Suez Water Pty Ltd
[2021] FWCA 4362
•23 JULY 2021
| [2021] FWCA 4362 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
Section 320 - Application to vary a transferable instrument
Suez Water Pty Ltd
(C2021/4196)
ALLWATER JV EMPLOYEES ENTERPRISE AGREEMENT 2018 - MECHANICAL TRADES AGREEMENT (AND OTHERS)
Water, sewerage and drainage services | |
DEPUTY PRESIDENT ANDERSON | ADELAIDE, 23 JULY 2021 |
Applications to vary a transferable instrument
[1] On 21 July 2021 Suez Water Pty Ltd (Suez, or the Applicant) applied to the Commission under section 320 of the Fair Work Act 2009 (the FW Act) to vary three transferable instruments (collectively, the Agreements).
[2] The instruments subject to this application are the:
● Allwater JV Employees Enterprise Agreement 2018 - Operators Agreement (Operator Agreement);
● Allwater JV Employees Enterprise Agreement 2018 - Mechanical Trades Agreement (Mechanical Agreement); and
● Allwater JV Employees Enterprise Agreement 2019 – Professional, Technical, Supervisory and Administration Agreement (PTSA Agreement).
[3] The variation seeks to vary the parties to the Agreements by making the following amendment:
“Seeking to amend the parties to all three of these agreements to replace “Broadspectrum” with SUEZ Water Pty Ltd and replace “Allwater JV” with Adelaide Service Delivery Production and Treatment (known as ASD P&T) within:
i. Allwater JV Employees Enterprise Agreement 2018 - Operators Agreement (Operator) (AG2018/6895)
ii. Allwater JV Employees Enterprise Agreement 2018 – Mechanical Trades Agreement (Mechanical) (AG2018/6896)
iii. Allwater JV Employees Enterprise Agreement 2019 – Professional, Technical, Supervisory and Administration Agreement (PTSA) (AG2019/2826)”
[4] The three agreements variously name the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), the Community and Public Sector Union (CPSU), the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) and the United Workers’ Union (formerly United Voice) as covered by one or more of the agreements.
[5] The background to this application warrants a brief summary.
[6] This application follows a previous application made by Suez under section 318 of the FW Act. 1 The section 318 application sought to vary the Agreements in the same manner sought in this application.
[7] The section 318 application was lodged on 11 June 2021 concurrently with a separate section 320 application 2. That other section 320 application sought to vary the Allwater JV Employees Enterprise Agreement 2018-2021 - Electrical Trades Agreement (Electrical Agreement). This other section 320 application sought to vary the Electrical Agreement by amending the parties in the same way sought here, as well as by inserting new classifications. That other section 320 application was approved on 15 July 2021.3
[8] On 17 June 2021 I issued directions concerning the section 318 application (and the first section 320 application). The directions required the CEPU, the CPSU, the AMWU and the UWU to advise their position(s) in relation to the applications in which they have standing by Monday 28 June 2021. The directions provided further for any person to advise an objection or intent to be heard on the applications.
[9] None of the unions objected to the section 318 application insofar as it related to the agreement(s) they were named in. 4
[10] Upon review of the section 318 application it became apparent that the power conferred upon the Commission under that section of the FW Act would not allow an order to be made in the terms sought. To achieve what Suez was seeking, an application under section 320 was required.
[11] The unions were asked to advise whether their positions recently expressed regarding the section 318 application would extend to the same application if made under section 320. The unions confirmed this to be the case. 5
[12] After further consideration it was recommended to Suez that, rather than amend its section 318 application such that it became a section 320 application, its original section 318 application be discontinued and a fresh section 320 application be lodged. Suez did so. This matter C2021/4196 is the fresh section 320 application.
[13] Given the extended background to this application, and given the positions twice expressed by the unions that none object to the applications, I indicated to the parties that unless advised otherwise I would consider their positions as previously expressed to remain their positions for the purpose of this application.
[14] A short period was allowed for the unions to advise any change to their position or otherwise comment on the fresh application. No further communication was received from the unions.
[15] As no objection(s) or other updated position(s) have been received it is appropriate to determine the application on the papers.
[16] The materials before me are the application as lodged by the Applicant on 21 July 2021 and the correspondence from the unions in this matter and matter AG2021/5571.
Facts
[17] The facts can be briefly stated.
[18] Suez has been awarded a five-year contract with SA Water Corporation (SA Water) to produce and treat water and wastewater in Adelaide’s metropolitan area. The delivery of these services is referred to as the Production & Treatment Alliance (P&T Alliance).
[19] This contract commenced on 1 July 2021.
[20] The production and treatment services now performed by Suez were, until the new contract was awarded, performed by a previous joint venture known as Allwater Pty Ltd (Allwater).
[21] The P&T Alliance is undertaking a transfer of business from Allwater, including the transfer of various industrial instruments. Three of these instruments are the Agreements dealt with in this application. An undisclosed number of employees within the new alliance will be covered by the transitional instruments.
