Qantas Airways Limited

[2016] FWC 4913

[2016] FWC 4913

FAIR WORK COMMISSION

DECISION

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

Qantas Airways Limited
(AG2016/4513)

VICE PRESIDENT WATSON MELBOURNE, 4 AUGUST 2016

Application by Qantas Airways Limited – Transferrable instruments – Application that transferrable instrument will not cover transferring employees – Fair Work Act 2009, ss.311, 312, 317 and 318.

Introduction

[1] This decision concerns an application by Qantas Airways Limited (Qantas) for an order under s.318 of the Fair Work Act 2009 (the Act) which relates to instruments covering a new employer and transferring employees in the context of a transfer of business.

[2] This application concerns cadet and non-cadet pilots within the Qantas Group who have applied for a position with Qantas as a Second Officer under Training. Qantas seeks an order that the Jetstar Airways Pilots’ Enterprise Agreement 2015 (Jetstar EA), Express Freighters Australia Operations Pty Limited Enterprise Agreement 2014 (EFA EA) and Network Aviation Australia, Collective Workplace Agreement (CWA) for Pilots (Network Collective Agreement) will not cover an employee previously covered by one the instruments when the employee commences employment with Qantas Airways Limited as a Second Officer Under Training (SOT).

[3] The circumstances in which Qantas seeks such an order are where the employee has voluntarily resigned from employment at Jetstar Airways Pty Limited, Express Freighters Australia (Operations) Pty Limited or Network Aviation Pty Ltd and the employee has been provided with a letter of offer of employment from Qantas that clearly specifies that upon commencement of employment of Qantas, the Qantas Airways Limited Pilots (Long Haul) Enterprise Agreement 2015 will apply to Qantas and the employee.

[4] For the purpose of s.311(6) of the Act, Qantas, Jetstar, Express Freighters and Network are associated entities as that term is defined in s.50AAA of the Corporations Act 2001.

Background

[5] Qantas wishes to recruit pilots to operate in its long haul operations. As the first step in the recruitment process, Qantas will give preference to pilots who are currently employed in other group companies, those pilots being either former cadet pilots or non-cadet pilots (the transferring employees).

[6] Qantas is only prepared to employ the transferring employees within 3 months of their employment ending with Jetstar, EFA or Network if the Fair Work Commission issues an order under s.318 of the Act that the Jetstar EA, EFA EA or Network Collective Agreement will not apply to Qantas or the transferring employees during the transferring employees’ employment with Qantas.

[7] At the time of making the application, the transferring employees were participating in the Qantas long haul recruitment process. If the Commission makes the order that is sought prior to the completion of the recruitment process, then the successful applicants will be offered employment as a SOT with Qantas to commence employment as soon as possible. If the application is still pending at that time, then the successful applicants will be offered employment as a SOT with Qantas, subject to either the Commission issuing an order that the Jetstar EA, EFA EA and Network EA will not apply to Qantas and any of the transferring employees in respect of the transferring employees’ employment with Qantas or three months passing since the end of the applicant’s employment with Jetstar, EFA or Network, as applicable.

The relevant legislation

[8] Part 2-8 of the Act describes when a transfer of business occurs and 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.

[9] Section 311(1) contains the definition of transfer of business in a wider manner than the ordinary English or legal meaning of the term. The definition is:

“(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).”

[10] Sections 317 and 318 of the Act relevantly provide:

“317 FWC may make orders in relation to a transfer of business:

This Division provides for 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.

318 Orders relating to instruments covering new employer and transferring employees

Orders that FWC may make

(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.

Who may apply for an order

(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).

Matters that FWC must take into account

(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.

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.”

Transfer of the Jetstar EA, EFA EA or Network Collective Agreement

[11] Qantas submits that if the Commission decides not to issue the order then Qantas cannot employ the transferring employees until three months after the transferring employees’ employment ends with Jetstar, EFA or Network, as applicable.

[12] Qantas submits that transferring employees have voluntarily applied for employment as SOTs with Qantas and have participated in the recruitment process of their own volition. It submits that there is no obligation for the employees to apply for these positions or accept employment with Qantas. It submits that the transferring employees are aware that employment with Qantas will be on the terms set out in the Qantas LH EA and not the terms of the Jetstar EA, EFA EA or Network Collective Agreement. It further submits that employment with Qantas is part of the transferring employees’ career development and that it is in each of the transferring employees’ interest that the order be made.

[13] Qantas wrote to each of the employees who entered the recruitment process and who would potentially be affected by the order. It provided a copy of the application and informed each applicant for recruitment that, if they wished to make submissions in relation to the application, they should do so within 7 days of the date of that correspondence. The Commission did not receive any submissions from any potentially affected employees.

[14] Qantas submits that the transferring employees will not be disadvantaged by the order sought, and that the conditions of the Qantas LH EA are more generous than the Jetstar EA, EFA EA and Network Collective Agreement.

[15] Qantas submits that the transfer of the Jetstar EA, EFA EA or Network Collective Agreement to Qantas would have a negative impact on Qantas’ business because each instrument contains separate and distinct work rules that are particular to the specific sector of the industry that each employer operates in. It submits that Qantas would not be able to roster the transferring employees to perform duties in an efficient manner, or at all, due to the restrictions contained in the transferring instrument and their interaction with the rostering requirements of the Qantas LH EA. There would also be other aspects of the instruments that would be incompatible with the Qantas LH EA such as pilot seniority which is routinely used to determine promotions and the allocation of work under the Qantas EA.

[16] In relation to whether Qantas would incur significant economic disadvantage as a result of the transferrable instrument covering the new employer, Qantas submits that due to the restrictions and difficulties that the transfer would create, Qantas would not allow the transfer to take place.

[17] Qantas submits that there is no or very little business synergy between the Jetstar EA, EFA EA or Network Collective Agreement and the Qantas LH EA.

[18] The Commission has power to make an order if there is, or there is likely to be, a transfer of business from an old employer to a new employer. If the transferring employees become employed by Qantas as is intended, the circumstances will fall within the definition of a transfer of business in s.311. It is common for employees within the Qantas group of companies to transfer between entities. Since the enactment of the Fair Work Act this has been contingent on applications of the type now before me being granted. Orders arising from applications have been commonly made.

[19] I am satisfied that the Jetstar EA, EFA EA and the Network Collective Agreement are each transferable instruments as described in s.312 of the Act. The circumstance is a transfer of business within s.311 of the Act as commencing employment with Qantas may be regarded as the termination of employment with Jetstar, EFA or Network as applicable. The application has been made in accordance with s.318(1) of the Act. The matters that I am required to take into account when considering whether to grant an order in the terms sought are prescribed by s.318(3) of the Act, as set out above. I have considered the factors set out in s.318(3) and am of the view that it is appropriate to make an order in relation to the transfer of the transferring employees’ employment. The instruments in question contain restrictions and work rules developed for the specific businesses in which they are intended to operate. Qantas has cogent reasons to avoid the introduction of those obligations into its mainstream business because the businesses are configured in markedly different ways. There is no disadvantage to employees. In the circumstances, the transfer of the instruments would be nonsensical. Any lost career opportunities caused by the absence of an order would be contrary to the interests of all concerned.

[20] I have had regard to the nominal expiry date of each of the Jetstar EA, the EFA EA and the Network Collective Agreement, which is 21 April 2019, 31 December 2018 and 14 March 2013 respectively. I have also taken into consideration any matters concerning the public interest.

Conclusion

[21] For the above reasons I will make an order as sought in the application.

VICE PRESIDENT

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