Application by HOSTPLUS Pty Ltd [2016] FWC 1297 (2 March 2016) [2016] FWC 1297 FAIR WORK COMMISSION DECISION Fair Work Act 2009 s.318 - Application for an order relating to instruments covering new employer and transferring employees HOSTPLUS Pty Ltd (AG2015/7507) Banking finance and insurance industry COMMISSIONER GREGORY MELBOURNE, 2 MARCH 2016 Application for an order relating to instruments covering new employer and transferring employees. Introduction [1] Hostplus Pty Ltd (“Hostplus”) is a provider of superannuation and financial services throughout Australia. As part of the services it provides it now has eight employees from Industry Fund Services Pty Ltd (“IFS”) engaged to provide financial advice services to members of Hostplus. However, it now wishes to engage these employees directly under the terms and conditions contained in the Hostplus Pty Ltd Enterprise Agreement 2013 – 2016 (“the Hostplus Agreement ” ) 1 that covers its employees. [2] It is understood the eight IFS employees agree to their employment being covered by the Hostplus Agreement from the commencement of their employment with Hostplus. They are currently employed under the terms contained in the IFS Agreement 2012 2 (“the IFS Agreement”). [3] Hostplus has accordingly made application under s.318 of the Fair Work Act 2009 (“the Act”) to the Commission for an order that the IFS Agreement no longer cover the transferring employees from the commencement of their employment with Hostplus, and for the Hostplus Agreement to instead cover them until such time as that Agreement is terminated or otherwise replaced in accordance with the Act. [4] The application consists of the Form F40 - Application for Orders in Relation to Transfer of Business, together with a Draft Order and Statutory Declaration made by Ms Natalie Strickland, Group Executive – People, Performance and Culture, at Hostplus. The application also attached copies of the relevant Agreements, together with various correspondence provided to the relevant employees. It also includes copies of elections from the employees confirming their agreement to the Hostplus Agreement covering their employment. [5] It is also noted that a copy of the application was provided to the Finance Sector Union, however, its National Industrial Officer, Mr Roger Lowrey, indicated in response that the Union does not oppose the application and does not seek to be heard in regard to the matter. The Issue to Be Determined [6] Section 311(1) defines when a transfer of business occurs under the Act. [7] Section 312 continues to set out the “Instruments that may transfer.” It states: “312 Instruments that may transfer Meaning of transferable instrument (1) Each of the following is a transferable instrument : (a) an enterprise agreement that has been approved by the FWC; (b) a workplace determination; (c) a named employer award. Meaning of named employer award (2) Each of the following is a named employer award : (a) a modern award (including a modern enterprise award) that is expressed to cover one or more named employers; (b) a modern enterprise award that is expressed to cover one or more specified classes of employers (other than a modern enterprise award that is expressed to relate to one or more enterprises as described in paragraph 168A(2)(b)). Note: Paragraph 168A(2)(b) deals with employers that carry on similar business activities under the same franchise.” 3 [8] Section 317 then provides that the Commission may make certain orders if there is, or is likely to be, a transfer of the business from a previous employer to a new employer. [9] Section 318 continues to set out what orders may be made, who may apply for an order, and the matters the Commission must take into account in making any order. It states: “318 Orders 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.” 4 [10] This decision accordingly deals with whether it is appropriate in all the circumstances to make the orders sought by Hostplus. Consideration [11] In determining this matter I have had particular regard to the various legislative requirements that I must take account of. As indicated, s.311 of the Act sets out when a transfer of business occurs. Based on the material contained in the application I am satisfied in the circumstances described that there will be a transfer of business within the meaning of s.311(1) of the Act. I am also satisfied that the IFS Agreement 2012, which was approved by the Commission on 3 August 2012, is a transferrable instrument under s.312(1) of the Act. [12] I am also satisfied the requirements of s.318(2) have been met in that the application is made by Hostplus, who is to be the new employer. [13] I now turn to deal with each of the matters in s.318(3) that the Commission must take into account before making any order. (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; [14] Hostplus, being the new employer, is the Applicant and obviously supports the making of the orders sought. [15] The Statutory Declaration provided by Ms Strickland also indicates that “one-on-one consultations” were held with each of the eight IFS employees in October last year in order to provide them with information about the proposed transfer, and to give them an opportunity to respond. The application indicates the eight transferring employees were then provided with a letter by Hostplus confirming its intention to make this application. The letter also contained a comparison table comparing the key benefits under the IFS Agreement and the Hostplus Agreement. Copies of each Agreement were also provided to the employees. [16] It is also noted that the employees were also provided with an election form to indicate whether they would prefer to be covered by the IFS Agreement or the Hostplus Agreement. Ms Strickland’s Statutory Declaration again indicates that each employee confirmed in those election forms that they consent to the transfer of their employment to Hostplus on the terms proposed. [17] The transferring employees were also provided with an opportunity to be heard in relation to this application, however, none of the employees took up this opportunity. As indicated previously the Finance Sector Union was also advised of the application and indicated in response it did not oppose the application, nor did it seek to make submissions about the matter. (b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment; [18] Both the application and the Statutory Declaration provided by Ms Strickland make reference to the differences between the IFS Agreement and the Hostplus Agreement. It is indicated that the IFS Agreement contains an entitlement to annual leave loading which is not contained in the Hostplus Agreement, however, the Hostplus Agreement provides a more generous superannuation entitlement. The transferring employees will also maintain their existing salaries and be entitled to the same annual pay increases as provided for under the Hostplus Agreement. In these circumstances there is nothing to suggest the employees will be disadvantaged by the making of the orders sought. (c) if the order relates to an enterprise agreement—the nominal expiry date of the agreement; [19] The nominal expiry date of the IFS Agreement, being 9 August 2015, has already passed, whereas the nominal expiry date of the Hostplus Agreement is 30 July 2016. These circumstances would appear to provide a benefit to the transferring employees. (d) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace; [20] There is nothing to suggest that there will be any negative impact on productivity. The application indicates instead that the intention is to avoid the potential disharmony and additional administrative process that could arise from two separate Agreements having application to employees working in close proximity and performing similar duties. (e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer; [21] There is nothing to suggest any economic disadvantage will result from the orders being proposed. (f ) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer; [22] The application does not address this consideration directly, however, it is noted that the orders proposed will ensure consistency in regard to employee entitlements. (g) the public interest. [23] There is nothing to suggest that the making of the orders sought would not be in the public interest. Conclusion [24] I have considered the details contained in the application, and the materials provided in support, including the statutory declaration of Ms Strickland. I have also had regard to each of the matters in s.318(3) that I am required to take account of. I am satisfied in response that it is appropriate to make orders in the terms sought by the Applicant. Those orders are issued in conjunction with this decision. COMMISSIONER 1 AE402715 2 AE895859 3 Fair Work Act 2009 (Cth) at s.312 4 Ibid at s.318 Printed by authority of the Commonwealth Government Printer <Price code C, AE895859 PR577506 >