Quicksilver Connections Limited T/A Quicksilver, Great Adventures and Silver Series

[2013] FWC 6535

[2013] FWC 6535

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

Quicksilver Connections Limited T/A Quicksilver, Great Adventures and Silver Series
(AG2013/2539)

Marine tourism and charter vessels
COMMISSIONER SPENCER	BRISBANE, 3 SEPTEMBER 2013

Application for orders in relation to transfer of business.

Background

[1] This matter was filed on 26 August 2013 by Quicksilver Connections Limited T/A Quicksilver, Great Adventures and Silver Series (the Applicant), and concerns an application pursuant to s.318(1) of the Fair Work Act 2009 (the Act) for orders relating to an instrument covering a new employer (the Applicant) and the transferring employees. The Applicant has standing to make the application pursuant to s.318(2)(a).

[2] The Applicant operates marine tourism ventures from Cairns and Port Douglas in the State of Queensland. The Applicant submitted on 8 August 2013, it purchased the vessel ‘Ocean Spirit’ from Ocean Spirit Cruises Pty. As a result of the sale, 21 employees (the transferring employees) of the old employer are now engaged by the Applicant.

[3] In accordance with s.311(1) of the Act, a transfer of business has occurred. The transferring employees were covered by the Ocean Spirit Cairns Marine Operations and Diving Services Agreement 2008,being a collective agreement approved by a Decision of the Work Place Authority on 11 January 2010. A collective agreement is a transferable instrument by operation of the Act s.312(1)(b). Section 313(1) provides that a transferrable instrument that covered the old employer and the transferring employees immediately before the termination of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant (the new employer) would be covered by the Ocean Spirit Cairns Marine Operations and Diving Services Agreement 2008 in relation to the transferring employees, however s.313(3) operates subject to s.318(1). Pursuant to s.318(1), the new employer has sought that the enterprise agreements that cover its existing workforce also cover the 21 new transferring employees.

[4] The workplace instruments that cover the Applicant in relation to the operations in which the transferring employees will be engaged are:

i. For Masters, Mates, and Marine Engineers: the Quicksilver Connections AMOU & AIMPE Marine Agreement 2010 – 2014;

ii. For Cruise Attendants, Multi-Skilled Cruise Attendants, Senior Cruise Attendants, Customer Service Supervisors, Dive Masters, Diver Instructors, Sales/Marketing and Deckhands: the Quicksilver Connections AWU Enterprise Agreement 2010 – 2014; and

iii. For Hospitality employees: the Green Island Resort AWU Enterprise Agreement 2010.

[5] The Applicant applies for an Order pursuant to s.318(1) to displace the operation of s.313(1) in relation to the Ocean Spirit Cairns Marine Operations and Diving Services Agreement 2008 and further to ensure that the transferring employees are covered by the existing industrial instruments, the Quicksilver Connections AMOU & AIMPE Marine Agreement 2010 – 2014, the Quicksilver Connections AWU Enterprise Agreement 2010 – 2014, and the Green Island Resort AWU Enterprise Agreement 2010 (the Quicksilver Instruments), which currently cover the Applicant’s employees, being some 492 employees.

Relevant legislation

[6] Section 313 provides:

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; and

....

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

[7] Section 318 provides:

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.

Consideration

[8] Mr Ben Cooper, Associate Director of Livingstones Australia, on behalf of the Applicant, addressed those matters that FWC must take into account by virtue of s.318(3), in the body of the application. Additional material was filed in support of the application including, an affidavit of Mr Anthony Baker as the Managing Director of Quicksilver Connections Limited, a comparison schedule of the general entitlements of the four instruments, a comparison of wages and earnings under the four instruments, and copies of the agreements to which this application refers.

[9] The material is considered below in relation to each of the matters in s.318(3).