Statutory provisions
[22] Section 320 of the FW Act provides:
“320 Variation of transferable instruments
Application of this section
(1) This section applies in relation to a transferable instrument that covers, or is likely to cover, the new employer because of a provision of this Part.
Power to vary transferable instrument
(2) The FWC may vary the transferable instrument:
(a) to remove terms that the FWC is satisfied are not, or will not be, capable of meaningful operation because of the transfer of business to the new employer; or
(b) to remove an ambiguity or uncertainty about how a term of the instrument operates if:
(i) the ambiguity or uncertainty has arisen, or will arise, because of the transfer of business to the new employer; and
(ii) the FWC is satisfied that the variation will remove the ambiguity or uncertainty; or
(c) to enable the transferable instrument to operate in a way that is better aligned to the working arrangements of the new employer’s enterprise.
Who may apply for a variation
(3) The FWC may make the variation only on application by:
(a) a person who is, or is likely to be, covered by the transferable instrument; or
(b) if the application is to vary a named employer award—an employee organisation that is entitled to represent the industrial interests of an employee who is, or is likely to be, covered by the named employer award.
Matters that the FWC must take into account
(4) In deciding whether to make the variation, 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 transferable instrument as varied;
(b) whether any employees would be disadvantaged by the transferable instrument as varied in relation to their terms and conditions of employment;
(c) if the transferable instrument is an enterprise agreement—the nominal expiry date of the agreement;
(d) whether the transferable instrument, without the variation, 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, without the variation;
(f) the degree of business synergy between the transferable instrument, without the variation, and any workplace instrument that already covers the new employer;
(g) the public interest.
Restriction on when variation may come into operation
(5) A variation of a transferable instrument under subsection (2) must not come into operation before the later of the following:
(a) the time when the transferable instrument starts to cover the new employer;
(b) the day on which the variation is made.”
Consideration
[23] I turn to the factors required to be taken into account by section 320(4) of the FW Act.
[24] Suez, as the new employer, or likely new employer, will be covered by the Agreement and as such has standing to apply for this variation. 6
Views of the new employer and employees
[25] In lodging the application, Suez is seeking that the Commission exercise its power to vary the Agreement. Self-evidently, the new employer’s view is that the application should be granted. I am further satisfied that employees who would be affected by the varied instrument do not oppose the Variation Application given the positions expressed by the unions.
Disadvantage to employees
[26] The variation sought is to amend the name of parties in the Agreements to reflect that the employing entity has changed. This is an uncontroversial amendment. I am satisfied that there will be no material disadvantage to affected employees.
Nominal expiry date
[27] The nominal expiry date of the Agreements vary. The Operator Agreement and Mechanical Agreement nominally expire on 1 September 2021. The PTSA Agreement nominally expires on 1 September 2022. Each agreement is still within its nominal period of operation. This factor weighs in favour of the variations sought.
If not varied, any negative impact on productivity of the new employer’s workplace
[28] The application lodged by Suez does not address any inefficiencies or negative impacts on productivity should the Agreement not be varied. Intuitively though if the applicable instrument for a person’s employment does not identify their employer, this may be a cause for ambiguity. In the absence of any direct submission from the Applicant this is a neutral consideration.
If not varied, any significant economic disadvantage on the new employer
[29] Similarly, there is no direct submission in the application concerning any disadvantage to Suez should the application not be granted. The same intuitive view can be taken as above and similarly this is a neutral consideration.
Degree of business synergy between workplace instruments
[30] The Agreements are three of at least four agreements underpinning the operation and maintenance of water and wastewater systems in South Australia. This application seeks to vary the name of a party bound in three of those agreements. By making the variation sought each of the three Agreements are likely to enable the transferable instrument to operate in a way that is better aligned to the working arrangements of the new employer’s enterprise. In light of the very limited variation sought, and the continued operation of the Agreement until it is terminated or replaced, there is likely to be somewhat improved synergy between workplace instruments.
Public interest
[31] No direct submission has been put concerning public interest in this application. Stable and consistent delivery of water and wastewater systems is well within the public interest however. Naming the correct employer party to the Agreements, following the aforementioned restructure, is in the public interest and weighs in favour of the application being granted.
[32] The unions named in the Agreements do not oppose the variations sought.
[33] In this matter some factors weigh in favour of the application and others are neutral. No evidence has been put before me of opposition to the application.
[34] I am satisfied that it is appropriate to vary the Agreements as sought. The application by Suez is granted.
[35] The variations will operate from 11:59pm on 23 July 2021. Three Orders will be issued to this effect. 7
DEPUTY PRESIDENT
1 AG2021/5571
2 C2021/3325
3 [2021] FWCA 4101
4 Email from CPSU 21 June 2021; email from CEPU 24 June 2021; email from AMWU 30 June 2021; and email from UWU 13 July 2021.
5 Email from CEPU 15 July 2021; email from CPSU 16 July 2021; email from AMWU 16 July 2021 and email from UWU 20 July 2021.
6 Section 320(3)(a)
7 Mechanical Agreement - PR731964; Operators Agreement - PR731967; and PTSA Agreement - PR731968
Printed by authority of the Commonwealth Government Printer
<PR731963>
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