Resolution Life Services Australia Pty Ltd
[2024] FWC 1267
•15 MAY 2024
| [2024] FWC 1267 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Resolution Life Services Australia Pty Ltd
(AG2024/279)
| DEPUTY PRESIDENT GRAYSON | SYDNEY, 15 MAY 2024 |
Application for an order relating to instruments covering new employer and transferring employees.
Resolution Life Services Pty Ltd (the Applicant) has made an application under s.318 of the Fair Work Act 2009 (Cth) (the Act). The application seeks an order from the Fair Work Commission (Commission) that the Commonwealth Bank Group Enterprise Agreement 2016 (Transferable Instrument) will not cover:
(a)The Applicant; and,
(b)Any person who:
(i)Has at any time been employed by AIA Australia Limited (AIA);
(ii)Has ceased to be employed by AIA;
(iii)Within three months of their employment with AIA ceasing, became employed by the Applicant to perform the same, or substantially the same, work that they performed for AIA; and,
(iv)Falls within the coverage clause of the Resolution Life Services Australia Agreement 2023.
[the Transferring Employees].
On 23 April 2024, the Applicant advised the Commission that it sought a further order in the following terms:
(a)The Resolution Life Services Australia Agreement 2023 will cover the Transferring Employees who became employed by the Applicant on 1 July 2023.
The Commission directed the Applicant to file submissions and material in support of its application, addressing the relevant provisions of the Act, and directed that it serve the submissions and material and a copy of its application on the Transferring Employees. The Applicant filed its submissions on 26 February 2024.
On 2 April 2024 and having reviewed the material filed, I issued further Directions requiring the Applicant to file material in support of its submissions already filed and submissions specifically addressing sections of s.311 of the Act. These Directions were also complied with by the Applicant.
The application, supporting documentation and all materials filed by the Applicant in accordance with the Directions were served on the Transferring Employees. The Transferring Employees did not file any submissions in opposition to the application nor request to be heard in relation to the application. Accordingly, I determined to deal with the matter on the papers and without the need for a hearing.
Legislation
Part 2-8 of Chapter 2 of the Act describes when a transfer of business occurs and s.312(1) of the Act provides for the transfer of certain instruments if there is a transfer of business from one employer to another employer.
Section 311 of the Act provides:
“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.”
Section 313 of the Act 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
(b)while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.
(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee’s employment with the old employer.
(3) This section has effect subject to any FWC order under subsection 318(1).”
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
(a) 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
(b) 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
(c) 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
(d) 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.”
Initial matters
Based on the material before the Commission, I am satisfied that:
(a) The employment of the Transferring Employees with AIA was terminated (s.311(1)(a) of the Act).
(b) The Transferring Employees became employed by the Applicant within three months after the termination of their employment with AIA (s.311(1)(b) of the Act) and are transferring employees for the purposes of s.311(2) of the Act.
(c) The work the Transferring Employees perform for the Applicant is the same or substantially the same as the work they performed for AIA (s.311(1)(c) of the Act).
(d) There is a connection between AIA and the Applicant as the Applicant owns or has the beneficial use of the assets that AIA previously owned and that relate to, or are used in connection with, the transferring work (s.311(3)(a)-(d)). These include AIA’s insurance assets and policies;
(e) The Transferring Employees are transferring employees in relation to the transfer of business (s.311(2) of the Act).
(f) The Transferable Instrument covered AIA and the Transferring Employees immediately before the termination of the Transferring Employees’ employment with AIA;
(g) The Transferable Instrument covers the Applicant and the Transferring Employees in relation to the transferring work subject to any order of the Commission under s.318(1) of the Act (s.313 of the Act).
(h) The Applicant has standing to apply for the orders it seeks pursuant to s.318(2) of the Act.
Consideration
In deciding whether or not to make an order pursuant to s.318(1) of the Act, the Commission must take into account the matters set out in s.318(3) of the Act.
The views of the Applicant (new employer) – s.318(3)(a)(i)
The Applicant supports the orders sought. The Applicant indicated that its preference was to have one industrial instrument apply to all of its employees other than the Chief Executive Officer and the Leadership Squad. It submitted that this application was part of a number of measures it has undertaken in its efforts to consolidate the number of industrial instruments applying to it. The Applicant referred to this streamlining as being in the interests of limiting unnecessary complexities, adverse impacts on employees’ engagement, inconsistent employment conditions and/or experiences, and the increased compliance risk and costs associated with those outcomes.
The views of the Applicant weigh in favour of the making of the orders.
