ARG Rail Pty Ltd T/A ARG Rail

[2019] FWC 7274

[2019] FWC 7274

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

ARG Rail Pty Ltd T/A ARG Rail
(AG2019/3052)

COMMISSIONER SPENCER BRISBANE, 21 OCTOBER 2019

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

INTRODUCTION

[1] An application pursuant to s.319 of the Fair Work Act 2009 (the Act) was made by ARG Rail Pty Ltd T/A ARG Rail (the Applicant) for an Order under s.319(1)(b), that the ARG Labour Services National Infrastructure Greenfields Agreement 2015 (the Agreement) cover non-transferring employees who perform, or are likely to perform, transferring work for the Applicant.

[2] In accordance with s.311(1) of the Act, a transfer of business from ARG Labour Services Pty Ltd to the Applicant was to occur on 16 September 2019. An enterprise agreement is a transferrable instrument by operation of s.312(1)(a) of the Act.

[3] Section 313(1) provides that a transferrable instrument that covered the old employer and the transferring employees immediately before the termination of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant would be covered by the Agreement in relation to the transferring employees.

[4] The Applicant seeks an Order that the Agreement will cover any non-transferring employees of the Applicant who perform, or are likely to perform, the transferring work, pursuant to s.319(1)(b) of the Act.

RELEVANT PROVISIONS

[5] Pursuant to s.319 of the Act:

“319 Orders relating to instruments covering new employer and non-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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;

(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.

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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(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 non-transferring employee before the later of the following:

(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;

(b) the day on which the order is made.”

SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE

[6] Directions were issued to the Applicant, inviting them to make submissions addressing the relevant criteria contained in s.319(3).

[7] The Applicant submitted with respect to the views of the employees who would be affected by the Order, that current employees of ARG Labour Services Pty Ltd would not be affected by the Order as they would continue to be covered by the Agreement, as it is a transferrable instrument. The only people to be affected by the Order are those who have not yet been employed by ARG Rail Pty Ltd and who are not being transferred from ARG Labour Services Pty Ltd. The Applicant therefore submitted that there are no employees who would be affected.

[8] The Applicant submitted that the Order would not cause any disadvantage to any employee. The Agreement contained terms and conditions that are superior to the Award terms and conditions in every aspect. The rates of pay contained in the Agreement have been continually increased in line the Commission’s yearly recommendation and subsequently have maintained superiority over the Award rates of pay.

[9] It was submitted that there would be no significant economic disadvantage as a result of the Agreement covering the Applicant’s workplace. The Applicant submitted that the Order would not result in a negative impact on productivity in the workplace, conversely, they submitted that workplace productivity would likely increase as a result of the Order.

[10] The Applicant submitted that there is little synergy between the Building and Construction Industry Award 2010 (the Award) and the operations of the Applicant. The Applicant is a labour hire company operating in the Rail Infrastructure construction and maintenance industry in Victoria. The Award fails to provide the level of specificity required for operations in the rail sector. The Applicant argued that the transferable instrument subject to this application is however, directly relevant to the operations of the Applicant and will be of great value in attracting and retaining employees.

[11] The Applicant further submitted that without the Order that is subject to this application, a situation would result where two classes of employees, doing the same work, at the same locations, are being paid in accordance with different industrial instruments, on different terms. This would result in a significant lack of workplace synergy.

[12] The Agreement has a nominal expiry date of 31 December 2017.

CONCLUSION

[13] I have taken into account the material provided by the Applicant in support of the application and the matters listed in s.319(3) of the Act. I am satisfied the Order should be issued.

[14] The Order PR713558, will issue with this Decision and take effect in accordance with s.319(4) of the Act.

COMMISSIONER

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