Tiger Airways Australia Pty Ltd T/A Tiger Airways

[2017] FWC 4793

[2017] FWC 4793

The attached document replaces the document previously issued with the above code on 6 October 2017.

Corrected paragraph numbering.

Calum Woods

Associate to Commissioner Spencer

Dated 6 October 2017

[2017] FWC 4793

FAIR WORK COMMISSION

DECISION

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

Tiger Airways Australia Pty Ltd T/A Tiger Airways
(AG2017/3797)

Airline operations
COMMISSIONER SPENCER	BRISBANE, 6 OCTOBER 2017

Application for an order relating to instruments covering new employer and transferring employees.

INTRODUCTION

[1] An application pursuant to s.318 of the Fair Work Act 2009 (the Act) was made by Tiger Airways Australia Pty Ltd T/A Tiger Airways (the Applicant) for an order relating to an instrument covering a new employer and transferring employees.

[2] Three applications were lodged in the Fair Work Commission (the Commission) by Virgin Australia Airlines Pty Ltd (AG2017/3796), Tiger Airways Pty Ltd (AG2017/3797) and Virgin Australia Regional Airlines Pty Ltd (AG2017/3800). In summary terms, the Applicants in each of those matters were related entities and sought orders in relation to transferring employees (as defined under s.311 of the Act), with respect to the coverage of the Virgin Australia Regional Airlines Pilots’ Enterprise Agreement 2015, the Virgin Australia Short Haul Pilots Agreement 2013, the Virgin Australia Long Haul Pilots Enterprise Agreement 2011 and the Tigerair Pilots Australia Enterprise Agreement 2014 (the Agreements).

[3] The Applicants made submissions in substantially similar terms (as they applied to the relevant Agreements in each matter), and in each instance Ms Joanna Glynn, General Manager – Group Workplace Relations of the Applicant, filed a statement in support of the applications.

[4] The Applicant sought orders as follows:

“(a) in respect of any former employee of Virgin Australia Regional Airlines Pty Ltd who is a transferring employee employed by the Applicant to perform transferring work (as defined in section 311 of the Fair Work Act 2009 (Cth)) (VARA Transferring Employees):

(1) the Virgin Australia Regional Airlines Pilots’ Enterprise Agreement 2015 (or any replacement agreements) not cover the Applicant and the VARA Transferring Employees; and

(2) the Tigerair Pilots Australia Enterprise Agreement 2014 covers the Applicant and the VARA Transferring Employees.

(b) in respect of any former employee of Virgin Australia Airlines Pty Ltd who is a transferring employee employed by the Applicant to perform transferring work (as defined in section 311 of the Fair Work Act 2009 (Cth)) (Virgin Australia Transferring Employees):

(1) the Virgin Australia Short Fiaul Pilots Agreement 2013 (or any replacement agreements) not cover the Applicant and the Virgin Australia Transferring Employees;

(2) the Virgin Australia Long Haul Pilots Enterprise Agreement 2011 (or any replacement agreements) not cover the Applicant and the Virgin Australia

Transferring Employees; and

(3) the Tigerair Pilots Australia Enterprise Agreement 2014 covers the Applicant and the Virgin Australia Transferring Employees.”

RELEVANT LEGISLATION

[5] Pursuant to s.313 of the Act:

“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…

(3) This section has effect subject to any FWC order under subsection 318(1).”

[6] Further, s.318 of the Act relevantly provides:

“318 Orders relating to instruments covering new employer and transferring employees

(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.

(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;

(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).

(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.

(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.”

CONSIDERATION

[7] The Applicant is the new employer and has standing to make the application pursuant to s.318(2)(a) of the Act. The Applicant submitted that a transfer of business would occur in accordance with s.311(1) of the Act, upon a pilot accepting a position within the Applicant, and those pilots would be classed as, “transferring employees,” pursuant to s.311(2) of the Act.

[8] The Applicant submitted that the circumstances giving rise to the transfer of business were as follows: employment with the former employer would terminate, the new position would likely be offered within three months of the termination, the work performed for the new employer may be the same or substantially the same as for the former employer and the former employer and the new employer are associated entities.

[9] The Virgin Australia Regional Airlines Pilots’ Enterprise Agreement 2015, the Virgin Australia Short Haul Pilots Agreement 2013 and the Virgin Australia Long Haul Pilots Enterprise Agreement 2011 are transferable instruments within the meaning of s.313 of the Act, and cover the transferring employees. The Applicant sought orders such that the transferable instruments would not cover the transferring employees and that they would instead be covered by the Applicant’s Agreement (Tigerair Pilots Australia Enterprise Agreement 2014) as set out.

[10] The Applicant submitted that the provisions in the transferable instruments (which contemplate the option of employees taking up employment within the Applicant’s group of companies) were approved by the employees. Further, it submitted that the transferring employees who accept employment within the Applicant’s group of companies would have done so on the basis that their employment was covered by the Applicant’s Agreements rather than the transferable instruments.

[11] The relevant employee organisations covered by the Agreements were the Association for Virgin Australia Group Pilots (VIPA) and the Australian Federation of Air Pilots (AFAP). Both the VIPA and the AFAP provided correspondence in support of the applications, indicating that there were no objections.

[12] The Applicant in its application, submitted that the employees would support the making of the order because:

“(a) the possibility of being able to take up career opportunities across the Virgin Australia Group pursuant to the Group Pilots List is contemplated by the Transferable Instruments (in particular clause 35.3 of the VARA Agreement, clause 54 and clause 1 of Appendix 4 of the Virgin Australia SH Agreement, and clause 51 of the Virgin Australia LH Agreement) which were approved by employees covered by those agreements;

(b) Transferring Employees who take up career opportunities with the Applicant will be offered employment on the basis that their employment is covered by the Tigerair Agreement and they accept that employment on the basis that the Tigerair Agreement and not the VARA Agreement, the Virgin Australia SH Agreement or the Virgin Australia LH Agreement (as relevant) will cover them in their new employment…”

[13] The Applicant submitted the employees would not be disadvantaged by the order sought because they will have voluntarily resigned their employment the associated entities and accepted employment with the Applicant on the basis that the Applicant’s Agreement would be applicable.

[14] The Tigerair Pilots Australia Enterprise Agreement 2014 has a nominal expiry date of 15 May 2017.

[15] The Applicant submitted the transferable instruments would have a negative impact on the productivity of the Applicant’s workplace, as it would result in transferring employees being covered by instruments providing terms and conditions of their employment that were different from existing employees of the Applicant performing the same work.

[16] The Applicant submitted that implementing the transferrable instruments would result in administrative challenges, additional payroll and other costs, operational changes needing to be made and industrial disharmony brought about by integrating and applying up to four different sets of terms and conditions of employment within the Applicant’s workplace where employees are performing the same role.

[17] The Applicant submitted there was a lack of business synergy between the Applicant’s Agreement and the transferable instruments because the Applicant’s operations are based on a different business model to that of its associated entities. Further, those transferable instruments include different terms and conditions, including rates of pay and allowances, work rules, and classification structure to that of the Applicant’s Agreement, and that these are not directly applicable to the Applicant’s business structure.

[18] The Applicant submitted that there are no public interest factors at issue with respect to this application.

CONCLUSION

[19] Taking into account the matters in 318(3) of the Act, I am satisfied that it is appropriate to make an Order in the terms as out set by the Applicant.

[20] An Order [PR596632] to that effect will issue together with this decision.

COMMISSIONER

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<Price code C, AE415428  PR596091 >