Agnew Gold Mining Company Pty Limited

[2013] FWC 7332

[2013] FWC 7332

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.318—Transfer of instrument

Agnew Gold Mining Company Pty Limited
(AG2013/2535)

Mining industry
COMMISSIONER WILLIAMS	PERTH, 24 SEPTEMBER 2013

Transfer of instrument.

[1] This is an application, pursuant to s.318 of the Fair Work Act 2009 (the Act) filed by Agnew Gold Mining Company Pty Limited (Agnew or the applicant) which seeks Orders as follows:

1. That the Barrick Yilgarn Collective Agreement 2009 will not cover Agnew Gold Mining Company Pty Limited, Darlot Mining Company Pty Ltd or GSM Mining Company Pty Ltd, and any employees of those companies formerly employed by Barrick (Granny Smith) Pty Ltd, Barrick (Australia Pacific) Limited or Barrick Mining Services Pty Ltd.

2. That any Australian Workplace Agreements (AWAs) and Individual Transitional Employee Agreements (ITEAs) covering employees of Barrick (Granny Smith) Pty Ltd, Barrick (Australia Pacific) Limited or Barrick Mining Services Pty Ltd will not cover those employees who become employees of Agnew Gold Mining Company Pty Limited, Darlot Mining Company Pty Ltd or GSM Mining Company Pty Ltd nor shall those AWAs and ITEAs cover those companies.

3. That the Agnew Gold Mine Employee Collective Agreement 2009 will cover any employees of Agnew Gold Mining Company Pty Limited, Darlot Mining Company Pty Ltd or GSM Mining Company Pty Ltd formerly employed by Barrick (Granny Smith) Pty Ltd, Barrick (Australia Pacific) Limited or Barrick Mining Services Pty Ltd under the Barrick Yilgarn Collective Agreement 2009, or on an AWA or ITEA.

4. That these Orders shall apply in respect of each employee transferring from a Barrick company to a Gold Fields company on and from the day after Barrick ceases to administer their pay and other employment entitlements.

[2] Section 318 of the Act sets out the circumstances in which such orders may be made by the Commission, as follows:

“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.

Who may apply for an order

(2) The FWC 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 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.


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.”

Background

[3] Agnew together with its related bodies corporate, Darlot Mining Company Pty Ltd and GSM Mining Company Pty Ltd, each being members of the Gold Fields Limited Group (collectively herein referred to as the Gold Fields companies) is in the process of acquiring the Darlot, Granny Smith and Lawlers gold mining operations from, among others, Barrick Mining Services Pty Limited, Barrick (Australia Pacific) Limited and Barrick (Granny Smith) Pty Ltd (collectively herein referred to as the Barrick companies).

[4] The Barrick Yilgarn Collective Agreement 2009 [AC327005], AWAs and ITEAs (herein after referred to collectively as the Barrick Agreements) apply at the Darlot, Granny Smith and Lawlers operations, whereas the applicant Agnew is bound by the Agnew Gold Mine Employee Collective Agreement 2009 [[AC324090] and [AC327623]] (the applicant’s Existing Agreement).

[5] Turning then to respectively consider those matters the Commission must take into account.

The views of the new employer

[6] The applicant employer is strongly of the view that the Barrick Agreements should not transfer to the applicant. The reasons for this are the applicant’s view about the negative impact on the applicant’s operations including productivity, the significant additional costs that would be incurred and the lack of business synergies between the Barrick Agreements and the applicant’s Existing Agreement.

The views of the employees who would be affected by the order

[7] Evidence was given by Mr Spencer, the applicant’s Manager − Remuneration and Benefits as to the communication process the applicant has undertaken with the affected employees and what steps the applicant has taken to have the views of the affected employees put before the Commission.

[8] Mr Spencer explained that meetings have been conducted at each of these sites to explain to the affected employees the intention of Agnew regarding this application, what offers of employment will be made to the affected employees and what provisions will be made to ensure the employees are not disadvantaged.

