Optus Administration Pty Limited v Australian Municipal, Administrative, Clerical and Services Union
[2010] FWA 3567
•5 MAY 2010
[2010] FWA 3567 |
|
DECISION |
Fair Work Act 2009
s 318 - Application for an order relating to instruments covering new employer and transferring employees in awards
Optus Administration Pty Limited
v
Australian Municipal, Administrative, Clerical and Services Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia-Communications Division
(C2010/3316)
DEPUTY PRESIDENT SAMS | SYDNEY, 5 MAY 2010 |
Application for an order relating to instruments covering new employer and transferring employees in awards.
[1] On 19 April 2010, I made the following orders [PR996355]:
1. That the Virgin Mobile (Australia) Pty Ltd Award 2003 [AP834608] will not cover the applicant, Optus Administration Pty Ltd and any employee of the applicant, formerly employed by Optus Mobile Investments Pty Ltd.
2. This order will take effect on and from 19 April 2010.
[2] These orders were made seven days after the hearing of this application on 12 April 2010. At the hearing, the applicant was represented, with permission, by Mr S Meehan, Solicitor for Optus Administration Pty Ltd. Mr D Dwyer appeared for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Communications Division (CEPU) and Mr J Nusifora appeared by video link for the Australian Municipal, Administrative, Clerical and Services Union (ASU). At the conclusion of the hearing on that day, I indicated that I was prepared to make the orders sought by the applicant, but in recognition of Mr Nusifora’s request to review further documents tendered in court that day, I proposed to delay making the orders for seven days to accommodate Mr Nusifora’s request. As no further communications were received from the ASU, the orders were made and I now publish my reasons for doing so.
[3] On 30 March 2010, the applicant made an application, pursuant to s 318 and 319 of the Fair Work Act 2009 (‘the Act’) for orders in respect to some 109 employees of Optus Mobile who are working in the Virgin Mobile business in customer service, clerical and administrative positions. It is proposed to transfer the employees in May of this year from North Sydney to Macquarie Park. They will perform the same or substantially the same work they are currently performing.
[4] The factual background to the application is conveniently set out in the application as follows:
Background – the applicant
1. The applicant is a constitutional corporation.
2. Further, the applicant is a national system employer for the purposes of the Fair Work Act 2009 ("Act") and has standing to bring this application under s318(2) of the Act.
3. The applicant is a wholly owned subsidiary of SingTel Optus Pty Limited (ACN 052 833 208) ("SingTel Optus").
4. Among other things, the applicant employs employees and provides the services of those employees, under its direction, to other companies within the SingTel Optus group of companies.
5. The applicant is respondent to the Optus Award 2000 ("Optus Award").
6. The Optus Award was made pursuant to the Workplace Relations Act 1996 by the Australian Industrial Relations Commission, and is an enterprise award for the purposes of the Act.
7. Further, for the purposes of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 ("FW(TPCA) Act"), the Optus Award is an enterprise award based instrument.
8. The applicant is also covered by the Optus Employment Partnership Agreement (2009) ("EPA").
9. The EPA was approved, pursuant to the Act, by Fair Work Australia on 15 October 2009 and has been in operation since 22 October 2009.
10. The nominal expiry date of the EPA is 21 October 2012.
11. The EPA is, for the purposes of the Act, a single enterprise agreement.
12. The EPA is the only enterprise agreement which covers employees of the applicant.
13. The Optus Award and the EPA are the only transitional instruments (as defined in the FW(TPCA) Act) which apply to the applicant.
14. Since its incorporation in 1992, the applicant has operated with one enterprise agreement, which results in consistent minimum terms and conditions of employment for those of its employees who are covered by an industrial instrument. The enterprise agreements which have applied to the applicant since 1992 are: the Optus Enterprise Agreement 1992; the Optus Enterprise Flexibility Agreement 1994; the Optus Employment Partnership Agreement 1997; the Optus Employment Partnership Agreement 2000; the Optus Employment Partnership Agreement 2003; the Optus Employment Partnership agreement 2006; and the EPA.
