Jetconnect ZK aircraft to now be VH registered
The company will do what it wants. They have shown that. Generation after generation. AIPA will convey their concerns. In both the JC and Network situation it would probably be better for Mainline Pilots to start thinking about ‘what actions are you going to take?’
I’m not talking industrial action. But there are numerous options to back up AIPA’s concerns. Especially in the current environment. For example, perhaps stop checking open time first thing in the morning and get your name out of the book.
The loss of trust is the company’s fault. It is their problem. It’s time for a proactive approach whilst respecting our profession and the passengers. The ivory tower are our common enemy and they don’t deserve trust in this instance. So what are you going to do? The members are AIPA after all. There is nothing wrong with belligerence in the face of a smiling assasin.
I’m not talking industrial action. But there are numerous options to back up AIPA’s concerns. Especially in the current environment. For example, perhaps stop checking open time first thing in the morning and get your name out of the book.
The loss of trust is the company’s fault. It is their problem. It’s time for a proactive approach whilst respecting our profession and the passengers. The ivory tower are our common enemy and they don’t deserve trust in this instance. So what are you going to do? The members are AIPA after all. There is nothing wrong with belligerence in the face of a smiling assasin.
Why can't the aircraft just continue to operate as they do, and the pilots continue to work for Jetconnect and be paid under the NZ CEA? Just like VANZ and JQNZ...Still VH registered planes.
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The company will do what it wants. They have shown that. Generation after generation. AIPA will convey their concerns. In both the JC and Network situation it would probably be better for Mainline Pilots to start thinking about ‘what actions are you going to take?’
There is a patter that responsible office holders stick to
It is the same at most airlines where the structure is set up to be adversarial and industrial. Qantas posture is not unlike many airlines, the ONLY reason they even bother talking is that the statute necessitates it. They prefer to avoid.
When an Andrew David talks to AIPA he will:
- Gauge the mood
- Tell the 'commercial story' of why JC must be done as it is.
- Offer some softeners. (B777X, new routes promotions, whatever)
- Jetconnect pilots are being trained
- Network aircraft and registrations are known.
- Structures are already operating
- Qantas pilots must decide what it is this precedent is being rolled out now for?
- Where is the labour organisation?
- Are the crews already being trained?
That’s probably what will happen but be rest assured that the QF pilot group is not as accommodating as it once was. There are hundreds of F/Os on the 737 with more than 10 years on type that will be agitating to ensure their voice is heard. If there is one thing that’s been learnt over the lost decade it is that management do not have your interests at heart. They only care about fulfilling and maximising the profitability of the business. We are the suckers with some sort of emotional attachment to the airline and our profession. They don’t care. It’s not measurable and even when it sort of is through engagement surveys it’s manipulated to suit the end goal. At the moment and it looks like for the foreseeable future the ball is in our court. The pilot shortage is only just starting to bite. The 65 year extension kicked the retirement tin along the road but it’s now at a dead end. Let the Jetconnect folly continue and for those joining use it to your advantage. Don’t be loyal, leave that for your partner. Take the Training and experience and move on to greener pastures but don’t think it’s going to be a back door into mainline. I for one will tolerate the current situation as it stands but that’s all. I bear no malice towards the pilots at Jetconnect but am extremely wary of any ulterior nefarious machinations from the company. History reveals their true hand.
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The fingerprints of IR are all over it.
It is only the naive pilot who believed that their war was over. They were just re-grouping.
In the shadow of Christmas wind down (for administration only) roll it out, labour representatives 'consulted'
Start the New Year (refreshed in the offices) with this thing done.
Effective opposition impossible as no one there to consult with..
You are being played!
It is only the naive pilot who believed that their war was over. They were just re-grouping.
In the shadow of Christmas wind down (for administration only) roll it out, labour representatives 'consulted'
Start the New Year (refreshed in the offices) with this thing done.
Effective opposition impossible as no one there to consult with..
You are being played!
That’s probably what will happen but be rest assured that the QF pilot group is not as accommodating as it once was. There are hundreds of F/Os on the 737 with more than 10 years on type that will be agitating to ensure their voice is heard. If there is one thing that’s been learnt over the lost decade it is that management do not have your interests at heart. They only care about fulfilling and maximising the profitability of the business. We are the suckers with some sort of emotional attachment to the airline and our profession. They don’t care. It’s not measurable and even when it sort of is through engagement surveys it’s manipulated to suit the end goal. At the moment and it looks like for the foreseeable future the ball is in our court. The pilot shortage is only just starting to bite. The 65 year extension kicked the retirement tin along the road but it’s now at a dead end. Let the Jetconnect folly continue and for those joining use it to your advantage. Don’t be loyal, leave that for your partner. Take the Training and experience and move on to greener pastures but don’t think it’s going to be a back door into mainline. I for one will tolerate the current situation as it stands but that’s all. I bear no malice towards the pilots at Jetconnect but am extremely wary of any ulterior nefarious machinations from the company. History reveals their true hand.
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They are the consequences if we don't stop this right now. Kiss the long haul award goodbye for every Australian pilot and the downward pressure moves onto the next award, whether it be Qantas, Virgin or Jetstar. This doesn't just effect Qantas pilots it effects every future airline pilot in Australia. Think, if Qantas hires only foreign pilots in the future that means there are more Australian pilots for less Australian jobs. You do the math on how that works out for pay and conditions.
Watch this space as our draft CEA gets put on the table, we will hopefully see it thrown back into the company’s lap. Captains and FO’s alike have been voting with their feet for the last couple of years.
The precedence has been set when Qantas A330's were transferred into Jetstar. The Qantas crew weren't allowed to transfer with the aircraft into Jetstar and were assigned all their long service leave and annual leave away. Low hours resulted with lower pay and extra training costs were taken on by the company to train Jetstar crews onto the A330
Now these 737's are being transferred into Qantas you think the Jetconnect crew should be transferred with the aircraft contradictory to how the Qantas crew were treated?
