Atlas Energy Services Pty Ltd T/A Atlas Energy Services Pty Ltd
[2022] FWC 3376
•23 DECEMBER 2022
| [2022] FWC 3376 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
Atlas Energy Services Pty Ltd T/A Atlas Energy Services Pty Ltd
(AG2022/4430)
| Building, metal and civil construction industries | |
| COMMISSIONER SCHNEIDER | PERTH, 23 DECEMBER 2022 |
Application for orders in relation to a transfer of business under s. 319
Atlas Energy Services Pty Ltd T/A Atlas Energy Services Pty Ltd (the Applicant) has made an application pursuant to section 319 of the Fair Work Act 2009 (Cth) (the Act) for the Fair Work Commission (the Commission) to make an order in relation to a transfer of business.
The Applicant seeks an Order in the following terms:
· Pursuant to section 319(1)(b) of the Act the Aegis Enterprise Agreement 2020 [[2021] FWCA 6071] (the Agreement) will cover any new or non-transferring employees of the Applicant who work in a classification contained in the Agreement in respect of their employment with the Applicant.
Background
The Applicant outlines the background of the matter thoroughly in the application, a summary follows:
· On or around 27 September 2022, the Applicant was established.
· On or around 17 October 2022, the Applicant employed employees who previously worked at Aegis Engineering Support Services (Aust) Pty Ltd (Aegis) (Transferring Employees). Aegis is covered by the Agreement
· The work carried out by the Transferring Employees for the Applicant is the same, or substantially the same, as the work they carried out for Aegis within the three months prior to their employment ending with Aegis and commencing with the Applicant. The work in question being a variety of maintenance services.
· The Agreement therefore applied to both the Applicant and the Transferring Employees in respect of this work as a transferable instrument.
· As part of the change in operational requirements, the Applicant will employee a number of new employees (Non-Transferring Employees) in addition to the Transferring Employees.
· Relevant to this application, the Applicant currently operates under the Building and Construction General On-site Award 2020 (the Award).
· The Non-Transferring of the Applicant are currently, or will, perform the same work as performed by the Transferring Employees are covered by the Award.
The application is supported by the witness statement of Mr Bruce Duplock (Mr Duplock), General Manager Employee Relations of Atlas Group (including the Applicant).
Relevant Legislation
Section 313 of the Act provides:
“313 Transferring employees and new employer covered by transferable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:
(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and
....
(3) This section has effect subject to any FWC order under subsection 318(1).”
Section 319 provides:
“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.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover 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.”
Consideration
The Applicant submits that, as it has engaged the Transferring Employees to perform the same or substantially the same work as they performed for Aegis, a transfer of business for the purposes of Part 2-8 of the Act has occurred. The Transferring Employees ceased employment with Aegis, as required by section 311 (1)(a) of the Act, on or by 17 October 2022 and commenced employment with the Applicant on 17 October 2022, this being within the three months prescribed by section 311 (1)(b) of the Act. The Applicant submits that it is an associated entity of the Aegis per section 311(6) of the Act.
On the materials before me, I am satisfied of the preliminary matters detailed within the Act. In determining the matter, the Commission must take into account the considerations listed above in section 319(3) of the Act.
Views of the new employer
The new employer is the Applicant and is supportive of the Orders being made.
The Applicant submits several reasons for seeking the Order and in support of it being granted. The Applicant asserts the Order would assist in:
· improving business efficiency and productivity of the Applicant;
· enabling the Non-Transferring Employees to be fully integrated into the employee management systems currently operating in the Applicant's business;
· avoiding the administrative costs involved in managing and ensuring compliance with multiple industrial instruments in relation to the same work;
· removing any disincentive to the Applicant offering or continuing employment of the Non-Transferring Employees.
· providing the Non-Transferring Employees with greater terms and conditions under the Agreement than under the Award.
Views of the employees who would be affected by the Order
The Applicant submits that there are two Non-Transferring Employees who would be affected by the Order. The Applicant submits that it undertook a consultation process with those employees during which they were given the opportunity to ask questions and raise objections. The Applicant submits that no objections were received from any of the three employees.
The Applicant has submitted contracts that were provided to the two employees during the consultation process, The contracts notify the Transferring Employees of both instruments and of the Applicant’s intention to seek this order. The contracts explain the effect of the potential change. All the Transferring Employees accepted the contracts. In accepting the contracts, the Transferring Employees were notified that they would therefore support and approve this application for an order.
Mr Duplock’s statement supports the above submissions and details the steps taken in the consultation with the two Non-Transferring Employees.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
The Applicant submits that Non-Transferring Employees will be better off and enjoy more favourable terms under the Agreement, in comparison to the terms of the Award. The Applicant highlights that the Agreement offers higher rates of pay and several more favourable terms when compared to the Award.
I accept the above submissions.
The nominal expiry date of the Agreement
The Agreement has a nominal expiry date of 17 February 2025.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace and if the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
The Applicant submitted that the Agreement would have a positive impact on the productivity of the workplace and employee engagement as employees doing the same work are subject to uniform terms and conditions and minimum rates of pay. The Applicant also submits that if the Orders are not granted, and employees are covered by separate instruments, it could cause unnecessary administrative burden. The Applicant again highlights the differences in rates of pay between the two instruments and the negative affect on morale that could present.
The Applicant submits that not granting the Order would have an economic disadvantage as it would require the Applicant to endure further administrative burden in applying two instruments to the employees.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
The Applicant submits that there is a lack of business synergy between the two instruments. The Applicant states that the Agreement is more relevant to its work.
The public interest
Having considered the commercial benefits to the Applicant, lack of objection from other parties, and the fact that there will be no disadvantage to the Non-Transferring Employees, I consider that it would not be contrary to the public interest to grant the Order.
Conclusion
In consideration of all the criteria in the Act, I am satisfied that the circumstances weigh in favour of the Orders being granted. It follows that the application should be granted. The Orders sought by the Applicant have been issued concurrently with this decision.[1]
COMMISSIONER
[1] [PR749281].
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