Anglo Coal (Capcoal Management) Pty Ltd

[2021] FWC 1623

[2021] FWC 1623

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees

Anglo Coal (Capcoal Management) Pty Ltd
(AG2021/4221)

Mining industry
DEPUTY PRESIDENT ASBURY	BRISBANE, 24 MARCH 2021

s.318 - Application for an order relating to instruments covering new employer and transferring employees.

Introduction

[1] Anglo Coal (Capcoal Management) Pty Ltd (Anglo Capcoal) applies to the Fair Work Commission (the Commission) pursuant to s.318 of the Fair Work Act 2009 (the Act) for orders in relation to transfer of business. Anglo Capcoal seeks to transition most of its permanent employees from related entity, Anglo Coal (Grasstree Management) Pty Ltd (Anglo Grasstree), to employment with Anglo Capcoal to work at the Aquila Mine.

[2] Employees at the Grasstree Mine employed by Anglo Grasstree are covered by the Grasstree Mine Operations Enterprise Agreement 2018 and the Grasstree Mine Deputies Enterprise Agreement 2017 (the Grasstree Mine Enterprise Agreements).

[3] Employees of Anglo Capcoal are covered by the Aquila Mine Operations Enterprise Agreement 2019 and the Aquila Mine Deputies Enterprise Agreement 2020 (the Aquila Mine Enterprise Agreements)

[4] Anglo Capcoal applies for the following orders under s.318(1) of the Act (The Proposed Orders):

“1. …

(a) The Grasstree Mine Operations Enterprise Agreement 2018 does not, and will not, cover Anglo Coal (Capcoal Management) Pty Ltd (Capcoal) in respect of the Aquila Mine.

(b) The Grasstree Mine Operations Enterprise Agreement 2018 does not, and will not, cover any employee whose employment transfers from Anglo Coal (Grasstree Management) Pty Ltd T/A Anglo American Grasstree Mine (Grasstree) to Capcoal, where the employee is to perform work at the Aquila Mine.

(c) The Grasstree Mine Deputies Enterprise Agreement 2017 does not, and will not, cover Capcoal in respect of the Aquila Mine.

(d) The Grasstree Mine Deputies Enterprise Agreement 2017 does not, and will not, cover any employee whose employment transfers from Grasstree to Capcoal, where the employee is to perform work at the Aquila Mine.

(e) The Aquila Mine Operations Enterprise Agreement 2019 and Aquila Mine Deputy Enterprise Agreement 2020, (together, the Aquila Mine Enterprise Agreements), will apply to former employees of Grasstreewho are employed by Capcoal to perform work at the Aquila Mine within the scope of the classificationscontained in the Aquila Mine Enterprise Agreements.

2. Subject to section 318(4) of the Act, the orders will come into operation from the date when the first employee transferring from Grasstree becomes employed by Capcoal to perform work at the Aquila Mine.

3. Such further orders as the Fair Work Commission considers appropriate.”

[5] Anglo Capcoal filed submissions in support of the application. The application was also accompanied by a Witness Statement of Mr Christopher Thomas Carroll, Operations Manager and Site Senior Executive of the Aquila Mine. 1 The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) provided correspondence in support of the application, filed by Mr Jeff Scales, District Vice President of the CFMMEU (Mining and Energy Division).

[6] The CFMMEU was a bargaining Representative for the Aquila Mine Enterprise Agreements and is covered by the agreements.

Legislation

[7] Section 318 of the Act provides:

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.

Consideration

Effect of the order

[8] The effect of the order sought by Anglo Capcoal would be that the Grasstree Mine Enterprise Agreements would not cover Anglo Capcoal as the new employer or the transferring employees. Anglo Capcoal and the transferring employees would be covered by the Aquila Mine Enterprise Agreements. I will consider each of those matters in s.318(3) of the Act in turn.

The views of the new employer or a person who is likely to be the new employer

[9] I accept that Anglo Capcoal is the new employer and wishes to ensure that the Aquila Mine Enterprise Agreements apply to transferring employees. Anglo Capcoal submits the Aquila Mine Enterprise Agreements provide certainty of terms and conditions of employment and will avoid significant inefficiencies relating to administrative matters such as payroll.

[10] Anglo Capcoal submits that when comparing the terms and conditions of the Grasstree Mine Enterprise Agreements to the Aquila Mine Enterprise Agreements, the transferring employees will:

“(a) work a similar amount of hours;

(b) be paid a similar amount per annum;

(c) be paid the same amount per hour;

(d) receive more favourable rostering arrangements as the shorter first and last shifts in a roster cycle, required by the Aquila Fatigue Management System, allow for an easier transition in and out of work;

(e) receive more beneficial roster change provisions, as beyond the introduction of two roster changes, any subsequent changes require agreement of the affected employees; and

(f) be better off under the Aquila Mine Incentive Scheme in the context of wind down activities at the Grasstree Mine.”

[11] The views of the employer are a consideration that weighs in favour of making of the Order.

Views of the employees affected by the order

[12] Anglo Capcoal relies on the Witness Statement of Mr Carroll and the correspondence filed by Mr Scales. In his correspondence Mr Scales states that:

“The CFMMEU has met with its membership and can confirm that its members endorse the application and the making of orders by the FWC.”

[13] Mr Carroll’s Witness Statement states that:

“…Transferring Employees were consulted in respect of the proposed opportunities for transfer to the Aquila Mine in connection with the ramp down and closure of the Grasstree Mine, and informed that the applicant proposed to apply for the Proposed Orders.

Additionally, Transferring Employees were informed of the key differences between the Aquila Enterprise Agreements and the Grasstree Enterprise Agreements, and were able to ask questions in which were later responded to in the Q&A document set out at “CTC-10”.