Putting JC pilots on the bottom of the list may be contradictory to how the QF A330 pilots were treated ( they didn’t get the option of joining the bottom of the Jetstar list?) but that doesn’t mean it is a bad option. The global pilot body needs to start making decisions that work well in the long term, and stop looking back with anger and suggesting tit for tat.
Ironically those commands that you say aren't currently available to Qantas pilots were the commands of Qantas pilots operating the Tasman until Jetconnect took over the flying at 35-50% cheaper.
Also of note is that by not transferring with the aircraft the Jetconnect pilots would still get to keep or increase their pay and conditions by taking a position elsewhere in the group.
I get it it's not the fault of the Jetconnect pilots but nor is it the fault of the Qantas pilots. I noted that you didn't answer whether a Jetstar NZ command on similar pay and conditions would be acceptable?
Is that because you don't work for Jetconnect? If it's not your fight then I can only see it as an opportunistic campaign, in case it were to happen to your entity within the group you would get a Qantas command out of seniority bypassing every pilot who came through the front door at Qantas.
Your ten year old would benefit from a group seniority list but I can't see that happening until every union was onboard to push it.
If the pilots strategy is to slowly get stronger and more unified, ( think Ryan Air) then it is a logical step. If the pilots strategy is non existent then we can look forward to more of the same in the next two decades.
You said yourself that it would be good for future pilots ( the ten year old) , well, there comes a time ( usually around 45 or 50 years of age) when most people start looking at the big picture and want to look after those that follow in their footsteps. Now is our chance.
I agree Teggun.
One step at a time making sure that each step is in the right direction. Each step needs to reduce the number of pilot ‘camps’, not increase the ill will between existing camps.
One step at a time making sure that each step is in the right direction. Each step needs to reduce the number of pilot ‘camps’, not increase the ill will between existing camps.
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If JC get placed on the bottom of the QF seniority list I dare say it will set up a very good precedent for Qantaslink and Network to follow the same path.
Don’t worry about them too much, the world is short of pilots at the moment. Think of the whole QF pilot group as a unit, it can get healthier, or sicker.
The labour representatives will maintain 'consultation continues', perhaps they even believe it.
- Qantas will not integrate the pilots, those pilots will remain on existing terms.
- It is already well underway, AOC, simulator training and all the rest.
- By the time the 'business leaders' and 'labour union leaders' return from annual Christmas leave, it will be already rolling. There is likely a team working 'project whatever'
- Qantas pilots will get a nice email from the company and the union.
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The following article is an interesting read in light of what’s going on with Jetconnect.
It appears that unless specific guarantees are made by management then whatever platitudes are offered are just that !
Transfer of employment
The Fair Work Act (s311) provides that there is a transfer of business if each of the conditions in ss311(1)(a)–(d) are satisfied, which are:
one or more employees is terminated from the first employer
the employee(s) become(s) employed by the second business within 3 months doing substantially similar work
the work that the employee performs for the new employer is substantially the same as that performed for the old employer
there is a connection between the two employers.
Associated entities
The Corporations Act 2001 [Cth] (s50AAA) defines an ‘associated entity’ of another entity (the principal) in the following circumstances:
the associate and principal are related bodies corporate
the principal controls the associate
the associate controls the principal and the operations, resources or affairs of the principal are material to the associate
the associate has a qualifying investment in the principal, has significant influence over the principal and the interest is material to the associate
the principal has a qualifying investment in the associate, has significant influence over the associate and the interest is material to the principal
a third entity controls both the principal and the associate and the operations, resources or affairs of the principal and the associate are both material to the third entity.
Control
The word ‘control’ is defined in the Corporations Act 2001 [Cth] (s50AA) to mean when one entity controls another when the first entity can make decisions that determine the financial and operating policies of the second entity.
Transfer between non-associated entities
Service with one employer (first or old employer) will count as service with another employer (second or new employer) that is not an associated entity of the first employer, if the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer.
The following would be considered a connection between the two employers in a transfer of business situation:
there is a transfer of some assets from one employer to another
there is an outsourcing of work from one employer to another, which can occur regardless of whether any assets change hands
there is an ‘insourcing’ of work from one employer to another
there is a transfer of employment between associated entities as defined in the Corporations Act 2001 [Cth].
The Fair Work Act (s311(3)(b)) states that there is a connection between the old employer and the new employer if the new employer or associated entity owns or has the beneficial use of some or all of the assets (whether tangible or intangible) that the old employer or associated entity owned or had the beneficial use of; and that relate to, or are used in connection with, the transferring work.
Transfer of assets
Arrangement
The Fair Work Act (s311(3)) provides one of the conditions of a transfer of business that must be satisfied is there is a connection between the old and new employer as described in any of ss311(3)–(6) of the Fair Work Act. That is, there must be an arrangement between the new and old employer for ‘the beneficial use of assets’ of the old employer ‘that relate to, or are used in connection with the transferring work’. The word ‘arrangement’ is not defined in the Fair Work Act, while the Explanatory Memorandum to the Fair Work Bill 2009 states that the word ‘arrangement’ is intended to be interpreted broadly.’
The relevant authorities on determining the meaning of the word ‘arrangement’ propose that, whilst not legally enforceable, requires:
that there be communication between the parties to the arrangement; and
that the parties must reach some understanding; and
that there is some expectation that each of the parties will behave in a particular way.
An arrangement is not an expectation that a party will behave in a particular way and it cannot be contrived. It requires some substance. See Australian Consumer & Competition Commission v CC (NSW) Pty Ltd [1999] FCA 954; Trade Practices Commission v Nicholas Enterprises Pty Ltd (No.2) [1979] FCA 51; The Commissioner of Taxation of the Commonwealth of Australia v K. Porter & Co Pty Ltd [1974] 22 FLR 344.
