South Australia Water Corporation T/A SA Water
[2021] FWC 2619
•14 MAY 2021
| [2021] FWC 2619 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
Section 318 - Application for an order relating to instruments covering new employer and transferring employees
South Australia Water Corporation T/A SA Water
(AG2021/4640)
Water, sewerage and drainage services | |
DEPUTY PRESIDENT ANDERSON | ADELAIDE, 14 MAY 2021 |
Application for an order relating to instruments covering new employer and transferring employees
[1] On 13 April 2021 South Australia Water Corporation T/A SA Water (SA Water or the Applicant) made an application to the Commission under section 318 of the Fair Work Act 2009 (FW Act) for orders in relation to instruments covering a new employer and transferring employees.
[2] The orders sought concern the Allwater JV Employees Enterprise Agreement 2019 - Professional, Technical, Supervisory and Administration Agreement (the Agreement). Three employees are will be impacted by the orders sought (the Affected Employees). SA Water seeks an order that the Agreement not cover the Affected Employees.
[3] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Electrical, Energy and Services Division (CEPU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) and the Community and Public Sector Union, State Public Services Federation (CPSU) (collectively, the Unions) are covered by the Agreement.
[4] On 19 April 2021 I issued directions requiring SA Water to serve its application, the directions and a provisional notice of listing on each transferring employee and the CEPU, AMWU and CPSU. Confirmation that this had occurred was provided by SA Water on 6 May 2021.
[5] The directions required the Unions to advise the Commission and SA Water of their position(s) in relation to the application by Friday 30 April 2021. Additionally, I directed generally that any request to be heard on the application be made by Friday 30 April 2021.
[6] For completeness, I note written materials in relation to any objection(s) to the application were to be filed by Wednesday 5 May 2021 and any reply materials by Friday 7 May 2021.
[7] I indicated in the directions that the application will be determined on the papers in the absence of any objections notified or expressions of intent to be heard.
[8] On 23 April 2021 my Chambers received notification from the CPSU 1 that it did not oppose the application. On 6 May 2021 my Chambers received notification from the CEPU2 and the AMWU3 that neither opposed the application. The CEPU further noted that it did not oppose the application as it considered that the wages and conditions provided in the SA Water Corporation Variation Agreement 2020 are overall better than those in the Agreement and that its members had not objected to transferring to SA Water.
[9] As no objections were received, I proceed to deal with the application on the papers.
[10] The materials before me are the application lodged by SA Water on 13 April 2021 and the aforementioned correspondence from the CEPU, AMWU and CPSU. The application itself contains an affidavit of Julie Pennetta, 4 Senior Manager Human Resources for SA Water.
Facts
[11] The facts can be briefly stated.
[12] Allwater JV (Allwater) is an unincorporated joint venture between Broadspectrum (Australia) Pty Ltd, Suez Environment Australia Pty Ltd and Degremont Pty Ltd. Since 2011 Allwater JV has had a contract with SA Water to operate and maintain water and wastewater systems owned by SA Water. This contract is due to expire on 1 July 2021.
[13] Operation and monitoring of South Australia’s water and wastewater systems are shared between Allwater and SA Water via Operations Control Centres. Allwater is primarily responsible for systems in the metropolitan area, whilst SA Water is primarily responsible for systems in regional South Australia. The metropolitan Operations Control Centre and the regional Operations Control Centre are both located in the SA Water Control Room. Despite different areas of responsibility, these teams are integrated.
[14] The three Affected Employees are employed by Broadspectrum Australia Pty Ltd (Broadspectrum) as part of Allwater. However each of the Affected Employees works in SA Water’s Control Room.
[15] SA Water has identified various benefits to ‘in-sourcing’ the metropolitan Operations Control Centre. SA Water wishes to take responsibility for the metropolitan Operations Control Centre. Ms Pennetta states that Allwater and SA Water have reached an agreement for this ‘in-sourcing’ to take effect. 5
[16] SA Water has provided each of the Affected Employees with an offer of direct employment with SA Water. This employment would be subject to the terms and conditions of the SA Water Corporation Variation Agreement 2020 (the SA Water Agreement). SA Water suggests that whilst some terms are better under the SA Water Agreement compared to the Agreement, and vice versa, the Affected Employees will not be disadvantaged by an order, if made. Specifically, it submits that under the SA Water Agreement, the Affected Employees would have access to additional leave days and a higher rate of pay.
[17] SA Water submits, and no contrary view has been advanced, that the Affected Employees support the orders sought due to their acceptance of SA Water’s conditional offers of employment. SA Water has also corresponded with the Unions concerning its intention to lodge this application. The Affected Employees are due to commence employment with SA Water from 1 July 2021.
