Avada Traffic Pty Ltd Trading AS Avada Traffic

Case •

[2025] FWC 614

•

28 FEBRUARY 2025
[2025] FWC 614

FAIR WORK COMMISSION
DECISION

Fair Work Act 2009

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

Avada Traffic Pty Ltd Trading AS Avada Traffic

(AG2024/2849)

Building, metal and civil construction industries

DEPUTY PRESIDENT GRAYSON

SYDNEY, 28 FEBRUARY 2025

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

  1. Avada Traffic Pty Ltd t/a Avada Traffic (the Applicant) has made an application under s.319 of the Fair Work Act 2009 (Cth) (the Act). The application seeks orders from the Fair Work Commission (Commission) that:

“the D &D Traffic Management & Other Work – Enterprise Agreement 2022 covers, or will cover, any non-transferring employee of the Applicant who perform, or are likely to perform, the transferring work, on the snowy Hydro 2.0 Project, pursuant to section 319(1)(b) of the Fair Work Act 2009 (Cth) effective from 5th August 2024.”

  1. The Commission directed the Applicant to file submissions and material in support of its application, addressing the relevant provisions of the Act, and directed that it serve the submissions and material and a copy of its application on the Australian Workers Union (AWU) and all non-transferring employees of the Applicant who perform, or are likely to perform, the transferring work, on the snowy Hydro 2.0 Project (Non-Transferring Employees). The Applicant filed its evidence and submissions on 6 August 2024 and 11 September 2024.

  1. The application and supporting documentation filed by the Applicant in accordance with the Directions were served on the AWU. Whilst the AWU originally opposed the application, following discussions between the parties, it ultimately determined not to oppose application. No submissions were received from any Non-Transferring Employees in opposition to the application nor was any request made to be heard in relation to the application. Accordingly, I have determined to deal with the matter on the papers and without the need for a hearing.

  1. The Applicant’s core business is to provide traffic control and traffic management services in relation to civil construction works. The core business of D &D Traffic Management (D&D) was to provide traffic control and traffic management services in relation to civil construction works. The Applicant and D&D are associated entities as defined in the Corporations Act 2001 (Cth). Both companies are owned by AVADA Group Limited.

re owned by AVADA Group Limited.

  1. The employees engaged by D&D were transferred from D&D to the Applicant on 5 August 2024 (Transferring Employees). As at the date that the Applicant filed their evidentiary case there were 24 Transferring Employees and one non-transferring employee who was engaged after 5 August 2024. The Applicant submits that the Transferring Employees were covered by the D &D Traffic Management & Other Work – Enterprise Agreement 2022 (D&D Agreement/Transferable Instrument) prior to their termination and will continue to be covered by the D&D Agreement pursuant to s.313 of the Act.

  1. In respect of the Snowy Hydro Project, the work performed was traffic control and traffic management. This work was transferred to the Applicant and performed from Monday, 5 August 2024. The contract for traffic control and traffic management on the Snowy Hydro Project will be for a period of approximately 3 years and will require the engagement of non-transferring employees in that period.

  1. The Applicant submits that, subject to any order of the Commission, the non-transferring employees of the Applicant, are, or will be, covered by the Building and Construction General Onsite Award 2020 (the Award).

  1. The contract for traffic control and traffic management on the Snowy Hydro Project will be for a further 3 years and will require the engagement of non-transferring employees in that

period. The employees engaged on the Snowy Hydro Project are casual employees.

Legislation

  1. Part 2-8 of Chapter 2 of the Act describes when a transfer of business occurs and s.312(1) of the Act provides for the transfer of certain instruments if there is a transfer of business from one employer to another employer.

  1. Section 311 of the Act relevantly provides:

311 When does a transfer of business occur

Meanings of transfer of business , old employer , new employer and transferring work

(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 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 subsections (3) to (6).

Meaning of transferring employee

(2)    An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.

Transfer of assets from old employer to new employer

(3)    There is a connection between the old employer and the new employer if, in accordance with an arrangement between:

(a)the old employer or an associated entity of the old employer; and

(b)the new employer or an associated entity of the new employer;

the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):

(c)that the old employer or the associated entity of the old employer, owned or had the beneficial use of; and

(d)that relate to, or are used in connection with, the transferring work.

….

  1. 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

(b)while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.

(2)    To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee’s employment with the old employer.

(3)    This section has effect subject to any FWC order under subsection 318(1).

Sections 317 and 319 of the Act relevantly provide:

317 FWC may make orders in relation to a transfer of business

This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.

…

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.

Initial matters

  1. Based on the material before the Commission, I am satisfied that:

  • The employment of the Transferring Employees with D&D was terminated (s.311(1)(a) of the Act).

  • The Transferring Employees became employed by the Applicant within three months after the termination of their employment with D&D (s.311(1)(b) of the Act) and are transferring employees for the purposes of s.311(2) of the Act.

  • The work the Transferring Employees perform for the Applicant is the same or substantially the same as the work they performed for D&D (s.311(1)(c) of the Act).[1]

  • There is a connection between D&D and the Applicant as the Applicant was an associated entity of D&D when the Transferring Employees commenced work with the Applicant (s.311(5)). Both companies are owned by AVADA Group Limited.

  • The Transferring Employees are transferring employees in relation to the transfer of business (s.311(2) of the Act).

  • The Transferable Instrument covered D&D and the Transferring Employees immediately before the termination of the Transferring Employees’ employment with D&D.

  • The Transferable Instrument covers the Applicant and the Transferring Employees in relation to the transferring work (s.313 of the Act).

  • The Applicant has standing to apply for the orders it seeks pursuant to s.319(2) of the Act.