Non-associated entities — transfer of assets
In a matter heard before the FWC, the employee worked for the old employer in a café. The business was purchased by the new employer. The employee worked three shifts for the new employer doing the same work before he was dismissed.
It was held that there was a transfer of employment, because there was a transfer of business between the old employer and the new employer. There was a connection between the old employer and the new employer as the transfer of business involved a transfer of assets.
Further, as the new employer had not informed the employee in writing that his previous service would not be recognised, the employee’s service with the old employer counted as service with the new employer. See Hill v Sahir t/a Café Moderno at Fountain Gate [2013] FWCA 668.
New employer ceased to outsource work to old employer
In a matter heard before FWA, the employee worked for the old employer, which provided labour to the new employer. After two years, the new employer ceased to outsource work to the old employer. The old employer terminated the employee’s employment, and she was employed by the new employer, but dismissed after about 3 weeks.
The employer was found to be a transferring employee in relation to a transfer of business. There was a connection between the old employer and the new employer because the new employer had ceased outsourcing work to the old employer. The employee was not informed in writing by the new employer that previous service with the old employer would not count as service with the new employer, and therefore it did not count. See Thorne v Jura Australia Espresso Pty Ltd [2012] FWA 4954.
No relevant connection between employers
In a matter heard before FWA, the employee worked as a security guard for the old employer, which provided site security under contract. A tender process resulted in the new employer being awarded the contract. The employee was offered employment with the new employer but was dismissed the following month. It was held that there was no connection between the employers, and therefore no transfer of business. As such, service with the old employer did not count as service with the new employer. See Szybkowski v Monjon Australia Pty Ltd [2010] FWA 7321.
In another matter heard before the FWC, the employee had been employed by the old employer to work at a hotel. The old employer operated the hotel under a lease with the owners. The old employer abandoned the lease, and the owners leased it to the new employer. The new employer employed the employee to perform the same duties, but later dismissed her. On appeal, it was found there was no connection between the old employer and the new employer, because there was no evidence of a transfer of assets in accordance with any arrangement between the employers. See John Lucas Hotel Management v Hillie [2013] FWCFB 1198.
Intangible assets
Intangible assets are defined as identifiable non-monetary assets that cannot be seen, touched or physically measured, which are created through time and/or effort and that are identifiable as a separate asset. There are two primary forms of intangibles — legal intangibles, eg trade secrets (customer lists), copyrights, patents, and trademarks, and competitive intangibles such as knowledge activities, eg know-how, collaboration activities, leverage activities and structural activities. Legal intangibles are known under the generic term intellectual property and generate legal property rights defensible in a court of law.
No beneficial use of assets — no transfer of business
In a matter before FWA involving a jurisdictional point regarding the employee’s period of employment, it was determined that the leaving of some electrical appliances and a procedures manual does not satisfy the requirements that the arrangement entered into by the employers was not a beneficial use of assets, so no transfer of business occurred. See Zabrdac v Transclean Facilities Pty Ltd [2011] FWA 4492.
Work performed
Under the Fair Work Act (s311(1)(c)), the transferring employee must perform the same, or substantially the same, work for the new employer as he or she performed for the old employer. It is intended this provision not be construed in a technical manner. It recognises that, in a transfer of business situation, there may well be some minor differences between the work performed for the respective employers. However, the requirement is satisfied where, overall, the work is the same or substantially the same — even if the precise duties of the employees, or the manner in which they are performed, have changed.
This section of the Fair Work Act relates in the similarity in the actual work performed by the transferring employee. Whilst the work of the companies, the employee’s title and precise duties may have changed, if the overall work performed for both employers is substantially the same, a transfer of business occurs. See Farrugia v Building Technology Integrators Pty Ltd [2011] FWA 1285.
Recognition of service with the first employer does not apply with respect to redundancy pay under the NES where the transfer is between non-associated entities and if the second employer decides not to recognise the employee’s service with the first employer. Where a transfer of employment occurs, a transferring employee is not entitled to redundancy pay at the time of the transfer of employment where employment with the second employer is ongoing.
The NES also provides that an employee is not entitled to redundancy pay if:
the employee rejects an offer of employment made by another employer that is on terms and conditions substantially similar to, and, considered on an overall basis, no less favourable than the terms and conditions of employment with the first employer immediately before the termination, and recognises the employee’s service with the first employer; and
had the employee accepted the offer, his/her employment would have been transferred.
The Fair Work Commission may order the first employer to pay an amount of redundancy pay if it is satisfied the offer of employment with the second employer operates unfairly to the employee.
A transfer of business does not automatically trigger an entitlement to redundancy pay. In the TCR case, the (then) AIRC said ‘we would make it clear that we do not envisage severance payments being made in cases of succession, assignment or transmission’. See Termination, Change and Redundancy Case 8 IR 34; Amcor Limited v Construction, Forestry, Mining and Energy Union and Ors [2005] HCA 10; Stones & CEPU v Simplot Australia Pty Ltd [1997] IRCA 175; Svitzer Australia Pty Ltd v Maritime Union of Australia, The Northern NSW Branch [2011] FWAFB 7947.
National Employment Standards (NES)
Section 312 of the Fair Work Act requires that an enterprise agreement, workplace determination or a named employer award (a transferable instrument) will bind a new employer who is a successor, assignee or transmittee of the whole or a part of the business of a former employer.
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Other acceptable employment
Under s120 of the Fair Work Act, the amount of redundancy pay may be reduced (which may be to nil) by the FWC where the employer arranges other acceptable employment, and the terms and conditions offered with respect to the other employment are deemed to be fair.
Industrial courts and tribunals have considered several factors when determining the suitability of an employer's offer of alternative employment to an employee whose position has become redundant. The test that is usually applied in this instance is an objective one, and should take into account each individual employee's circumstance. This test should be applied when an employer is either trying to organise alternate employment with another employer or trying to arrange other employment within the organisation. Such factors include:
Pay levels — if the salary offered for an alternate job is similar or the same as the redundant position, this could be viewed as suitable to the acceptability of the offer. Where there is a drop in salary, the tribunal would determine the reasonableness, or otherwise, of the lower salary.