Background - Optus Mobile Investments Pty Ltd
15. Optus Mobile Investments Pty Ltd ("OMI") is a constitutional corporation.
16. Further, OMI is a national system employer for the purposes of the Act.
17. OMI is a wholly owned subsidiary of SingTel Optus.
18. OMI is an associated entity of the applicant for the purposes of the Corporations Act 2001 and the Act.
19. OMI is bound by the Virgin Mobile (Australia) Pty Ltd Award 2003 ("Transferable Instrument") by reason of a transmission of business from Virgin Mobile (Australia) Pty Ltd ("VMA"), the named respondent to the Transferrable Instrument.
20. The Transferable Instrument was made pursuant to the Workplace Relations Act 1996 by the Australian Industrial Relations Commission, and is an enterprise award for the purposes of the Act.
21. Further, for the purposes of the Act and the FW(TPCA) Act, the Transferable Instrument is an enterprise award based instrument and a transferable instrument.
22. The Transferable Instrument is the only transitional instrument (as defined in the FW(TPCA) Act) which applies to OMI employees affected by this application.
23. OMI is not covered by any enterprise agreement made under the Act.
Background to the application
24. The applicant wishes to employ certain persons who are currently employed by OMI ("Transferring Employees") by offering those persons employment with the applicant which will commence within 3 months after the termination of their employment with OMI.
25. The applicant will offer employment to the Transferring Employees on terms and conditions which:
(a) overall, are no less favourable than the Transferring Employees' terms and conditions of employment with OMI;
(b) recognise each Transferring Employee's service with OMI as service with the applicant for the calculation of service related entitlements; and
(c) recognise each Transferring Employee's service with OMI as continuous service with the applicant for all purposes.
26. The work which will be performed by the Transferring Employees for the applicant will be the same, or substantially the same, as the work the Transferring Employees perform for OMI.
27. Some of the Transferring Employees are covered by the Transferrable Instrument.
28. All of the Transferring Employees who are covered by the Transferrable Instrument are capable of being covered by the Optus Award and the EPA.
29. As a consequence of the matters referred to in paragraphs 18, 24 and 26 above, there will be a transfer of business from OMI to the applicant for the purposes of the Act.
30. As a consequence of the matters referred to in paragraphs 21 and 29 above, and subject to FWA granting the orders sought by the applicant, the Transferrable Instrument will cover the Transferring Employees referred to in paragraph 27 above as soon as those Transferring Employees are employed by the applicant.
[5] The reasons for the application are set out in an affidavit of Mr Paul Leaver, General Manager, Optus Administration Pty Ltd, as follows:
All of the employees who transfer from Optus Mobile to Optus Administration who are covered by the Virgin Award are capable of being covered by the EPA. I do not believe that any employees who transfer from Optus Mobile to Optus Administration will be disadvantaged in relation to their terms and conditions of employment if the EPA applies to them as a consequence of the granting by Fair Work Australia of the order sought in this Application. My reasons for this belief are as follows:
(a) The salaries in the EPA for the employees who will transfer are more generous than those under the Virgin Award;
(b) There are other entitlements under the EPA that I believe significantly exceed those available under the Virgin Award. One example is the redundancy entitlements in clause 5.9 of the EPA. Another would be that the leave provisions for matters such as Parental Leave, Sick Leave and flexibility of Annual Leave and Long service Leave are much more beneficial to employees;
(c) There are few entitlements in the Virgin Award that appear to be more favourable, viewed in isolation, than the corresponding provision in the EPA. In this regard I refer to the comparative table annexed to the affidavit of Bruce Heddle. I believe that overall, the more favourable benefits under the EPA plus the general terms and conditions of employment with Optus Administration significantly outweigh the less favourable benefits.
[6] Mr Leaver also expressed the view that the Virgin Award would potentially have a negative impact on the productivity of the applicant, if it applied to the transferring employees, because:
(a) Optus Administration would have employees working in proximity to each other at Macquarie Park whose minimum terms and conditions of employment would be different. This would give rise to discontentment amongst staff, adversely affect the work environment, and undermine the culture of equity that now exists;
(b) Optus Administration would need to devote resources to the maintenance and management of two distinct employment systems. I believe it would be necessary to rewrite employment policies to accommodate the different entitlements under the EPA and Virgin award. In addition, because Optus utilises online employee training delivery it would be necessary to review certain training modules to reflect the existence and application of the Virgin Award to some Optus Administration staff.