[9] Mr Spencer explained that as part of the presentations to employees a detailed PowerPoint presentation was made 1.

[10] That PowerPoint presentation explained the difference in employment terms and conditions between those detailed in the Barrick Agreements and those that were being offered as part of employment under the applicant’s Existing Agreement.

[11] Importantly the PowerPoint presentation included a section which explained in some detail that an “equalisation allowance” would be paid on a case-by-case basis to individual employees to ensure that as a whole the terms of employment offered to them were the same or similar to their previous employment conditions with a Barrick company.

[12] The company’s commitment to paying this equalisation allowance is contained in the offers of employment that have been given to affected employees 2.

[13] As part of this application the applicant has provided a written undertaking in respect of transferring employees. A copy of that undertaking has been signed by the Directors of Gold Fields Australia Pty Ltd and has been filed on the Commission’s file in this matter. The undertaking recital is as follows:

“D. AND WHEREAS an undertaking has been given to employees currently under the Barrick Agreement that they shall be no worse off on transferring to Gold Fields when their terms and conditions of employment are considered on an overall, or bottom line basis.”

[14] The undertaking further explains that an employee who is of the view that this has not been honoured shall be able to pursue that issue under Clause 25 − Fair Treatment Procedure/Dispute Resolution of the applicant’s Existing Agreement and that the Gold Fields companies will always agree to the Fair Work Commission being the independent third-party for mediation under that clause and will always agree to the method of resolving the issue being referral for arbitration by the Fair Work Commission where mediation or conciliation has not resolved the issue. The undertaking is that the Gold Fields companies will accept and be bound by any decision of the Fair Work Commission subject to any right of appeal.

[15] Mr Spencer’s evidence is that the headcount of employees who may be affected across all the sites in total is 964 and of those 827 have been offered new contracts of employment and of those 514 have accepted those contracts which have been issued.

[16] The evidence of Mr Spencer was that employees at the presentations were given a feedback sheet which included a number of questions for employees. The sheets were headed “Feedback for Gold Fields & The Fair Work Commission”.

[17] His evidence was that 321 employees have returned their feedback sheets to the company. These returned sheets have been tendered in these proceedings. In terms of the issues to be considered by the Commission in this matter question 3 asked whether the employees were satisfied as a whole that the terms of employment offered by a Gold Fields company are the same or similar to their previous employment conditions with a Barrick company.

[18] 292 employees answered “yes” to this question and 22 answered “no”.

[19] Question 7 asks whether they support this application “...which can achieve standardisation of conditions of employment by 1 November 2013.”

[20] 265 said “yes”, 8 employees said “no” and 30 had “no opinion”.

[21] Question 8 asks whether the employees would prefer to be employed under a Gold Fields company’s terms and conditions, a Barrick company’s terms and conditions or had no preference.

[22] 129 employees preferred “Gold Fields terms and conditions”, 35 preferred “Barrick’s terms and conditions” and 139 had “no preference”.

[23] I note the total for the various answers often do not amount to 321, meaning some failed to answer the question.

[24] The feedback sheets stated that if the employees wish to email their views they could do so to the email address of my chambers.

[25] At the time of this decision I have received emails from 9 employees regarding this matter. I would characterise these emails as follows.

[26] 3 raised general concerns but were neither positive nor negative about this application.

[27] 6 explained specific individual concerns and opposed the application.

[28] Limiting my considerations firstly to those employees who have returned their feedback sheets it is readily apparent that there is a significant majority of these employees who are satisfied as a whole with the terms of employment offered by a Gold Fields company and agree that these are similar or the same as their conditions with a Barrick company.

[29] The particular wording of question 7 means the answers to this question cannot be taken as direct support for this application but rather for the broader concept of standardisation of conditions of employment.

[30] The answers to question 8 again demonstrate that there is a significant majority of these employees who prefer the “Gold Fields terms and conditions” of employment or have “no preference” and only a minority preferred “Barrick’s terms and conditions” of employment.