Hours of work — where the offer involves a change of starting and finishing times, a change from shift work to day work, or vice-versa, or work on different days of the week, this may be deemed unsuitable, depending on the circumstances of the individual employee. The tribunal may take into account such factors as the employee's family responsibilities when determining the suitability of the offer.
Nature of employment — the offer of part-time or casual employment to a current full-time employee may be deemed unsuitable. This may also fail on the basis of a lower salary level associated with these types of employment.
Employment status/seniority — the offer of a non-managerial position to a manager may be unsuitable as there is a certain 'status' associated with the current position. Such an offer could be viewed by a tribunal as a demotion.
Skills and qualifications — does the offer involve a position that the employee has the necessary skills and/or qualifications to perform? If not, the employer must have offered to provide the necessary training for the employee to acquire the necessary skills and/or qualifications.
Location of new offered position — where there is a relocation of the position, a tribunal will consider such factors as: the similarity of the job at the new location, the notice given to an employee(s) of the new location, whether the new location offers similar transport facilities, and the amount of additional time, if any, travelled by the employees to the new location.
Loss of fringe benefits — a tribunal, where relevant, may look at the overall impact of the offer of alternate employment on the employee's contract of employment. The loss of benefits such as the provision of a company motor vehicle, share option plan, shift or penalty rates, bonus and commission payments, or regular overtime payments, may make the offer unsuitable despite the base salary remaining the same.
Job security — this can be a factor in the offer of casual work to an employee because, with casual employment, there is no guarantee of permanent employment. Also, if the new position offered is of a temporary nature, this could be viewed as unsuitable.
The factors to be considered in a particular matter regarding an offer of acceptable alternate employment by an employer to an employee in relation to redundancy has been the subject of considerable precedent case law. See Clothing & Allied Industries of Australia v Hot Tuna Pty Ltd [1988] AIRC 483; Clothing & Allied Industries of Australia v Algray Pty Ltd [1989] AIRC 135; Derole Nominees Pty Ltd v Australian Chamber of Manufactures [1990] AIRC 980; Feltex Australia Pty Ltd v Textile, Clothing & Footwear Union of Australia [2006] AIRC 737; National Union of Workers v Linfox Australia Pty Ltd [2008] AIRC 647; Timbercraft Pty Ltd [2011] FWA 6283.
Adjustment to amount of redundancy pay
Section 120 of the Fair Work Act allows the FWC to make an adjustment to the total amount of redundancy pay (down to nil) under the NES where the employer arranges acceptable alternative employment. In doing so, the FWC takes into account the efforts of an employer who arranges (say) a successful job interview for an employee being retrenched and so, applies to reduce the amount of redundancy pay that would otherwise have applied. In Baywood Products Pty Ltd v Inall [2010] FWA 9303 (21 December 2010) the employer was successful in obtaining a 50% reduction in the appropriate redundancy payment because he arranged an interview for an employee who was retrenched. In Spano Enterprises Pty Ltd [2011] FWA 3672, Fair Work Australia issued an order that the amount of redundancy pay be reduced to nil.
Refusing other suitable employment
The FWC has stated that it will not tolerate a situation where an employee who is faced with redundancy and is offered comparable alternative employment, but refuses it because he/she would rather take a redundancy payout. Accordingly, an employee who refuses the offer of suitable alternative employment in this circumstance will not be entitled to receive any redundancy pay under the Fair Work Act (s120). See Mantra Hospitality (Admin) Pty Ltd [2013] FWC 1063.
Redeployment
Under s389(2) of the Fair Work Act, a redundancy is not genuine if it would have been reasonable in all the circumstances for the person to be redeployed within:
the employer's enterprise; or
the enterprise of an associated entity of the employer.
The factors taken into account about the reasonableness of any proposed redeployment in relation to a redundancy are the same is with other acceptable employment.
Fair Work Australia has determined that it is an essential part of the concept of redeployment under this section that a redundant employee be placed in another job in the employer's enterprise as an alternative to termination of employment. The job must be suitable, in the sense that the employee has the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. See Ulan Coal Mines Ltd v Honeysett & Ors v Ulan Coal Mines Ltd [2010] FWAFB 7578 (12 November 2010).
Re-employment after redundancy
The redundancy provisions of the National Employment Standards do not prevent the re-employment of an employee previously made redundant, nor is there a provision disqualifying redundancy pay if the employee is re-employed within a particular period after the original redundancy occurred. An employee re-employed at any future time would not be required to forfeit their redundancy pay.
It is common for an employer to have a company policy that prohibits the re-employment of an employee whose position was made redundant. The existence of such a policy may be a response to existing taxation law.
For tax purposes, the redundancy pay must relate to a ‘bona fide’ redundancy. This determines whether the payment receives a concessional taxation rate compared to other eligible termination payments. Any arrangement entered into with the employee prior to termination of an employee’s employment regarding future re-employment would not be considered a ‘bona fide’ redundancy for the purposes of tax law.
Selection criteria
An area of potential disputation relates to selecting which employees are to be made redundant where a reduction in the overall numbers of employees has been decided upon. This decision may be influenced by a number of factors, including union pressure, award obligations, or anti-discrimination legislation.
Even in the case of genuine redundancy, the termination of employment may be harsh, unjust or unreasonable. See Quality Bakers of Australia Limited v Goulding (1995) IRCA 305; Needham v Shepparton Preserving Company Limited (1991) AILR 395; Cheesman v Kinhill Engineers Pty Ltd 59 SAIR 168; Corkery v General Motors Holden Limited (1986) AILR 429; Hemmings v CPS Credit Union (1991) 58 SAIR 421.
