United Super Pty Ltd (AG2022/853)
[2022] FWC 746
| [2022] FWC 746 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
United Super Pty Ltd
(AG2022/853)
Superannuation industry
| DEPUTY PRESIDENT COLMAN | MELBOURNE, 5 APRIL 2022 |
Application for orders relating to transferrable instruments
United Super Pty Ltd, which trades as CBUS Superannuation (CBUS), has made an application under s 318 of the Fair Work Act 2009 (Act) for an order that the Media Super Enterprise Agreement 2020 (Media Super Agreement) not cover CBUS or any ‘transferring employees’ (see s 311(2)) of Media Super Limited (Media Super) who become employees of CBUS in connection with a pending merger. It also seeks an order under s 319 of the Act that the Media Super Agreement not cover any non-transferring employees who perform any ‘transferring work’ (see s 311(1)) in their employment with CBUS.
In 2021, CBUS and Media Super agreed to a merger of the CBUS and Media Super funds by means of a successor fund transfer. The merger will result in the integration of the investments, membership, administration and operation of the funds. Media Super will be the outgoing fund. CBUS will be the host fund. Relevant assets of Media Super will be transferred to CBUS. The merger will take place on 9 April 2022.
In July 2021, CBUS made offers of employment to certain employees of Media Super, pursuant to which they would perform the same or substantially the same work for CBUS as they had performed for Media Super. Six employees of Media Super have accepted offers of employment with CBUS. They will cease to be employees of Media Super on 8 April 2022. Their employment with CBUS will commence on 9 April 2022. Five of the six employees will work in CBUS’s ‘member and employer’ services area, providing financial and superannuation advice. One employee will work in CBUS’s ‘strategy and growth’ area. Existing employees of CBUS who work in these areas are covered by the United Super Pty Ltd Collective Bargaining Agreement 2017 (CBUS Agreement).
As I explain further below, it is clear that on 9 April 2022 there will be a transfer of business within the meaning of section 311(1) of the Act from Media Super, the old employer, to CBUS, the new employer, and that the six employees who accepted employment with CBUS will be transferring employees within the meaning of section 311(2) of the Act. The transferring employees are currently covered by the Media Super Agreement, which is a transferable instrument within the meaning of section 312(1).
In the absence of an order of the Commission under s 318 of the Act, the Media Super Agreement will cover the transferring employees while they are performing transferring work for CBUS. The application under s 318 seeks an order from the Commission that the Media Super Agreement not apply, such that the CBUS Agreement will apply on its terms to the transferring employees.
CBUS also asks the Commission to make an order under s 319 of the Act that the Media Super Agreement not cover any non-transferring employees who perform, or are likely to perform, the transferring work in their employment with CBUS. At a telephone mention on 4 April 2022, I foreshadowed that it was not apparent to me that an order under s 319 was needed (or indeed available). CBUS submitted that the application under s 319 had been made on a precautionary basis and that it did not wish to be heard further in relation to it.
I have concluded that I have no power to make an order under s 319. An order under that provision is 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)’ not apply to the non-transferring employee. I am not satisfied that under s 314(1) the Media Super Agreement would, or would be likely to, cover non-transferring employees. As I will explain, I have decided to make the order that is sought under s 318. This will mean that the Media Super Agreement will not cover CBUS, because my order will disengage the effect of s 313. The first of the four requirements of s 314(1) will not be met. Further, if a non-transferring employee becomes employed by CBUS to undertake transferring work, the CBUS Agreement will cover that work in any effect. The last of the four requirements of s 314(1) will not be met: it will not be the case that ‘no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work’. I therefore cannot make an order under s 319. Nor does CBUS require one to prevent the Media Super Agreement applying to non-transferring employees. Its own agreement will apply on its terms.
Framework
Section 318(1) of the Act provides that the Commission may, on application by a person or organisation identified in s 318(2), 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.”
The power to make orders under s 318 is contingent upon the Commission being satisfied that there has been, or that there is likely to be, a transfer of business for the purpose of s 311 of the Act. I am satisfied that there will be a transfer of business from Media Super to CBUS for the following reasons.
First, the employment of six employees of Media Super will terminate and within three months of termination (in fact, the next day) the employees will become employees of CBUS (s 311(1)(a) and (b)). Secondly, having regard to the information provided in the application, I consider that the work to be performed by the transferring employees for CBUS will be the same or substantially the same as the work these employees performed for Media Super (s 311(1)(c)). Finally, there is a ‘connection’ between Media Super and CBUS as described in s 311(3), because in accordance with an arrangement between Media Super (the old employer) and CBUS (the new employer), CBUS will own or have the beneficial use of some or all of the assets that Media Super owned or had the beneficial use of and that relate to or are used in connection with the transferring work (s 311(1)(d)).
Next it is necessary for me to consider s 318(3), which states that, in deciding whether to make an order under s 318(1), the Commission must take into account certain matters. I consider each of these considerations below, as they apply to the present application.
The views of the new employer - s 318(3)(a)(i)
The view of CBUS, the new employer of the transferring employees, is that the application should be granted. It submitted that in order to effect the merger of the funds, it had agreed with Media Super that it would seek orders from the Commission that the Media Super Agreement not apply to the transferring employees, so that they could be covered by the CBUS Agreement, which overall is more generous than the Media Super Agreement. In this regard, CBUS noted first that under the CBUS Agreement, full-time employees’ ordinary hours of work are 35 hours per week, compared to 38 hours under the Media Super Agreement. Secondly, employees who earn below $150,000 per year are able to take six rostered days off per year, compared to none under the Media Super Agreement. Thirdly, full-time employees are entitled to ten non-cumulative days of carers leave per year in addition to twelve days’ cumulative personal leave, whereas the Media Super Agreement does not provide such additional leave. Fourthly, employees are eligible to receive meal, shift, relocation, stand by, call back and higher duties allowances, whereas the Media Super Agreement does not provide such benefits.
