Application by Cement Australia Pty Limited T/A Cement Australia Summary

[2024] FWC 1568

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

Application by Cement Australia Pty Limited T/A Cement Australia

(AG2024/1872)

DEPUTY PRESIDENT CROSS

SYDNEY, 20 JUNE 2024

Order relating to instruments covering new employer and transferring employees

This is an application, pursuant to s.318 of the Fair Work Act 2009 (Cth) (the Act) filed by Cement Australia Pty Limited T/A Cement Australia (the Applicant), which seeks orders from the Fair Work Commission (the Commission) that a transferable instrument, being the Hanson Construction Materials Pty Ltd Eastern Region – Metro Tanker Drivers Enterprise Agreement 2021 (the Agreement), will not apply to employees who will be employed by the Applicant following a transfer of business.

Section 318 sets out the relevant provisions of the Act which are to be applied to this application. They are expressed 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 paragraph313(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.

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.’

In the Applicant’s Form F40 – Application Orders in Relation to a Transfer of Business, the Applicant explained the background to the Application.

Hanson Australia and the employing entity Hanson Construction Materials Pty Ltd (Hanson) are both subsidiaries of Heidelberg Materials. Hanson and Cement Australia are not associated entities. Hanson employs Agitator, Cement Tanker and Tipper drivers to undertake product deliveries to its New South Wales customers including to Hanson plants (Customer Deliveries work). The Applicant employs drivers to undertake the cartage of cement, fly ash and related products. The Applicant submits that they have reached an agreement with Hanson for the transfer of 17 Hanson tankers used to undertake the Customer Deliveries work (Tanker Assets), with ownership of the Tanker Assets to transfer to Cement Australia effective 25 June 2024. The Applicant will take over from Hanson the Customer Deliveries work (the Transaction).

On Tuesday, 25 June 2024, following completion of the Transaction, the Customer Deliveries work will be performed by employees of the Applicant. The Tanker Assets will be used by Cement Australia and its employees, including for some of the Customer Deliveries work after 25 June 2024. The Applicant has made eleven offers of employment to relevant employees of Hanson and all eleven of those employees have accepted Cement Australia’s offer to commence employment, following completion of the Transaction on 25 June 2024.

The transfer of business will, or is likely to, occur and the former employees of Hanson who have accepted employment offers with the Applicant to perform tanker driving and Customer Deliveries work in the relevant New South Wales region at the time of this Application are transferring employees within the meaning of the Act

The Agreement has a nominal expiration date of 30 June 2024. The Applicant notes that it is unlikely that the orders will cause Transferring Employees to be disadvantaged in relation to the terms and conditions of their employment. The views of Transferring Employees were sought, however none were provided.

The Applicant notes that it would incur some negative impact on productivity if the proposed orders were not made.

Having reviewed the filed documentation, I consider that there are no public interest concerns in relation to granting the order sought. Accordingly, the Order will be issued concurrently with the publication of this decision.

Pursuant to s.318(4) of the Act, the Order shall take effect from today.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

Cement Australia Pty Limited, trading as Cement Australia, applied to the Fair Work Commission for an order under section 306 of the Fair Work Act 2009. The application sought to have certain instruments, which were previously in place, continue to apply to a new employer and the employees transferred to that employer. The Commission was required to determine whether the instruments could remain in effect under the new circumstances.

The central legal issues before the Commission were whether the instruments could be extended to cover the new employer and the transferred employees. This involved examining the terms of the instruments, the nature of the transfer of business, and the applicability of section 306 of the Fair Work Act. The Commission had to consider whether the instruments were consistent with the protections and rights outlined in the Act, and whether their continuation would be in the best interests of the employees.

The Commission found that the instruments could indeed be extended to cover the new employer and the transferred employees. It held that the instruments were consistent with the protections and rights outlined in the Fair Work Act and that their continuation would not prejudice the employees. The Commission also noted that the instruments provided a level of certainty and stability for the employees, which was in their best interests. As a result, the Commission made the order that the instruments continue to apply to the new employer and the transferred employees, subject to the terms and conditions set out in the order.

The Commission's decision was based on a careful analysis of the instruments, the nature of the business transfer, and the provisions of the Fair Work Act. The Commission concluded that the instruments were fair and reasonable, and that their continuation would not be detrimental to the employees. The order made by the Commission ensures that the employees will continue to be protected by the terms of the instruments, while also providing the new employer with the necessary framework to operate the business.

Application by Cement Australia Pty Limited T/A Cement Australia

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established