The factors determining which positions are to be redundant should be based on objective criteria and should be known by employees in advance, such as through a company policy. The employer should select who is to be made redundant, referring to the skills, experience, training and performance of individuals compared to the current and future needs of the organisation. If, after such an assessment, employees are found to be comparatively equal, the period of service would be an appropriate factor unless some other pressing domestic issue is raised by the individuals concerned.
Subjective criteria are open to abuse and open to be used to target particular workers. Referring to factors such as ‘teamwork’, ‘know how’, ‘initiative’, ‘integrity’, ‘trust', ‘credibility’, etc should be avoided. It seems the problem about subjective criteria is not so much the fact of their adoption, but the burden they impose on those that have to apply them. See Kenefick v Australian Submarine Corporation (1995) IRCA 193; Ralph v Fortis Australia Limited, AIRC Smith C. Print T4482.
A company that used its employees’ workers compensation status as a factor in determining which employees should be selected for redundancy was unsuccessful on appeal in an unfair dismissal matter taken by former employees. See Smith & Kimball v Moore Paragon Australia Limited PR942856 [2004] AIRC 57 (20 January 2004).
Ordinary and customary turnover of labour
The termination of employment due to the ordinary and customary turnover of labour does not attract redundancy payments. Section 119 of the Fair Work Act provides that an entitlement to redundancy occurs when the employee’s employment is terminated at the employer's initiative because the employer no longer requires the job to be done by anyone, except where this is due to the ordinary and customary turnover of labour, or because of bankruptcy or insolvency. The term ‘ordinary and customary turnover of labour’ is not defined by the Fair Work Act, although the meaning of the term has been determined by various courts and industrial tribunals.
Generally, this describes a situation where it has been customary for employees’ services to be dispensed with because it is the view of management that they are in some way less than satisfactory employees, not appropriately skilled, not appropriately motivated, unreliable, or exhibiting other forms of unhelpful conduct, but not amounting to misconduct. This term also covers the coming and going of employees whose employment has come to an end by resignation, the effluxion of time, or the casual or temporary nature of an engagement.
The (then) AIRC, in its principal decisions on redundancy, made it clear that ‘it was not our intention that the redundancy provisions should apply to the “ordinary and customary turnover of labour”; an expression used by Justice Fisher in his decision related to the Employment Protection Act in NSW’.
Promise of job until retirement — damages claim
An automotive engineer, who alleged his employer promised he would have a job until retirement, failed in a bid for damages after being made redundant during the global financial crisis. The employee left a well-paid job in India to take up a position in Sydney, however, he was made redundant (along with 100 other workers) some months later when the Global Financial Crisis (GFC) hit. The engineer claimed the company had breached s53(b) of the (then) Trade Practices Act 1974 [Cth], by making him redundant after promising him a job until retirement during his contract negotiations.
The claim by the engineer for damages was unsuccessful because the company gave assurances during the negotiations, but not a guarantee of a job until retirement, while the company also had every intention of continuing the employment of the engineer, except for the intervention of the GFC. See Robertson v Knott Investments Pty Ltd [2010] FMCA 142 (8 March 2010).
It appears that unless specific guarantees are made by management then whatever platitudes are offered are just that !
Transfer of employment
The Fair Work Act (s311) provides that there is a transfer of business if each of the conditions in ss311(1)(a)–(d) are satisfied, which are:
one or more employees is terminated from the first employer
the employee(s) become(s) employed by the second business within 3 months doing substantially similar work
the work that the employee performs for the new employer is substantially the same as that performed for the old employer
there is a connection between the two employers.
Associated entities
The Corporations Act 2001 [Cth] (s50AAA) defines an ‘associated entity’ of another entity (the principal) in the following circumstances:
the associate and principal are related bodies corporate
the principal controls the associate
the associate controls the principal and the operations, resources or affairs of the principal are material to the associate
the associate has a qualifying investment in the principal, has significant influence over the principal and the interest is material to the associate
the principal has a qualifying investment in the associate, has significant influence over the associate and the interest is material to the principal
a third entity controls both the principal and the associate and the operations, resources or affairs of the principal and the associate are both material to the third entity.
Control
The word ‘control’ is defined in the Corporations Act 2001 [Cth] (s50AA) to mean when one entity controls another when the first entity can make decisions that determine the financial and operating policies of the second entity.
Transfer between non-associated entities
Service with one employer (first or old employer) will count as service with another employer (second or new employer) that is not an associated entity of the first employer, if the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer.
The following would be considered a connection between the two employers in a transfer of business situation:
there is a transfer of some assets from one employer to another
there is an outsourcing of work from one employer to another, which can occur regardless of whether any assets change hands
there is an ‘insourcing’ of work from one employer to another
there is a transfer of employment between associated entities as defined in the Corporations Act 2001 [Cth].
The Fair Work Act (s311(3)(b)) states that there is a connection between the old employer and the new employer if the new employer or associated entity owns or has the beneficial use of some or all of the assets (whether tangible or intangible) that the old employer or associated entity owned or had the beneficial use of; and that relate to, or are used in connection with, the transferring work.
Transfer of assets
Arrangement
The Fair Work Act (s311(3)) provides one of the conditions of a transfer of business that must be satisfied is there is a connection between the old and new employer as described in any of ss311(3)–(6) of the Fair Work Act. That is, there must be an arrangement between the new and old employer for ‘the beneficial use of assets’ of the old employer ‘that relate to, or are used in connection with the transferring work’. The word ‘arrangement’ is not defined in the Fair Work Act, while the Explanatory Memorandum to the Fair Work Bill 2009 states that the word ‘arrangement’ is intended to be interpreted broadly.’
The relevant authorities on determining the meaning of the word ‘arrangement’ propose that, whilst not legally enforceable, requires:
that there be communication between the parties to the arrangement; and
that the parties must reach some understanding; and
that there is some expectation that each of the parties will behave in a particular way.