CBUS contended that its enterprise agreement provides either more favourable or substantively equivalent terms to the Media Super Agreement in almost every respect, save that the Media Super Agreement provides for one day of study leave per semester, a ‘staff creative benefit’ payment of $400 for employees to pursue creative skill and development activities, and modest ongoing salary increases during the nominal life of the agreement, although it was noted in the latter regard that CBUS was currently negotiating a new agreement, which could be expected to deliver wage increases. CBUS submitted that transferring employees would be significantly better off under the CBUS Agreement than under the Media Super Agreement. CBUS also contended that granting the application would avoid the inequity of having employees working in similar roles being covered by different enterprise agreements with substantively different entitlements, and the costs and inefficiencies associated with having to administer a separate enterprise agreement for a relatively small group of employees.
The views of the employer weigh in favour of granting the application.
The views of the employees affected by the order - s 318(3)(a)(ii)
CBUS submitted that the transferring employees supported the making of the proposed order. The offers of employment that had been made to the relevant employees had stated that by accepting the offer, the employees acknowledged and agreed that they did not want the Media Super Agreement to apply to their employment with CBUS and instead would support an application by CBUS to obtain an order from the Commission preventing the transfer of that agreement to their employment with CBUS, the consequence of such an order being that the CBUS Agreement would apply to them. The company submitted that a communications process accompanied the making of the offers of employment. It also noted that the successor fund transfer arrangements required that employees of Media Super be offered employment with CBUS on terms overall no less favourable than those of their current employment.
CBUS confirmed that each of the six employees had been served with a copy of its application and that no issues or concerns had been raised by employees. No employees have sought to be heard or conveyed views to the Commission. In all the circumstances, I infer from the employees’ acceptance of the offers of employment that they are content with and generally support the application. The views of affected employees weigh in favour of the application.
Whether any employees would be disadvantaged by the order - s 318(3)(b)
CBUS submitted that it had undertaken a comparison of the key entitlements provided for by the Media Super Agreement and the CBUS Agreement and submitted a comparison document setting out its analysis. CBUS submitted, and I accept, that the comparison demonstrates that the CBUS Agreement provides for terms and conditions of employment that overall are more generous than those of the Media Super Agreement. I am satisfied that the transferring employees will not be disadvantaged by the proposed order. In fact, they will be better off overall. This weighs in favour of granting the application.
The nominal expiry date of transferring agreements - s 318(3)(c)
The Media Super Agreement was approved on 26 February 2021. It nominally expires on 30 June 2023. The nominal expiry date of the CBUS Agreement is 30 June 2020. CBUS is currently bargaining for a new enterprise agreement. I consider the nominal expiry date of the transferring agreement to be a neutral consideration.
Whether negative impact on productivity etc - s 318(3)(d)
CBUS submitted that its payroll was not configured to apply the Media Super Agreement and that significant effort would be required to make relevant adjustments, which would have a negative impact on productivity. I accept that the transferable instrument would have a negative impact on productivity, but only to a limited extent and principally in administration. Nevertheless, this weighs in favour of granting the application.
Whether significant economic disadvantage - s 318(3)(e)
CBUS contended that it would incur economic disadvantage as a result of the increase in cost and effort associated with having to administer and ensure compliance with two industrial instruments rather than one. Having all of its employees employed on common terms and conditions under the CBUS Agreement would eliminate this economic disadvantage. However, quite properly, CBUS does not contend that it would suffer significant economic damage as a result of the transferable instrument covering it. This factor does not support the granting of the application in this case.
Whether there is business synergy between instruments s 318(3)(1)
CBUS contended that various elements of the Media Super Agreement do not align with the CBUS Agreement. For example, the Media Super Agreement defines a full-time employee as an employee engaged to work an average of 38 ordinary hours per week, whereas ordinary full-time hours under the CBUS Agreement are 35 per week. CBUS contended that such elements of unalignment would lead to unnecessary inconsistencies and complications in its employment arrangements. I conclude that there is little business synergy between the two instruments. This weighs moderately in favour of granting the application.
The public interest - s 318(3)(g)
CBUS contended that the order it seeks is not contrary to the public interest, because it would ensure that the relevant employees would be better off overall. It would also avoid having employees on different conditions for the same work. Section 318(3)(g) requires the Commission to consider ‘the public interest’. It does not specify whether this consideration is concerned with the question of whether the application is in the public interest, or instead not contrary to the public interest. The reference to the ‘public interest’ here is informed by the objects of Part 2-8 (see s 309) as well as the object of the Act as a whole (see s 3). This entails a concern for the protection of transferring employees’ conditions of employment and the importance of an employer being able to run its enterprise efficiently. The application is compatible with the public interest. But the public interest does not carry any particular weight in this matter. It is therefore a neutral consideration.
Conclusion
Taking into account the matters in s 318(3), I have decided to grant the application under s 318(1). CBUS has presented a persuasive case. In particular, relevant employees will be better off overall under the CBUS Agreement than under the transferrable instrument. I will make an order under s 318(1)(a) that the Media Super Agreement will not cover CBUS or any of the transferring employees. An order will be issued separately in PR739993.
DEPUTY PRESIDENT
Determined on the papers
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