[7] Ms Dianne Fahey, Human Resources Director for Virgin Mobile, dealt with the business changes in her affidavit and dealt with the staff briefing process concerning the changes. This included an online questionnaire which asked:
Whether, upon the transfer of your employment from Virgin Mobile to Optus, you prefer to have your minimum terms and conditions of employment covered by the Optus Employment Partnership Agreement 2009 (EPA)?
There were 29 responses to the survey - 25 answered ‘yes’ and four answered ‘no’. Mr Meehan submitted that significant weight should be given to this result.
[8] Mr Bruce Heddle, Solicitor for the applicant, also provided an affidavit, in which attached a comparative analysis of the terms and conditions of the Virgin Award and the Optus Employment Partnership Agreement (EPA). It was said that this comparison plainly demonstrated that the transferring employees would enjoy more favourable terms and conditions under the EPA, including in respect to salaries (through a general incentive scheme), parental leave and redundancy pay.
[9] Mr Dwyer supported the application and agreed that the transfer was a transmission of business covered by the terms of s 318 and 319 of the Act. He agreed that no employee will be disadvantaged by the transfer. He also noted undertakings given by the applicant that the service of any transferring employee from Optus Mobile Investments Pty Ltd (OMI) will be counted as continuous service for all purposes.
[10] Mr Nusifora indicated his Union’s preliminary support for the application.
CONSIDERATION
[11] Section 318(1) of the Act is expressed as follows:
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 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.
[12] The jurisdictional premise underpinning this application is that the proposed transfer of employees from OMI to Optus Administration Pty Ltd, is a ‘transfer of business’ as defined in s 311 of the Act. That section is as follows:
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.
[13] Mr Meehan submitted, correctly I think, that for abundant caution this application had been made to ensure that the parties’ legal obligations under the Act, were properly attended to. He further submitted that the proposed transfer of employees was a ‘transfer of business’, as defined, and if it was not, then there would be no necessity for this application. Mr Dwyer also agreed that the transfer of employees constituted a ‘transfer of business’.
[14] Based on the uncontested evidence and the submissions of the parties, I have no doubt that the requirements of s 311 of the Act have been satisfied. In particular, I would observe that:
a) the employment of employees with the old employer will be terminated and they will become employees of the new employer within three months (May 2010);
b) the transferring work is the same, or substantially the same, as the work performed by the old employer; and
c) there is an obvious connection between the old and new employers; in fact they operate in the same industry.
[15] Accordingly, I am satisfied that the proposed transfer of employees of OMI to Optus Administration Pty Ltd is a ‘transfer of business’ for the purposes of Part 2-8 of the Act.
[16] That said, Fair Work Australia (FWA) may make the orders the applicant seeks, but only after taking into account all of the matters set out in s 318(3) of the Act, which are expressed as follows:
(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.
[17] In taking all of these matters into account, I note in particular:
a) the extensive consultation and briefing process involving the affected employees;
b) the overwhelming result of the votes cast in the employee survey;
c) the consent of the Union parties to the application;
d) that no transferring employee will suffer any disadvantage, and in fact employees will enjoy more favourable terms and conditions under the EPA;
e) the nominal expiry date of the EPA is 21 October 2012;
f) the negative impact on productivity and uncertainty at the new employer’s workplace by having different industrial instruments covering employees performing the same work;
g) the applicant has traditionally operated with a single-enterprise agreement covering all of its employees; and
h) there is a significant degree of business synergy between the two industrial instruments.
[18] These factors demonstrate important public interest considerations in balancing the protection of the employees’ terms and conditions and ensuring that the applicant’s business operates effectively and efficiently.
[19] Accordingly, I consider that the grounds and reasons in support of the application have been properly made out, all of the requirements of the Act in respect to this application have been satisfied and there is no basis for FWA refusing to make the orders as sought. I reaffirm the orders I made on 19 April 2010 [PR996355].
DEPUTY PRESIDENT
Appearances:
Mr S Meehan, Solicitor for Optus Administration Pty Ltd
Mr D Dwyer, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Communications Division (CEPU)
Mr J Nusifora, Australian Municipal, Administrative, Clerical and Services Union (ASU)
Hearing details:
2010
SYDNEY
12 April
Printed by authority of the Commonwealth Government Printer
<Price code C, PR996807>
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