Territory Transit Pty Ltd

[2016] FWC 2598

[2016] FWC 2598

The attached document replaces the document previously issued with the above code on 26 April 2016.

● In paragraph [1] 5 October 2015 has been corrected to 5 October 2014.

Stephanie Shahine

Associate to Commissioner Bissett

Dated 4 May 2016

[2016] FWC 2598

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees

Territory Transit Pty Ltd
(AG2016/2757)

TERRITORY TRANSIT ENGINEERING STAFF AGREEMENT 2015

Manufacturing and associated industries
COMMISSIONER BISSETT	MELBOURNE, 26 APRIL 2016

Application for an order relating to instruments covering transferring employees – Territory Transit Engineering Staff Agreement 2015 – application granted.

[1] On 5 October 2014 Territory Transit commenced operating public bus services in the Northern Territory. Prior to this date the service was conducted by the Northern Territory Government (the NT Government).

[2] As part of the transfer of business that occurred when Territory Transit commenced operating the public bus service Territory Transit gained a number of employees from the NT Government. Included in these employees are three (3) engineering employees (the transferring employees).

[3] By virtue of the operation of the Fair Work Act 2009 (the Act) the transferring employees continue to be covered by the Northern Territory Public Sector Enterprise Agreement 2013-2017 (the NTPS Agreement, the transferable instrument). Non-transferring employees (that is, those employees who were not transferred from NT Government employment) of Territory Transit are covered by the Territory Transit Engineering Staff Agreement 2015 (the TT Engineering Staff Agreement).

[4] Territory Transit, as the new employer, seeks an order of the Commission to the effect that the NTPS Agreement does not cover Territory Transit and the transferring employees.

Legislation

[5] Section 318 of the Act sets out the circumstances in which an order such as that sought by Territory Transit may be made by the Commission:

318 Orders relating to instruments covering new employer and 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 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) 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 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 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 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.

[6] I will consider each of the matter as required.

[7] I am assisted in this by virtue of a detailed application filed by Territory Transit, an affidavit of Brian Thompson, General Manager of Territory Transit Pty Ltd and information from the transferring employees.

Section 318(3)(a)(i) - the views of the new employer

[8] Territory Transit says that its preference is that all of its employees be covered by the same industrial instrument as this will assist in rostering. Further, it says it would not be harmonious to have employees performing the same work covered by different terms and conditions and that two sets of terms and conditions will be more difficult to manage with respect to compliance due to the need to maintain detailed knowledge of more than one instrument.

Section 318(3)(a)(ii) - the view of the employees who would be affected by the order

[9] Each of the transferring employees has indicated that they have been involved in discussions in relation to the NTPS Agreement and the TT Engineering Staff Agreement and each confirms that he wishes to be covered by the TT Engineering Staff Agreement.

Section 318(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[10] I have considered carefully the analysis of wages and conditions pursuant to the NTPS Agreement and the TT Engineering Staff Agreement and am satisfied that the transferring employees will not be disadvantaged by the order sought in relation to their terms and conditions of employment.

Section 318(3)(c) - if the order relates to an enterprise agreement—the nominal expiry date of the agreement

[11] The nominal expiry date of the NTPS Agreement is 10 August 2017. The TT Engineering Staff Agreement has a nominal expiry date of 18 February 2020.

Section 318(3)(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[12] I am satisfied that the transferable instrument would have a negative impact on Territory Transit’s operation. Territory Transit would need to have staff trained and able to ensure compliance with two industrial instruments; it would have two distinct sets of terms and conditions applying to staff performing the same work; and it would create difficulties and be time consuming to accommodate different minimum shift lengths, pay rates and allowances for staff performing the same work.

Section 318(3)(e) - whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[13] I am satisfied, for the reasons outlined above, that that Territory Transit would incur economic disadvantage if was covered by the NTPS Agreement.

Section 318(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[14] Territory Transit submit and I accept that there is not a high degree of synergy between the NTPS Agreement and the TT Engineering Staff Agreement. This is because the NTPS Agreement is an agreement with broad coverage of the NT public sector. It is not specific to an engineering facility such as this particular part of Territory Transit.

Section 318(3)(g) - the public interest

[15] I am satisfied that it is on the public interest to grant the application.

[16] It is in the public interest to develop and encourage harmonious workplaces. One way of doing this is to encourage a single set of terms and conditions and employment in the workplace with respect to employees doing essentially the same work. Two disparate industrial instruments covering the employees may result in disquiet and an attempt by employees to try and cherry pick the best of conditions or it may result in one group of employees believing the other group is more favoured.

[17] A single industrial instrument will also ensure efficiency and minimise the risk of non-compliance with an industrial instrument. Such an outcome is in the public interest as it reduces the need for public monies to be spent on ensuring compliance or monitory compliance.

Conclusion

[18] For the reasons given above I will make the order as sought in the application. The Order will issue with this decision.

COMMISSIONER

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