Application by GO Offshore Pty Ltd
[2022] FWC 3260
•12 DECEMBER 2022
| [2022] FWC 3260 |
| 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 GO Offshore Pty Ltd
(AG2022/4738)
| DEPUTY PRESIDENT BINET | PERTH, 12 DECEMBER 2022 |
Instruments covering new employees and transferring employees in agreements.
Go Offshore Pty Ltd (Go Offshore) has made an Application (Application) for orders pursuant to section 318 of the Fair Work Act 2009 (Cth) (FW Act).
Go Offshore provides marine and logistic services to the offshore oil and gas industry. Go Offshore is covered by the Go Offshore Pty Ltd Maritime Offshore Oil and Gas Employee Enterprise Agreement 2021 (Go Offshore Agreement).
Toll Transport Pty Ltd owns and operates the Toll Provider (Vessel). Toll and employees of Toll engaged to perform work on the Vessel are covered by the Toll Maritime Offshore AMOU Oil and Gas Industry (Deck Officers) Enterprise Agreement 2019 (Deck Officers Agreement) and the Toll Maritime Offshore Oil and Gas Industry (Engineers) Greenfields Agreement 2017 (Engineers Agreement).
On or around 27 October 2022, Go Offshore entered into a business sale agreement with Toll to purchase the Vessel and associated assets (Sale). A term of the Sale is that Go Offshore will offer employment to the employees of Toll engaged to perform work on the Vessel.
Go Offshore intend that employees of Toll who accept an offer of employment from Go Offshore will perform, the same or substantially the same work as they performed for Toll. The Transferring Employees will perform the same or substantially the same work as employees of Go Offshore covered by the Go Offshore Agreement (Non Transferring Employees).
Go Offshore submit that a transfer of business within the meaning of s.311(1) of the FW Act has occurred as the Transferring Employees:
a.ceased employment with Toll as required by s.311(1)(a) on or by 27 October 2022;
b.commenced employment with Go Offshore on or by 28 October 2022, this being within the three months prescribed by s.311(1)(b),
c.perform the same or substantially the same work for Go Offshore as they did for Toll as required by s.311 (1 )(c); and
d.there has been a transfer of assets (i.e. Vessel) from Toll to Go Offshore which relate to, or are used in connection with, the transferring work.
Go Offshore have applied for the following Orders:
a.pursuant to section 318(1)(a), that Deck Officers Agreement and the Engineers Agreement will not cover Go Offshore or employees of Toll who accept an offer of employment from Go Offshore to perform, the same or substantially the same work as they performed for Toll (Transferring Employees); and
b.pursuant to section 318(1)(b) of the FW Act that the Go Offshore Agreement will cover the Transferring Employees.
(collectively the Orders)
Go Offshore assert that the Deck Officers Agreement and the Engineers Agreement are a transferable instruments for the purposes of section 312 of the FW Act and that the Deck Officers Agreement and the Engineers Agreement would cover Go Offshore and the Transferring Employees by virtue of section 313 of the FW Act if the Orders are not granted.
The Application was supported by a statutory declaration made by Ms Karen Clark, General Manager of Employee Relations for Go Offshore (Ms Clark).
On 23 November 2022 directions were issued to Go Offshore (Directions) which inter alia required Go Offshore to provide a copy of the Application (and materials filed in support of the Application) and a copy of the Directions to all Transferring Employees and any employee organisation which ordinarily represents the industrial interests of the Transferring Employees by 4pm Monday 28 November 2022.
The Directions invited any Transferring Employee or employee organisation which ordinarily represents the industrial interests of the Transferring Employees wishing to be heard with respect to the Application to contact my Chambers by 4pm Monday 5 December 2022.
Relevant statutory provision
Section 311(1) of the FW Act provides that:
(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a)the employment of an employee of the old employer has been terminated;
(b)within 3 months after the termination, the employee becomes employed by the new employer;
(c)the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of the subsections (3) to (6).”
Section 318 of the FW Act provides that:
“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
Go Offshore has standing pursuant to section 318(2)(a) of the FW Act to make the Application in its capacity as the new employer of the Transferring Employees.
Go Offshore says that it seeks the Orders because the making of the requested orders will assist in:
a.improving business efficiency and productivity of Go Offshore;
b.enabling the Transferring Employees to be fully integrated into the employee management systems currently operating in Go Offshore’s business;
c.avoiding the administrative costs involved in managing and ensuring compliance with multiple industrial instruments in relation to the same work;
d.removing any disincentive to Go Offshore offering or continuing employment of the Transferring Employees; and
e.providing the Transferring Employees with more beneficial terms and conditions.
There are six (6) Transferring Employees who will be affected by the orders sought.
Ms Clark has provided evidence as to various discussions both verbal and via email with the Transferring Employees to assess their views with respect to the proposed transfer of employment and the proposed orders.
As part of these discuss1ons Go Offshore made offers of employment to Transferring Employees. The Transferring Employees' letters of employment advised the employees of Go Offshore’s intention to make this Application and specifically advised them that by signing and returning the offer of employment, they communicated their agreement to Go Offshore making the Application. All Transferring Employees accepted the offers of employment. According to Ms Clark all Non-Transferring Employees were given the opportunity to contact Go Offshore to discuss any matters relating to this Application further, however, no Non-Transferring employees did so.
Nor did any Transferring Employee, Non-Transferring Employee or employee organisation which ordinarily represents the industrial interests of the Transferring Employees contact Chambers seeking to be heard within the period proscribed in the Directions.
Ms Clark has given evidence that no Transferring Employee will be disadvantaged by the proposed orders in relation to their terms and conditions of employment. According to Ms Clark each Transferring Employee will be entitled to higher hourly rates of pay under the GO Agreement. In addition, she says that there are a number of more favourable terms and conditions provided for in the GO Agreement to which Transferring Employees are not entitled under the Toll Agreements.
The GO Agreement is still within its nominal term and will reach its nominal expiry date on 14 September 2025. If the orders sought are made the Transferring Employees will have the benefit of established terms and conditions of employment set in place until late 2025. The Transferring Employees will also have the benefit of being able to engage in bargaining should Go Offshore decide to negotiate a new enterprise agreement.
Ms Clark explained that if the Toll Agreements apply to the Transferring Employees, it will create additional costs associated with the maintenance of two separate payroll systems arising from the application of more than one enterprise agreement. In addition, she points out that having employees engaged in the same duties working side by side under different agreements with different entitlements will impose an administrative and regulatory burden on Go Offshore and create dissatisfaction and confusion between employees.
Ms Clark says that Go Offshore would incur some economic disadvantage if the Toll Agreements were to cover it and the Transferring Employees as Go Offshore would need to modify its existing payroll system or implement a new payroll system. She also foresees differences in employment conditions causing disenchantment among the workforce.
There is a lack of business synergy between the Toll Agreements and the GO Agreement, in particular due to the less favourable rates of pay that apply under the Toll Agreements to employees performing the same work.
I am satisfied that if the orders are granted Go Offshore will benefit from the ability to directly engage skilled and experienced personnel and that Transferring Employees will also be afforded the benefit of improved terms and conditions of employment.
There is nothing to suggest that the proposed orders would be contrary to the public interest.
In light of the above, I am satisfied that it is appropriate to make the order sought by Go Offshore. An order to this effect will be issued with this decision.[1]
DEPUTY PRESIDENT
[1] PR748816.
Printed by authority of the Commonwealth Government Printer
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