Anglo Coal (Grosvenor Management) Pty Ltd
[2022] FWC 2548
•21 SEPTEMBER 2022
| [2022] FWC 2548 |
| 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 (Grosvenor Management) Pty Ltd
(AG2022/3782)
FES Coal Pty Ltd Greenfield Agreement 2018
| Coal industry | |
| DEPUTY PRESIDENT ASBURY | BRISBANE, 21 SEPTEMBER 2022 |
Application for an Order relating to instruments covering new employer and transferring employees
Background
Anglo Coal (Grosvenor Management) Pty Ltd (Anglo Coal) applies to the Fair Work Commission (the Commission) pursuant to s. 318 of the Fair Work Act 2009 (the Act) for an Order in relation to transfer of business. Anglo Coal seeks to transfer employees from One Key Resources Pty Ltd (One Key) to direct employment with Anglo Coal. One Key is a labour hire contractor providing labour to Anglo Coal. A majority of workers who currently perform production and engineering work for Anglo Coal at the Grosvenor Mine are supplied by One Key under a labour hire agreement with Anglo Coal. Anglo Coal intends to directly employ approximately 200 of these employees (transferring employees) to perform the same or substantially the same work at the Grosvenor Mine.
The employees to be transferred from One Key are presently covered by FES Coal Pty Ltd Greenfield Agreement 2018 (the One Key Agreement). To ensure that the One Key agreement does not cover the transferring employees or Anglo Coal by virtue of s. 313 of FW Act, Anglo Coal applies for the following order under s. 381(1) of the Act (the proposed order):
“In respect of any former employee of One Key Resources Pty Ltd who is a transferring employee employed by the Applicant to perform transferring work (as defined in s. 311 of the Fair Work Act 2009 (Transferring Employees), the FES Coal Pty Ltd Greenfield Agreement 2018 does not, or will not, cover the Applicant and the Transferring Employees.”
Anglo Coal filed submissions in support of the application. The application was accompanied by a witness statement by Mr Christopher Newman, Employee Relations Manager of Anglo American Steelmaking Coal Pty Ltd, a parent company of Anglo Coal.
The Mining and Energy Union (MEU) of the Construction Forestry Maritime Mining Energy Union was a bargaining representative for the One Key Agreement. The MEU is also a party to and covered by the One Key Agreement. Through correspondence, the MEU confirms its support for the application. A witness statement by Mr Stephen Smyth, District President of the Queensland District of the MEU, has also been filed confirming that the Union supports the application.
Legislation
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
Preliminary matters
Anglo Coal submits that One Key currently employs 324 employees who perform production and engineering work for Anglo Coal at the Grosvenor Mine. Anglo Coal intends to offer direct employment to approximately 200 of these employees. Anglo Coal states that after the transfer, these employees will continue to perform production and engineering work for Anglo Coal at the Grosvenor Mine. Offers of employment were made to an initial cohort of 20 transferring employee on 31 August 2022 and Anglo Coal intends to complete the transferring process by the end of 2022.
I am satisfied that: Anglo Coal is entitled to make this application as the new employer; the transferring employees will perform the same or substantially the same work for Anglo Coal; and there is a transfer of business from One Key to Anglo Coal within the meaning of s. 311 of the FW Act.
The effect of the Order sought by Anglo Coal would be that the One Key Agreement would not cover Anglo Coal or any of the transferring employees. Section 318 provides that the Commission has a discretion to make the Order as sought by Anglo Coal and in determining whether to make the order, I must consider each of the matters in s. 318(3) of the FW Act. I will now turn to consider these matters.
The views of the new employer and the employees who would be affected by the order
Anglo Coal supports the application and proposed order.
The statement of Mr Newman outlines in some detail a series of briefings, presentations and consultations which were held with the production and engineering workforce at the Grosvenor Mine between February and August 2022. According to Mr Newman, the transferring employees are supportive of the proposed Order and the opportunity for direct employment with Anglo Coal. It is his understanding that:
“… the transferring employees and the MEU have been supportive of the proposal during discussions and consultation meetings. Further I have not received any negative feedback from the initial transferring employees in relation to the application for the proposed orders.”
The MEU represents the industrial interests of coal mine workers and is the principal representative for employees in the black coal mine industry. Mr Smyth indicates that the MEU supports this application and the proposed order sought by Anglo Coal. Mr Smyth also states that he had discussions with MEU members who had received the initial offers of direct employment with Anglo Coal and, after explaining to those members that the terms of employment offered by Anglo Coal are more favourable than the One Key agreement, those members are supportive of the One Key Agreement not covering their new employment.
I accept the uncontested evidence of Anglo Coal and the MEU and find that this factor weighs in favour of making the proposed Order.
Whether any employees would be disadvantaged by the order
The effect of the Order, if granted, would be that the One Key Agreement would not cover the transferring employees or Anglo Coal. Mr Newman explains that Anglo Coal intends to employ the transferring employees on common law contracts, the terms and conditions of which will be underpinned by the Black Coal Mining Industry Award 2020 (BCMI Award), but at a significantly enhanced hourly rate. Anglo Coal explains that it is part of its plan that the common law contracts will eventually be replaced by a proposed Grosvenor enterprise agreement which is currently being negotiated with the MEU.
