Sydney Trains; NSW Trains

[2018] FWC 1681

[2018] FWC 1681

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.768BA - Application for an order about coverage for transferring employees under a state instrument

Sydney Trains; NSW Trains
(AG2018/426)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 21 MARCH 2018

Application for orders that the Sydney Trains Enterprise Agreement 2014 and NSW Trains Enterprise Agreement 2014 will cover employees currently covered by the Transport for New South Wales Salaries and Conditions of Employment Award 2017 who are transferring to Sydney Trains and NSW Trains respectively – Fair Work Act 2009 (Cth) s.768BA – application granted – orders issued.

Background

[1] This decision concerns an application made pursuant to s.768BA of the Fair Work Act 2009 (Cth) (FW Act) by Sydney Trains and NSW Trains (the applicants). The application relates to the transfer of 22 employees (the transferring employees) from the Transport Service of NSW (Transport for NSW or TfNSW) to the applicants’ businesses. The orders sought are that:

•  the Transport for New South Wales Salaries and Conditions of Employment Award 2016 (the TfNSW Award) will not cover the transferring employees as a copied State instrument;

•  the Sydney Trains Enterprise Agreement 2014 1 cover the transferring employees transferred to Sydney Trains; and

•  the NSW Trains Enterprise Agreement 2014 2 cover the transferring employees transferred to NSW Trains.

[2] The employees perform human resources roles. They are variously employed as HR Business Leadership Partners, OD Business Partners, HR Associate Business Partners and HR Performance Analysts. Prior to the transfer, while the employees were employed by TfNSW, they performed the same roles on deployment in the business of the applicants. After the transfer, they continue to perform the same work, using the same assets that they used prior to the transfer.

The legislation

[3] The relevant legislative provisions of the FW Act are as follows:

‘768BA FWC orders about coverage for transferring employees

Orders that the FWC may make

(1) The FWC may make the following orders:

(a) an order that a copied State instrument for a transferring employee that would, or would be likely to, cover the transferring employee and the new employer because of subsection 768AN(1) does not, or will not, cover the transferring employee and the new employer;

(b) an order that an enterprise agreement or named employer award that covers the new employer at the transferring employee’s re-employment time covers, or will cover, the transferring employee.

Who may apply for an order

(2)  The FWC may make an order under subsection (1):

(a) on its own initiative; or

(b) on application by any of the following:

i. a transferring employee or an employee who is likely to be a transferring employee;

ii. the new employer or a person who is likely to be the new employer;

iii. an employee organisation that is entitled to represent the industrial interests of an employee referred to in subparagraph (i);

iv. if the application relates to an enterprise agreement—an employee organisation that is, or is likely to be, covered by the agreement.

Matters that the FWC must take into account

(3) In deciding whether to make an order under subsection (1), the FWC must take into account the following:

(a) the views of:

i. the employees who would be affected by the order; and

ii. the new employer or a person who is likely to be the new employer;

(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 a copied State employment agreement or an enterprise agreement—the nominal expiry date of the agreement;

(d) whether the copied State 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 copied State instrument covering the new employer;

(f) the degree of business synergy between the copied State instrument and any workplace instrument that already covers the new employer;

(g) the public interest.

Restriction on when order may come into operation

(4) An order under subsection (1) must not come into operation in relation to a particular transferring employee before the later of the following:

(a) the transferring employee’s re-employment time;

(b) the day on which the order is made.’

Consideration

[4] Written submissions were received from the applicants, Unions NSW and three of the transferring employees. I have taken all of these submissions into account.

[5] I am satisfied that the applications have been validly made by the new employers as provided for under s.768BA(2)(b)(ii) of the FW Act.

[6] With regard to the views of the transferring employees, I note that the applicants sent letters to the transferring employees outlining the way in which the transfers would take place and the proposed application to the Fair Work Commission (the Commission), and asking them to

‘… acknowledge the terms and conditions of this transfer and consent to [the relevant applicant] making an application under s.768BA of the Fair Work Act 2009 (Cth) and the relevant order being made by the Fair Work Commission, as described in the letter above.’

[7] 19 of the 22 transferring employees gave their consent to the application. All the employees were notified by the Commission and invited to advise my chambers if they wished to be heard on the application. None of the employees who had given their consent to the application responded to this invitation. It can reasonably be inferred that those 19 employees are at least not opposed to the making of the orders sought by the applicants.

