QT Administration Pty Ltd
[2015] FWC 8013
•30 NOVEMBER 2015
| [2015] FWC 8013 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
QT Administration Pty Ltd
(AG2015/6490)
Tasmania | |
COMMISSIONER LEE | MELBOURNE, 30 NOVEMBER 2015 |
Application for an order pursuant to s.319 of the Fair Work Act 2009 relating to instruments covering new employer and non-transferring employees. Order granted.
[1] An application has been made by QT Administration Pty Ltd (the Applicant) to the Fair Work Commission (the Commission) for an order pursuant to section 319 of the Fair Work Act 2009 (the Act).
[2] The Application seeks an order pursuant to S.319 (1)(b) of the Act in the following terms:
That the Tasplan EA covers employees of QT Admin who are not covered by a transferable instrument because:
(a) they are employees who ceased work at Quadrant on 30 November 2015 and commence work at QT Admin on 1 December 2015 and will be:
(i) non-transferring employees in respect of the transfer of business from Tasplan to QT Admin because their ‘‘old employer’ will be Quadrant, not Tasplan;
(ii) performing transferring work in respect of the transfer of business from Tasplan to QT Admin (as well as transferring work in respect of the transfer of business from Quadrant to QT Admin); and
(iii) covered by the Award only and will not automatically be covered by any transferrable instrument;
(b) they are non-transferring employees performing transferring work who are not covered by a transferable instrument because they are new employees not previously employed by Tasplan, Quadrant or AAS.
Background
1. Tasplan Ltd (ABN 13 009 563 062) (Tasplan) is the trustee for a multi-industry, profit-for-members, public offer, industry super fund. Tasplan currently employs 45 employees.
2. Quadrant Superannuation Pty Ltd (ABN 82 067 516 938) (Quadrant) is the trustee for a multi-industry, profit-for-members, public offer, industry super fund. Quadrant currently employs 31 employees.
3. Tasplan currently outsources administrative work to Australian Administration Services Pty Ltd (ABN 62 003 429 114) (AAS) Link Business Services Pty Limited (ABN 47 136 882 767) (Link) acquired AAS in 2009.
4. Tasplan and Quadrant are merging. From 30 November 2015 the two funds will operate as one. The Tasplan fund will continue and all Quadrant members will be transferred to Tasplan (Merger).
5. QT Administration Pty Ltd (ABN 11 602 741 891) (QT Admin) is an associated entity of Tasplan. QT Admin has been established to provide administrative services to Tasplan following the Merger. As a result of the Merger, a number of Employees from Tasplan, Quadrant and AAS will have their employment terminated because of redundancy.
6. All redundant employees have been offered employment with either Tasplan or QT Admin.
Applicable workplace instruments prior to Merger
7. At the time of making this application the:
(a) Tasplan Enterprise Agreement 2013 which was approved by the Fair Work Commission on 13 December 2013 and has a nominal expiry date of 12 December 2017 (Tasplan EA) covers Tasplan and its employees that fall within the coverage of the Tasplan EA;
(b) Banking, Finance and Insurance Award 2010 (Award) covers Quadrant and its employees that fall within the coverage of the Award;
(c) AAS Enterprise Agreement 2004 which was approved by the Australian Industrial Relations Commission on 18 August 2004 and has a nominal expiry date of 17 August 2006 (AAS EA) covers AAS and its employees that fall within the coverage of the AAS EA;
(d) Link Business Services Collective Agreement 2009 (Link CA) which has a nominal expiry date of 30 June 2014 covers AAS and its employees that fall within the coverage of the Link CA.
Transferable instruments and Award coverage for QT Admin
8. As a result of the transfers of business under the Act, set out above in paragraph 7 (a)-(d), the following transferable instruments will apply to QT Admin:
(a) Tasplan EA which will cover employees that are transferred from Tasplan to QT Admin as per 7(c) above; and
(b) AAS EA and Link CA which will cover employees that were previously employed by AAS and accept employment with QT Admin as per 7(d) above.
9. QT Admin and:
(a) its employees who were previously employed by Quadrant as per 7(b) above;
(b) any new employees (not previously employed by Quadrant, Tasplan or AAS) and who will be performing transferring work in accordance with the Act will be covered by the Award.
