Application by Brookfield Global Integrated Solutions [2016] FWC 4956 (9 August 2016) [2016] FWC 4956 FAIR WORK COMMISSION DECISION Fair Work Act 2009 s.320 - Application to vary a transferable instrument - agreement Brookfield Global Integrated Solutions (AG2016/3876) Banking finance and insurance industry DEPUTY PRESIDENT BINET PERTH, 9 AUGUST 2016 Variation of a transferable instrument – HBF Enterprise Agreement 2014-2017. [1] Brookfield Global Integrated Solutions ( BGIS ) has made an application ( Application ) to the Fair Work Commission ( FWC ) pursuant to section 320 of the Fair Work Act 2009 (Cth) ( FW Act ) to vary the HBF Enterprise Agreement 2014-2017 ( Agreement ). [2] The Agreement is a single enterprise agreement with a nominal expiry date of 3 October 2017. The Agreement covers employees of HBF Health Limited ( HBF ) and HealthGuard Health Benefits Fund Ltd employed in specified classifications which include employees performing certain building maintenance services ( Transferring Employees ). [3] On or around 1 April 2016 HBF entered into an agreement with BGIS to outsource the provision of the work performed by the Transferring Employees to BGIS. [4] BGIS offered employment to the Transferring Employees to perform work for BGIS which is the same, or substantially the same, as the work performed by the Transferring Employees in their employment with HBF. The offer of employment was accepted and the Transferring Employees commenced employment with BGIS on 1 June 2016. [5] A transfer of business occurred for the purposes of Part 2-8 of the FW Act. By virtue of section 313 of the FW Act, the Agreement continues to apply to the Transferring Employees but now also applies to BGIS as a Transferable Instrument. [6] Under clause 1.7 of Schedule B to the Agreement, the employer of the Transferring Employees is obliged to provide Permanent and Maximum Term Employees (as those terms are defined in the Agreement) who are HBF Health Insurance Policy holders with a discount on the base rate of the HBF Health Insurance premium of not less than 25% for the term of the Agreement. [7] BGIS submits that, being a business that does not itself provide health insurance products, it is unable to comply with the requirements of clause 1.7 of Schedule B to the Agreement. [8] BGIS has made the Application pursuant to section 320 of the Act as a person who is, or is likely to be, covered by the Agreement, to vary clause 1.7 of Schedule B to the Agreement on the grounds that it is a term that is not capable of meaningful operation to employees of BGIS to whom the Agreement applies. [9] Section 320 of the FW Act provides as follows: “ 320 Variation of transferable instruments Application of this section (1) This section applies in relation to a transferable instrument that covers, or is likely to cover, the new employer because of a provision of this Part. Power to vary transferable instrument (2) The FWC may vary the transferable instrument: (a) to remove terms that the FWC is satisfied are not, or will not be, capable of meaningful operation because of the transfer of business to the new employer; or (b) to remove an ambiguity or uncertainty about how a term of the instrument operates if: (i) the ambiguity or uncertainty has arisen, or will arise, because of the transfer of business to the new employer; and (ii) the FWC is satisfied that the variation will remove the ambiguity or uncertainty; or (c) to enable the transferable instrument to operate in a way that is better aligned to the working arrangements of the new employer’s enterprise. Who may apply for a variation (3) The FWC may make the variation only on application by: (a) a person who is, or is likely to be, covered by the transferable instrument; or (b) if the application is to vary a named employer award—an employee organisation that is entitled to represent the industrial interests of an employee who is, or is likely to be, covered by the named employer award. Matters that the FWC must take into account (4) In deciding whether to make the variation, 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 transferable instrument as varied; (b) whether any employees would be disadvantaged by the transferable instrument as varied in relation to their terms and conditions of employment; (c) if the transferable instrument is an enterprise agreement—the nominal expiry date of the agreement; (d) whether the transferable instrument, without the variation, 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, without the variation; (f) the degree of business synergy between the transferable instrument, without the variation, and any workplace instrument that already covers the new employer; (g) the public interest. Restriction on when variation may come into operation (5) A variation of a transferable instrument under subsection (2) must not come into operation before the later of the following: (a) the time when the transferable instrument starts to cover the new employer; (b) the day on which the variation is made.” [10] BGIS has undertaken ( Undertaking ) to ensure that the Transferring Employees are paid an Annual Salary greater than the minimum Annual Salary which is payable to the Transferring Employees under the Agreement for the grade in which the Transferring Employees are employed, to compensate the Transferring Employee for the loss of the benefit contained in clause 1.7 ( Additional Compensation ). The Undertaking is attached to this Decision as Attachment A. [11] BGIS’s Application was supported by three statutory declarations ( Statutory Declarations ) in support of the Application by: (a) Mr John Gilmore, the first of the Transferring Employees; (b) Mr Michael Biggar, the second of the Transferring Employees; and (c) Ms Raquel Scott, HBF Account Manager, BGIS. [12] The Statutory Declarations reveal that as a result of BGIS providing the Transferring Employees with the Additional Compensation, the Transferring Employees will not be disadvantaged in relation to the terms and conditions of their employment by the variation to the Agreement proposed by the Application. [13] The Statutory Declarations also reveal that the Transferring Employees consent to the Agreement being varied in the manner sought by BGIS. [14] BGIS submit that if the variation is not allowed it will incur additional costs associated with the hire and recruitment of other employees to perform the duties of the Transferring Employees. [15] I am satisfied that the variation is necessary to remove terms in the Agreement that are not, or will not, be capable of meaningful operation in relation to the Transferring Employees and the continuing business of BGIS as the new employer. [16] I have taken into account the matters referred to in section 320 of the FW Act as relevant to the Application and have had regard to the grounds relied upon by BGIS and the support provided by the Transferring Employees and HBF as evidenced by way of the Statutory Declarations. Accordingly, I am satisfied that it is appropriate to vary the Agreement as sought. An order to this effect [ PR583206 ] will be issued reflecting this decision. DEPUTY PRESIDENT Printed by authority of the Commonwealth Government Printer <Price code C, AE410365 PR583220> ATTACHMENT A