment with the Qantas Group, work challenges and the completion of maintenance on smaller aircraft.
[19] There are no AME opportunities available at Qantas in Brisbane where the Transferring Employees are currently based. 12
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
[20] If the orders sought are made, then the Transferring Employees will receive an increase in their salaries in addition to securing an AME position, having been apprentices. At Qantas, the Transferring Employees received $50,799.32 per annum (exclusive of superannuation). At Network Turbine that amount increases to $74,306.00 per annum (exclusive of superannuation).
The nominal expiry date of the agreement
[21] The nominal expiry date of the Qantas Agreement is 20 June 2020.
Whether the Qantas Agreement would have a negative impact on the productivity of Network Turbine’s workplace
[22] Consideration of the impact concerning roster arrangements has been broadly outlined in discussing Network Turbine’s views. However, in his evidence, Mr Gale provides persuasive reasons as to the lack of synergy between the Qantas Agreement and the operations of Network Turbine. 13 This is particularly the case at paragraph 88 of his witness statement.
[23] The differences in terms and conditions of employment provided by the transferable instrument and Network Turbine’s own enterprise are significant. It can be readily perceived that administering the two instruments would not be without difficulty and would likely lead to a negative impact on productivity. Allowances and penalties provided by the Qantas Agreement are not aligned to those of Network Turbine. Consequently, there would be a disparity between the rates of pay of those whose terms and conditions were dictated by the Qantas Agreement compared with those receiving such conditions via the Network Turbine Agreement.
Whether Network Turbine would incur significant economic disadvantage as a result of the Qantas Agreement covering it
[24] Network Turbine submitted that the Qantas Agreement had the potential to cause significant economic disadvantage. According to Network Turbine, it would create additional administrative and financial complexity by requiring the application of different terms and conditions of employment and work rules to employees who performed the same or substantially similar work.
The degree of business synergy between the Qantas Agreement and the Network Turbine Agreement
[25] As traversed, the Qantas Agreement is reflective of the operations at the Brisbane Airport where base maintenance is undertaken. The difference between the two types of maintenance has given rise to two markedly different industrial instruments that reflect the distinctive character of their workplaces. One, focused on line maintenance and the need to roster employees over a 24 hour, seven days a week, period, and the other, on base maintenance, where the working hours could be perceived as your ‘standard’ Monday to Friday. Network Turbine presses that there is no to little business synergy between the Qantas Agreement and its own. Such an assertion is not misplaced.
The public interest
[26] The public interest in this context is influenced by the objects of this Part of the Act in s 309 and those adopted by the Act more broadly.
[27] There is public interest in ensuring that agreed and statutorily approved arrangements are not put aside lightly, and where they are to no longer apply, the interests of the employees concerned are safeguarded. 14 The absence of an overall disadvantage in the terms and conditions of employment of the Transferring Employees, the evident support of the Transferring Employees and lack of objection from relevant registered organisations for the change, in this case, are important considerations.
[28] Network Turbine submits that it is not contrary to the public interest to make the orders proposed by the application. I would agree. The Transferring Employees will enjoy employment in the AME positions for a period of two years in circumstances where their remuneration will increase significantly as will their experience. The internal recruitment of apprentices to trade qualified positions within a group of companies should not be discouraged in situations such as these.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<AE429005 PR726285 >
1 PR608543.
2 PR591649.
3 PR726343.
4 Witness Statement of Mr Brenton Mark Gale [2].
5 Ibid.
6 Ibid [23].
7 Ibid [17].
8 Ibid [20].
9 Ibid [17].
10 Ibid [83].
11 Witness Statement of Mr Michael Francis Cox and Witness Statement of Mr Benjamin James Rooney.
12 Witness Statement of Mr Brenton Mark Gale [36].
13 Ibid [84] – [89].
14 Linfox Australia Pty Ltd [2013] FWC 3384 [29].
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