An arrangement is not an expectation that a party will behave in a particular way and it cannot be contrived. It requires some substance. See Australian Consumer & Competition Commission v CC (NSW) Pty Ltd [1999] FCA 954; Trade Practices Commission v Nicholas Enterprises Pty Ltd (No.2) [1979] FCA 51; The Commissioner of Taxation of the Commonwealth of Australia v K. Porter & Co Pty Ltd [1974] 22 FLR 344.
Non-associated entities — transfer of assets
In a matter heard before the FWC, the employee worked for the old employer in a café. The business was purchased by the new employer. The employee worked three shifts for the new employer doing the same work before he was dismissed.
It was held that there was a transfer of employment, because there was a transfer of business between the old employer and the new employer. There was a connection between the old employer and the new employer as the transfer of business involved a transfer of assets.
Further, as the new employer had not informed the employee in writing that his previous service would not be recognised, the employee’s service with the old employer counted as service with the new employer. See Hill v Sahir t/a Café Moderno at Fountain Gate [2013] FWCA 668.
New employer ceased to outsource work to old employer
In a matter heard before FWA, the employee worked for the old employer, which provided labour to the new employer. After two years, the new employer ceased to outsource work to the old employer. The old employer terminated the employee’s employment, and she was employed by the new employer, but dismissed after about 3 weeks.
The employer was found to be a transferring employee in relation to a transfer of business. There was a connection between the old employer and the new employer because the new employer had ceased outsourcing work to the old employer. The employee was not informed in writing by the new employer that previous service with the old employer would not count as service with the new employer, and therefore it did not count. See Thorne v Jura Australia Espresso Pty Ltd [2012] FWA 4954.
No relevant connection between employers
In a matter heard before FWA, the employee worked as a security guard for the old employer, which provided site security under contract. A tender process resulted in the new employer being awarded the contract. The employee was offered employment with the new employer but was dismissed the following month. It was held that there was no connection between the employers, and therefore no transfer of business. As such, service with the old employer did not count as service with the new employer. See Szybkowski v Monjon Australia Pty Ltd [2010] FWA 7321.
In another matter heard before the FWC, the employee had been employed by the old employer to work at a hotel. The old employer operated the hotel under a lease with the owners. The old employer abandoned the lease, and the owners leased it to the new employer. The new employer employed the employee to perform the same duties, but later dismissed her. On appeal, it was found there was no connection between the old employer and the new employer, because there was no evidence of a transfer of assets in accordance with any arrangement between the employers. See John Lucas Hotel Management v Hillie [2013] FWCFB 1198.
Intangible assets
Intangible assets are defined as identifiable non-monetary assets that cannot be seen, touched or physically measured, which are created through time and/or effort and that are identifiable as a separate asset. There are two primary forms of intangibles — legal intangibles, eg trade secrets (customer lists), copyrights, patents, and trademarks, and competitive intangibles such as knowledge activities, eg know-how, collaboration activities, leverage activities and structural activities. Legal intangibles are known under the generic term intellectual property and generate legal property rights defensible in a court of law.
No beneficial use of assets — no transfer of business
In a matter before FWA involving a jurisdictional point regarding the employee’s period of employment, it was determined that the leaving of some electrical appliances and a procedures manual does not satisfy the requirements that the arrangement entered into by the employers was not a beneficial use of assets, so no transfer of business occurred. See Zabrdac v Transclean Facilities Pty Ltd [2011] FWA 4492.
Work performed
Under the Fair Work Act (s311(1)(c)), the transferring employee must perform the same, or substantially the same, work for the new employer as he or she performed for the old employer. It is intended this provision not be construed in a technical manner. It recognises that, in a transfer of business situation, there may well be some minor differences between the work performed for the respective employers. However, the requirement is satisfied where, overall, the work is the same or substantially the same — even if the precise duties of the employees, or the manner in which they are performed, have changed.
This section of the Fair Work Act relates in the similarity in the actual work performed by the transferring employee. Whilst the work of the companies, the employee’s title and precise duties may have changed, if the overall work performed for both employers is substantially the same, a transfer of business occurs. See Farrugia v Building Technology Integrators Pty Ltd [2011] FWA 1285.
Recognition of service with the first employer does not apply with respect to redundancy pay under the NES where the transfer is between non-associated entities and if the second employer decides not to recognise the employee’s service with the first employer. Where a transfer of employment occurs, a transferring employee is not entitled to redundancy pay at the time of the transfer of employment where employment with the second employer is ongoing.
The NES also provides that an employee is not entitled to redundancy pay if:
the employee rejects an offer of employment made by another employer that is on terms and conditions substantially similar to, and, considered on an overall basis, no less favourable than the terms and conditions of employment with the first employer immediately before the termination, and recognises the employee’s service with the first employer; and
had the employee accepted the offer, his/her employment would have been transferred.
The Fair Work Commission may order the first employer to pay an amount of redundancy pay if it is satisfied the offer of employment with the second employer operates unfairly to the employee.
A transfer of business does not automatically trigger an entitlement to redundancy pay. In the TCR case, the (then) AIRC said ‘we would make it clear that we do not envisage severance payments being made in cases of succession, assignment or transmission’. See Termination, Change and Redundancy Case 8 IR 34; Amcor Limited v Construction, Forestry, Mining and Energy Union and Ors [2005] HCA 10; Stones & CEPU v Simplot Australia Pty Ltd [1997] IRCA 175; Svitzer Australia Pty Ltd v Maritime Union of Australia, The Northern NSW Branch [2011] FWAFB 7947.
National Employment Standards (NES)
Section 312 of the Fair Work Act requires that an enterprise agreement, workplace determination or a named employer award (a transferable instrument) will bind a new employer who is a successor, assignee or transmittee of the whole or a part of the business of a former employer.
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Other acceptable employment
Under s120 of the Fair Work Act, the amount of redundancy pay may be reduced (which may be to nil) by the FWC where the employer arranges other acceptable employment, and the terms and conditions offered with respect to the other employment are deemed to be fair.