Consideration

  1. In deciding whether or not to make an order pursuant to s.319(1) of the Act, the Commission must take into account the matters set out in s.319(3) of the Act.

The views of the Applicant (new employer) – s.319(3)(a)(i)

  1. The Applicant supports the orders sought and submits that non-transferring employees would be disadvantaged if their conditions of employment were to remain regulated by the Award, as well as, to maintain fairness between the Transferring Employees and the Applicant’s other employees who operate as a team working on the same project.

  1. The views of the Applicant weigh in favour of the making of the orders.

The views of the employees who would be affected by the order – s.319(3)(a)(ii)

  1. As at 11 September 2024, there were twenty-four Transferring Employees and one Non-Transferring Employee. Per Directions issued by the Commission, the Application, supporting documentation, and the Directions were amongst other things, posted on notice boards in the workplaces of the Applicant and made available via the Applicant’s internal communications portal.[2]

  1. At least one Non-Transferring Employee would be affected by the order sought. No employees of the Applicant, Non Transferring or otherwise, filed any submissions in opposition to the application and did not request to be heard in relation to the application.

  1. I consider this to be a neutral consideration.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment – s.319(3)(b)

  1. The Applicant submits that the Non-Transferring Employees would not be disadvantaged by the orders sought in relation to their terms and conditions of employment as the terms and conditions of employment set out in the D&D Agreement are consistent with the Award or better. It also filed evidence and made submissions regarding some of the differences between the instruments, including the rates of pay and some allowances. Casual Traffic Controllers are paid $0.05 per hour above the hourly Award rate for ordinary hours worked, by way of an allowance. It submits that employees being paid in accordance with the Award would be worse off than those being paid in accordance with the D&D Agreement.

  1. The Applicant filed evidence with the Commission which set out nature of the employment and rostering arrangements of the Non-Transferring Employees. It also made submissions regarding some of the differences between the instruments, including the rates of pay and some allowances.

  1. The roster for the provision of traffic control services to be worked by Non-Transferring Employees on the project is as follows:

·   14 days on and 7 days off;

·   The hours of work have split commencing times with two teams commencing at either 6 am or 7.30 am; and

·    The shift is 11.5 hours exclusive of the unpaid meal break worked Monday to Friday.

  1. Accordingly, employees of the Applicant are day-workers and no shift work is performed on site by the Transferring and Non-Transferring Employees. The employees are provided with accommodation (meals and accommodation) or provided with accommodation and $60.00 per day for meals. The employees are provided with company provided return transport from the accommodation to the worksite.

Name Blake Date 11/09/2024

  1. The Applicant submits that, having regard to the matters detailed in the preceding paragraph, the casual nature of the workforce, shift patterns and rates of pay, that the Non-Transferring Employees will receive higher rates of take-home pay if the orders are made.

  1. While I consider that the benefits of the D&D Agreement over the Award are only marginal, having considered the submissions and evidence and the terms of the D&D Agreement and the Award I am satisfied that, overall, the Non-Transferring Employees would not be disadvantaged if the proposed order is made. This factor weighs in favour of making the order.

The nominal expiry date of the agreement – s.319(3)(c)

  1. The D&D Agreement has a nominal expiry date of 30 July 2026.

Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace – s.319(3)(d)

  1. The Applicant submits in it’s application that the D&D Agreement would not negatively affect the productivity of the Applicant’s business. To the contrary, it argues that if the order is not made and the D&D Agreement does not cover Non-Transferring Employees, then this will require the administration of payroll and compliance with respect to two different instruments, despite the employees of the Applicant covered by the two industrial instruments working as part of a team on the Snowy Hydro Project performing the same or similar work. It submits that having all employees performing the same or similar work under a single instrument on the Project will improve productivity.

  1. I accept that the existence of two industrial instruments covering employees would increase the amount of compliance and administrative work associated with paying two groups of employees at the same site, and that this would have some negative impact on the productivity of the Applicant’s workplace.

  1. This weighs in favour of the making of the orders.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer – s.319(3)(e)

  1. The Applicant submits that it would not incur significant economic disadvantage as a result of the transferable instrument covering the Applicant in respect of the Non-Transferring Employees.

  1. I accept that the Applicant will not incur significant economic disadvantage as a result of the D&D Agreement covering it.

  1. This weighs in favour of the making of the orders.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer – s.319(3)(f)

  1. The Applicant made no submissions regarding this consideration. I consider this to be a neutral consideration.

The public interest – s.319(3)(f)

  1. The Applicant submits that granting the orders sought is in the public interest in that it would provide that all employees engaged by the Applicant on a remote major infrastructure project would have consistent wage rates and conditions of employment. I infer that they also rely on the improvement of pay and overall conditions for Non-Transferring Employees if they are covered by the D&D Agreement as compared to having their pay and conditions regulated by the Award only.

  1. In all the circumstances, and having considered the materials before the Commission, I am satisfied that there are no public interest considerations that weigh against making the orders sought.

Conclusion

  1. Having taken into account the considerations in s.319(3) of the Act, I consider that the following orders should be made pursuant to s.319(1)(b) of the Act:

A.The D&D Traffic Management & Other Work – Enterprise Agreement 2022 covers, or will cover, any non-transferring employee of the Applicant who performs, or are likely to perform, the transferring work, on the Snowy Hydro 2.0 Project.

  1. For the purposes of s.319(4) of the Act, the order will come into operation on 28 February 2025. The order giving effect to this decision will be issued separately in PR784853.

DEPUTY PRESIDENT

<AE518290  PR784852>


[1] Statement of Scott Erwin dated 6 August 2024 [3]-[4], [6].

[2] Statutory Declaration of Blake Puckeridge dated 12 August 2024 [3]-[6].

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