[18] The Applicant is seeking orders under section 318(1)(a) of the FW Act that the Agreement not cover SA Water and the Affected Employees.
Statutory provisions
[19] Section 318 of the Act 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
[20] I turn to the factors required to be taken into account by section 318(3) of the FW Act.
Views of the employer (section 318(3)(a))
[21] Ms Pennetta’s affidavit provides SA Water’s view. By way of summary, the prospective employer submits that:
● the in-sourcing of the metropolitan Operations Control Centre will centralise functions, which will mitigate or remove barriers within the Control Room and improve SA Water’s resource allocation;
● the transfer of former Broadspectrum employees will allow SA Water to provide improved service delivery to its customers;
● employing each of the Affected Employees within SA Water’s workforce will foster an improved culture, as well as enable better succession planning, training and development;
● the Affected Employees have been offered employment that will count prior service with Allwater for all purposes, such as for leave accruals and the minimum employment period;
● the Affected Employees have been offered contractual entitlements that are generally better than, or no less favourable when considered overall to, the benefits in the Agreement;
● preserving the Agreement would incur operational and administrative inefficiencies. These inefficiencies include having to apply two different enterprise agreements for employees who perform the same or similar work; and
● the nominal expiry date of the Agreement is 1 September 2022, however the contract between Allwater and SA Water will expire on 1 July 2021. The offer of ongoing employment with SA Water is prospective (1 July 2021).
[22] Each of these grounds advanced by the Applicant weigh in favour of granting the application.
Views of employees (section 318(3)(a))
[23] Whilst provided an opportunity to do so, no employees individually participated in these proceedings.
[24] As noted earlier, the CEPU, the AMWU and the CPSU do not oppose the application.
[25] I am satisfied that the Affected Employees, and Unions, do not object to the application being granted. This factor weighs in favour of making the order sought.
Whether employees will be disadvantaged (section 318(3)(b))
[26] SA Water submit that employees will not be disadvantaged as the offers of ongoing employment accepted by the relevant employees entitle those employees to terms and conditions substantially similar to, or no less favourable than, current terms.
[27] The Applicant submits that overall employees will be better off in the direct employ of SA Water. On the material before me, I am satisfied that employees will not be disadvantaged.
Nominal expiry dates (section 318(3)(c))
[28] The Agreement has not passed its relevant nominal expiry date of 1 September 2022. This causes me to make two observations. The Agreement is not a stale instrument. Plainly the parties to the Agreement intended it to have operated until at least that date.
[29] However, the SA Water Agreement similarly has not yet passed its nominal expiry date 6, though will do so the day before the Affected Employees commence employment with SA Water. While the SA Water Agreement will thus have nominally expired the day prior, I do not consider that the SA Water Agreement will be stale or lack relevance.
[30] This factor is neutral.
Productivity, economic impact and business synergy (sections 318(3)(d), (e) and (f))
[31] I note that the work conducted by the Affected Employees and the relevant employees of SA Water is related and that having such employees on the same site performing work under common terms is likely to lessen the administrative burden of processing payroll and managing employment issues. It may also avoid potential disputes.
[32] This factor weighs in favour of making the orders sought.
Public interest (section 318(3)(g))
[33] There was no evidence that making the orders would be contrary to the public interest. This is a neutral factor.
Conclusion
[34] Being the proposed new employer of the Affected Employees, SA Water has standing to make these applications. 7 I am satisfied that the jurisdictional facts necessary for the exercise of the Commission’s powers under section 318(1)(a) of the FW Act have been made out.
[35] Having taken into account the considerations under section 318(3) of the FW Act, I am satisfied that these factors collectively weigh in favour of making the proposed orders. That all three of the Unions consent to the relevant applications, and in the absence of any other employee objection, I am satisfied that any potential disadvantage to the transferring employees has been addressed by the Applicant’s offers of employment entitling the transferring employees to substantially similar or equivalent conditions of employment.
[36] Consistent with section 318(4)(a), the date of effect of the Commission’s orders will be the day upon which the employees employed under the Agreement come to be transferred from the employment of Broadspectrum to the employment of SA Water. From that date they will be employed under the offers of ongoing employment with SA Water and the SA Water Agreement.
[37] An order will be issued giving effect to this decision. 8
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<AE505405 PR729666>
1 Email received 23 April 2021 at 3:55pm (ACST)
2 Email received 6 May 2021 at 5:24pm (ACST)
3 Email received 6 May 2021 at 5:53pm (ACST)
4 Exhibit A1
5 A1 at [11]
6 30 June 2021
7 Section 318(2)(a)
8 PR729667
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