Industrial courts and tribunals have considered several factors when determining the suitability of an employer's offer of alternative employment to an employee whose position has become redundant. The test that is usually applied in this instance is an objective one, and should take into account each individual employee's circumstance. This test should be applied when an employer is either trying to organise alternate employment with another employer or trying to arrange other employment within the organisation. Such factors include:
Pay levels — if the salary offered for an alternate job is similar or the same as the redundant position, this could be viewed as suitable to the acceptability of the offer. Where there is a drop in salary, the tribunal would determine the reasonableness, or otherwise, of the lower salary.
Hours of work — where the offer involves a change of starting and finishing times, a change from shift work to day work, or vice-versa, or work on different days of the week, this may be deemed unsuitable, depending on the circumstances of the individual employee. The tribunal may take into account such factors as the employee's family responsibilities when determining the suitability of the offer.
Nature of employment — the offer of part-time or casual employment to a current full-time employee may be deemed unsuitable. This may also fail on the basis of a lower salary level associated with these types of employment.
Employment status/seniority — the offer of a non-managerial position to a manager may be unsuitable as there is a certain 'status' associated with the current position. Such an offer could be viewed by a tribunal as a demotion.
Skills and qualifications — does the offer involve a position that the employee has the necessary skills and/or qualifications to perform? If not, the employer must have offered to provide the necessary training for the employee to acquire the necessary skills and/or qualifications.
Location of new offered position — where there is a relocation of the position, a tribunal will consider such factors as: the similarity of the job at the new location, the notice given to an employee(s) of the new location, whether the new location offers similar transport facilities, and the amount of additional time, if any, travelled by the employees to the new location.
Loss of fringe benefits — a tribunal, where relevant, may look at the overall impact of the offer of alternate employment on the employee's contract of employment. The loss of benefits such as the provision of a company motor vehicle, share option plan, shift or penalty rates, bonus and commission payments, or regular overtime payments, may make the offer unsuitable despite the base salary remaining the same.
Job security — this can be a factor in the offer of casual work to an employee because, with casual employment, there is no guarantee of permanent employment. Also, if the new position offered is of a temporary nature, this could be viewed as unsuitable.
The factors to be considered in a particular matter regarding an offer of acceptable alternate employment by an employer to an employee in relation to redundancy has been the subject of considerable precedent case law. See Clothing & Allied Industries of Australia v Hot Tuna Pty Ltd [1988] AIRC 483; Clothing & Allied Industries of Australia v Algray Pty Ltd [1989] AIRC 135; Derole Nominees Pty Ltd v Australian Chamber of Manufactures [1990] AIRC 980; Feltex Australia Pty Ltd v Textile, Clothing & Footwear Union of Australia [2006] AIRC 737; National Union of Workers v Linfox Australia Pty Ltd [2008] AIRC 647; Timbercraft Pty Ltd [2011] FWA 6283.
Adjustment to amount of redundancy pay
Section 120 of the Fair Work Act allows the FWC to make an adjustment to the total amount of redundancy pay (down to nil) under the NES where the employer arranges acceptable alternative employment. In doing so, the FWC takes into account the efforts of an employer who arranges (say) a successful job interview for an employee being retrenched and so, applies to reduce the amount of redundancy pay that would otherwise have applied. In Baywood Products Pty Ltd v Inall [2010] FWA 9303 (21 December 2010) the employer was successful in obtaining a 50% reduction in the appropriate redundancy payment because he arranged an interview for an employee who was retrenched. In Spano Enterprises Pty Ltd [2011] FWA 3672, Fair Work Australia issued an order that the amount of redundancy pay be reduced to nil.
Refusing other suitable employment
The FWC has stated that it will not tolerate a situation where an employee who is faced with redundancy and is offered comparable alternative employment, but refuses it because he/she would rather take a redundancy payout. Accordingly, an employee who refuses the offer of suitable alternative employment in this circumstance will not be entitled to receive any redundancy pay under the Fair Work Act (s120). See Mantra Hospitality (Admin) Pty Ltd [2013] FWC 1063.
Redeployment
Under s389(2) of the Fair Work Act, a redundancy is not genuine if it would have been reasonable in all the circumstances for the person to be redeployed within:
the employer's enterprise; or
the enterprise of an associated entity of the employer.
The factors taken into account about the reasonableness of any proposed redeployment in relation to a redundancy are the same is with other acceptable employment.
Fair Work Australia has determined that it is an essential part of the concept of redeployment under this section that a redundant employee be placed in another job in the employer's enterprise as an alternative to termination of employment. The job must be suitable, in the sense that the employee has the skills and competence required to perform it to the required standard either immediately or with a reasonable period of retraining. Other considerations may be relevant such as the location of the job and the remuneration attaching to it. See Ulan Coal Mines Ltd v Honeysett & Ors v Ulan Coal Mines Ltd [2010] FWAFB 7578 (12 November 2010).
Re-employment after redundancy
The redundancy provisions of the National Employment Standards do not prevent the re-employment of an employee previously made redundant, nor is there a provision disqualifying redundancy pay if the employee is re-employed within a particular period after the original redundancy occurred. An employee re-employed at any future time would not be required to forfeit their redundancy pay.
It is common for an employer to have a company policy that prohibits the re-employment of an employee whose position was made redundant. The existence of such a policy may be a response to existing taxation law.
For tax purposes, the redundancy pay must relate to a ‘bona fide’ redundancy. This determines whether the payment receives a concessional taxation rate compared to other eligible termination payments. Any arrangement entered into with the employee prior to termination of an employee’s employment regarding future re-employment would not be considered a ‘bona fide’ redundancy for the purposes of tax law.
Selection criteria
An area of potential disputation relates to selecting which employees are to be made redundant where a reduction in the overall numbers of employees has been decided upon. This decision may be influenced by a number of factors, including union pressure, award obligations, or anti-discrimination legislation.
