The Australian National University
[2019] FWC 5588
•15 AUGUST 2019
| [2019] FWC 5588 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
The Australian National University
(AG2019/2327)
Educational services | |
DEPUTY PRESIDENT KOVACIC | CANBERRA, 15 AUGUST 2019 |
Application for an order relating to instruments covering the Applicant and transferring employees – orders made that the Department of Industry, Innovation and Science Enterprise Agreement 2016 – 2019 will not apply to any transferring employees or the Applicant.
[1] This decision concerns an application made pursuant to s.318 of the Fair Work Act2009 (the Act) by the Australian National University (the University) seeking orders that:
• the Department of Industry, Innovation and Science Enterprise Agreement 2016 – 2019 1(the DIIS Agreement) does not and will not cover the University or any transferring employees; and
• The Australian National University Enterprise Agreement 2017-2020 2(the ANU Agreement) will apply to the transferring employees in respect of their employment with the University.
[2] The application arises in circumstances where the University was part of a consortium of 13 Australian universities chosen to manage and operate the Anglo-Australian Telescope (AAT) at Siding Spring Observatory which was previously part of a Division in the Australian Government Department of Industry, Innovation and Science (DIIS). The University was appointed to operate the AAT on behalf of the consortium with effect from 1 July 2018. As a result, the University considered that there was a transfer of business for the purposes of s.311 of the Act.
[3] The University made offers of employment to 14 employees of DIIS who were employed to operate the AAT. Of those 14 employees, 12 accepted employment with the University (the transferring employees) and commenced employment on 1 July 2018. The transferring employees perform substantially the same work for the University as they performed when employed by DIIS. The transferring employees are currently covered by the DIIS Agreement. All other employees of the University who perform similar work to the transferring employees are covered by the ANU Agreement.
[4] Ms Belinda Farrelly, the University’s Associate Director, Organisational Change in the Human Resources Division, provided an affidavit in support of the application. In her affidavit Ms Farrelly provided, among other things, an overview of the consultation process undertaken by the University with the transferring employees. Of note, Ms Farrelly deposed that on:
• on 10 January 2019 the transferring employees were provided with a comparison of the terms and conditions provided for in the ANU and DIIS Agreements and the process and reasons for the University’s at that stage proposed s.318 application; and
• between 10 and 24 January 2019 members of the University’s Human Resources team and the Director, Siding Spring Observatory were available to meet with the transferring employees to provide with the opportunity to ask questions and raise concerns regarding their remuneration and proposed terms of employment, including the terms of the ANU Agreement.
[5] Ms Farrelly declared that at the time of her affidavit eight of the transferring employees had indicated that they would prefer to be covered by the ANU Agreement, one transferring employee indicated that he would prefer to be covered by the DIIS Agreement, one transferring employee did not have a preference for either of the agreements and two transferring employees did not respond.
[6] In her affidavit Ms Farrelly also summarised the main advantages of being covered by the ANU Agreement rather than the DIIS Agreement and vice versa. Specifically, Ms Farrelly identified the following as the main advantages of being covered by the ANU Agreement as opposed to the DIIS Agreement:
• annual salary increases until July 2021;
• 26 weeks’ paid parental leave in relation to the birth or placement of a child for staff with more than one year’s continuous service plus additional career re-entry assistance for primary carers (compared to 14 weeks’ paid maternity leave under the DIIS Agreement);
• annual leave loading (the DIIS Agreement does not provide for annual leave loading);
• more generous redundancy payments;
• up to 20 days’ paid personal leave upon commencement, 20 days’ personal leave per year for service up to 3 years and 25 days’ personal leave per year for service after 3 years (the DIIS Agreement provides for 18 days personal leave per annum with no credit granted upon commencement);
• 17% superannuation for all transferring employees with continuing or fixed term appointments greater than 12 months (the DIIS Agreement provides for 15.4%, for those employees not eligible to join the Commonwealth Defined Benefit Scheme); and
• ordinary hours of 70 hours per fortnight for professional staff (the DIIS Agreement provides for 75 hours per fortnight), with a narrower span of hours of 8:00am to 6:00pm for administrative and technical streams or 7:30am to 4:00pm for the maintenance stream as opposed to 7:00am to 7:00pm under the DIIS Agreement;
[7] As to the main advantages of being covered by the DIIS Agreement as opposed to the University Agreements, Ms Farrelly identified the following:
• a wider range of allowances were payable under the DIIS Agreement, including fire warden allowance, health and safety representative allowance and healthy lifestyle subsidy (there are no equivalent entitlements payable to staff under the ANU Agreement);
• the Coonabarabran allowance payable under the DIIS Agreement is higher than that payable under the ANU Agreement, i.e. $900 and $772 per annum respectively for staff without dependents and $1800 and $1535 per annum respectively for staff with eligible dependents;
• a guarantee of part-time work for employees returning from maternity leave up to the child’s six birthday (there is no equivalent entitlement under the ANU Agreement);
• Part-time staff were eligible to be paid overtime when they worked outside their ordinary daily hours, whereas under the ANU Agreement overtime was only payable to part-time employees once they had worked more than 35 hours per week;
• access to studies assistance; and
• vacation childcare subsidy for accredited providers of up to $26 per day per primary school age child on days when the parent(s)/guardian(s) were at work (there is no equivalent provision under the ANU Agreement).
[8] Ms Farrelly also deposed that the University had undertaken to maintain a number of more beneficial entitlements in the DIIS Agreement, e.g. minimum salary rates which are higher than the salary rate for the relevant classification under the ANU Agreement and more beneficial shift allowance arrangements, or apply more beneficial entitlements provided for in University Policy, e.g. up to 12 weeks’ purchased leave.