The Application
10. QT Admin applies for an order pursuant to section 319(1)(b) of the Act that:
The Tasplan EA covers employees of QT Admin who are not covered by a transferrable instrument because:
(a) they are employees who ceased work at Quadrant on 30 November 2015 and commence work at QT Admin on 1 December 2015 and will be:
(i) non-transferring employees in respect of the transfer of business from Tasplan to QT Admin because their‘old employer’will be Quadrant, not Tasplan;
(ii) performing transferring work in respect of the transfer of business from Tasplan to QT Admin (as well as transferring work in respect of the transfer of business from Quadrant to QT Admin); and
(iv) covered by the Award only and will not automatically be covered by any transferrable instrument;
(b) they are non-transferring employees performing transferring work who are not covered by a transferable instrument because they are new employees not previously employed by Tasplan, Quadrant or AAS.
11. The employees affected by the proposed order:
(a) employees who cease work at Quadrant on 30 November 2015 and have been offered and accepted work at QT Admin commencing 1 December 2015; and
(b) any new employees of QT Admin (who are not yet appointed or identifiable).
[3] The CEO of Tasplan, Mr. Wayne Davey, has supplied a statutory declaration setting out the background to this application and providing evidence in respect of the factors in s. 319(3) of the Act to which I am to have regard in deciding whether or not to make the order.
[4] Having considered the evidence of Mr. Davey and the background to the application I resolved to determine the matter on the papers.
Transfer of business and the transfer of the enterprise agreement
Transfer of business
[5] Section 311 of the Act provides as follows in relation to a transfer of business;
“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.”
[6] The Applicant submits that pursuant to section 311(1) of the Act that as a result of the Merger there will be a transfer of business (pursuant to section 311 of the Fair Work Act 2009 (Cth) (Act)) as follows:
(a) Quadrant to Tasplan as:
(i) the employment of all current Quadrant employees will be terminated on 30 November 2015;
(ii) a number of existing Quadrant employees have been offered and accepted employment with Tasplan commencing on 1 December 2015;
(iii) Quadrant employees taking up an offer of employment with Tasplan will be performing the same, or substantially, the same work as they performed for Quadrant; and
(iv) there is a connection between Quadrant and Tasplan as required by section 311(1)(d) of the Act because there will be a transfer of assets from Quadrant to Tasplan in the manner prescribed by section 311(3) of the Act as a result of the Merger.
(b) Quadrant to QT Admin as:
(i) the employment of all current Quadrant employees will be terminated on 30 November 2015;
(ii) a number of existing Quadrant employees have been offered and accepted employment with QT Admin commencing on 1 December
2015;
(iii) Quadrant employees taking up an offer of employment with QT Admin will be performing the same, or substantially, the same work as they performed for Quadrant;
(iv) there is a connection between Quadrant and QT Admin as required by section 311(1)(d) of the Act because there will be a transfer of assets from Quadrant to Tasplan in the manner prescribed by section
311(3) of the Act as a result of the Merger.
(c) Tasplan to QT Admin as
(i) the employment of some current Tasplan employees will be terminated on 30 November 2015;
(ii) a number of current Tasplan employees have been offered and accepted employment with QT Admin commencing on 1 December 2015;
(iii) Tasplan employees taking up an offer of employment with QT Admin will be performing the same, or substantially, the same work as they performed for Tasplan;
(iv) there is a connection between Tasplan and QT Admin as required by section 311(1)(d) of the Act because:
(A) there will be a transfer of assets from Tasplan to QT Admin in the manner prescribed by section 311(3) of the Act as a result of the Merger; and
(B) QT Admin is an associated entity of Tasplan as set out in section 311(3) Tasplan is outsourcing the work to QT Admin in the manner prescribed by section 311(4) of the Act.
(d) AAS to QT Admin as:
(i) the employment of a number of current AAS employees will be terminated on 31 October 2015;
(ii) a number of existing AAS employees have been offered and accepted employment with QT Admin commencing on 1 November
2015;
(iii) AAS employees taking up an offer of employment with QT Admin will be performing the same, or substantially, the same work as they performed for Quadrant;
(iv) there is a connection between Quadrant and QT Admin as required by section 311(1)(d) of the Act because there will be a transfer of assets from Quadrant to Tasplan in the manner prescribed by section 311(3) of the Act as a result of the Merger.
[7] Accordingly, pursuant to section 311 of the Act, there is a transfer of business and the employees of the old employer are transferring employees within the meaning of the Act.
Whether the Agreement covers non-transferring employees
[8] Section 314 of the Act sets out when non-transferring employees are automatically covered by the transferring instrument (the Agreement). This only occurs in certain circumstances.
[9] Section 314 of the Act provides as follows;
“314 New non-transferring employees of new employer may be covered by transferable instrument
(1) If:
(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and
(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and
(c) the non-transferring employee performs the transferring work; and
(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;
then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.
