South Australian Water Corporation T/A SA Water
[2021] FWC 3577
•22 JUNE 2021
| [2021] FWC 3577 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
Section 318 - Application for an order relating to instruments covering new employer and transferring employees
South Australian Water Corporation T/A SA Water
(AG2021/5239)
ALLWATER JV EMPLOYEES ENTERPRISE AGREEMENT 2018 - OPERATORS AGREEMENT
Water, sewerage and drainage services | |
DEPUTY PRESIDENT ANDERSON | ADELAIDE, 22 JUNE 2021 |
Application for an order relating to instruments covering new employer and transferring employees.
[1] On 21 May 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 2018 - Operators Agreement (the Agreement). One employee will be impacted by the orders sought (the Affected Employee). SA Water seeks an order that the Agreement not cover the Affected Employee.
[3] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and United Workers’ Union (UWU), formerly United Voice, (collectively, the Unions) are covered by the Agreement.
[4] On 24 May 2021 I issued directions requiring SA Water to serve its application, directions I had issued and a provisional notice of listing on the transferring employee and each of the Unions. Confirmation that this had occurred was provided by SA Water on 28 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 7 June 2021. Additionally, I directed generally that any request to be heard on the application be made by 7 June 2021.
[6] For completeness, I note written materials in relation to any objection(s) to the application were to be filed by 11 June 2021 and any reply materials by 18 June 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 21 June 2021 my Chambers received notification from the AMWU, 1 the CEPU2 and the UWU3 that each individually did not oppose the application. No correspondence was received from the Affected Employee.
[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 21 May 2021 and the aforementioned correspondence from the AMWU, the CEPU and UWU. 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 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] Under the contract Allwater is responsible for delivery of the Myponga water system. This encompasses water and wastewater treatment operations and network support for surrounding areas. A Process Technician employee is involved with this work. The Process Technician is primarily responsible for water supply and quality through operation of the water treatment plant.
[14] The Affected Employee is employed by Broadspectrum Australia Pty Ltd (Broadspectrum) as part of Allwater in the role of Process Technician. The terms and conditions of these roles are covered by the Agreement. The Agreement’s nominal expiry date is 1 September 2022. 5
[15] SA Water has taken the decision to insource Myponga water, wastewater and network facilities. Ms Pennetta suggests this will build SA Water’s knowledge of metropolitan assets. 6
[16] SA Water has provided the Affected Employee 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).
[17] SA Water suggests that the terms and conditions of the Agreement and the SA Water Agreement are similar, however certain differences exist also. For example the Agreement provides for specific training 7 whereas ordinary hours per week under the SA Water Agreement are 37.5 hours per week.8
[18] SA Water submits that the Affected Employee supports the orders sought due to their acceptance of SA Water’s conditional offer of employment. SA Water has also corresponded with the Unions concerning its intention to lodge this application. The Affected Employee is due to commence employment with SA Water from 1 July 2021.
[19] The Applicant is seeking orders under section 318(1)(a) of the FW Act that the Agreement not cover SA Water and its employees whose employment will transfer from Broadspectrum to SA Water to perform the transferring work. These orders are sought to operate from 1 July 2021 or such other date as the Commission deems appropriate.
Statutory provisions
[20] 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
[21] 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))
[22] Ms Pennetta’s affidavit provides SA Water’s view. By way of summary, the prospective employer submits that:
• the in-sourcing of the Myponga water, wastewater and network facilities will enhance SA Water’s knowledge and expertise concerning metropolitan assets;
• the Affected Employee has 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 Employee has been offered contractual entitlements that are generally better than the benefits in the Agreement;
• the Affected Employee would be paid an additional $2.06 per week under the SA Water Agreement compared to the Agreement;
• preserving the Agreement would lead to a situation where SA Water employees are paid at different rates for the same work, which could cause division or friction;
• 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, the nominal expiry date of the SA Water Agreement is 30 June 2021. The offer of ongoing employment with SA Water is prospective (1 July 2021).
[23] Each of these grounds advanced by the Applicant weigh in favour of granting the application.
Views of employees (section 318(3)(a))
[24] The Commission received no advice from the Affected Employee regarding his position on the SA Water application.
[25] The Commission was advised that each of the AMWU, CEPU and UWU did not oppose the application.
[26] In the absence of any advice from the Affected Employee, and with no objection(s) raised by the Unions, this factor weighs in favour of making the order sought.
Whether employees will be disadvantaged (section 318(3)(b))
[27] SA Water submit that the employee will not be disadvantaged as the offer of ongoing employment accepted by the Affected Employee entitles the employee to terms and conditions substantially similar to, or no less favourable than, his current terms.
[28] The Applicant submits that overall the employee will be better off in the direct employ of SA Water. On the material before me, I am satisfied that the Affected Employee will not be disadvantaged.
Nominal expiry dates (section 318(3)(c))
[29] 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.
[30] However, the SA Water Agreement similarly has not yet passed its nominal expiry date 9, 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.
[31] This factor is neutral.
Productivity, economic impact and business synergy (sections 318(3)(d), (e) and (f))
[32] I note that the work conducted by the Affected Employee 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.
[33] This factor weighs in favour of making the orders sought.
Public interest (section 318(3)(g))
[34] There was no evidence that making the orders would be contrary to the public interest. This is a neutral factor.
Conclusion
[35] Being the proposed new employer of the Affected Employee, SA Water has standing to make this application. 10 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.
[36] 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. As all three of the Unions do not object to the application, I am satisfied that any potential disadvantage to the transferring employee has been addressed by the Applicant’s offer of employment entitling the transferring employee to substantially similar or equivalent conditions of employment.
[37] Consistent with section 318(4)(a), the date of effect of the Commission’s orders will be the day upon which the employee employed under the Agreement comes to be transferred from the employment of Broadspectrum to the employment of SA Water. From that date the Affected Employee will be employed under the offer of ongoing employment with SA Water and the SA Water Agreement.
[38] An order will be issued giving effect to this decision. 11
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<AE502510 PR730924>
1 Email received 21 June 2021 at 11:43am (ACST)
2 Email received 21 June 2021 at 11:33am (ACST)
3 Email received 21 June 2021 at 12:19pm (ACST)
4 Exhibit A1
5 Agreement, clause 1.4
6 A1 at [9]
7 Agreement clause 4.2
8 SA Water Agreement clause 4.9.1
9 30 June 2021
10 Section 318(2)(a)
11 PR730925
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