Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 6, Item 4 - Application to make a modern award to replace an enterprise instrument.

AIRLINE OPERATION - SALARIED STAFF - QANTAS INFORMATION TECHNOLOGY LIMITED AWARD 2003

Application by Australian Municipal, Administrative, Clerical and Services Union and Qantas Information Technology Limited for a modern enterprise award for Airline Operation - Salaried Staff - Qantas Information Technology Limited. Fair Work (Transitional Provisions and Consequential Amendments Act 2009 Schedule 6 sub-item 4(5), 9(3).

Introduction

[1] The Australian Municipal, Administrative, Clerical and Services Union (ASU) and Qantas Information Technology (QIT) have each made an application under item 4 of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) for the Fair Work Commission to make a modern enterprise award to replace the Airline Operations - Salaried Staff - Qantas Information Technology Limited Award 2003 (the QIT Award).

[2] The QIT Award is an enterprise instrument for the purposes of Schedule 6 as it applies only to salaried employees of QIT. At the date of hearing this matter the QIT Award covered 13 employees. Employees covered by the Award are generally employed as information technology officers, managers or technical consultants. They are employed in planning, operations, network and communications, systems development and associated support functions.

[3] At the hearing of this matter Ms T Firth of counsel and Ms J. Oldmeadow appeared for Qantas. Mr E. White of counsel and Mr. J. Cooney of counsel appeared for the ASU

The Legislative Task

[4] The role of the Commission in an application to make a modern enterprise award is governed by sub-item 4(5) of Schedule 6 to the Transitional Act which provides:

(5)       In deciding whether or not to make a modern enterprise award, and in determining the content of that award, the FWC must take into account the following:

(a)  the circumstances that led to the making of the enterprise instrument rather than an instrument of more general application;
(b)  whether there is a modern award (other than the miscellaneous modern award) that would, but for the enterprise instrument, cover the persons who are covered by the instrument, or whether such a modern award is likely to be made in the Part 10A award modernisation process;
(c)  the content, or likely content, of the modern award referred to in paragraph (b) (taking account of any variations of the modern award that are likely to be made in the Part 10A award modernisation process);
(d)  the terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument;
(e)  the extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment;
(f)  the likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons;
(g)  the views of the persons covered by the enterprise instrument;
(h)  any other matter prescribed by the regulations.

[5] It is also necessary to consider the modern enterprise awards objective: Item 6 of Schedule 6 of the Transitional Act. This is a legislative requirement for the Commission to recognise that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises and to generally have regard to other modern awards objectives. We turn to consider these factors in relation to the circumstances of this case.

The Circumstances that led to the making of the enterprise instrument rather than an instrument of more general application: Item 4 (5) (a)

[6] The history of the QIT Award can be traced to the 1980s when its original predecessor award applied to Australian Airline employees in the Information Services Division. The award has always been an enterprise specific instrument. Qantas contends that the award reflected the public service environment in which QIT operated.

Whether there is a modern award that would, but for the enterprise instrument, cover the persons who are covered by the instrument: Item 4 (5) (b)

[7] Qantas and the ASU contend that there is no single award that would cover QIT employees if the QIT award ceased to apply. However the Clerks Private Sector Award 2010 and the Professional Employees Award 2010 may cover some employees. The Clerks Private Sector Award 2010 is limited to employees engaged wholly or principally in clerical work including administrative work of a clerical nature. The Professional Employees Award 2010 applies to graduate professionals and above.

The content, or likely content, of the modern award referred to in paragraph (b): Item 4 (5) (c)

[8] The terms and conditions contained in the modern awards are less beneficial to employees compared to those in the QIT Award. There are 10 salary levels for IT Officers ranging from $34,381 to $67,788 pa. Rates for the two levels of Managers/Technical Consultants are $63,137 and $73,922 pa. Salary progression is based on performance. The salaries for clerical employees under the Clerks Private Sector Award 2010 range from $34,403 to approximately $49,000. Under the Professional Employees Award 2010 salaries range from $43,256 to $62,900 pa. A question arises as to whether the rates in the QIT Award are properly fixed minimum rates.

[9] The modern awards are also less beneficial in relation to allowances, hours of work, personal leave and public holidays.

The terms and conditions of employment applying in the industry in which the persons covered by the enterprise instrument operate, and the extent to which those terms and conditions are reflected in the instrument: Item 4 (5) (d)

[10] The airline industry has undergone significant changes over the past 25 years. In particular there has been an increase in the number of employers in the industry including new low cost airline operators and third party service providers. Information technology services are a critical part of running an airline. The small number of employees covered by the QIT Award is likely to represent a small proportion of information technology employees engaged in or in connection with the airlines industry.

[11] Employees covered by the QIT Award other than Managers and Technical Consultants are covered by the ASU (Qantas Airways Limited) Enterprise Agreement. Managers and Technical Consultants are covered by the ASU/QIT (Managers and Technical Consultants) Enterprise Agreement. The terms and conditions of these agreements are in excess of the terms of the QIT award.

[12] A number of employee groups within Qantas operations have been historically covered by awards confined to the Qantas enterprise. This bench has not been satisfied that a sufficient case has been made out to make a modern enterprise award for some of these groups. This includes the Qantas airline Officers Award which applies to a much larger group of Qantas clerical and salaried employees. Outside the Qantas operations enterprise awards are rare in the airlines industry. Enterprise agreements however are widespread. The usual safety net is the applicable industry or vocational modern award.

The extent to which the enterprise instrument provides enterprise-specific terms and conditions of employment: Item 4 (5) (e)

[13] The more generous terms and conditions contained in the QIT Award can be described as enterprise specific, particularly as they have arisen from successive enterprise awards. In other respects the terms are generally in line with relevant modern awards.

The likely impact on the persons covered by the enterprise instrument, and the persons covered by the modern award referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award, including any impact on the ongoing viability or competitiveness of any enterprise carried on by those persons: Item 4 (5) (f)

[14] As the employees covered by this award are covered by enterprise agreements there is no immediate impact on them from the termination of the QIT Award. However the different award safety net would apply on renegotiation of the enterprise agreements.

The views of the persons covered by the enterprise instrument: Item 4 (5) (g)

[15] Qantas and the ASU support the making of a modern enterprise awards. The ASU contends that employees also support its application.

Any other matter prescribed by the regulations: Item 4 (5) (h)

[16] There are no other matters prescribed.

The Modern Enterprise Awards Objective

[17] The specific terms and conditions in the QIT Award and their continuation in a modern enterprise award is consistent with the modern enterprise awards objective.

Should a modern enterprise award be made?

[18] This award applies to a small group of employees within Qantas who represent a small proportion of employees who perform information technology services to the airline industry. Indeed it is likely that information technology services are provided to Qantas by a much larger number of employees of other employers.

[19] The award has an enterprise history and contains more generous enterprise specific conditions. But in our view, in the context of the modern award system and the nature of the airline industry as it has evolved, there is not a sufficient basis to continue an enterprise award for this group of employees. We are not persuaded that a modern enterprise award should be made in the circumstances of this matter.

Conclusions

[20] As we have not been persuaded to make a modern enterprise award covering the employees of QIT we dismiss the applications made by QIT and the ASU. The QIT Award terminates as at the date of this decision by virtue of Item 9(3) of Schedule 6 to the Transitional Act.

VICE PRESIDENT

Appearances:

Ms. T Firth of Ashurst and Ms J Oldmeadow with permission for Qantas Airways Group

Mr. E White of counsel and Mr. J. Cooney with permission for the ASU

Hearing details:

2014

Melbourne

9 July

Final written submissions:

Qantas on 29 July 2014.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR553040, AP833180>