Agnew Gold Mining Company Pty Limited
[2017] FWC 6412
•4 DECEMBER 2017
| [2017] FWC 6412 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Agnew Gold Mining Company Pty Limited
(AG2017/5758)
Mining industry | |
DEPUTY PRESIDENT BULL | PERTH, 4 DECEMBER 2017 |
S.318 - Application for an order relating to instruments covering new employer and transferring employees.
[1] On 24 November 2017, Agnew Gold Mining Company Pty Limited (the applicant/Agnew Gold) lodged an application in the Fair Work Commission (the Commission) for orders under s.318 of the Fair Work Act 2009 (the FW Act) which relate to an instrument covering a new employer and transferring employees in the context of a transfer of business.
[2] The applicant is the new employer of the business to which this application relates and therefore has standing to apply for the order under s.318(2)(a) of the Act.
[3] The transferable instrument to which this application relates is the Sedgman Metalliferous Agreement 2015 (the Sedgman Agreement). The Sedgman Agreement came into operation on 6 October 2015 and has a nominal expiry date of 6 October 2019.
Orders sought
[4] The applicant sought the following orders pursuant to s.318 of the FW Act:
• The Sedgman Metalliferous Agreement 2015 will not cover Agnew Gold Mining Company Pty Limited, Gold Fields Australia Pty Ltd, Gold Fields Australasia Pty Ltd, GSM Mining Company Pty Ltd or St Ives Gold Mining Company Pty Ltd (Gold Fields Companies) and any employees of those companies formerly employed by Sedgman Employment Services Pty Ltd.
• The Gold Fields Companies Enterprise Agreement 2014 will cover any employees of the Gold Fields Companies formerly employed by Sedgman Employment Services Pty Ltd under the Sedgman Metalliferous Agreement 2015.
[5] Following correspondence from the Commission to the applicant’s representative, the applicant indicated that it did not wish to proceed with naming Gold Fields Australia Pty Ltd, Gold Fields Australasia Pty Ltd, GSM Mining Company Pty Ltd or St Ives Gold Mining Company Pty Ltd in the orders sought.
[6] The applicant further indicated the correct entity name of the former employer was Sedgman Operations Employment Services Pty Ltd.
Background
[7] The applicant has acquired Sedgman Pty Limited’s crushing assets at the Agnew mine site; the acquisition took place on 1 December 2017.
[8] As part of the acquisition six employees have been offered employment with the applicant, commencing from the acquisition date, and their employment transferred from Sedgman Operations Employment Services Pty Ltd, an associated entity of Sedgman Pty Limited, to the applicant.
[9] Of the six employees, two employees are covered by the Sedgman Agreement (transferring employees).
[10] If the orders sought are made, the transferring employees would be cease to be covered by the Sedgman Agreement and would be covered by the Gold Fields Companies Enterprise Agreement 2014 (Gold Fields Agreement).
Transfer of business
[11] Section 317 of the FW Act provides that the Fair Work Commission may make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.
Relevant legislation
[12] Section 312(1) of the FW Act defines the meaning of a transferable instrument. Pursuant to s.312(1)(a), the Sedgman Agreement constitutes a transferable instrument for the purposes of the Act.
[13] Section 313 provides for the transferable instrument to transfer to the new employer along with the employees who are transferred.
[14] Therefore, the applicant and the transferring employees will be covered by the Sedgman Agreement.
[15] The applicant seeks that the Sedgman Agreement not cover the applicant or the transferring employees.
[16] The relevant section of the FW Act which allows for the Commission to make the orders sought is section 318 which is in the following terms:
“S.318 Orders relating to instruments covering new employer and transferring employees
Orders that the FWC may make
(1) The FWC 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.”
[17] Section 318(3) of the FW Act sets out the considerations that the Commission must take into account in deciding whether to make the order:
“Matters that the FWC must take into account
(3) In deciding whether to make the order, the FWC 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.”
Consideration
[18] In its application, the applicant addressed each of the matters the Commission is required to consider when issuing an order under s.318. The application was accompanied by an affidavit signed by Michael Spencer, Manager, Employee Relations and further material to demonstrate the views of the transferring employees.