[31] I note that there is also a significant number of employees who have not provided any feedback to the Commission as to their views. Given these employees have had an opportunity to make their views known but have chosen not to do so it is reasonable to assume that they do not have a strong opinion on the matter and so I take their position on this application to be neutral.

[32] Finally the Australian Workers’ Union (the AWU) have had organisers attend the information meetings conducted by Agnew and have met with their members and other employees. On behalf of their members at the various operations the AWU submits that they support this application as does the AWU itself.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[33] If these Orders are granted there will be a change to the detail of the terms and conditions of the transferring employees simply because compared side by side there are differences between the Barrick Agreements and the applicant’s Existing Agreement. Clearly some employees would prefer to remain on a Barrick Agreement and prefer the particular terms and conditions it offers. Whilst for some employees there may be a disadvantage if these Orders are granted I am satisfied that the undertaking provided by Gold Fields Australia Pty Ltd and the application of the equalisation allowance will significantly reduce this for those employees.

The nominal expiry date of the agreement

[34] Both the Barrick Agreements and the applicant’s Existing Agreement were made in 2009 in or about May of that year, both have a five year term and so both reach their nominal expiry date at approximately the same time.

Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[35] The applicant submits that if the Barrick Agreements are transferred to the Gold Fields companies there will be two distinct groups of employees with differing terms and conditions of employment. Given that the individual components of the two sets of terms and conditions of employment differ there is the potential for there to be disputes triggered by this which will be unproductive and unnecessarily disruptive for the Gold Fields companies.

[36] It is also apparent that having differential conditions of employment across the various sites will limit the ability to easily transfer employees between sites which is not the most efficient operating environment.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[37] The potential for disputes explained above raises the potential for there to be economic loss incurred over such matters. Further the applicant submits that maintaining a payroll system for a new and separate set of terms and conditions of employment for a large number of employees will be an unnecessary expense for the business which can be avoided by harmonising the employment arrangements as proposed by these Orders.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[38] The applicant submits that there is no synergy between the transferable instruments, the Barrick Agreements and the applicant’s Existing Agreement are quite different.

[39] Importantly the Barrick Agreements do not extend coverage to team leaders or supervisors and are limited to classifications below this level. This is contrasted with the applicant’s Existing Agreement which extend its coverage to supervisors, administrative employees, professional employees and also managers. The applicant argues that this model of universal coverage for all employees on the site is preferred because it assists all employees regardless of classification to recognise they are part of the same team and that they are covered by the same arrangements and so is less divisive in the workplace. Imposing the Barrick Agreements into this environment will be negatively disruptive.

The public interest

[40] In terms of public interest on behalf of the applicant it is stressed that there has been a significant downturn in the gold mining sector in Western Australia and prior to the acquisition of the Barrick operations by the Gold Fields companies they faced an uncertain future. It is argued that allowing these Orders to issue will be supportive of the Gold Fields companies being able to operate in the most efficient and productive manner for the future in this difficult economic environment.

Conclusion

[41] It is quite clear in terms of the matters that the Commission must consider that both the applicant and a significant majority of the employees affected support these Orders being made as does the AWU.

[42] Importantly the undertakings provided directly to affected employees and recorded in these Commission proceedings mean that any disadvantage to employees has been significantly reduced.

[43] There are self-evidently negative implications for the productivity of the Gold Fields companies and additional costs to them plus some potential for disruption should the Barrick Agreements transfer to the Gold Fields companies.

[44] It is for the reasons above that I am satisfied it is appropriate that this application be granted and an Order [PR542245] to that effect was issued on 20 September 2013.

COMMISSIONER

Appearances:

A Cameron of the Australian Mines and Metals Association for the applicant.

M Zoetbrood on behalf of the AWU.

Hearing details:

2013.

Perth:

September 4 and 17.

 1   Exhibit A3.

 2   Exhibit A4.

Printed by authority of the Commonwealth Government Printer

<Price code C, AC327005  PR542349 >