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Qantas entity avoids excess baggage

By Kristin Ramsey07 Jun 2012

Last Monday Fair Work Australia (FWA) handed down a decision regarding a transfer of business situation which, whilst not overly remarkable in itself, raises some interesting issues for employers with related or associated entities (see Express Freighters Australia (Operations) Pty Ltd and others (2012) FWA 4556).

First Officer Watt (FO) is currently employed by Qantas Airways Limited (QANTAS) as a pilot and wants to commence employment with Express Freighter Australia (Operations) Pty Ltd (EFA), as a few years of experience at EFA will put him on the fast-track to becoming a Captain compared with if he stays with QANTAS.

Given that:

  • the work that the FO would perform for EFA is virtually the same as the work he currently performs for QANTAS; and
  • QANTAS and EFA are related entities,

if EFA were to employ the FO, a transfer of business would take place and the enterprise agreement which applies to the FO whilst employed at QANTAS would become binding on EFA

As such, EFA, QANTAS and the FO applied to FWA for an order that the relevant QANTAS EBA would not transfer over to EFA in the event that the FO commences employment with EFA.

The parties were successful in obtaining such an order on the grounds that the FO was transferring to EFA voluntarily, EFA has in place an up to date and comprehensive EBA itself, and the transfer would provide the FO with training and career progression opportunities.

What is interesting about this decision is that it was necessary for the application to be brought in the first place!

The decision is an important reminder about the broader application of the present transfer of business rules and the fact that they can apply even in circumstances where an employee leaves their employment and commences employment with an associated entity entirely of their own initiative.

In particular, group companies with EBAs in place need to be mindful of employees bringing “excess baggage” with them when they move from company to company within the group.