The views of the employees who would be affected by the order – s.318(3)(a)(ii)
There are currently 101 Transferring Employees covered by the Transferable Instrument. The Applicant filed documents in relation to measures taken to notify Transferring Employees of the intention to make the application prior to them commencing employment with the applicant together with comprehensive material provided to affected employees prior to the application being filed. The Applicant also filed material recording the views of the Transferring Employees which indicates that the majority of the employees who provided their views to the Applicant did not oppose the application. The Applicant engaged in discussions with the Finance Sector Union (FSU) prior to filing the application. Neither the FSU nor any Transferring Employee filed any submissions in opposition to the application and did not request to be heard in relation to the application. On 4 March 2024, the FSU corresponded with the Commission indicating that it neither supported nor opposed the Application.
The views of the Transferring Employees weigh in favour of the making of the orders.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.318(3)(b)
The Applicant submits that the Transferring Employees would not be disadvantaged by the orders sought in relation to their terms and conditions of employment as the terms and conditions of employment set out in the Resolution Life Services Australia Agreement 2023 (Agreement) are generally equivalent or more favourable than those in the Transferable Instrument. The Applicant filed analysis with the Commission setting out the differences between the instruments. The Applicant also filed evidence that where certain terms in the Transferable Instrument may be considered more favourable than the Agreement terms that this has been addressed by offering to honour certain terms by way of side letters. While there are differences between the instruments, I accept that these differences mean that employees are unlikely to be disadvantaged or alternatively, that the impact on Transferring Employees will be minimal.
Having considered the differences between the Agreement and the Transferable Instrument, I consider this to be a neutral consideration.
The nominal expiry date of the agreements – s.318(3)(c)
The Transferable Instrument has a nominal expiry date of 30 June 2017. The Transferable Instrument does not have guaranteed minimum remuneration increases and has outdated minimum bandings and classifications.
I consider this to weigh in favour of the making of the orders.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace – s.318(3)(d)
The Applicant submits that the Transferable Instrument has a negative impact on the productivity of the Applicant’s workplace because it presents practical difficulties with applying two different sets of terms and conditions for the same types of work. The Applicant also contends that the operational differences arising from the terms in the Transferable Instrument differing from the Agreement, including rostering rules and differences in performance year cycles, leads to additional work in managing the workforce. It also submits that disparity in conditions could also lead to dissatisfaction and disharmony within the workforce, causing a negative effect on productivity.
I accept that the administration of multiple instruments across the 111 Transferring Employees would create additional payroll, operational and administrative complexity giving rise to additional administrative and managerial activities that would have some negative impact on the productivity of the Applicant’s workplace. I also accept, given that the Applicant’s evidence and submissions on this are uncontested, that a disparity in conditions could lead to dissatisfaction and disharmony within the workforce, causing a negative effect on productivity.
This weighs in favour of the making of the orders.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer – s.318(3)(e)
The Applicant submits that it would incur economic disadvantage arising from the Transferable Instruments covering it as a result of the matters described at [20] above. It does not submit that this economic disadvantage would be significant.
I accept that the Applicant has already and will continue to incur some economic disadvantage as a result of these matters however it cannot be established based on the material before me that this is significant.
I consider this to be a neutral consideration.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer – s.318(3)(f)
The Applicant submits that there is a lack of business synergy between the Transferable Instrument and the Agreement, which applies to the Applicant’s employees that do similar work. It also contends that the lack of synergy is likely to cause both practical difficulties and disharmony for the reasons outlined at [20] above.
I accept that the Transferable Instrument has significant differences to the Agreement, however, there is some synergy between the instruments.
I consider this to be a neutral consideration.
The public interest – s.318(3)(g)
The applicant submitted, on the bases it had identified in its submissions in relation to s.318(3)(a) – (f), that it was in the public interest for the application to be granted in the circumstances of this application.
In all the circumstances, and having considered the materials before the Commission, I am satisfied that there are no public interest considerations that weigh against making the orders sought.
Conclusion
Having taken into account the considerations in s.318 of the Act, I consider that the following orders should be made:
“1. Pursuant to s.318(1)(a) of the Fair Work Act 2009 (Cth) (the Act), the Commonwealth Bank Group Enterprise Agreement 2016 will not cover:
A. The Applicant; and,
B. Any person who:
(i)Has at any time been employed by AIA Australia Limited;
(ii)Ceased to be employed by AIA Australia Limited;
(iii)Within three months of their employment with AIA Australia Limited ceasing, became employed by Resolution Life Services Pty Ltd to perform the same, or substantially the same work that they performed at AIA Australia Limited; and,
(iv)Falls within the coverage clause of the Resolution Life Services Australia Agreement 2023.
(the Transferring Employees).
2. Pursuant to s.318(1)(b) of the Act, the Resolution Life Services Australia Agreement 2023 will cover the Transferring Employees in relation to their employment with Resolution Life Services Pty Ltd.”
For the purposes of s.318(4) of the Act, the order will come into operation on 15 May 2024. The order giving effect to this decision will be issued separately in [PR775024].
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR775023>
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