Agnew Gold Mining Company Pty Limited
[2010] FWA 7430
•23 SEPTEMBER 2010
[2010] FWA 7430 |
|
DECISION |
Fair Work Act 2009
s.318—Transfer of instrument
Agnew Gold Mining Company Pty Limited
(AG2010/14308)
COMMISSIONER WILLIAMS | PERTH, 23 SEPTEMBER 2010 |
Instruments covering new employer and transferring employees in agreements.
[1] This matter is an application by Agnew Gold Mining Company Pty Limited (the Applicant) under s.318 of the Fair Work Act 2009 (the Act).
[2] Fair Work Australia (FWA) may make a determination under s.318(1)(a) of the Act that a transferable instrument that would cover a new employer and a transferring employee by virtue of paragraph s.313(1)(a) of the Act will not cover the new employer and the transferring employee. FWA also may make a determination under s.318(1)(b) of the Act that an enterprise agreement that covers the new employer will cover the transferring employee.
[3] The Applicant seeks orders that:
1. The Byrnecut Mining Pty Ltd as trustee for The Byrnecut Mining Unit Trust Employee Collective Workplace Agreement 2007 [AC310989] will not cover the Applicant, Agnew Gold Mining Company Pty Limited and any employees of the Applicant, formerly employed by Byrnecut Mining Pty Ltd.
2. That the Agnew Gold Mine Employee Collective Agreement 2009 [AC324090] will cover any employees of the Applicant, formerly employed by Byrnecut Mining Pty Ltd.
Background
[4] The Applicant is the operator of the Agnew Gold Mine which is located 23km west of the town of Leinster in Western Australia.
[5] From 2001 the Applicant outsourced the underground mining function at the Agnew Gold Mine to an underground mining contractor, Byrnecut Mining Pty Ltd (Byrnecut). On 23 March 2010, the Applicant gave notice to Byrnecut that it would be terminating that arrangement effective from 23 May 2010. The Applicant’s decision to cease to outsource the underground mining function, and to manage that function directly, was central to the Applicant’s broader direct engagement strategy and the harmonisation of terms and conditions at the Agnew Gold Mine.
[6] Between late March 2010 and early May 2010, the Applicant made offers of employment to a number of Byrnecut employees, all of whom were engaged to work at the Agnew Gold Mine. Out of the 120 employees who were engaged by Byrnecut to work at Agnew Gold Mine, 16 persons accepted direct employment with the Applicant and commenced work between 24 May 2010 and 12 July 2010. The underground mining work the former Byrnecut employees perform for the Applicant is the same as they performed during their employment with Byrnecut. The work performed, the type of equipment to be used and the processes to be followed have not changed. All that has occurred is that the Applicant has ceased to outsource the work.
The Legislation
The relevant section of the Act is s.318:
“318 Orders relating to instruments covering new employer and transferring employees
Orders that FWA may make
(1) FWA may make the following orders:
(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.
Who may apply for an order
(2) FWA 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).
Matters that FWA must take into account
(3) In deciding whether to make the order, FWA 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.”
[7] I accept that the Applicant’s decision to cease to outsource the underground mining function at Agnew Gold Mine, and the subsequent employment of former Byrnecut employees, amounted to a transfer of business in accordance with s.311(1) of the Act.
[8] The former Byrnecut employees are “transferring employees” for the purpose of s.311(2) of the Act because the requirements in s.311(1)(a), (b) and (c) of the Act are satisfied.
[9] Immediately prior to the termination of the Transferring Employees’ employment with Byrnecut, the Transferring Employees and Byrnecut were covered by the Byrnecut Mining Pty Ltd as trustee for The Byrnecut Mining Unit Trust Employee Collective Workplace Agreement 2007 [AC310989] (Byrnecut Agreement). The Byrnecut Agreement is an employee collective agreement made under s.327 of the Workplace Relations Act 1996 (Cth) (WR Act).
[10] Employee collective agreements made under the WR Act are transitional instruments (see Item 3, Part 2, Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (FW Transitional Act)). Pursuant to Item 8, Part 3, Division 1, Schedule 11 of the FW Transitional Act a transitional instrument is a transferable instrument as defined by s.312(1) of the Act. Accordingly, the Byrnecut Agreement, which is a transitional instrument, is a transferable instrument for the purposes of the Act.
[11] Pursuant to s.313(1)(b) of the Act the Byrnecut Agreement now covers the Applicant and the Transferring Employees in relation to the Transferring Work (s.311(1)(c)). While the Byrnecut Agreement covers the Applicant and the Transferring Employees in relation to the Transferring Work, no other enterprise agreement or named employer award that covers the Applicant covers the Transferring Employees in relation to that work.
[12] The Applicant and its employees, other than the Transferring Employees, who are engaged at Agnew Gold Mine are covered by the Agnew Gold Mine Employee Collective Agreement 2009 [AC324090] (Agnew Agreement). The Agnew Agreement is an employee collective agreement made under s.327 of the WR Act.
[13] The Applicant submits that the Agnew Agreement should cover the Transferring Employees. The Agnew Agreement was developed specifically for the Agnew Gold Mine and has synergies with the Applicant’s operations. Amongst other benefits, the Agnew Agreement will provide the Transferring Employees with higher rates of pay and a roster which promotes a superior work life balance.
[14] The Applicant argues it is not desirable for the Byrnecut Agreement to operate in parallel to the Agnew Agreement. Specifically, the Applicant should not be obliged to conduct its operations with its workforce divided into two separate and distinct groups operating under different terms and conditions, for example different rosters. Such a result would be warranted where it is necessary to protect employees from suffering a reduction in their terms and conditions of employment, but in this case operating under the Agnew Agreement is to the financial benefit of the Transferring Employees.