[9] Ms Farrelly further deposed that based on her review of the DIIS and ANU Agreements she considered that transferring employees would be no worse off overall under the ANU Agreement and that the majority of transferring employees would be better off overall.
Relevant legislation
[10] The relevant sections of the Act are ss.313 and 318 which provide as follows:
“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).
318 Orders relating to instruments covering new employer and transferring employees
Orders that FWC may make
(1) 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) 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;
…
Matters that FWC must take into account
(3) In deciding whether to make the order, 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.”
[11] Before turning to consider each of the matters specified in s.318(3) the Act, I note that the University, as the new employer, has standing pursuant to s.318(2)(a) of the Act to make the application for the orders sought.
The views of the new employer [s.318(3)(a)(i)]
[12] The University stated that its preference was to maintain consistent employee entitlements for employees engaged in performing the transferring work so as to ensure the better cultural and operational integration of the transferring employees as well as providing them with greater certainty regarding their terms and conditions of employment given that the DIIS Agreement had passed its nominal expiry date. The University also relied on Ms Farrelly’s affidavit in support of its application.
The views of the employees who would be affected by the order [s.318(3)(a)(ii)]
[13] Drawing on Ms Farrelly’s affidavit, the University contended that in January 2019 it conducted a detailed consultation process with all transferring employees that included an explanation of the key differences between the DIIS and ANU Agreements. The University also noted that a subsequent ballot of transferring employees saw 8 of the 12 transferring employees express a preference to be covered by the ANU Agreement while only one transferring employee expressed a preference to continue to be covered by the DIIS Agreement.
[14] Beyond that, I note the various other steps outlined in Ms Farrelly’s affidavit which the University took to explain to transferring the differences between the DIIS Agreement and the University Agreements employees.
[15] The above analysis points to the transferring employees being aware of the application and the orders sought, with only one transferring employee wishing to remain covered by the DIIS Agreement. This weighs in favour of making the orders sought.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment [s.318(3)(b)]
[16] The University submitted that based on its analysis of the difference between the DIIS and ANU Agreements it appeared that each of the transferring employees would be better off overall if employed under the terms of the ANU Agreement. In particular, the University highlighted that certain core conditions under the ANU Agreement with far more beneficial than the DIIS Agreement, i.e. provisions relating to superannuation, hours of work, annual leave loading, personal leave and paid parental leave.
[17] As noted above, Ms Farrelly in her affidavit set out the main advantages of being covered by the ANU Agreement rather than the DIIS Agreement and vice versa. Having done so, Ms Farrelly deposed that she was satisfied that the transferring employees would be no worse off overall under the ANU Agreement and that the majority would be better off overall.
[18] What is also clear from Ms Farrelly’s affidavit is that the University has in addition sought to mitigate or minimise any disadvantage which might be associated with the transferring employees being covered by the ANU Agreement. For instance, Ms Farrelly deposed that where a transferring employee had been offered employment at a classification level with a base salary rate lower than their current salary under the DIIS Agreement the University had provided a fixed salary loading to ensure that no employee’s remuneration was less favourable overall.
[19] Whilst there are undoubtedly some “swings and roundabouts” associated with the transferring employees being covered by the ANU Agreement, the material before the Commission suggests that the University has taken, where it can, steps to mitigate or minimise any disadvantage and that there are several important advantages for transferring employees. Having regard to that material, on balance, I do not consider that employees would be disadvantaged by the orders sought. This favours the making of the orders sought.
The nominal expiry date of the agreement [s.318(3)(c)]
[20] The DIIS Agreement passed its nominal expiry on 6 April 2019. Accordingly, in the absence of the orders sought being made, the terms and conditions of employment of transferring employees would effectively be frozen in time.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace [s.318(3)(d)] and any significant economic disadvantage to the new employer [s.318(3)(e)]
[21] The University submitted that there were continuing administrative and cost implications for it in administering two different sets of terms and conditions for similar employees. These implications stemmed largely from having to manually process the provision of the terms and conditions provided for in the DIIS Agreement. The University did not in its application highlight any specific impacts on productivity.
[22] While I consider that any impact on productivity is likely to be negligible, I accept that in the absence of the orders sought the University will incur additional costs in administering a separate set of terms and conditions.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer [s.318(3)(f)]
[23] The University contended that there was little, if any, synergy between the DIIS and ANU Agreements as the former had been negotiated in respect of employees of the Australian Public Service (APS) and therefore contained a number of terms and conditions with which the University was unable to comply. For instance, the DIIS Agreement included a decision-making structure under which all employee entitlements or requests were administered by the Secretary or his/her delegate and referenced APS-specific legislation, policies and guidelines.
[24] An examination of the DIIS and ANU Agreements indicates that there is little business synergy between them.
The public interest [s.318(3)(g)]
[25] The University stated in its application that the public interest was not agitated in this case. The University added however that, to the extent that the public interest was relevant, it was in the public interest to grant the application to ensure the transferring employees were properly integrated into University operations and were employed on the same terms and conditions as University employees performing similar work.
[26] I do not consider that the public interest is enlivened in this case.
Conclusion
[27] Taking into account each of the matters set out in s.318(3), I am satisfied that the orders sought should be made.
[28] The orders (PR711233) will provide that the DIIS Agreement does not and will not cover the University or any transferring employees. The orders will operate from the date on which they are made.
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