Service One Financial Services Pty Limited
[2023] FWC 1471
•26 JUNE 2023
| [2023] FWC 1471 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
s. 319 - Application for an order relating to instruments covering new employer and non-transferring employees
Service One Financial Services Pty Limited
(AG2023/1907)
| DEPUTY PRESIDENT DEAN | CANBERRA, 26 JUNE 2023 |
Application for an order relating to instruments covering new employer, transferring and non-transferring employees.
Service One Financial Services Pty Limited (Applicant or SOFS) has applied for orders pursuant to s.318 and s.319 of the Fair Work Act 2009 (the Act). The Applicant seeks orders in the following terms:
“That, on and from 3 July 2023:
1. The Service One Mutual Limited Staff Enterprise Agreement 2019 does not cover:
a.Service One Financial Services Pty Limited (ACN 662 398 272) (SOFS); and
b. any of its employees transferring from Service One Mutual Limited (ACN 095 848 598), who commenced employment with SOFS on 19 June 2023 (the SOM Transferring Employees).
2. The Molonglo Financial Services Limited Enterprise Agreement 2021 covers:
a. Service One Financial Services Pty Limited; and
b. the SOM Transferring Employees who fall within the classifications of the Molonglo EA.
3. The Molonglo EA covers:
a. Service One Financial Services Pty Limited; and
b. all new non-transferring employees of Service One Financial Services Pty Limited who:
i. fall within the classifications of the Molonglo EA; and
ii. commenced or commence employment with Service One Financial Services Pty Limited on or after 19 June 2023.
For the purposes of this order, the phrase 'non-transferring employees' is defined by subsection 314(2) of the Fair Work Act 2009 (Cth).”
Background
The background to the application can be briefly stated. The Applicant is a subsidiary of Service One Mutual Limited (SOM). It was established in September 2022 to take over the banking business of SOM which operates Bendigo Community Bank under a franchise agreement with Bendigo and Adelaide Bank.
A transfer of business within the meaning of s.311(1) of the Act occurred on 19 June 2023 when employees of SOM were transferred to SOFS. The Service One Mutual Limited Staff Enterprise Agreement 2019 (the Service One Agreement), an enterprise agreement approved by the Commission which covered SOM and its former employees employed in the classifications contained in the Agreement, became a transferable instrument by virtue of s.312(1)(a) of the Act. In accordance with s.313(1) of the Act, the Service One Agreement covers SOFS (new employer) and its transferring employees in relation to the transferring work.
The Applicant has also separately purchased the franchise business of Molonglo Financial Services Limited (Molonglo) to resume Molonglo’s operation of Bendigo Community Bank. A transfer of business is set to occur on 3 July 2023 when all employees of Molonglo who accepted offers of employment transfer to SOFS. Molonglo Financial Services Limited Enterprise Agreement 2021 (Molonglo Agreement) is the relevant transferable instrument and under the operative provisions of the Act will cover SOFS and the transferring employees from 3 July 2023.
SOFS now seeks orders under sections 318(1)(a), 318(1)(b) and 319(1)(b) such that the Molonglo Agreement will be the only enterprise agreement covering all transferring and non-transferring employees who fall within the classifications of the transferable instrument arising from the transfer of business.
Relevant Legislation
Sections 318 and 319 of the Act set out the circumstances in which orders may be made relating to instruments covering new employer, transferring and non-transferring employees:
“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.”
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.
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.
Restriction on when order may come into operation
(4) The order must not come into operation in relation to a particular non-transferring employee before the later of the following:
(a)the time when the non-transferring employee starts to perform the transferring work for the new employer;
(b)the day on which the order is made.
Consideration
The application is supported by a statement from Ms Louise Parker, Special Projects Manager of SOM. Ms Parker’s statement set out detailed grounds of the application and addressed each of the matters in s.318(3) and s.319(3) that the Commission must take into account.
Views of the new employer and affected employees
Ms Parker stated that SOFS supports the application and provided two key reasons. Firstly, this will ensure consistency in the terms and conditions which apply to its employees. Secondly, this will streamline its administrative and payroll processes and reduce the risk of disputes arising from employees who perform the same or similar work receiving different entitlements.
Ms Parker outlined the consultation process with the affected employees in relation to the proposed changes to their employment. Ms Parker stated that SOFS obtained support by way of a confidential voting process employees overwhelmingly indicated they support the adoption of the Molonglo Agreement.
The Finance Sector Union of Australia, being the employee organisation covered by the Service One Agreement, was advised of the application and did not raise any objection.
Whether any employees would be disadvantaged by the order
Ms Parker stated that both the transferring and the non-transferring employees will not be disadvantaged if the orders were made because the Molonglo Agreement contains terms and conditions that are overall more beneficial than those of the Service One Agreement and the aligned modern award. For those senior employees who will not be covered by the Molonglo Agreement due to the coverage provision, Ms Parker said that they will be employed on common law employment contracts and also receive entitlements more beneficial than that under the Service One Agreement.
Expiry date of the agreement
The Service One Agreement has passed its nominal expiry date of 30 June 2022, whereas the Molonglo Agreement has a nominal expiry date of 18 July 2024. Ms Parker said that coverage by the Molonglo Agreement will result in the SOM transferring employees and any new employees having certainty as to their terms and conditions of employment for a longer period. Ms Parker indicated that the Applicant intends to bargain for a new enterprise agreement with its employee at a future date.
Productivity
If the orders were not made, Ms Parker highlighted a negative impact on the productivity of the Applicant’s business due to the administrative difficulties and costs associated in applying two different enterprise agreements. Having one agreement covering all employees will also ensure consistency in the terms and conditions which apply to its employees, streamline its administrative and payroll processes and reduce the risk of disputes arising from employees who perform the same or similar work receiving different entitlements.
Economic disadvantage
Ms Parker stated that SOFS would incur economic disadvantage if its employees were covered by two different enterprise agreements, as a result of the associated inefficiency reduced productivity and additional costs.
Degree of business synergy
Ms Parker submitted that whilst there may be some degree of synergy between the two agreements in that they both operate in the banking, finance and insurance sector, the differing terms and conditions of employment are not easily reconciled. Further, where there is differential treatment of employees performing same or substantially similar jobs, this would naturally have a negative impact on business synergy.
Public interest
Ms Parker submitted that there is no evidence to suggest that it would be against the public interest if the orders are made.
Conclusion
Having considered the material provided and taking into account all of the matters in s.318(3) and s.319(3) of the Act, I am satisfied that an order in the terms sought should be made. I am further satisfied that the operative date of the order sought by the Applicant, 3 July 2023, is a date consistent with s.318(4) and s.319(4).
An Order will be issued with this decision.
DEPUTY PRESIDENT
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