[15] The Applicant has consulted with the Transferring Employees throughout, and prior to, the lodgement of this Application. The Transferring Employees were provided with a copy of both the Byrnecut Agreement and the Agnew Agreement at the commencement of their employment and the Applicant’s human resources officers were made available to answer any questions concerning either agreement.
[16] On 24 May 2010, Andrew Upfill, Human Resources Manager wrote to the Transferring Employees informing them that a transfer of employment was taking place and that the Applicant intended to make an Application of this nature to secure their employment under the Agnew Agreement.
[17] On 12 July 2010, Mr Upfill again wrote to the Transferring Employees, this time informing them that the Applicant intended holding a secret ballot to gauge the Transferring Employees’ views in relation to which agreement they wanted to regulate their employment. A copy of both the Byrnecut and Agnew Agreement was available for Transferring employees to review.
[18] Between 14 July 2010 and 17 July 2010, Victor Rajasooriar, Mining Manager/Acting General Manager, met with the Transferring Employees and conducted the secret ballot. The results of the secret ballot were unanimous, all 16 employees who were balloted voted to support the transfer to the Agnew Agreement. Mr Victor Rajasooriar’s statutory declaration dated 19 July 2010 was provided to the Tribunal.
[19] On 17 July 2010, Mr Upfill met with the Transferring Employees to provide them with an update on the integration process and sought direct views from a representative group. Two of those employees later provided statutory declarations to the Applicant concerning their views and which agreement they wished to regulate their employment. Those statutory declarations of Alexandre Vogel de Araujo (Service Paste Crew) and Philip Sugden Smith (Long Hole Driller) were provided to the Tribunal. These employees support the making of the orders sought by the Applicant.
[20] The employees view is to support the application which is consistent with the fact that they will be performing exactly the same work, but for a greater financial reward.
Consideration
[21] The Act requires the tribunal to take into account the matters in s. 318(3) and these are considered below.
Section 318(3)(a)(i): the views of the new employer
[22] The Applicant is the new employer and is obviously supportive of the application.
Section 318(3)(a)(ii): the views of the employees prospectively affected by any order
[23] I accept the submissions and the statutory declarations provided that demonstrate that the transferring employees who will be affected are all supportive of this application being granted.
Section 318(3)(b): any disadvantage to the employees
[24] I accept that there is no overall disadvantage to the affected employees and in fact in terms of remuneration and some other conditions there are significant advantages to the affected employees being covered by the Agnew Agreement.
Section 318(3)(c): the nominal expiry date of the transferable instrument (the Agreement)
[25] The Byrnecut Agreement has a nominal expiry date of 16 November 2012 and the Agnew Agreement has a nominal expiry date of 28 August 2014. The fact that the Agnew Agreement will be within its nominal term for almost two years longer than the Byrnecut Agreement will ensure a longer period of stability in industrial relations at the Agnew Gold Mine. Additionally, this will provide consistency in employment for the Transferring Employees and guarantee wage reviews for the duration of the Agreement.
Section 318(3)(d): any negative impact on the productivity of the workplace
[26] If the Byrnecut Agreement which is the transferable instrument were to continue to cover to the Transferring Employees at the Agnew Gold Mine, the Applicant would be required to maintain two separate and distinct employment systems. This will create a division between the Transferring Employees and the Applicant’s existing workforce and any future employees. This will discourage integration of the workforce which I accept will cause inefficiencies and have negative consequences for the workplace’s productivity.
Section 318(3)(e): any significant economic disadvantage to the employer
[27] The maintenance of two separate and distinct employment systems would require the Applicant to incur the unnecessary cost of administering and maintaining two payroll systems. It is not clear however precisely what this economic cost would be but I do accept that it would not be an insignificant economic disadvantage.
Section 318(3)(f): business synergy between the transferable instrument and the existing agreement
[28] The Applicant submits that while it is possible to operate the Agnew Gold Mine using both the Agnew and Byrnecut Agreements the practical outcome is that the existing workforce, and any new employees, will fall under the Agnew Agreement and will therefore be under different conditions to the Transferring Employees. The Applicant submits that this has the potential to give rise to industrial grievances in the workplace. As found above it will also involve day to day inefficiencies and reduces productivity. For example, the roster systems currently in place at the Agnew Gold Mine are not compatible with the Byrnecut Agreement. The Byrnecut Agreement provides for a two week on/one week off roster and a one week on/one week off roster, while the Agnew Agreement provides for an eight shifts on/six shifts off roster (which is the current roster system at the Agnew Gold Mine). There is an obvious need for uniformity between the industrial instrument and roster system for people who are working together on the same job.
[29] I conclude then that there is no business synergy between the transferable instrument and the workplace instrument that already covers the Applicant.
Section 318(3)(g): the public interest
[30] There is no evidence that the public interest is a matter of relevance in this application.
Conclusion
[31] Having considered the evidence and submission of the Applicant and having taken account of each of the matters stipulated at s.318 (3) of the Act, I have decided that I should make an order of the kind sought. The order will operate from 20 September 2010 and will be issued in conjunction with this decision.
COMMISSIONER
Appearances:
A. Cameron, of Counsel, with A. Upfill of Agnew Gold Mining Pty Ltd and J. Shepherdson
of the Australian Mines and Metals Association.
Hearing details:
2010.
Perth:
September 20.
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<Price code C, PR502012>
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