U-Go Mobility Pty Limited

Case •

[2023] FWC 1861

•

28 JULY 2023
[2023] FWC 1861

FAIR WORK COMMISSION
DECISION

Fair Work Act 2009

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

U-Go Mobility Pty Limited

(AG2023/2024)

Passenger vehicle transport (non rail) industry

COMMISSIONER P RYAN

SYDNEY, 28 JULY 2023

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

Introduction and Background

  1. U-Go Mobility Pty Ltd (Applicant) has made an application seeking orders pursuant to s.318 of the Fair Work Act 2009 (FW Act) relating to instruments covering it and transferring employees (Application).

  1. In December 2022, the Applicant was awarded the Greater Sydney Bus Contract for Region 10 (Region 10 Contract) to provide a range of bus services and undertake ancillary activities in the South and South-West region of Sydney. The Region 10 Contract commenced on 1 July 2023.

  1. Prior to 1 July 2023, the area covered by the Region 10 Contract was divided into two regions known as Region 5 and Region 10. Bus services in Region 5 were operated by the Punchbowl Bus Company Pty Ltd (PBC) out of a depot located in Punchbowl. The PBC employees were covered by the Punchbowl Bus Company and the Transport Workers’ Union of Australia Fair Work Agreement 2012[1] (Punchbowl Agreement). Bus services in the former Region 10 were operated by Transdev NSW South Pty Ltd and Transdev NSW Pty Ltd (collectively, Transdev). Transdev employees were covered by the Transdev NSW & TWU Bus Enterprise Agreement 2022-2026[2] (Transdev Agreement). Transdev operated out of four depots located in Kingsgrove, Revesby, Menai, and Taren Point.

  1. From 1 July 2023, the Applicant has operated the bus services pursuant to the Region 10 Contract out of the depots located in Kingsgrove, Revesby, Menai, and Taren Point.

  1. In operating the bus services, the Applicant owns, or has the beneficial use of, some of the assets that the PBC and Transdev owned, or had the beneficial use of, including the use of depots, bus leases, and electric vehicle chargers for electric buses.

  1. The Applicant has employed bus drivers and yard persons formerly employed by PBC and Transdev to perform the same, or substantially the same, work that they performed for their old employer.

  1. Under the transfer of business provisions in the FW Act, the Applicant and the transferring employees formerly employed by PBC are covered by the Punchbowl Agreement, and the Applicant and the transferring employees formerly employed by Transdev are covered by the Transdev Agreement.[3]

  1. The Applicant wishes to establish common terms and conditions of employment and seeks orders that:

(i)Pursuant to s.318(1)(a) of the FW Act, the Punchbowl Agreement does not, and will not, cover the Applicant and any transferring employees formerly employed by PBC; and

(ii)Pursuant to s.318(1)(b), the Transdev Agreement covers, or will cover, any transferring employees formerly employed by PBC.

  1. Following a mention and directions hearing on 28 June 2023, I issued directions for the Applicant, any affected employees, and any relevant employee organisation to file any materials in support of, or in opposition to, the Application. 

  1. The Applicant relied on written submissions and a statutory declaration of Mr Matt Baynie, the Applicant’s manging director. No submissions were received from any affected employees or any relevant employee organisation.

  1. In the circumstances, I consider it appropriate to determine the matter based on the material before the Commission.

Relevant Legislative Provisions – Transfer of Business

  1. Section 311(1) of the FW Act sets out the circumstances in which a transfer of business occurs. It states:

(1)  There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:

(a)  the employment of an employee of the old employer has terminated;

(b)  within 3 months after the termination, the employee becomes employed by the new employer;

(c)  the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d)  there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).

  1. In relation to the relevant connection, s.311(3) of the FW Act states:

    (3)  There is a connection between the old employer and the new employer if, in accordance with an arrangement between:

(a)  the old employer or an associated entity of the old employer; and

(b) the new employer or an associated entity of the new employer; the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):

(c)  that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and

(d)  that relate to, or are used in connection with, the transferring work.

  1. Section 312 of the FW Act defines “transferable instrument” to include “an enterprise agreement that has been approved by the FWC”.