To date, no objections have been received from any Transferring Employees in respect of the Transfer and Proposed Orders.”

[14] Mr Carroll believes the transferring employees and the CFMMEU are in support of the application pursuant to s.318 of the Act, as corroborated by the correspondence filed by Mr Scales.

[15] I accept that the views of the employees evidenced by Mr Carroll’s statement and supporting material appended to it and the correspondence from the CFMMEU, weighs in favour of making the order.

Whether any employees would be disadvantaged by the order

[16] Anglo Capcoal submits that the transferring employees from the Grasstree Mine would not be disadvantaged on an overall basis by the Proposed Orders, due to the terms and conditions of the Aquila Mine Enterprise Agreements being substantially similar to those of the Grasstree Mine Enterprise Agreements. This is corroborated in the Witness Statement of Mr Carroll and the correspondence of Mr Scales.

[17] Mr Carroll states that the transferring employees will receive slightly less on average in respect of their coal production bonus than they receive over the life of the Grasstree Mine. Mr Carroll states that the amount paid under the Grasstree Production Bonus scheme was highly variable and fluctuated significantly over the course of the life of the Grasstree Mine; noting that bonus payments were dependent on production levels. He states that by contrast, the Aquila Mine Incentive Scheme will relatively quickly provide the transferring employees with steady bonus payment which is not contingent on hitting high production rates.

[18] Mr Carroll states that transferring employees who accept an offer of employment with Anglo Capcoal on the terms and conditions contained in the Aquila Mine Enterprise Agreements will not be disadvantaged on an overall basis compared to their terms and conditions under the Grasstree Mine Enterprise Agreements.

[19] I accept this evidence and that this weighs in favour of making the Order.

The nominal expiry date of the agreement

[20] The nominal expiry date of the Grasstree Enterprise Agreements are 14 February 2022 and 22 January 2021, and the Aquila Enterprise Agreements nominal expiry dates are 12 September 2023 and 10 February 2024.

[21] Anglo Capcoal submits that the transferring employees will therefore have a greater period of certainty as to their terms and conditions of employment if the Proposed Orders are made. My view is that this weighs in favour of making the order.

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

[22] Anglo Capcoal submits that there will be a negative impact on the productivity of the workforce at the Aquila Mine if the Proposed Orders are not granted due to the requirement to administer four enterprise agreements.

[23] Further, Anglo Coal submits that having to apply differing rosters and administration systems such as payroll under the Agreements would undermine productivity.

[24] Mr Carroll states that the application of different terms and conditions of employment to the transferring employees compared to the other employees they will be working in collaboration with is also likely to adversely impact morale, workplace harmony and productivity over time. He states the application of different terms and conditions is likely to encourage the creation of separate work groups which would negatively impact on work culture, and productivity and efficiency.

[25] Anglo Capcoal submits in contrast, that granting the proposed order would enable administrative simplicity, promote organisational consistency, and allow for internal equity as to the terms and conditions of employment.

[26] I accept these submissions and that these are matters that weigh in favour of making the Order

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

[27] Anglo Capcoal submits that the costs of setting up and administering two separate configurations and interpretations for rostering and payroll for both the transferring employees and the Aquila Mine employees would be economically ineffective and problematic. I accept that Anglo Capcoal would incur significant economic disadvantage on this basis if the order is not made, and that conversely the employer would accrue economic advantage if the order was made. This also weighs in favour of making the order.

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

[28] Anglo Capcoal submits that the two Agreements provide for differing rostering arrangements, and that the rostering at the Grasstree Mine is not appropriate for the Aquila Mine because of differences in operating conditions between the mines.

[29] Further, Anglo Capcoal submits that the Coal Production Bonus Scheme operating at the Grasstree Mine would not be suitable for the Aquila Mine, due to the lower height of the longwall panels which would result in Anglo Capcoal paying significantly higher amounts in bonus payments while producing less coal.

[30] Anglo Capcoal submits, as above, that if it was required to operate two distinct rostering and payroll configurations to accommodate those arrangements, this would cause a lack of operational efficiency and disparity between terms and conditions of employment for the two groups of employees.

[31] I accept that the differences between the transferrable instrument and any other instrument that covers the new employer means that there is not a high degree of synergy and this is a matter which weighs in favour of making the Order.

The public interest

[32] Anglo Capcoal submits that the Proposed Orders would allow for the majority of the current workforce of Anglo Grasstree to take up new positions within a mine of Anglo Capcoal, that are similar in role and proximate geographically to their current positions with Anglo Grasstree.

[33] It is also submitted that the application strikes a balance between the protection of employees’ terms and conditions of employment and the interests of Anglo Capcoal in running its enterprises efficiently, and without the burden of unnecessary complications in employment arrangements.

[34] Further, Anglo Capcoal submits that the Aquila Mine involves substantial capital investment and will create approximately 350 permanent jobs in the Queensland mining industry. It states that it wishes for these opportunities to be provided to the transferring employees, and this is supported by Anglo Grasstree, the CFMMEU and the transferring employees.

[35] It is in the interests of Anglo Capcoal and the employees that the order is made. It is likely that the addition of permanent positions in the Queensland mining industry will have some positive impact on local and regional economies. In any event, it is not contrary to the public interest to make the order and these matters weigh in favour of the order being made.

Conclusion

[36] Having considered the matters required by the Act, I am satisfied that the order sought should be made.

[37] An order [PR727967] in the terms sought in the application will issue with this Decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR728078>

 1   Witness Statement of Mr Christopher Thomas Carroll dated 16 March 2021.