(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWC order under subsection 319(1).”
Whether the Agreement should cover non-transferring employees
Section 319 of the Act
[10] Section 319 of the Act provides as follows;
“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.”
[11] In this matter, the Applicant seeks orders pursuant to section 319(1) (b). The application has been made by the Applicant, the new employer, pursuant to section 319(2)(a). I must now consider the requirements in subsection 319 (3), and will deal with each requirement now in turn.
Section 319(3)(a)(i) - the views of the new employer
[12] QT Admin is the Applicant and supports the application.
Section 319(3)(a)(ii) - the views of the employees who will be affected by the order
[13] QT Admin will employ 15employees who will cease employment with Quadrant on 30 November 2015 and commence employment with QT Admin on 1 December 2015. Those employees have accepted offers of employment on the basis they will be covered by the TasPlan EA.
[14] Mr Davey gave evidence that from the 17 employees who will cease employment with Quadrant on 30 November 2015 and have been offered employment with QT Admin commencing on 1 December 2015, 15 employees have accepted the offer. As far as QT Admin is aware, none of these employees have objected to the application.
[15] In addition to the offers of employment being subject to QT Admin obtaining an order from the Fair Work Commission, Mr Davey has written to each of the affected employees advising that QT Admin intended to lodge the Application and invited them to provide any views they had in respect of the Application.
[16] Affected employees were also advised (and Quadrant agreed to facilitate) that they would be given an opportunity to attend any hearing of the Application if they wanted to personally convey their views to the Fair Work Commission or to be available to provide any information requested by the Fair Work Commission. Mr. Davey has provided evidence that none of the affected employees have exercised the option to provide him with any views on the application in writing or otherwise.
[17] As there are currently no new employees who are not previously employed by Tasplan, Quadrant or AAS it is not possible to obtain their views.
Section 319(3)(b) - whether any employees would be disadvantaged
[18] There will be no disadvantage to affected employees as:
(i) employees who will cease employment with Quadrant on 30 November 2015 and commence with QT Admin on 1 December 2015 have been guaranteed no loss of entitlement in their contracts of employment with QT Admin, which they have accepted;
(ii) it will provide coverage of the Tasplan EA which is the industrial instrument that the majority of QT Admin employees will be covered by (with the exception of employees who will cease employment with AAS on 31 October 2015 and commence with QT Admin on 1 November 2015 and will be covered by either the AAS EA or the Link CA); and
(iii) the Tasplan EA provides substantially ‘‘better-off-overall’’ terms and conditions than the Award.
Section 319(3)(c) - the nominal expiry date of the agreement
[19] The nominal expiry date of the Agreement is 12 December 2017. The applicant has submitted that when the Tasplan EA is re-negotiated, it is intended that the scope of the Tasplan EA will be expanded to include QT Admin employees. The applicant submits that granting the orders sought will place a larger number of existing QT Admin employees in an equal bargaining position with other employees already covered by the Tasplan EA.
Section 319(3)(d) - whether negative impact on the productivity of the new employer
[20] There will be no negative impact on the productivity of QT Admin. The Tasplan EA is a tailored EA which will suit QT Admin’s operations better than the Award. Productivity issues would be likely to arise if the Applicant had to apply the Award to a sub-set of employees as well as the Tasplan EA and AAS EA.
Section 319(3)(e) - whether the new employer would incur significant economic disadvantage
[21] The Applicant would not incur significant economic disadvantage. Any economic disadvantage would occur as a result of extending better terms and conditions of employment to more employees which the Applicant supports.
[22] Any economic disadvantage to the Applicant is off-set (to the satisfaction of the Application) by more consistency in the industrial instruments covering its workforce. Consistency has considerable cost benefits for employers, particularly in respect of payroll issues.
Section 319(3)(f) - the degree of business synergy
[23] There will be a number of employees already covered by the Tasplan EA who will have the same terms and conditions as will be applied to affected employees as all employees will be, to some extent, performing transferring work from the transfer of business between Tasplan and QT Admin, the Applicant will be operating in a similar manner to Tasplan which is also covered by the Tasplan EA.
Section 319(3)(g) - the public interest
[24] By making the order sought, there will be a platform to facilitate bargaining for a new enterprise agreement (when the time comes) which will provide more certainty and consistency in relation to employment conditions (favourably to affected employees).
Conclusion
[25] Taking into account each of the matters set out in section 319(3) of the Act, I am satisfied that the order as sought should be granted.
[26] An Order PR574544 will be issued concurrently with this decision.
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