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

OPTUS AWARD 2000

Application by Optus Administration Pty Ltd T/A Optus Communications for a modern enterprise award for Optus Communications. Factors to be considered when making a modern enterprise award - unique circumstances - case made out for making a modern enterprise award - Fair Work (Transitional Provisions and Consequential Amendments Act 2009 Schedule 6 sub-item 4(5).

[1] Optus Administration Pty Ltd T/A Optus Communications (Optus) has made an application under item 4 of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) for the Fair Work Commission to make a modern enterprise award to replace the Optus Award 2000 (Optus Award).

[2] At the hearing of this matter Mr E White of counsel and Ms R Eason appeared for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) Mr S Meehan of counsel and Ms S Jones appeared for Optus.

The Legislative Task

[3] 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.

[4] 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, in addition to the modern awards objective and the minimum wage objective generally, that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises.

[5] 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] Optus was granted a licence to provide telecommunications services in 1991 and commenced operations in 1992. It was the first competitor to Telstra which previously had a monopoly in the provision of telecommunications services in Australia. Industrial regulation of Optus commenced with an order for exclusive representation of Optus employees by predecessors of the CEPU made in 1992. A Consent Agreement between Optus and the CEPU was approved later that year. The first Optus Award was made in 1994. It was made by consent and largely reflected the terms of the 1992 Agreement. The award was simplified in 2000.

[7] Optus and the CEPU submitted that these circumstances are unique. We accept that this is the case. Optus was established when formalised enterprise bargaining was in its infancy in Australia. The Award and the predecessor agreement reflect the nature of the new operation, the particular employment culture Optus established with its workforce and the terms and conditions deemed appropriate for the operations of its type. In contrast to Telstra’s more prescriptive awards, the instruments were concise and in many ways, innovative. Optus operated in an industry as a start up private sector operator in an industry dominated by Telstra. The content of the enterprise award strongly reflected these circumstances.

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)

[8] Optus conducts a range of operations under the Optus Award. It submits that apart from the Telecommunications Services Award 2010 (Telecommunications Services Award), the Professional Employees Award 2010, the Commercial Sales Award 2010 and the General Retail Industry Award 2010 would potentially apply if the Optus Award did not.

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

[9] There are significant differences between the content of the above awards and the Optus Award. The Optus Award provides for flexibility in commission based work, additional employment types of “fixed term employee” and “project employee” and more beneficial entitlements concerning salaries, loadings, overtime, leave entitlements and dispute resolution. The general industry and occupational awards are of a different nature and contain differences between them because they focus on the other industries or occupations. The Telecommunications Services Award applies to smaller businesses undertaking a range of different telecommunication service functions.

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 complete dominance of Telstra prior to 1992, and its ongoing dominance of the industry, as by far the largest player, are unusual features. Even now Telstra remains covered by at least ten enterprise awards. Telstra’s application to terminate its enterprise awards was rejected by a Full Bench of this Commission in 2012 and as a result a modern enterprise award is in an advanced stage of development. Neither Telstra nor Optus were involved in the making of the Telecommunications Services Award. That award applies to smaller operators who are a small proportion of the telecommunications services industry, and does not apply to the two largest telecommunications operators, Telstra and Optus.

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

[11] A number of provisions of the Optus Award are not contained in the Telecommunications Services Award as identified in [9] above. In our view these differences can be described as enterprise specific terms and conditions of employment.

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)

[12] Optus and the CEPU submit that a decision to not make a modern enterprise Optus award will have detrimental effects on both Optus and its employees. We accept that the resultant application of four different awards and different terms and conditions will add to the administrative burden of Optus, at least at the time of renewal of its agreement and provide a different safety net for employees.

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

[13] Optus and the CEPU support the making of a modern enterprise award applying to Optus.

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

[14] There are no prescribed other matters.

The Modern Awards Objective and the Modern Enterprise Awards Objective

[15] The modern awards objective of a simple, easy to understand, stable and sustainable modern award system that avoids unnecessary overlap in awards, encourages the minimisation of enterprise awards operating in conjunction with appropriate industry awards. It is relevant to note that if the Optus Award is terminated, the industry award would not be the only modern award applying to Optus employees, and enterprise specific terms of employment would not be in the award. Of course it will remain the case that the industry award will not apply to the predominant industry employer, Telstra.

Should a modern Enterprise Award be made?

[16] In our view there are unique circumstances in this matter that warrant the making of a modern enterprise award applying to Optus.

[17] The history of award coverage shows that Optus has never been covered by an industry award and took no part in the development of the modern industry award. Its award has been closely aligned with its enterprise agreements, and indeed applied as a stand-alone enterprise agreement in its early years. It continues to contain enterprise specific terms and conditions that are quite different to the terms of the industry award. Most importantly, the industry is not predominantly covered by the modern industry award because Telstra is covered, and will continue to be covered, by an enterprise award. The continuation of the Optus Award is supported by Optus and the union representing its members employed at Optus. In our view a case has been made out to make a Modern Enterprise Award applying to Optus.

Conclusion

[18] In these circumstances we conclude that a modern enterprise award should be made with respect to Optus. The terms of the modern award will be considered further following a conference of the parties convened by a member of this Bench.

VICE PRESIDENT

Appearances:

Mr S Meehan of counsel and Ms S Jones, for Optus Administration Pty Ltd T/A Optus Communications.

Mr E White of counsel and Ms R Eason, for Communication, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

Hearing details:

2014.

Melbourne.

22 August.

Final written submissions:

Optus Administration Pty Ltd on 11 September 2014.

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