Mr Newman provides comparisons of the annual remuneration under the One Key Agreement and that offered by Anglo Coal to the initial cohort of 20 transferring employees. Mr Newman also states that:
“Whilst I am aware that One Key currently pays flat rates of pay which are higher than either of the base rates of pay provided in the One Key Agreement, or the minimum hourly rate in the Award, the rates of pay being offered by Anglo are significantly higher than the rates provided under the One Key Agreement.
…
Further, under their contracts, the initial transferring employees will continue to receive a mine production bonus consistent with what they currently receive as employees of One Key. The production bonus is calculated using the same formula as that provided under the One Key Agreement.”
Mr Newman states that the same level of remuneration is intended to apply to employees performing production and engineering work under the proposed Grosvenor enterprise agreement.
I accept the evidence that the transferring employee will receive higher remuneration under contracts of employment with Anglo Coal than they currently receive under the One Key Agreement.
Anglo Coal further submits that on an overall basis the transferring employees will not be disadvantaged because they will:
“a. have greater job security by securing employment with an owner-operator employer, as opposed to a labour hire provider;
b. be employed in similar classifications under the BCMI Award or, in future, in comparable classifications under the Grosvenor Agreement as they are under the One Key Agreement;
c. be paid an hourly rate which is significantly higher than the rate provided for under the One Key Agreement
d. perform work for the Applicant at the Grosvenor Mine which is the same work they currently perform as One Key employees;
e. work a similar roster as they currently work at the Grosvenor Mine as employees of One Key.”
Mr Smyth similarly states that the terms and conditions offered by Anglo Coal to the transferring employees, including wage rates, are superior to those in the One Key Agreement or the BCMI Award. Mr Smyth is of the view that the transferring employees will be better off as a result of direct employment with Anglo Coal on the terms and conditions offered by Anglo Coal.
I am satisfied that the transferring employees would not be disadvantaged if the proposed Order is made. This factor weighs in favour of making the Order.
The nominal expiry date of the agreement
The nominal expiry date for the One Key Agreement is 13 August 2022. As the One Key Agreement has passed its nominal expiry date, Mr Newman states that the employees are no longer entitled to the benefit of pay increase as guaranteed by the One Key Agreement. 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
Anglo Coal submits that if the One Key Agreement is transferred, there will be a negative impact on the productivity of the workforce at Grosvenor Mine. Mr Newman states that it would create burden for Anglo Coal to maintain the One Key Agreement whilst administering contracts for non-transferring employees who join the Grosvenor workforce. This is said to result in potential inefficiencies and loss of productivity associated with payroll, administration and leave management as well as workplace disharmony created by the different terms and conditions among employees who perform the same work for the same employer at the same location.
I accept these submissions and that these matters weigh in favour of making the proposed Order.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
Anglo Coal submits that economic disadvantage would result from the One Key Agreement covering Anglo Coal because the different terms and conditions that would apply to transferring and non-transferring employees would likely impair productivity and workplace harmony between employees. Anglo Coal further submits that there would be administrative burdens associated with payroll processing in accordance with different employment regimes.
I accept that if the proposed order is not made, there is potential for Anglo Coal to suffer economic disadvantage from the loss of productivity if transferring employees are discontent with the lesser conditions provided for by the One Key Agreement as compared to the conditions afforded to non-transferring employees by Anglo Coal. Given the submissions of Anglo Coal on this issue are uncontested, I accept that this factor weighs in favour of the making the proposed Order.
The degree of business synergy between the transferable instrument and any workplace instrument that covers the new employer
Anglo Coal acknowledges that the One Key Agreement is a coal specific agreement. If the Order is made, the transferring employees would be covered by common law contracts, the terms and conditions of which will be underpinned by the BCMI Award but at a higher hourly rate. Both instruments have a high degree of synergy to the business of Anglo Coal. However, Anglo Coal submits that the One Key Agreement is an “inferior” industrial instrument in its terms. This view is also shared by the MEU. I consider that the factor is neutral as to the making of the Order.
The public interest
Anglo Coal and the MEU submit that making the proposed Order is in the public interest because it is consistent with the objects of the transfer of business regime under the FW Act in that it strikes a balance between protecting employees’ terms and conditions of employment and the interest of Anglo Coal in the efficient running of its enterprise without unnecessary complication and duplication in its employment arrangements.
In particular, Anglo Coal and MEU are both of the view that the transferring employees would benefit from the more advantageous terms of employment than they would otherwise have under the One Key Agreement. Further, Anglo Coal submits that the transferring employees will also benefit from ongoing direct employment with Anglo Coal, which is the owner-operator of the Grosvenor Mine, rather than being employed by a labour hire company.
I accept these submissions and these matters weigh in favour of making the proposed Order.
Conclusion
Having considered the matters required by s. 318 of the FW Act, I am satisfied that the Order sought should be made and the Order will be issued with this Decision.
DEPUTY PRESIDENT
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