UGL Regional Linx Pty Ltd
[2022] FWC 42
•12 JANUARY 2022
| [2022] FWC 42 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
UGL Regional Linx Pty Ltd
(AG2021/8695)
John Holland Rail Pty Ltd Country Regional Network (CRN) Agreement 2019
| Rail industry | |
| DEPUTY PRESIDENT EASTON | SYDNEY, 12 JANUARY 2022 |
Application for an order relating to instruments covering new employer and non-transferring employees to be employed by UGL Regional Linx Pty Ltd.
UGL Regional Linx Pty Ltd (the Applicant/”UGL Regional Linx”) has made an application pursuant to s.319(1)(b) of the Fair Work Act 2009 (the Act) for an order that the John Holland Rail Pty Ltd Country Regional Network (CRN) Agreement 2019 (the Agreement) covers it and any non-transferring employees who perform the work contained within the classification structure of the Agreement.
In summary I am satisfied that:
a)a transfer of business will shortly occur (as defined in s.311);
b)the Agreement is a transferable instrument (as defined in s.312);
c)transferring employees will continue to be covered by the Agreement (per s.313);
d)new employees hired by the new employer will otherwise be covered by a modern award;
e)unless an order under made under s.319, new employees will not be covered by the Agreement (per s.314); and
f)it is appropriate to make an order under s.319 so that transferring employees and new employees performing the same work for the new employer are all covered by the Agreement.
The matter was listed for a telephone directions hearing on 21 December 2021 to ascertain the views of any employees and any employee organisations that are, or are likely to be covered by the agreement. Mr Jason Hart and Mr Wayne Moody appeared for the Australian Rail, Tram and Bus Industry Union (RTBU) and confirmed that the Union did not oppose the application.
The transfer of business
The relevant workers are currently employed by John Holland Rail Pty Ltd (John Holland). UGL Regional Linx will take over the operation and maintenance of the Country Regional Network (CRN) for Transport for New South Wales on or about 30 January 2022.
Section 311(1) of the Act sets out the circumstances in which a transfer of business occurs:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(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).”
The Applicant submits that pursuant to s.311(1) of the Act, a transfer of business is about to occur:
a)the employment of a number of employees who work on the CRN for John Holland (“Transferring Employees”) will terminate on 29 January 2022;
b)the next day, being within 3 months of the termination of the Transferring Employee’s employment with John Holland, they will commence employment with the Applicant;
c)the work the Transferring Employees perform for the Applicant is the same, or substantially the same as the work they performed for John Holland, being work on the CRN (“Transferring Work”); and
d)there is a connection between John Holland and the Applicant as described in s 311(3) of the FW Act, because the Applicant will own some of the assets that John Holland owned that relate to or were used in connection with the Transferring Work in accordance with an arrangement (being a written Transitional Agreement) between the Applicant and John Holland.
The Form F40 was accompanied by a Witness Statement of Ms Zara Noble (National Industrial Relations Manager – Services for UGL Regional Linx). In reliance on this uncontested evidence I am satisfied that a transfer of business will shortly occur.
A “transferrable instrument” includes “an enterprise agreement that has been approved by the FWC” (per s.312(1)(a) of the Act).
Section 313(1)(a) of the Act provides:
“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; …”
Accordingly, pursuant to section 311 of the Act, I am satisfied that there will be a transfer of business and the employees of the old employer are ‘transferring employees’ within the meaning of the Act. I am also satisfied that the Agreement is a transferrable instrument that will cover UGL Regional Linx and the transferring employees (per s.313(1)(a)).
Section 314 of the Act also provides for a transferable instrument to cover other employees in certain circumstances:
“314 New non-transferring employees of new employer may be covered by transferable instrument
(1) If:
(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and
(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and
(c) the non-transferring employee performs the transferring work; and
(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;
then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.
(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWC order under subsection 319(1).”
In this case there is a modern award that would otherwise apply to the non-transferring employees, being the Rail Industry Award 2020 (the Award). The condition in s.314(1)(d) is not satisfied and the Agreement will not otherwise cover non-transferring employees.
UGL Regional Linx is concerned that the Transferring Employees and any new employees who perform the same Transferring Work side by side at the same sites on the CRN contract will have their minimum terms regulated by different instruments.
UGL Regional Linx seeks to apply the same minimum terms and conditions for all of its employees who perform Transferring Work and seek an order under s.319(1)(b) of the Act.
Consideration
Section 319 provides:
“319 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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;
(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.
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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(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 non-transferring employee before the later of the following:
(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;
(b) the day on which the order is made.”
I am satisfied that UGL Regional Linx has standing to bring the application (per s.319(2)(a)).
Section 319(3)(a)(i) – the views of the new employer
UGL Regional Linx, being the new employer, supports the making of an Order
Section 319(3)(a)(ii) - the views of the employees who will be affected by the order
Ms Noble’s witness statement provides that UGL Regional Linx has offered employment via written contracts of employment to 169 of John Holland’s employees who perform work on the CRN to perform the same, or substantially the same work for UGL Regional Linx when it takes over the CRN. Of 169 offers made, 101 of John Holland’s employees have accepted employment with UGL Regional Linx to perform the transferring work.
The RTBU also supports the application. Mr Moody advised that he has consulted extensively with the current workforce and no objections have been raised by members.
As there are currently no non-transferring employees, it is not possible to obtain their views.
Section 319(3)(b) - whether any employees would be disadvantaged
I am satisfied that the non-transferring employees would not be disadvantaged in relation to their terms and conditions of employment by the making of an Order.
Section 319(3)(c) - the nominal expiry date of the agreement
The nominal expiry date of the Agreement is 3 November 2023 which means the proposed order will have significant utility and longevity.
Section 319(3)(d) - whether negative impact on the productivity of the new employer
I am satisfied that there will be no negative impact on productivity if the Order is made. In contrast, if the Order is not made and transferring and non-transferring employees are on different terms and conditions of employment, this may have a negative impact on team engagement and workplace productivity.
Section 319(3)(e) - whether the new employer would incur significant economic disadvantage
The Agreement’s coverage of non-transferring employees will not cause any significant economic disadvantage.
Section 319(3)(f) - the degree of business synergy
The Agreement and the Award contain a number of different terms and conditions of employment. If the Order is granted it will confirm a single framework of regulation that has been negotiated and approved in the same general context in which it has applied, and will continue to apply. This is likely to enhance the degree of synergy that exists within the acquired business. That is, granting the order will result in a greater degree of synergy for both UGL Regional Linx and the relevant employees who perform the transferring work.
Section 319(3)(g) - the public interest
Based on the material contained in the Form F40 application and Ms Noble’s statement, I am satisfied that it would not be contrary to the public interest to make the Order sought and that the granting of the order would provide more certainty and consistency in relation to employment conditions.
Conclusion
Having considered each of the matters in s.319(3) of the Act I am satisfied that it is appropriate for an Order to be made.[1]
In accordance with s.319(4) of the Act, the Order will not come into operation in relation to each non-transferring employee until 30 January 2022.
DEPUTY PRESIDENT
[1] PR737417.
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<AE505979 PR737416>
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