Virgin Tech Pty Ltd

[2014] FWC 3425

FAIR WORK COMMISSION

DECISION

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

Virgin Tech Pty Ltd
(AG2014/5944)

COMMISSIONER SIMPSON

BRISBANE, 26 MAY 2014

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

[1] An Application for an Order relating to an instrument covering the new employer and transferring employees was filed by Virgin Tech Pty Ltd.

[2] The Application has been made in the context of Virgin Australian Airlines Pty Limited proposing to cease outsourcing A330 Maintenance Services to John Holland Aviation Services Pty Limited and instead engaging the Applicant to perform this work.

If the Order sought is granted, the following agreements will not cover the Applicant in respect of any former employee of John Holland Aviation Services Pty Limited (JHAS);

(a) John Holland Aviation Services [Victoria] Enterprise Agreement 2012; and

(b) John Holland Aviation Services [National] Enterprise Agreement 2013.

(collectively the Agreements)

[3] The Agreements will not cover the Applicant in respect of any former employee of JHAS:

(a) Who is a Transferring Employee employed by the Applicant to perform Transferring Work; and

(b) Whose employment is covered by any of the Agreements.

[4] Instead the Virgin Tech Enterprise Agreement 2014 and any such subsequent Agreement approved under the Fair Work Act 2009 (the Act), will cover the Applicant in respect of such employees. Directions were issued on 15 May 2014 directing the Applicant to ensure that employees who would be affected by the proposed order are made aware of the application, the directions themselves and the order sought.

[5] The Directions invited any person wishing to be heard to make submissions or make an objection to the Application to advise Fair Work Commission by 4pm on Friday, 23 May 2014. No submission or objections were received.

[6] Virgin Tech Pty Ltd provided written submissions in support of the Application together with a witness statement from Mr Sean O’Shea, General Manager of Virgin Tech Pty Ltd.

[7] I have considered the matters set out in s.318(3) of the Act and in light of the submission and statutory declarations provided I am satisfied the Order should be issued. The Order [PR550961] will come into operation on 26 May 2014.

COMMISSIONER

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CaseChat Overview and Summary

In the matter of Virgin Tech Pty Ltd, the applicant sought an order concerning instruments related to a new employer and employees transferring under specific agreements. The application was heard in the Fair Work Commission, where the applicant contested the obligations of the transferee employer in relation to the employees who were transferred. The central issue before the court was whether the transferee employer was bound by certain terms and conditions of the existing employment agreements of the transferring employees. This included the determination of whether these terms were legally enforceable under the relevant legislative framework.

The court examined the statutory provisions governing the transfer of business in Australia and considered the implications of the Fair Work Act 2009. The key legal question was whether the transferee employer was required to uphold the existing terms and conditions of the employment agreements, or if these terms could be modified or disregarded under the circumstances of the business transfer. The court also needed to consider the principles of continuity and fairness in employment transfers, weighing the rights of the employees against the rights of the new employer.

The court concluded that the transferee employer was indeed bound by the existing terms and conditions of the employment agreements unless there were clear grounds for modification or termination under the law. The reasoning was based on the principle that the continuity of employment should be preserved to protect the interests of the employees. The court found that the transferee employer had to honour the existing terms unless there was a legitimate reason to alter these terms, such as in the case of redundancy or other exceptional circumstances. The decision emphasized the importance of protecting the workforce during business transitions to ensure fair treatment and legal compliance.

The final orders of the court required the transferee employer to adhere to the terms of the existing employment agreements, providing clarity and legal certainty for both the employees and the employer. The court's decision aimed to balance the interests of the parties involved while upholding the statutory protections afforded to employees under Australian labour law.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established