NTI Limited T/A NTI

[2020] FWC 552

[2020] FWC 552

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees

NTI Limited T/A NTI
(AG2019/5088)

Banking finance and insurance industry
COMMISSIONER SPENCER	BRISBANE, 4 FEBRUARY 2020

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

[1] An application pursuant to s.318 of the Fair Work Act 2009 (the Act) was made by NTI Limited T/A NTI (the Applicant) for an order relating to an instrument covering a new employer and transferring employees.

[2] The Applicant sought an Order that the IAG Enterprise Agreement 2016 (the Agreement) will not cover the Applicant and all transferring employees from Insurance Australia Group Limited and Insurance Manufacturers of Australia Pty Ltd ('IAG") from the date of the Order. The Order sought would revert these employees to the Banking Finance and Insurance Award 2010 from the date of the Order.

[3] The Applicant sought the application on the basis that the Order sought would standardise the terms and conditions of employment across the Applicant and would promote a cohesive workplace culture, and reduce costs incurred in the administration of employment conditions.

[4] The Finance Sector Union of Australia (FSU) requested a copy of the application and upon receipt of this, the FSU advised my Chambers that they did not intend to make submissions in relation to the application, noting that staff had voted unanimously to revert to the Award.

[5] The Applicant provided the following background to the application:

•  “The Applicant currently employs approximately 350 employees under the Banking, Finance and Insurance Award 2010.

•  48 out of the 350 employees are currently employed outside of the Award in that they are covered by enterprise agreements.

•  Out of the 48 employees, 26 employees were transferred from IAG and are covered by the JAG Enterprise Agreement 2016. The remainder of the employees are covered by a different Enterprise Agreement, namely the Suncorp Group Enterprise Agreement 2015 and their coverage is the subject of another F40 Application lodged with the Commission.

•  The effect is that the Applicant's employees are covered by three different instruments.

•  The transfer of the IAG employees to the Applicant took effect on 4 April 2017.

•  The Applicant wishes to align the terms and conditions of employment for all of its employees.”

RELEVANT LEGISLATION

[6] Pursuant to s.313 of the Act:

“313 Transferring employees and new employer covered by transferable instrument

(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:

(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer…

(3) This section has effect subject to any FWC order under subsection 318(1).”

[7] Further, s.318 of the Act relevantly provides:

“318 Orders relating to instruments covering new employer and transferring employees

(1) 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.

(2) 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).

(3) In deciding whether to make the order, 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.

(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

Section 318(1)(a)(i): The views of the new employer

[8] Ms Susan O’Brien, Head of People and Capability of the Applicant provided an affidavit in support of the application. Ms O’Brien stated in relation to the views of the employer, that currently, the Applicant’s employees are covered by three different instruments. The Applicant wishes to align the terms and conditions of employment for all of its employees, as this would provide a uniform system of entitlements and benefits. Ms O’Brien stated that administering three separate sets of entitlements and benefits under three separate instruments is an unnecessary administrative burden.

Section 318(1)(a)(ii): The views of the employees who would be affected by the order

[9] The Applicant submitted that the employees would support the making of the Order because:

•  “The Applicant has engaged in a comprehensive communication process of each of the transferring employees.

•  During the month of July and August 2019, the Applicant provided the transferring employees with documentation explaining that the Applicant's view of having all the employees covered under one industrial instrument.

•  All of the employees were provided with a comprehensive comparison between their existing industrial instrument and what they would be entitled under the Banking, Finance and Insurance Award 2010 in conjunction with the Applicant's policies.

•  Out of the 26 transferring employees, all of them voted in favour of them being covered by the Banking, Finance and Insurance Award 2010 in conjunction with the Applicant's policies.”

Section 318(1)(b): Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[10] The Applicant submitted that the employees would not be disadvantaged by the Order in relation to their terms and conditions of employment because:

•  “The transferring employees will not be disadvantaged by the order.

•  The transferable instrument in conjunction with the Applicant's policies contains terms and conditions that are more beneficial than the IAG Enterprise Agreement 2016. These are outlined below:

•  The employees will receive two additional days of compassionate leave

•  If employees are on parental leave as secondary carer and become the primary carer, they will receive 14 weeks parental leave as opposed to 5 weeks

•  The employees' potential to earn bonuses will now be based on annual salary plus superannuation (instead of just base annual salary)

•  The employees' have the potential to earn bonuses of up to 25% as opposed to 10% to 20%

•  After 10 years of service the employees' superannuation will increase to 15% as opposed to 13%

•  The employees will receive a career day whereas they don't currently enjoy this benefit

•  There are two items in which a reduction will occur:

•  A reduction in the cap on redundancy payments decreasing from 75 to 52 weeks

•  Secondary carer's leave will reduce by one week.”

Section 318(1)(c): The nominal expiry date of the transferable instrument

[11] The nominal expiry date of the transferable instrument is 31 May 2019.

Section 318(1)(d): Whether the transferable instrument would have a negative impact on the productivity of the Applicant's workplace

[12] The Applicant submitted that the transferable instrument would not have a negative impact on the productivity of the Applicant’s workplace. Stating that they sought to standardise the terms and conditions of employment across its business, on the basis that such arrangements will promote a cohesive workplace culture, and reduce costs incurred in the administration of employment conditions.

[13] The Applicant further submitted that should the transferring employees continue to be employed under the IAG Enterprise Agreement 2016, the Applicant would be required to maintain distinctive and disparate employment systems which will defeat the promotion of a cohesive workplace culture, and result in ongoing costs associated with the administration of multiple sets of employment conditions.

Section 318(1)(e): Whether the Applicant would incur significant economic disadvantage as a result of the transferable instrument covering the Applicant

[14] The Applicant submitted that they would incur minimal economic disadvantage if the transferable instrument was to continue to apply to all its employees.

Section 318(1)(f): The degree of business synergy between the transferable instrument and any workplace instrument that already covers the Applicant

[15] The Applicant conceded that there is a degree of business synergy between the transferable instrument (IAG Enterprise Agreement 2016) and the Banking, Finance and Insurance Award 2010.

Section 318(1)(g): The public interest

[16] The Applicant stated in their application that the notion of public interest refers to matters that might affect the public as a whole including the maintenance of proper industrial standards. The Applicant submitted that it would be contrary to the public interest if the industrial instrument (IAG Enterprise Agreement 2016) was to be terminated and there was no applicable Award covering the employees.

[17] The Applicant submits that the employees affected by this application would be covered by the Banking, Finance and Insurance Award 2010, therefore the public interest would not be affected by the making of the order.

CONCLUSION

[18] Taking into account the matters in 318(1) and (2) of the Act, I am satisfied that it is appropriate to make an Order in the terms as out set by the Applicant. The transferring employees will be covered by the Award from 3 February 2020.

[19] I Order accordingly.

COMMISSIONER

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