  1. Section 313 of the FW Act provides that “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”.

  1. Section 313(3) of the FW Act provides that s.313 is subject to any order made under s.318(1).

  1. Sections 317 and 318 of the FW Act provide:

317     FWC may make orders in relation to a transfer of business

This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.

318Orders 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.

Consideration

  1. In deciding whether to make an order pursuant to s.318(1) of the FW Act, the Commission must take into account the matters set out in s.318(3).

  1. Before turning to those matters, and having regard to the evidence and submissions before me, I am satisfied as to the following:

(i)That there was a transfer of business from PBC to the Applicant on or about 1 July 2023 (ss.311(1) and 317 of the FW Act);

(ii)That the former employees of PBC who have been employed by the Applicant are transferring employees (s.311(2) of the FW Act);

(iii)That the Punchbowl Agreement covered PBC and the transferring employees immediately before the termination of their employment with PBC (s.313(1) of the FW Act);

(iv)That the Punchbowl Agreement is a transferable instrument (s.312(1) of the FW Act); and

(v)That the Applicant as the new employer, or a person who is likely to be the new employer, of the transferring employees can make an application for the orders sought (s.318(2)(a) of the FW Act).

  1. Furthermore, and taking into consideration the effect of the order sought pursuant to s.318(1)(b), it is necessary that I am also satisfied there was a transfer of business between the Applicant and Transdev, as in the absence of that, the Applicant would not be an employer covered by the Transdev Agreement.

  1. Having regard to the material before me, and for the same reasons as set out in paragraph [19] above, I am satisfied that there was a transfer of business between the Applicant and Transdev on or about 1 July 2023, and as a consequence of that transfer of business, the Applicant is covered by the Transdev Agreement (s.313 of the FW Act).

  1. I now turn to a consideration of the matters set out in s.318(3) of the FW Act.

Views of the new employer – s.318(3)(a)(i)

  1. The Applicant is the new employer, who seeks, and is supportive of, the proposed orders. This weighs in favour of making the proposed orders.

Views of the employees who would be affected by the order – s.318(3)(a)(ii)

  1. The directions issued by my Chambers sought the views of the transferring employees. No employees sought to provide their views directly to the Commission. The evidence of Mr Baynie is that during consultation with the affected employees there were no concerns raised or opposition expressed in relation to the making of the proposed orders. This weighs in favour of making the proposed orders.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.318(3)(b)

  1. I am satisfied that the transferring employees will not be disadvantaged in relation to their terms and conditions of employment by the making of the proposed orders. This weighs in favour of making the proposed orders.

The nominal expiry date of the agreement – s.318(3)(c)

  1. The nominal expiry date of the Punchbowl Agreement is 30 June 2015. The nominal expiry date of the Punchbowl Agreement is 30 June 2026. I consider this a neutral factor in relation to the making of the proposed orders.

Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace – s.318(3)(d)

  1. I am satisfied that there will be no negative impact on productivity if the proposed orders are made. In contrast, if the proposed orders are not made and transferring employees are subject to different terms and conditions of employment, this may have a negative impact on employee engagement and in turn upon workplace productivity. This weighs in favour of making the proposed orders.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer – s.318(3)(e)

  1. The Applicant submits that it will incur significant economic disadvantage through additional administrative and payroll costs as a result of managing employees performing the same work for the same employer under two separate instruments.

  1. I accept that if the proposed orders were not made, there is some potential for the Applicant to suffer economic disadvantage as a result of administrative burden associated with the administration and application of two enterprise agreements. This weighs in favour of the making the proposed orders.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer – s.318(3)(f)

  1. The granting of the order will result in a greater degree of synergy for the Applicant and the employees who perform the transferring work, as all employees will be employed pursuant to a single instrument. This weighs in favour of making the proposed orders.

The public interest – s.318(3)(g)

  1. Having regard to the material before me, I am not of the view that there are public interest reasons weighing against making the proposed orders.

Conclusion

  1. Taking in to account the matters to be considered in section 318(3) of the FW Act, I am satisfied that it is appropriate that the Application be granted. An order [PR764662] to that effect will be issued in conjunction with this decision.

COMMISSIONER


[1] AE899397.

[2] AE516423.

[3] See s.313 of the FW Act.

Printed by authority of the Commonwealth Government Printer

<AE899397 PR764660>

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