[19] Information provided by the applicant included:
● a copy of the PowerPoint presentation provided to transferring employees;
● a copy of the offers of employment provided to transferring employees;
● a copy of the feedback forms, which requested the employees’ views about the transfer of business and proposed change to the Gold Fields agreement to govern their conditions at work, completed and signed by the transferring employees;
● a description of comparison of conditions of employment;
● details regarding administrative costs potentially incurred by the applicant should the orders as sought not be made;
● details regarding discrepancies between the terms and conditions of the two agreements and potential negative impacts this could have on productivity; and
● details regarding the degree of business synergy between the Sedgman Agreement and the Gold Fields Agreement.
[20] The submissions of the applicant are contained its Form F40 and the affidavit of Mr Spencer, the Manager Employee Relations, and accompanying attachments.
Views of the new employer or the likely new employer
[21] The new employer Agnew Gold Mining Company Pty Limited has stated that it currently employs some 312 employees who are covered by the Gold Fields Agreement.
[22] It is put that the two transferring employees will be undertaking duties identical to some of Agnew Gold’s employees who are covered by the Gold Fields Agreement. The applicant submits that the transferring employees will not be a discrete group of employees and will work alongside other employees performing the same or similar roles. The applicant submits that the proposed orders will provide it with ‘certainty and consistency’ in relation to its workplace arrangements and application of industrial instruments following the acquisition of Sedgman Pty Limited’s crushing assets at the Agnew mine site.
Views of the employees who would be affected by the order
[23] The applicant has advised that the two affected employees are supportive of the orders sought and have stated that they prefer the applicant’s conditions of employment contained in the Gold Fields Agreement over the conditions contained in the Sedgman Agreement. This information was ascertained from a questionnaire sent to the affected employees.
Whether any employee would be disadvantaged by the order in relation to their terms and conditions of employment
[24] The applicant contends that ‘overall’ having regard to the entitlements under both the relevant industrial instruments the transferring employees will not be disadvantaged in relation to their terms and conditions if the proposed orders issue. The more beneficial conditions of the Gold Fields Agreement are listed in the application. The applicant has stated that the key beneficial terms applying under the Sedgman Agreement will be maintained for the transferring employees under their contracts of employment. 1
The nominal expiry date of the agreement
[25] The Sedgman Agreement’s nominal expiry date is 6 October 2019, whereas the nominal expiry date for the Gold Fields Agreement is 9 April 2018. The applicant states that the transferring employees will have the opportunity to be involved in negotiations to replace the Gold Fields Agreement.
Whether the transferable agreement would have a negative impact on the productivity on the new employer’s (the applicant) workplace
[26] The applicant states that the need to administer different terms and conditions of employment, a classification system and a separate payroll system for the transferring employees would result in a negative impact on productivity.
Whether the applicant would incur significant economic disadvantage as a result of the Agreement covering it
[27] The applicant estimates that the one-off cost to modify its payroll system would be up to $25,000 with an on-going cost of up to $10,000 per annum with additional training for HR and payroll staff.
The degree of business synergy between the Agreement and any workplace instrument that already covers the new employer
[28] The Sedgman Agreement is drafted on the basis that it applies to a contractor providing services across a number of sites to different clients whereas the Gold Fields Agreement applies to gold miners operating a number of mine sites. This is said by the applicant to negatively impact on the synergy of the two agreements.
The public interest
[29] The applicant submits that it is in the public interest that it be allowed to operate efficiently without the burden of complications arising from having to administer an additional enterprise agreement for two employees. Further, the application is supported by the affected employees.
Conclusion
[30] I am satisfied that the Sedgman Agreement is a transferable instrument as described in s.312(1)(a) of the FW Act and that the circumstances described are a transfer of business within the meaning of s.311 of the FW Act.
[31] The FW Act requires the Commission to take into account the circumstances of the transmission of business under the various headings listed above and then to balance these considerations in reaching a conclusion.
[32] Having regard to the grounds and reasons stated in support of the application, I am satisfied that the requirements of the FW Act have been met. With respect to the considerations above I am satisfied that the orders sought should be granted, particularly having regard to the views of the transferring employees.
[33] For the reasons set out above, orders [PR598312] will issue that:
● S.318(1)(a) the Sedgman Metalliferous Agreement 2015 will not cover the applicant or the transferring employees who will perform, or are likely to perform, the transferring work for the applicant;
● S.318(1)(b) the Gold Fields Companies Enterprise Agreement 2014 will cover the transferring employees.
DEPUTY PRESIDENT
1 See paragraphs [17], [18] and [19] of the Form F40
Printed by authority of the Commonwealth Government Printer
<Price code C, AE415917 PR598311 >
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