Section 318(3)(a)(i): the views of the new employer

[10] The Applicant, as the new employer, seeks that the transferable instrument not cover or apply to it. Several reasons were advanced for this including reasons relating to the disparity which may arise between members of the Applicant’s workforce by having employees in the same workplace covered by different industrial instruments and receiving different entitlements. The Applicant also pointed to inefficiencies in payroll processes that may arise as a result of having to administer two different and distinct payroll and employment systems. The Applicant is also of the viewF that the terms of the Applicant’s workplace instruments, taken as a whole, will be significantly more advantageous to the transferring employees than those of the transferable instrument.

Section 318(3)(a)(ii): the views of the employees prospectively affected by any order

[11] The Applicant advises that between 1 and 5 August 2013, the transferring employees were notified in writing regarding the effects that the change of industrial instrument coverage would have on employment conditions. Further, during this period, the Applicant met with the transferring employees individually to explain the effect of the transfer of business and of the proposed change of industrial instrument coverage. The Applicant advises that all of the 21 transferring employees verbally indicated that they supported the proposition that the Ocean Spirit Cairns Marine Operations and Diving Services Agreement 2008 no longer cover their employment.

[12] The Applicant supplied the letters of offer provided to employees regarding an offer from the Applicant after the transfer of business. These letters contain a notification from the Applicant to the employees that an application will be made to terminate the previous agreement. While this is not strictly correct (in that the Applicant has not applied for a termination but rather an Order in relation to a transferrable instrument) the effect is nonetheless that employees were aware that the Applicant would take steps to have the previous agreement cease to apply to them and that the appropriate enterprise agreement would commence to apply to them.

Section 318(3)(b): any disadvantage to the employees

[13] The Applicant has provided a comparison of the general entitlements and earnings between employees under the Ocean Spirit Cairns Marine Operations and Diving Services Agreement 2008 and those covered by the Quicksilver Instruments. A majority of the conditions are more favourable to the transferring employees including the expected earnings. The Applicant has indicated that it intends to recognise the transferring employees’ past service with Ocean Spirit Cruises Pty Ltd for all purposes, except for the purpose of the minimum employment period for unfair dismissal applications under s383 of the Act.

[14] The Commission has had regard to the comparison schedule filed in support of the Application.

Section 318(3)(c): the nominal expiry date of the transferable instrument (the Agreement)

[15] The nominal expiry date of the Ocean Spirit Cairns Marine Operations and Diving Services Agreement 2008 is 30 April 2011. The nominal expiry dates of the Quicksilver Connections AMOU & AIMPE Marine Agreement 2010 – 2014, the Quicksilver Connections AWU Enterprise Agreement 2010 – 2014, and the Green Island Resort AWU Enterprise Agreement 2010, are 31 March 2014, 13 May 2014 and 24 June 2014 respectively. The Applicant notes that they are currently in negotiations with employees and union parties for replacement agreement for each of the above enterprise agreement.

Section 318(3)(d): any negative impact on the employer’s workplace

[16] As set out above, the Applicant identified some potential impacts on the workplace if the Order was not issued. It was submitted that having employees on two different agreements, providing for different entitlements, may lead to dissatisfaction among employees and a less cohesive workplace culture, in addition to restricting the movement of employees within the Applicant’s operations.

[17] The Applicant also identified certain operational inefficiencies that would arise from having to administer the terms of an additional agreement for 21 employees out of 492.

Section 318(3)(e): any significant economic disadvantage to the employer

[18] The Applicant did submit that “economic disadvantage” would be suffered by the Applicant in relation to this point but only relied on the administrative burden caused by operating separate systems in support of this claim. This matter is more relevant to the consideration of s.318(3)(d) and (f), in terms of administering the payroll for an additional agreement.

Section 318(3)(f): business synergy between the transferable instrument and the existing agreement

[19] The Applicant submitted that there is little business synergy between the transferrable instrument and the Quicksilver Instruments that cover the Applicant.

Section 318(3)(g): the public interest

[20] There is no evidence that the public interest is agitated in this matter.

CONCLUSION

[21] On balance, taking into account each of the matters stipulated at s.318(3), I am satisfied that the Order sought should be granted.

[22] A separate Order will issue [PR541226]. The Order will come into operation, in accordance with s.318(4).

COMMISSIONER

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<Price code A, PR541225 >