[8] Three of the employees did not give their written consent to the application and in addition, advised the Commission of their concerns. These concerns, which are discussed in more detail below, relate to perceived disadvantages they would suffer if the proposed orders are made.

[9] The new employers support the proposed orders for reasons that will be discussed below.

[10] Three of the employees submitted that the proposed orders would disadvantage them. Their position was supported by Unions NSW. Their concerns primarily arise because they work a 35-hour week under the TfNSW Award, whereas they would work a 38-hour week under the applicants’ enterprise agreements. Other concerns relate to the loss of ‘banked Christmas flex’ (available to TfNSW employees, but not employees of the applicants) differences in long service leave, parental leave and paid lactation breaks, and the transfer of accrued entitlements.

[11] It is hard to argue with the proposition that, all other things being equal, moving from a 35-hour week to a 38-hour week constitutes a disadvantage to the employees. However, I note that all the transferring employees will move to the nearest higher equivalent grade under the enterprise agreements. This means that all the employees will receive an increase in remuneration. Unions NSW calculated the average pay increase as $1825.71 a year.

[12] There would be other benefits to the transferring employees under the applicants’ enterprise agreements. This includes a free travel pass not previously provided as part of their employment with TfNSW, as well as significantly enhanced redundancy benefits. This later benefit is potentially of more than academic interest, as it is anticipated that the unit where the transferring employees work is to be restructured in the immediate future, which could result in some roles being made redundant. Without the proposed orders, any transferring employees who become redundant as part of this process would only be entitled to the legislative minimum entitlements.

[13] With regard to long service leave, the main difference between the industrial instruments is that under the TfNSW Award, employees are entitled to access pro rata ‘extended leave’ after seven years of continuous service, whereas under the applicants’ enterprise agreements, employees are not entitled to access long service leave until they have accrued at least 10 years’ continuous service. There appears to be no difference in the quantum of leave accrued. While the inability to access accrued pro rata leave after seven years may be a minor disadvantage for some employees, I note that the employee who raised this as a concern, and who had obtained approval from TfNSW to access her accrued leave after seven years, is to have this approval recognised by Sydney Trains to ensure she is not disadvantaged.

[14] With regard to Christmas flex leave, this is not an entitlement provided for in the TfNSW Award. The proposed orders would have no effect on this entitlement and could not therefore be said to disadvantage the affected employees in this regard.

[15] I am satisfied that the applicants have made appropriate arrangements to ensure that the accrued entitlements of the transferring employees are dealt with equitably.

[16] Finally I note that the applicants’ enterprise agreements do not provide one week’s paid parental leave or paid lactation breaks, unlike the TfNSW Award.

[17] The affected employees will have to work somewhat longer hours if the orders are made and will lose some other relatively minor conditions. However they will receive increased pay, a free travel pass, and improved redundancy benefits. Weighing up all these changes, I am satisfied that the proposed orders would not disadvantage any of the employees to any significant extent.

[18] I am satisfied that failure to make the proposed orders would have a negative impact on the productivity of the applicants’ businesses. It would mean that the pay and conditions of a very small number of employees would be governed by a different industrial instrument from those governing the thousands of other employees employed by the applicants. This would include, amongst other things, a different pay and classification structure. It would introduce significant and unnecessary complexity in the management of the applicants’ businesses. Given the differences between the industrial instruments, there is clearly a lack of business synergy between the TfNSW Award and the applicants’ enterprise agreements.

[19] I am not satisfied that the public interest is greatly engaged by the application, beyond the very general interest in agencies such as Sydney Trains and NSW Trains being run as efficiently as possible for the benefit of the people of NSW.

Conclusion

[20] Taking into account all the relevant factors, I am satisfied that it would be appropriate to make the orders sought, effective from the date of this decision.

[21] The orders will be issued concurrently with this decision, to the following effect:

•  the Transport for New South Wales Salaries and Conditions of Employment Award 2016 will not cover the transferring employees as a copied State instrument;

•  the Sydney Trains Enterprise Agreement 2014 will cover the transferring employees transferred to Sydney Trains; and

•  the NSW Trains Enterprise Agreement 2014 will cover the transferring employees transferred to NSW Trains.

SENIOR DEPUTY PRESIDENT

Written submissions:

Marketa Hajek: 16 February and 4 March 2018.

Michael Bates: 5 March 2018.

Kathleen Healy: 5 March 2018.

Unions NSW: 7 March 2018.

Sydney Trains & NSW Trains (reply): 19 March 2018.

<PR601381>

 1   AE410462.

 2   AE410460.

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