Suez Water Pty Ltd

[2021] FWCA 4101

[2021] FWCA 4101

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
Section 320 - Application to vary a transferable instrument

Suez Water Pty Ltd
(C2021/3325)

ALLWATER JV EMPLOYEES ENTERPRISE AGREEMENT 2018-2021 - ELECTRICAL TRADES AGREEMENT

Manufacturing and associated industries
DEPUTY PRESIDENT ANDERSON	ADELAIDE, 15 JULY 2021

Application to vary transferable instrument

[1] On 11 June 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 a transferable instrument.

[2] The instrument subject to this application is the Allwater JV Employees Enterprise Agreement 2018 - 2021 - Electrical Trades Agreement (the Agreement). The variation, detailed further below, seeks to vary the parties to the Agreement and to insert new classifications.

[3] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) is named as covered by the Agreement.

[4] Concurrent with this matter, Suez also filed a separate application 1 in the Commission under section 318 of the FW Act for an order relating to instruments covering a new employer and transferring employees. That application concerned three other Allwater JV enterprise agreements. Those three applications variously named the CEPU, the CPSU (Community and Public Sector Union), 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] Where separate reference is required, this application under section 320 of the FW Act is referred to as the ‘Variation Application’. The section 318 applications will be referred to as the ‘Transfer Application’.

[6] On 17 June 2021 I issued directions concerning both the Variation Application and the Transfer Application. Those directions required Suez to serve its applications, the directions and a provisional notice of listing on each of the industrial associations covered by the transferable instrument(s).

[7] 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.

[8] On 12 July 2021 the CEPU advised 2 it did not object to either the Variation Application or the Transfer Application.

[9] This decision concerns the Variation Application only.

[10] As no objection was received in relation to the Variation Application, it is appropriate to determine the application on the papers.

[11] The materials before me are the Variation Application as lodged by the Applicant on 11 June 2021 and the correspondence from the CEPU.

Facts

[12] The facts can be briefly stated.

[13] 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 by the Applicant as by the Production & Treatment Alliance (P&T Alliance).

[14] This contract commenced on 1 July 2021.

[15] 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).

[16] The P&T Alliance is undertaking a transfer of business from Allwater, including the transfer of various industrial instruments. One of these instruments is the Agreement. Approximately 45 employees will be covered by the Agreement following the transfer of business.

[17] The Variation Application seeks two changes to the Agreement:

● amendment of the corporate entity description referred to in the Agreement so as to replace “Broadspectrum” with SUEZ Water Pty Ltd and replace “Allwater JV” with Adelaide Service Delivery Production and Treatment (known as ASD P&T); and

● insertion of new classifications in addition to the existing classifications within the Agreement.

[18] The new classifications sought to be inserted relate to Operators and Process Technicians. The additional classifications provide a range of levels within each class of employee.

Statutory provisions

[19] 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

[20] I turn to the factors required to be taken into account by section 320(4) of the FW Act.

[21] 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. 3

Views of the new employer and employees

[22] 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 position expressed by the CEPU.

Disadvantage to employees

[23] The variation sought is to add new classifications to the Agreement. Suez has submitted that wage rates under the new classification structure will be at least 2.5% higher, and that greater increases may be available depending on further certification or trade competencies. Suez also indicates that no employees will have a reduction in pay if the application is approved. I am satisfied that there will be no material disadvantage to effected employees.

Nominal expiry date

[24] The nominal expiry date of the Agreement is 1 September 2021. The 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

[25] The application lodged by Suez does not directly address any inefficiencies or negative impacts on productivity should the Agreement not be varied. Suez does indicate that the new classifications will assist in delivering productivity targets. This submission is more relevant to public interest and is not direct evidence of a negative impact on productivity from not varying the Agreement. This is a neutral consideration.

If not varied, any significant economic disadvantage on the new employer

[26] Similarly, there is no direct submission in the application concerning any disadvantage to Suez should the application not be granted. This is a neutral consideration.

Degree of business synergy between workplace instruments

[27] The Agreement is one of at least four agreements underpinning the operation and maintenance of water and wastewater systems in South Australia. The Variation Application seeks to insert new classifications into only one of the four agreements (as well as vary the name of a party bound). The classifications sought, although limited in nature, are relevant to the business of Suez. They 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 limited variations 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

[28] Suez indicates that the new classifications will assist it in efficiently delivering water and wastewater services in line with its 5-year contract. Suez also submits the new classifications will improve productivity by increasing the skills and scope of tasks undertaken by employees. Efficient and sustainable delivery of water and wastewater systems is well within the public interest. This factor should not be overstated in the context of the limited variations sought, but weighs somewhat in favour of the application being granted.

[29] The union named in the Agreement, the CEPU, does not oppose the variations sought.

[30] 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.

[31] I am satisfied that it is appropriate to vary the Agreement as sought. The application by Suez is granted.

[32] The variations will operate from 11:59pm on 15 July 2021. An Order will be issued to this effect.

DEPUTY PRESIDENT

 1   AG2021/5571

 2   Email received 12 July 2021 at 9:49am ACST

 3 Section 320(3)(a)

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