Qantas Airways Limited v Australian Municipal, Administrative, Clerical and Services Union

[2013] FWC 2585

[2013] FWC 2585

FAIR WORK COMMISSION

DECISION

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

Qantas Airways Limited
v
Australian Municipal, Administrative, Clerical and Services Union
(AG2013/5898)

VICE PRESIDENT WATSON SYDNEY, 8 MAY 2013

Application in relation to a transfer of business - transferrable instrument - application that transferrable instrument not cover transferring employees – conditional offer of employment – application not opposed - Qantas Airways Limited - Fair Work Act 2009 ss.311, 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. The application is made in respect of Mr James Wing who is an employee of Jetstar Airways Limited (Jetstar) and a prospective employee of Qantas.

[2] Mr Wing is employed by Jetstar under the Jetstar/ASU Agreement 2011 1(the Jetstar Agreement). The terms of the Order are sought under s.318(1) and provide that in relation to Mr Wing, where there is a transfer of business from Jetstar to Qantas within the meaning of Division 2, Part 2-8 of the Act, the Jetstar Agreement will not cover Qantas.

[3] For the purpose of s.311(6) of the Act, Qantas and Jetstar are associated entities or have a connection by virtue of their status as related bodies corporate, as that term is defined by s.50 of the Corporations Act 2001.

Background

[4] Mr Wing is employed by Jetstar in a customer service role. Mr Wing voluntarily applied and was selected for a vacant customer service position with Qantas at Hobart Airport. On 7 March Qantas made an offer of permanent employment to Mr Wing, he verbally accepted the offer on 14 March 2013. On 26 March 2013, Qantas confirmed the offer of employment in writing. Qantas informed Mr Wing in its letter of offer that it intended to seek orders pursuant to s.318(1) of the Act and sought his support for the application. On 28 March 2013 Mr Wing returned the letter of offer and indicated by signing the letter that he accepted the terms of employment and supported the making of the application.

The relevant legislation

[5] 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.

[6] 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).”

[7] 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 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.

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.”

Submissions

[8] In relation to the factors set out in s.318(3) of the Act, Qantas submits that the proposed orders should be made in order to facilitate the transfer of Mr Wing and ensure his interests and the interest of Qantas.

[9] It is submitted that Mr Wing voluntarily applied for and accepted the offer of employment with Qantas and that the proposed orders will facilitate his career progression. It is submitted that in accepting the offer of employment Mr Wing acknowledged that this application would be made and does not oppose the orders sought.

[10] It is submitted that Mr Wing will not be disadvantaged if the order is made, and that the Australian Services Union (Qantas Airways Limited) Enterprise Agreement 9 2 (Qantas Agreement) under which Mr Wing will be employed in the new role with Qantas generally provides terms and conditions of employment that are more favourable than the Jetstar Agreement.

[11] Qantas submits that the application of the Jetstar Agreement at its workplace would have a negative impact on productivity due to a need to administer different terms and conditions of employment and divergent classification systems for employees performing the same work by reference to different classification systems.

[12] Qantas submits that there is little business synergy between the Jetstar Agreement and Qantas Agreement. It submits that the Qantas Agreement reflects that as a premium international and domestic airline, Qantas’ business is different to that of Jetstar as a low fares airline.

[13] The Australian Municipal, Administrative, Clerical and Services Union is a party to both the Jetstar and Qantas Agreements. It does not oppose the application.

Transfer of the Jetstar Agreement

[14] I am satisfied that the Jetstar Agreement is a transferable instrument as described in s.312(1)(a) of the Act and this circumstance is a transfer of business within s.311 of the Act as commencing employment with Qantas will involve the termination of employment with Jetstar. The application has been made pursuant to 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.

[15] I have considered the factors set out in s 318(3). The continued application of the Jetstar Agreement makes little sense in the circumstances. I am of the view that it is appropriate to make orders in relation to the transfer of the Mr Wing’s employment.

Conclusion

[16] For the reasons above I will make an order 3 that the Jetstar Agreement will not cover Mr Wing during the period of his employment with Qantas.

VICE PRESIDENT WATSON

 1   AE890553.

 2   AE885997.

 3   PR536067.

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