South Australian Water Corporation
[2011] FWA 3281
•26 MAY 2011
[2011] FWA 3281 |
|
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements
South Australian Water Corporation
(AG2011/7224)
Water, sewerage and drainage services | |
COMMISSIONER STEEL | ADELAIDE, 26 MAY 2011 |
Transfer of business - transferring employees in agreements.
[1] This matter concerns an application for orders relating to an instrument covering a likely new employer and likely transferring employees pursuant to s.318(1)(a)of the Fair Work Act 2009 (the Act) and a further order relating to an instrument covering a likely new employer and non-transferring employees pursuant to s.319(1)(a) of the Act.
[2] Chapter 2, Part 2-8, Division of the Act provides the powers for Fair Work Australia (FWA) to make such orders, prescribes who can apply for such orders and the matters that FWA must take into account in deciding to exercise the discretion to make such orders. The latter are set out as follows:
“318 Orders relating to instruments covering new employer and transferring employees
Orders that FWA may make
(1) FWA 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) FWA 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 FWA must take into account
(3) In deciding whether to make the order, FWA 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.
...
319 Orders relating to instruments covering new employer and non-transferring employees
Orders that FWA may make
(1) FWA 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) FWA 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 FWA must take into account
(3) In deciding whether to make the order, FWA 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.”
Background to this matter
[3] Following a review by the South Australian government in regard to service delivery of water contracts it was decided that various operations that were previously done by the South Australian Water Corporation (SA Water) and outsourced to United Water International Pty Ltd (United Water), would be brought back in house, into SA Water.
[4] It is not contentious that such functions returning to SA Water are a transfer of business pursuant to s.311 of the Act. The intended transfer affects approximately 60 employees, a large number of whom have been offered employment with SA Water and who have accepted such offers conditional on this application being successful.
[5] United Water employees are covered by the United Water Employees Enterprise Agreement 2009 (the United Water Agreement). SA Water employees have an applicable agreement, the SA Water Corporation Enterprise Agreement 2010 (the SA Water Agreement). As a consequence of the transfer, the employees of United Water who accept such offers of employment with SA Water and who work in connection with the transferred operational functions will be transferring employees within the meaning of s.311(1) of the Act.
[6] The United Water Agreement in this context will be a transferable instrument pursuant to s.313 of the Act and will be applicable to SA Water and the transferred employees and may have applicability to non-transferring employees pursuant to s.314 of the Act.
[7] The applicant simply does not wish to be covered by two agreements in regard to their workforce and seeks the nominated orders to provide that the transferable instrument, (the United Water Agreement) shall not apply to transferred or non-transferred employees.
The application
[8] The applicant seeks the following orders:
1. Pursuant to s.318(1)(a) of the Act, that the United Water Agreement 2009 will not cover the applicant or any employees of the applicant who were previously employed by United Water International Pty Ltd (“United Water”) and who are transferring employees within the meaning of the Act.
2. Pursuant to s.319(1)(a) of the Act that the United Water Agreement will not cover any employees of the applicant who are non-transferring employees within the meaning of the Act.
3. The above orders are to have effect on and from 1 July 2011, or earlier date that any transferring or non-transferring employees commence employment with the applicant.
[9] Mr Dean of United Voice also sought an additional order, which was not objected to by the parties, as follows:
Pursuant to s.318(1)(b) of the Act that the SA Water Corporation Enterprise Agreement 2010 will cover the applicant and any employees of the applicant who were previously employed by United Water International Pty Ltd and who are transferring employees within the meaning of the Act.
Jurisdictional references
[10] Sections 318(3) and 319(3) of the Act are identical and they are the matters FWA must take into account in deciding this matter. Such conditioned discretion is further provided in s.309 that provides as follows:
“309 Object of this Part
The object of this Part is to provide a balance between:
(a) the protection of employees’ terms and conditions of employment under enterprise agreements, certain modern awards and certain other instruments; and
(b) the interests of employers in running their enterprises efficiently;
if there is a transfer of business from one employer to another employer.”
Submissions
[11] Mr Kidman for the applicant provided submissions.
[12] Mr Marks for United Water confirmed that they had participated in the formation of documentation issued to employees and that such represented a proper and formal consideration of the terms of both agreements.
[13] Mr Dean for United Voice proposed an additional order which was not opposed by the other parties.
[14] Mr Thorpe for the Community and Public Sector Union generally agreed that the submissions of Mr Kidman were valid.
[15] Mr Pisoni for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union did not object to the application.
Consideration in regard to ss.318(3) and 319(3) of the Act
[16] The applicant is seeking to generally apply one instrument to its workforce in the interests of its commercial requirements reflected in s.309 of the Act. The likely to be transferred employees form a small proportion of the applicant’s total employees and there are obvious benefits in such standardisation, efficiencies of administration and workplace culture. The relevant employees have been offered new contracts and have accepted such new contracts conditional upon the relevant instrument being the SA Water Agreement.
[17] The evidence provided orally supports that the process provided adequate consultation, information and feedback to employees involved.
[18] In terms of disadvantage to the employees concerned, on the evidence provided as to comparisons between the United Water Agreement and the SA Water Agreement, the tribunal considers on balance that there is was no identified disadvantage to the relevant employees. The mentioned enhanced remuneration and minor condition changes have been evaluated and accepted by the relevant employees.
[19] The nominal expiry date of the United Water Agreement is 1 July 2012 while the SA Water Agreement’s nominal expiry date is 30 June 2012. The employees shall therefore not lose any accrued benefits in term of a recently negotiated agreement and will have an opportunity for a new agreement at the same juncture.
[20] In considering the question of negative impact upon the employer’s productivity the tribunal has accepted that there are benefits and efficiencies for the enterprise of having a standardised approach and the avoidance of multiple instruments and their administration. There is also economic benefit in terms of clarity of activities and operations of the applicant, in that work does not need to be categorised as transferable or otherwise in respect to employees. There is no evidence identified that any significant disadvantage would be experienced by the applicant, presumably because the number of employees considered in this matter is minor.
[21] In regard to the question of business synergy between the two agreements, it was submitted that there is a lack of business synergy between the agreements as they have contrasting classification systems and the scope of the businesses are varied.
[22] Finally, in terms of the public interest consideration, given the submission of the parties, the tribunal can find no offence to the public interest in this application given the guidance of the object of the legislation in s.309 of the Act.
[23] The tribunal therefore considers, with due regard to the requirements of the Act, that it is in the interests of the applicant, their existing employees and their likely transferable employees that this application for orders pursuant to ss.318 and 319 be granted. The tribunal so orders. The orders shall have an operative date of 1 July 2011 or any earlier date that any transferring employee or non-transferring employee commence employment with the applicant.
COMMISSIONER
Appearances:
Mr T Kidman with Ms D Grainger and Mr C Glasson for the applicant
Mr T Marks with Ms K Gallina for United Water International Pty Ltd
Mr P Dean for United Voice
Mr M Thorpe with Mr A Wise for the Community and Public Sector Union - SPSF Group (South Australian Branch)
Mr S Pisoni for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - South Australian Divisional Branch
Hearing details:
2011:
Adelaide
19 May
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