Norfina Limited
[2024] FWC 2126
•9 AUGUST 2024
| [2024] FWC 2126 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319––Enterprise agreement
Norfina Limited
(AG2024/2900)
| Banking finance and insurance industry | |
| DEPUTY PRESIDENT CLANCY | MELBOURNE, 9 AUGUST 2024 |
Application for an order relating to instruments covering new employer and non-transferring employees.
On 31 July 2024, Norfina Limited (the Applicant) applied to the Fair Work Commission (the Commission) pursuant to s.319 of the Fair Work Act 2009 (Cth) (the Act) for an order in relation to a transfer of business.
The Applicant seeks an order for the Suncorp Group Enterprise Agreement 2015 (the Agreement) to cover the Applicant and any non-transferring employees who perform, or are likely to perform, transferring work as employees of the Applicant and are employed in roles that fall within the classifications under the Agreement. It seeks an order that would come into operation in relation to each non-transferring employee from the later of 31 July 2024 and the date that the non-transferring employee starts to perform the transferring work with the Applicant. The Applicant filed a witness statement of Jessica Main, Talent and Culture Consultant and Senior Lawyer of Australia and New Zealand Banking Group Limited (ANZ), who informed the Commission that the impacted non-transferring employees will commence their employment with the Applicant on 12 August 2024.[1]
If the order sought is not granted, the impacted new non-transferring employees, who are subsequently engaged by the Applicant in roles within classifications in the Agreement, will otherwise be covered by the Banking, Finance and Insurance Award 2020 (the Award).
Clause 6 of the Agreement relevantly states that the parties covered by the Agreement are: “(a) Suncorp Staff Pty Ltd; (b) Suncorp Insurance Services Limited; (c) Australian Associated Motor Insurers Limited; and (d) Each of their employees who perform work from time to time in one of the classifications outlined in Schedule 1 to this Agreement.” As outlined in the decision issued by Deputy President Sams on 4 December 2014,[2] the Agreement was negotiated with the Finance Sector Union of Australia (the FSU) and the Australian Municipal, Administrative, Clerical and Services Union (the ASU) (collectively, the Unions) and five non-Union employee bargaining representatives.[3] The Unions are covered by the Agreement pursuant to s.201(2) of the Act.[4]
The relevant legislation
Part 2-8 of Chapter 2 of the Act describes when a transfer of business occurs and s.312(1) of the Act 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.
Section 311 of the Act relevantly provides:
“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.
…
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.” (bold and italicised text in the original)
Section 317 of the Act relevantly provides:
“317 FWC may make orders in relation to a transfer of business
This Division provides for the 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.” (bold and text in the original)
Section 319 of the Act relevantly provides:
“319 Orders relating to instruments covering new employer and non‑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 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) 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 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 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 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.” (bold and italicised text in the original)
Section 319(4) of the Act relevantly states:
“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.”
Background
The Applicant says that Suncorp Group Limited was a financial services business that offered both banking and insurance services. It asserts that in July 2022, the ANZ reached an agreement with Suncorp Group Limited to purchase Suncorp Bank. The Applicant says that employees who performed work for Suncorp Bank were employed by one of three entities covered by the Agreement: Suncorp Staff Pty Ltd, Suncorp Insurance Services Limited, or Australian Associated Motor Insurers Limited (Entities). It states that, to support the transition of Suncorp Bank to ANZ, these employees were offered employment with Suncorp-Metway Limited (SML) that was conditional on completion of the sale. It also says that SML was a wholly owned subsidiary of Suncorp Group Limited prior to the sale.
The Applicant asserts that on 31 July 2024, completion of the sale occurred. The statement of Ms Main states that the sale was effected by the transfer of shares in SML from Suncorp Group Limited to ANZ.[5] The Applicant has outlined in the Form F40 application that on the same date, employees who accepted that offer of employment with SML commenced employment with SML, SML became a wholly owned subsidiary of ANZ, and the registered company name of SML changed to Norfina Limited.
