The Office of the National Rail Safety Regulator

[2017] FWC 83

[2017] FWC 83

FAIR WORK COMMISSION

DECISION

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

The Office of the National Rail Safety Regulator
(AG2016/7527)

State and Territory government administration
COMMISSIONER PLATT	ADELAIDE, 5 JANUARY 2017

Application by The Office of the National Rail Safety Regulator for an order about coverage for transferring employees under a state instrument.

[1] This is an application filed by the Office of the National Rail Safety Regulator (ABN 44 260 419 904) (ONRSR) which seeks orders from the Fair Work Commission pursuant to s.768BA of the Fair Work Act 2009 (the Act).

[2] The ONRSR provided the following background in respect of the application:

● on 30 January 2013, the Rail Safety (Adoption of National Law) Act 2012 commenced to apply the Rail Safety National Law, as set out in the Schedule to the Rail Safety National Law (South Australia) Act 2012. As a result the ONRSR was the rail safety regulator for railway operators based in the State of New South Wales;
● the Independent Transport Safety Regulator (ITSR), as established under Part 4A of the Transport Administration Act (NSW) 1988, entered into a Service Level Agreement (SLA) with the ONRSR to deliver regulatory services on behalf of ONRSR;
● on 20 September 2015, the NSW Government announced that it would remove the SLA and that the ITSR would be abolished, with employees of ITSR currently undertaking regulatory functions to transition their employment and role to the ONRSR;
● the ONRSR took over the function of rail safety regulator, undertaken by the employees of the ITSR by way of a SLA;
● in 2016 the NSW Government determined that the SLA would be removed, the ITSR would be abolished, and ITSR staff would be offered direct employment with the ONRSR;
● a transfer of business from ITSR to the ONRSR will occur pursuant to section 768AD of the Act on the basis that:

• the employment of the transferring employees who are employed by the ITSR will be terminated with effect from a date to be determined in early 2017;
• the transferring employees who accept an offer of employment with the ONRSR, will commence employment with the ONRSR within three months of their termination;
• the work the transferring employees will perform for the ONRSR will be the same, or substantially the same as the work the transferring employees performed for the ITSR; and
• there is a connection between the ITSR and the ONRSR in the form of a transfer of assets;




● as at a date to be determined, and subject to orders being made by the Commission, the ONRSR will offer employment to approximately 50 transferring employees in New South Wales in what will be known as the ONRSR NSW Branch Office;
● the National Rail Safety Regulator Reform Project Board has agreed that all transitioning staff will retain their salary and annual leave loading (if applicable) for the duration they are in the same role when they come to the ONRSR- with the intent of ensuring staff will be “no worse off;”

the salaries of the transferring employees are substantially higher than the salary amounts set in the ONRSR EA for the equivalent role;

● the ONRSR seeks the orders that the transferring employees be covered by the ONRSR EA and not the copied State instrument; and
● the ONRSR is entitled to seek the orders pursuant to section 768BA as it will be the new employer of the transferring employees (section 768BA(2)(b)(iii) of the Act).

[3] In respect of the requirements of s.768BA(3)(b) the ONRSR contends that:

● there will be no overall disadvantage to the transferring employees if they are covered by the ONRSR EA and not the copied State instrument on the basis that the ONRSR has undertaken that the transferring employees will:

• retain their current salary;



• elect to remain at 35 hours per week or increase to 37.5 hours per week (in accordance with the ONRSR EA); and



• receive the following items, paid as an allowance at the current base hourly rate to form a new personal salary (if the transferring employee was entitled previously):



• annual leave loading;



• additional hours of work (2.5) if chosen to work the additional hours under the ONRSR EA (up to 37.5 hours per week);



• 4.5 days per year for extended leave/long service leave once 10 years of service is reached (to make up for the additional days they would otherwise have received under the copied State Instrument after 10 years' service);



• travel passes to be provided for those employees that were defined as "transferred staff' under the Crown Employees (Independent Transport Safety Regulator) Award 2016; and



• sick leave accrual balance will be transferred to the ONRSR. If the employee chooses to increase their working hours to 37.5 hours per week, their sick leave transfer balance will be proportionally adjusted and increased to reflect the change in hours.

[4] In respect of the remaining matters the FWC must consider under s.768BA(3) the ONRSR submitted that:

● multiple industrial instruments operating at the same site to employees performing the same or similar work arrangements will impact negatively on productivity and present a barrier to developing harmonious work arrangements and meeting the aim of a “single National Rail Safety Regulator;”
● the need to maintain different employment terms for the transferring employees will be an unnecessary and unproductive burden to the ONRSR as it will create administrative difficulties and increase costs as there will be a need to apply multiple industrial instruments;
● it is in the public interest for the ONRSR to have one industrial instrument covering all of its employees as this will prevent disparity arising between the transferring employees and the non-transferring employees;
● the ONRSR EA is appropriately tailored to the ONRSR's operations and provides greater business synergy, given the ONRSR is specifically not a public sector agency, than the copied State instrument;
● a vote was of the transferring employees was undertaken with 96.4% of transferring employees voting in favour of being employed under the ONRSR EA; and
● the Public Services Association NSW (PSA) (and on behalf of the ASU and APESMA) supports the application.

[5] A hearing was conducted by telephone on 23 December 2016. The union parties to the Agreement and all transferred employees who would be impacted by the granting of the application were invited to attend.

[6] Ms Laura Paulus (Legal Counsel) and Ms Sue McCarney (CEO) represented the NRSR. Mr Blakes Stevens (Industrial Manager) and Mr Shane Howes (Delegate) on behalf of the Public Services Association NSW (PSA) (and on behalf of the ASU and APESMA) advised that the Unions supported the application.

[7] Mr Natalie Clark and Ms Nicole Seal who are transferring employees attended but did not seek to make any submissions in respect of the application.

[8] The factual background and the applicant’s submissions were not contested.

[9] Section 768BA of the Act is set out 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.”

[10] I am satisfied after considering the material filed with the application that:

● the transferring employees and their unions have been consulted;
● they have, in an informed manner, expressed their support for orders that the Agreement, rather than the state instruments, apply to their future employment;
● the new employer has made this application;
● the transferring employees will not be disadvantaged in relation to their terms and conditions of employment;
● I have been advised of the nominal expiry date of the State Agreement;
● it would be inappropriate for the State instruments to apply to NRSR in that it would be inefficient and unproductive for NRSR to operate under different and multiple instruments;
● it was not put to me that a failure to make this order would result in significant economic disadvantage to NRSR; and
● it is in the public interest to approve the application.

[11] Based on the information provided, and the undertakings given, I have decided to grant the orders sought by the applicant. I have taken into account all of the statutory requirements under s.768BA(3) of the Act. Consequential orders will be published contemporaneously with this decision. The order shall operate with respect to each transferring employee from the day on which the order is made or the date the transferring employee is re-employed, whichever is later.

COMMISSIONER

<Price code A, AE415910  PR589123>