Austal Cairns Pty Ltd

[2021] FWC 5551

[2021] FWC 5551

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees

Austal Cairns Pty Ltd
(AG2021/6999)

DEPUTY PRESIDENT BEAUMONT PERTH, 21 SEPTEMBER 2021

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

[1] Austal Cairns Pty Ltd (Austal Cairns)has applied for orders under s 318 of the Fair Work Act 2009 (Cth) (Act) relating to the transfer of five employees (Transferring Employees) from Austal Ships Pty Ltd (Austal Ships) to its business. The Transferring Employees are currently covered by the Austal (Australian Operations) Enterprise Agreement 2015-2019 1 (Austal Operations Agreement).

[2] Austal Cairns and Austal Ships are subsidiaries of Austal Limited, a global shipbuilder, defence prime contractor and maritime technology partner. 2 On 1 December 2020, BSE Maritime Solutions Group was acquired by Austal Limited. BSE Cairns Pty Ltd, part of the BSE Maritime Solutions Group, was subsequently renamed Austal Cairns.

[3] Since the acquisition, employees in the ‘Austal Group’ located in Cairns, Queensland, are covered by two enterprise agreements:

a) the Austal Operations Agreement which covers employees of Austal Ships in Perth, Darwin, and Cairns; and

b) the Cairns Slipways Enterprise Agreement 2019 3 (Cairns Slipways Agreement), which covers the employees of the Applicant.

[4] Whilst Austal Cairns employs the majority of the ‘trades’ employees in Cairns, and those same employees are covered by the Cairns Slipways Agreement, there are five longer term ‘trades’ employees, namely the Transferring Employees, who remain employed by Austal Ships. Four of the five Transferring Employees have accepted offers of employment with Austal Cairns effective 1 September 2021. However, those offers are conditional upon the certain orders being made by this Commission. The orders sought are set out as follows:

a) The Austal (Australian Operations) Enterprise Agreement 2015-2019 will not cover Austal Cairns Pty Ltd and any employees of Austal Cairns Pty Ltd formerly employed by Austal Ships Pty Ltd.

b) The Cairns Slipways Enterprise Agreement 2019 will cover any employees of Austal Cairns Pty Ltd formerly employed by Austal Ships Pty Ltd under the Austal (Australian Operations) Enterprise Agreement 2015-2019.

[5] Austal Cairns was content for the application to be determined on the papers. The application contained detailed grounds and submissions, and was accompanied by an affidavit of Mr Phillip John Growden, General Manager Queensland, Austal Cairns.

[6] In short, I have reviewed the application documentation and the accompanying material. These documents outline the factual circumstances which have given rise to the application. Further, the submissions contained in the application address the relevant legislative requirements which provide a proper basis for the making of the orders sought.

[7] I am satisfied this circumstance is a transfer of business and that the Austal Operations Agreement is a transferable instrument. If the order under s 318(1)(a) was not made, then by virtue of s 313(1)(a) the Austal Operations Agreement would cover the Transferring Employees notwithstanding their employment with Austal Cairns. I have considered all the factors set out in s 318(3) and have concluded that it is appropriate and not contrary to the public interest to make orders sought under s 318(1)(a).

[8] My detailed reasons for granting the orders follow.

Legislative framework

[9] Section 318 of the Act sets out the circumstances in which an order such as that sought by Austal Cairns may be made by the Commission:

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 of matters that the Commission must take into account

[10] Without recounting the particulars set out in the application or in the material accompanying the application, I am persuaded, having regard to that material and taking into account the matters in s 318(3) of the Act, that an order should issue. I am satisfied that:

a) Austal Cairns has standing to make the application;

b) Austal Cairns considers that the proposed orders would provide certainty and consistency in relation to its workplace arrangements and application of industrial instruments, hence assisting with the harmonisation of employment arrangements in the operations at Cairns;

c) the Transferring Employees were issued with offers of employment (Offers) on 10 August 2021. Those same Offers detailed:

i. Transferring Employees who are currently covered by the Austal Agreement will be overed by the Cairns Slipways Agreement;

ii. Transferring Employees will be employed by Austal Cairns with effect from 1 September 2021;

iii. Austal Cairns had made an application to the Commission that the Transferring Employee will not be covered by the Austal Agreement but by the Cairns Slipways Agreement; and

iv. Austal Cairns would provide the acceptance to the Offer to the Commission as confirmation of the view of the Transferring Employee that it does not wish the Austal Agreement to cover him. 4

d) each Offer included a table comparing employee entitlements under the Austal Agreement to the Cairns Slipways Agreement; 5

e) there are several beneficial entitlements under the Cairns Slipways Agreement; 6

f) while the minimum hourly rates of pay under the Cairns Slipways Agreement are lower than the Austal Agreement, the Offers reflect that the current rates of pay of the Transferring Employees under the Austal Agreement will be retained (and an additional $1.00 per hour allowance under the Cairns Slipways Agreement will also be paid);

g) four out of the five Transferring Employees signed the Offers;

h) the nominal expiry date of the Austal Operation Agreement has passed;

i) the operation of the Austal Operation Agreement will likely interfere with the Austal Cairns’ business synergies and culture; and

j) there are no matters about which I am aware that would render the making of the order contrary to the public interest. The goals that would be achieved by making the order, namely of business synergy, the achievement of industrial harmony and the greater earning potential as well as the fact that four out of the five Transferring Employees have accepted the Offers, are all matters that are concordant with the public interest.

Conclusion

[11] In accordance with s 318(4), the orders 7 shall have effect from the time when the Transferring Employees become employed by Austal Cairns or the date of the orders, whichever is the latter.

DEPUTY PRESIDENT

On the papers.

Printed by authority of the Commonwealth Government Printer

<PR733593>

 1   PR575217.

 2   Affidavit of Phillip John Growden 31 August 2021 (Growden Affidavit) [4].

 3   PR718562.

 4 Growden Affidavit [14].

 5 Growden Affidavit [18].

 6   Ibid.

 7   PR734119.