Ms Main’s statement outlines that the Applicant currently employs approximately 3,000 employees, being former employees of Suncorp Group Limited who transferred employment to SML (now known as Norfina Limited) on completion.[6] It also outlines that, as at 31 July 2024, 12 new, non-transferring employees accepted employment with the Applicant and that their employment will commence on 12 August 2024.[7] The statement further indicates that the Award would apply to 11 of the new, non-transferring employees in their employment with the Applicant.[8]
Transfer of business
I am satisfied that there was a transfer of business within the meaning of s.311 of the Act from Suncorp Group Limited to the Applicant and that the Applicant is a “new employer” pursuant to s.311(1) of the Act, having regard to the material before me, because:
the employment of each of the employees with one of the three Entities in Suncorp Group Limited terminated on 31 July 2024 (s.311(1)(a) of the Act);
the employees commenced employment with SML on 31 July 2024 (i.e. within three months after the termination with one of the three Entities) (s.311(1)(b) of the Act);
the work performed by the employees for SML will be the same, or substantially the same, as the work performed for their old employing entity, being one of the three Entities (s.311(1)(c) of the Act); and
there being a connection between Suncorp Group Limited and the Applicant (s.311(1)(d), as described in s.311(6) of the Act, in that the Applicant (formerly called SML) was an associated entity of each of the Entities in Suncorp Group Limited when the transferring employees became employed by the Applicant.
As I am satisfied that the Applicant is a “new employer”, as defined pursuant to s.311(1) of the Act, it may apply to the Commission under s.319 of the Act for orders relating to a transferable instrument.
Transferable instrument
As it is an enterprise agreement that was approved by the Commission on 4 December 2014, the Agreement is a transferable instrument pursuant to s.312(1)(a) of the Act.
Section 314 of the Act provides that the Agreement covers the Applicant and any non-transferring employees, subject to any order of the Commission under s.319(1) of the Act.
Who may apply for an order?
The application has been made by Norfina Limited, the new employer. This meets the requirements of s.319(2) of the Act.
The Applicant seeks an order that the Agreement covers it and any non-transferring employees pursuant to s.319 of the Act.
Matters that the Commission must take into account – Section 319(3)
Section 319(3)(a) the views of the new employer or a person who is likely to be the new employer and the employees who would be affected by the order
The Applicant, the new employer, has made the application under s.319 of the Act and supports the making of the order sought.
The Applicant submits that 100% (11 of 11) of the impacted new, non-transferring employees have confirmed in writing to the Applicant that they support the making of the order as sought and that no opposition was received, following the Applicant’s requests for their views by email and telephone.[9]
Having regard to the matters raised in relation to s.319(3)(a), I have formed the view that they weigh in favour of granting the order sought.
Section 319(3)(b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
The Applicant submits that granting the order sought would result in the non-transferring employees “having overall more beneficial terms and conditions of employment” than if the Award applied, particularly in relation to the applicable rates of pay that would apply.
According to the statement of Ms Main, material terms in the Agreement “are more and less favourable than the Award.[10] An attachment to the statement of Ms Main provides a list of key provisions of the Agreement that are more favourable to employees than under the Award, such as provisions relating to rates of pay, the on-call allowance, overtime, meal allowances, and redundancy entitlements.[11]
Although the witness statement does not explain the terms of the Agreement that are less favourable than those provided in the Award, I note the Commission has previously satisfied itself that, in relation to the Agreement, the requirements of s.186 of the Act have been met (which includes the requirement for the Commission to be satisfied that the Agreement passes the better off overall test). Having considered all the material before me, I am satisfied that the impacted non-transferring employees will not be disadvantaged by the order in relation to their terms and conditions of employment. I am also satisfied that transferring employees will not be disadvantaged. Therefore, I consider this factor weighs in favour of making the order sought.
Section 319(3)(c) if the order relates to an enterprise agreement – the nominal expiry date of the agreement
I note that the Agreement has a nominal expiry date of 27 November 2018.[12] This does not weigh against making the order sought.
Section 319(3)(d) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
The Applicant submits that the making of the order may in fact have a positive impact on productivity as it will avoid the need to implement two different industrial instruments for the period between the completion of the sale on 31 July 2024 and the making of a new enterprise agreement. It says that the making of the order would be consistent with the object of Part 2‑8 of the Act, which is to provide a balance between the protection of employees’ terms and conditions of employment under enterprise agreements and the interests of employers in running their enterprises efficiently.
These submissions are not without merit, and I have formed the view these factors weigh in favour of making an order. I do not apprehend the Agreement having a negative impact on the productivity of the Applicant’s workplace.
