Telstra Limited
[2022] FWC 2872
•26 OCTOBER 2022
| [2022] FWC 2872 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
Telstra Limited
(AG2022/4421)
| COMMISSIONER JOHNS | MELBOURNE, 26 OCTOBER 2022 |
Application for an order relating to instruments covering new employer and non-transferring employees
On 21 October 2022, Telstra Limited (the Applicant), made an application (the Application) pursuant to s.319 of the Fair Work Act 2009 (Cth) (the Act) for the Fair Work Commission (the Commission) to make an order relating to instruments covering new employer and non-transferring employees.
The Applicant seeks an Order in the following terms:
“1. Pursuant to section 319(1)(b) of the Fair Work Act 2009 (Cth) (FW Act), each of the Enterprise Agreements cover Telstra Limited and any Non-Transferring Employees who perform, or are likely to perform, Transferring Work for Telstra Limited.
2. In this order:
(a) “Enterprise Agreements” means the:
(i) Telstra Retail Stores Agreement 2022 - 2024 [AE516065]; and
(ii) Telstra InfraCo Fixed Enterprise Agreement 2022 - 2024 [AE516067]; and
(iii) Telstra Limited Enterprise Agreement 2022 - 2024 [AE516070].(the Agreements)
(b) “Non-Transferring Employees” has the same meaning as in section 314(2) of the FW Act.
(c) “Transferring Work” has the same meaning as in section 311(1) of the FW Act”
Each of the Agreements currently cover Telstra Corporation Ltd (TCL). After an impending corporate restructure, it is proposed that most employees of TCL whose employment is covered by the Agreements will, from around December 2022, be employed by the Applicant. By operation of sections 311 and 313 of the Act, there will be “transfers of business” from TCL to the Applicant. The Agreements will therefore cover the Applicant and the transferring employees after they commence employment with the Applicant while they perform the relevant transferring work.
The Applicant is currently covered by the Telstra Award 2015 and, once it becomes an employer in the retail industry, will be covered by the General Retail Industry Award 2020 (the Awards). The coverage of the Awards has the result that the Agreements will not apply to non-transferring Employees automatically under section 314 of the Act. In the present application the Applicant seeks that any non-transferring employees who perform the transferring work will also be covered by the applicable Enterprise Agreement. That is, it seeks to adopt the Agreements for employees hired by Telstra Limited after the transfers, who perform the transferring work but did not transition as part of the restructure.
The Application was lodged by email attaching a Form F40 Application form. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), the CPSU, the Community and Public Sector Union (CPSU) and Professionals Australia, who are covered by the Agreement, were copied in by way of service.
On 18 October 2022, Kristin Barlow, Industrial Officer of the CPSU, advised Lauren Frazer, Employee Relations for the Applicant, that the CPSU were supportive of the Application.[1] On 19 October 2022, Margaret Buchanan, Director of National Industrial Strategy & Workplace Advice and Support for Professionals Australia, advised Ms Frazer that Professionals Australia were supportive of the Application.[2] On the same day, Dahlia Khatab, Legal Officer for the CEPU, also advised Ms Frazer that the CEPU were supporting of the Application.[3]
No submissions in opposition to the Application were received. I have made my determination on the basis of all the written materials, whether mentioned in this decision or not.
Relevant Legislation
Section 313 provides:
313 Transferring employees and new employer covered by transferable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:
(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and
....
(3) This section has effect subject to any FWC order under subsection 318(1).
Section 319 provides:
319 Orders relating to instruments covering new employer and non-transferring employees
Orders that the FWC may make
(1) The 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 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) The 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 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 the FWC must take into account
(3) In deciding whether to make the order, 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 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 non-transferring employee before the later of the following:
(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;
(b) the day on which the order is made.
Consideration
In determining the matter, the Commission must take into account s.319(3).
Views of the new employer – s.319(3)(a)(i)
The new employer is the Applicant and is supportive of the Orders being made. This weighs in favour of the Orders being made.
Views of the employees who would be affected by the Order – s.319(3)(a)(ii)
The Applicant currently does not have any employees who would be affected by the Order. This is a neutral factor.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.319(3)(b)
The Applicant submits that the Agreements contain terms and conditions more generous than those which apply in the Telstra Award 2015 and the General Retail Industry Award 2020 (the Awards) that would otherwise apply to non-transferring employees. For example, the Agreements contain an entitlement to 15 days’ paid personal/carer’s leave, versus 10 under the National Employment Standards which would apply to retail employees (the Telstra Award does however contain this entitlement). The Agreements contain other entitlements including above-award minimum rates of pay, 16 weeks’ paid parental leave, three days of compassionate leave per permissible occasion, and a maximum redundancy benefit of 80 weeks’ pay, which are not prescribed by the awards.
This weighs in favour of the Orders being made.
The nominal expiry date of the agreement – s.319(3)(c)
The Agreements each have a nominal expiry date of 30 September 2024. The Applicant submitted that, therefore, a rationalisation of all terms and conditions for Telstra Limited employees, by replacing the Agreements, could not occur for some time.
This weighs in favour of the Orders being made.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace – s.319(3)(d)
The Applicant submitted that the Agreements will have a positive impact on the productivity of the Telstra Limited workplace and employee engagement as it would mean that employees doing the same work are subject to uniform terms and conditions and minimum rates of pay. Effectively, it will maintain the status quo.
This weighs in favour of the Orders being made.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer – s.319(3)(e)
The Applicant submitted that this consideration does not pertain to the present application where Telstra Limited is seeking orders to effect broader coverage of the transferring instruments.
This is a neutral factor.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer – s.319(3)(f)
The Applicant submitted that if the orders are made, there would be a high degree of business synergy between the instruments which would apply to non-transferring employees, and the Agreements. The industrial instruments covering both the Transferring Employees and non-transferring employees would be identical
This weighs in favour of the Orders being made.
The public interest – s.319(3)(g)
Having considered the commercial benefits to the Applicant, the support of the Unions and the fact that there will be no disadvantage to the non-transferring employees, I consider that it is in the public interest for the Orders to be made. This weighs in favour of the Orders being made.
Conclusion
It follows that the Application should be granted. The Orders sought by the Applicant have been issued [PR747259] concurrently with this decision.
COMMISSIONER
[1] LF-18 to Witness Statement of Lauren Frazer dated 21 October 2022.
[2] Ibid.
[3] Ibid.
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