Even in the case of genuine redundancy, the termination of employment may be harsh, unjust or unreasonable. See Quality Bakers of Australia Limited v Goulding (1995) IRCA 305; Needham v Shepparton Preserving Company Limited (1991) AILR 395; Cheesman v Kinhill Engineers Pty Ltd 59 SAIR 168; Corkery v General Motors Holden Limited (1986) AILR 429; Hemmings v CPS Credit Union (1991) 58 SAIR 421.
The factors determining which positions are to be redundant should be based on objective criteria and should be known by employees in advance, such as through a company policy. The employer should select who is to be made redundant, referring to the skills, experience, training and performance of individuals compared to the current and future needs of the organisation. If, after such an assessment, employees are found to be comparatively equal, the period of service would be an appropriate factor unless some other pressing domestic issue is raised by the individuals concerned.
Subjective criteria are open to abuse and open to be used to target particular workers. Referring to factors such as ‘teamwork’, ‘know how’, ‘initiative’, ‘integrity’, ‘trust', ‘credibility’, etc should be avoided. It seems the problem about subjective criteria is not so much the fact of their adoption, but the burden they impose on those that have to apply them. See Kenefick v Australian Submarine Corporation (1995) IRCA 193; Ralph v Fortis Australia Limited, AIRC Smith C. Print T4482.
A company that used its employees’ workers compensation status as a factor in determining which employees should be selected for redundancy was unsuccessful on appeal in an unfair dismissal matter taken by former employees. See Smith & Kimball v Moore Paragon Australia Limited PR942856 [2004] AIRC 57 (20 January 2004).
Ordinary and customary turnover of labour
The termination of employment due to the ordinary and customary turnover of labour does not attract redundancy payments. Section 119 of the Fair Work Act provides that an entitlement to redundancy occurs when the employee’s employment is terminated at the employer's initiative because the employer no longer requires the job to be done by anyone, except where this is due to the ordinary and customary turnover of labour, or because of bankruptcy or insolvency. The term ‘ordinary and customary turnover of labour’ is not defined by the Fair Work Act, although the meaning of the term has been determined by various courts and industrial tribunals.
Generally, this describes a situation where it has been customary for employees’ services to be dispensed with because it is the view of management that they are in some way less than satisfactory employees, not appropriately skilled, not appropriately motivated, unreliable, or exhibiting other forms of unhelpful conduct, but not amounting to misconduct. This term also covers the coming and going of employees whose employment has come to an end by resignation, the effluxion of time, or the casual or temporary nature of an engagement.
The (then) AIRC, in its principal decisions on redundancy, made it clear that ‘it was not our intention that the redundancy provisions should apply to the “ordinary and customary turnover of labour”; an expression used by Justice Fisher in his decision related to the Employment Protection Act in NSW’.
Promise of job until retirement — damages claim
An automotive engineer, who alleged his employer promised he would have a job until retirement, failed in a bid for damages after being made redundant during the global financial crisis. The employee left a well-paid job in India to take up a position in Sydney, however, he was made redundant (along with 100 other workers) some months later when the Global Financial Crisis (GFC) hit. The engineer claimed the company had breached s53(b) of the (then) Trade Practices Act 1974 [Cth], by making him redundant after promising him a job until retirement during his contract negotiations.
The claim by the engineer for damages was unsuccessful because the company gave assurances during the negotiations, but not a guarantee of a job until retirement, while the company also had every intention of continuing the employment of the engineer, except for the intervention of the GFC. See Robertson v Knott Investments Pty Ltd [2010] FMCA 142 (8 March 2010).
Join Date: Jul 2014
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An open question is do the transmission of business sections even apply to another jurisdiction?
Given the impending shortage, an adversarial play is to open the channel to offshoring as a method of control for any AU based group pilots (offshore to onshore type model). This looks like the "angle" to me. Get everything up and running, EBA signed off and then make NZ as a pseudo base with AU overnights.
Of course, under this model, generously LWOP would be offered to those who wished to take a JC command, by way of being a "suitable applicant" [read management prerogative playing Machiavelli]. Would there ever be another AU command offered again?
If this scenario actually did occur, the same thing could done to other agreements within the group, including LH.
Just musing...
Given the impending shortage, an adversarial play is to open the channel to offshoring as a method of control for any AU based group pilots (offshore to onshore type model). This looks like the "angle" to me. Get everything up and running, EBA signed off and then make NZ as a pseudo base with AU overnights.
Of course, under this model, generously LWOP would be offered to those who wished to take a JC command, by way of being a "suitable applicant" [read management prerogative playing Machiavelli]. Would there ever be another AU command offered again?
If this scenario actually did occur, the same thing could done to other agreements within the group, including LH.
Just musing...
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Haven't JC Pilots been "negotiating" their CEA for 2 years now? With the Company stalling them at every opportunity?
The timing is impeccable... almost as if it were planned from the beginning.
Receiving a Draft CEA after 2 years of failed negotiations is very different to signing it. Although I suspect they'll use the threat of redundancy to get it ratified.
The timing is impeccable... almost as if it were planned from the beginning.
Receiving a Draft CEA after 2 years of failed negotiations is very different to signing it. Although I suspect they'll use the threat of redundancy to get it ratified.
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Draft CA released yesterday. Quite a number of changes in the draft however a lot of rumors associated with the acceptance of it. All the pilots need further information to decide whethere these changes are pro Jetconnect or pro the ease of AOC shutdown. 10 days off/ month and a definition of a day off to now read 0001 to 2400. The rest 'cost neutral' for Qantas and Jetconnect. Still a well and truely far off a contract that is fair and comparable to others in today's market. Good luck to the pilots for fighting for a better contract and putting up a good negotiation fight during what is going to be a fairly messy AOC shutdown and amalgamation. Can others shed some light on how this has been accepted by the Qantas mainline folks and their respective unions alike?