Section 319(3)(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
Another of the attachments to the statement of Ms Main is an email sent to the impacted non-transferring employees on 29 July 2024.[13] This email relevantly states that the Agreement “contains more beneficial terms and conditions overall than the … Award” and advised the impacted non-transferring employees that the Applicant would be applying for an order for the Agreement to apply to them, and that such order sought “will mean that all Suncorp Bank employees in similar roles are covered by a common set of terms of conditions, which will promote consistency and equity in our employment arrangements.” (underlining added)
I agree that having a single instrument apply to transferring and non-transferring employees is likely to result in the promotion of consistency and equity in the Applicant’s employment arrangements. Further, I consider the benefits derived from having a single instrument applying to transferring and non-transferring employees is likely to result in some economic advantage, including by removing operational inefficiencies and decreasing the administrative burden associated with applying the different instruments (with respect to employees performing the same sort of work). I am satisfied that this would not result in a significant disadvantage to the Applicant because any economic disadvantage that might arise as a result of the more beneficial terms and conditions having to be applied under the Agreement would be ameliorated by the benefits of consolidation. I have formed the view that s.319(3)(e) weighs in favour of granting the order sought.
Section 319(3)(f) the degree of business synergy between the transferable instrument and any
workplace instrument that already covers the new employer
I am satisfied there would be a degree of synergy between the Agreement and the Award, just as there are some differences. However, as outlined above, I consider affording the Applicant a single framework of regulation will enhance the “promotion of consistency and equity” in its employment arrangements, and the removal of operational inefficiencies and a decrease in the administrative burden associated with applying the different instruments and as such, will render some economic advantage. I am therefore satisfied this factor does not weigh against the granting the order sought.
Section 319(3)(g) the public interest
The Applicant contends that the granting of the order sought would be consistent with the object of Part 2-8 of the Act, which is to provide a balance between:
a)the protection of employees' terms and conditions of employment under enterprise agreements, certain modern awards and certain other instruments; and
b)the interests of employers in running their enterprises efficiently.
Prior to its approval, the Agreement was negotiated with the FSU, the ASU and five non-union employee bargaining representatives. I observe that the FSU is entitled to represent the industrial interests of both the transferring and non-transferring employees and that the Applicant consulted with the FSU in relation to the terms of this application. On 31 July 2024, the FSU confirmed that it had reviewed the draft application and supplementary material and advised the Applicant that it supports this application and the making of the order sought.[14]
As outlined above, the Applicant is seeking an order that would come into operation in relation to each non-transferring employee from the later of 31 July 2024 and the date that the non-transferring employee starts to perform the transferring work with the Applicant. This is consistent with s.319(4) of the Act. I also note that the Applicant has made a commitment to the FSU to negotiate a new agreement covering the transferring and non-transferring employees.
Given these circumstances and having regard to the material before me, I am satisfied that there are no public interest reasons weighing against making of an order that operates in accordance with s.319(4) of the Act.
Conclusion
Having considered each of the matters set out in s.319(3) of the Act, I am satisfied that the following order should be made, with effect on and from 12 August 2024 (s.319(4)(a)):
On and from 12 August 2024, the Suncorp Group Enterprise Agreement 2015 will cover non-transferring employees who perform, or are likely to perform, transferring work for Norfina Limited (being work that is the same, or substantially the same, as the work performed by transferring employees under the Agreement prior to those employees being employed by the Norfina Limited), and are employed in roles that fall within the classifications under the Agreement.
An order to this effect will be issued along with this decision.
DEPUTY PRESIDENT
[1] Statement of Jessica Main (undated) filed on 31 July 2024 at [11]
[2] Suncorp Staff Pty Ltd and others [2014] FWCA 8569
[3] Ibid at [1]
[4] Ibid at [4]
[5] Statement of Jessica Main (undated) filed on 31 July 2024 at [4]
[6] Ibid at [9]
[7] Ibid at [11]
[8] Ibid at [12]
[9] Ibid at [13]-[16]
[10] Ibid at [20]; JM-3
[11] JM-1
[12] Correction to Decision –Suncorp Staff Pty Ltd and others [2014] FWCA 8569 (8 December 2024)
[13] Statement of Jessica Main (undated) filed on 31 July 2024 at [13]; JM-2
[14] Statement of Jessica Main (undated) filed on 31 July 2024 at [21]-[23]; JM-3
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