s.318 - Application for an order relating to instruments covering new employer and transferring employees

Application for orders relating to instruments covering new employer and transferring employees.

• [1] Transit Systems West Services Pty Ltd (Applicant) has applied for orders pursuant to s.318 of the Fair Work Act 2009 (the Act) relating to instruments covering new employer and transferring employees.

• [2] The application arises in the context of a transfer of business between Transit (NSW) Services Pty Ltd and the Applicant which occurred on 30 June 2023. As a result of the transfer, 17 Region 6 employees (the Transferring Employees) had their employment transferred to the Applicant. Pursuant to s.313 of the Act, the Transit (NSW) Services Engineering Staff Enterprise Agreement 2021 (the Transit NSW 2021 Agreement) is the transferable instrument that covers the Applicant and Transferring Employees.

• [3] The Applicant currently has a total of 76 Region 6 employees. Apart from the Transferring Employees, the rest of the employees are engaged under the terms and conditions of the Transit Systems West Services Engineering and Maintenance Enterprise Agreement 2024 (the Transit Systems West 2024 Agreement).

• [4] The Applicant seeks orders that the Transit NSW 2021 Agreement ceases to cover the Applicant and the Transferring Employees and instead, the Transit Systems West 2024 Agreement would apply to the Applicant and the Transferring Employees.

• [5] Section 318 of the Act relevantly provides:

"318 Orders relating to instruments covering new employer and transferring employees

(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.

(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).

(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."

• [6] I am satisfied that the Applicant, being the new employer, has standing to apply for the orders sought in the present application.

• [7] I now turn to consider the matters in s.318(3) which the Commission must take into account in determining whether to make the orders sought, having regard to the grounds and submissions advanced by the Applicant.

Views of the new employer and affected employees (s.318(3)(a))

• [8] The Applicant as the new employer supports the application. The Applicant intends to have all Region 6 employees covered under one enterprise agreement to ensure that all employees performing the same work would be entitled to the same pay rates, allowances, and general term and conditions.

• [9] The Applicant submits that during the negotiations of the Transit Systems West 2024 Agreement, all Region 6 employees were consulted and represented with the understanding that they would be covered by the agreement once it was approved by the FWC.

• [10] In terms of the views of the employees, the Commission has issued Directions inviting all affected employees who wished to be heard on the application to contact my chambers. No response has been received from any affected employees in response to the Directions.

• [11] The "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU), being a party to the transferable instrument, wrote to the Commission indicating their support for the making of the orders sought in this application.

Whether any employees would be disadvantaged by the order - s.318(3)(b)

• [12] The Applicant submits that no transferring employees would be disadvantaged if the application is granted. The Applicant submits that the Transit NSW 2021 Agreement has less favourable pay rates and conditions than the Transit West Agreement 2024. Further, with the recent approval of the Transit West Enterprise Agreement 2024, employees will receive a backpay of wages and conditions and this will be extended to the Transferring Employees if the orders are made.

Expiry date of the agreements - s.318(3)(c)

• [13] The Transit NSW 2021 Agreement has a nominal expiry date of 25 July 2025. The Transit Systems West 2024 Agreement has a nominal expiry date of 27 May 2027.

Whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace - s.318(3)(d)

• [14] The Applicant submits that the removal of the 'two-tiered' workplace would have a positive impact on the workplace.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer - s.318(3)(e)

• [15] The Applicant does not claim that it would incur significant economic disadvantage as a result of being covered by the transferable instrument.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer - s.318(3)(f)

• [16] The Applicant makes no submissions in relation to this factor.

The public interest - s.318(3)(f)

• [17] I do not consider that it is against the public interest if the orders sought are made.

• [18] Having considered the material provided and taking account of all the matters in s.318(3) of the Act, I am satisfied that it is appropriate to grant the application. The orders will be issued separately with this decision.

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