BHP Billiton Mitsui Coal Pty Ltd
[2012] FWA 4181
•24 MAY 2012
[2012] FWA 4181 |
|
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in awards
BHP Billiton Mitsui Coal Pty Ltd
(C2012/3306)
COMMISSIONER SPENCER | BRISBANE, 24 MAY 2012 |
Application for orders in relation to transfer of business.
[1] BHP Billiton Mitsui Coal Pty Ltd (the Applicant/BMC) made an application pursuant to s. 318(1) of the Fair Work Act 2009 (the Act), which sought orders as follows:
“In circumstances where there is a transfer of business from Leighton Contractors Pty Ltd to BHP Billiton Mitsui Coal Pty Ltd within the meaning of Division 2, Part 2-8 of the Fair Work Act 2009 (Cth), then:
1. the Leighton Poitrel/Daunia Enterprise Agreement 2012 will not cover BHP Billiton Mitsui Coal Pty Ltd and any transferring employee; and
2. the BHP Billiton Mitsui Coal Pty Ltd Poitrel Mine Enterprise Agreement 2012 will cover all employees employed by BHP Billiton Mitsui Coal Pty Ltd at the Poitrel Mine who are within the classifications and scope of application of that Agreement.
Legislation
[2] Section 318 of the Fair Work Act 2009 provides that:
“318 Orders relating to instruments covering new employer and transferring employees
Orders that FWA may make
(1) FWA 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) FWA 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 FWA must take into account
(3) In deciding whether to make the order, FWA 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.”
Summary of applicant submissions
[3] The Poitrel Mine is owned and managed by BHP Billiton Mitsui Coal Pty Ltd (BMA). The mine is 80% owned by BHP Billiton Limited and 20% owned by Mitsui Co.
[4] The Applicant submitted that the Poitrel Mine will be a contractor operated by Leighton Contractors Pty Ltd until 3 September 2012. After that date it will become owner operated by BHP Billiton Mitsui Coal Pty Ltd. Approximately 90 employees currently employed by Leighton are likely to be offered employment with BMC; it is likely these workers will perform the same (or substantially the same) work with BMC as they do for Leighton.
[5] The Leighton Poitrel/Daunia Enterprise Agreement 2012 (Leighton Agreement) was approved on 2 March 2012 and has a nominal expiry of 8 March 2015. The BHP Billiton Mitsui Coal Pty Ltd Poitrel Mine Enterprise Agreement 2012 (BMC Agreement) was approved on 31 January 2012 and has a nominal expiry date of 31 August 2015.
[6] BMC submitted that there will be a transfer of business in accordance with the Act because:
● the Leighton employees will become employed by BMC within 3 months of their Leighton employment ending;
● the transferring work will be the same, or substantially the same, as the work currently being done for Leighton; and
● there is the required connection between Leighton and BMC.
[7] BMC submitted that the requirement for a connection is satisfied by the fact that the transferring work is currently outsourced to Leighton and will cease to be outsourced.
[8] The Applicant made submissions going to each of the factors FWA must consider:
View of the new employer (BMC)
[9] BMC seeks that the Leighton Agreement not apply to any former Leighton employee who transfers to BMC to carry out the same work they previously performed while engaged by Leighton at the Poitrel Mine. This is because BMC seeks to standardise its employment conditions; improve terms and conditions for all employees; reduce administrative costs and encourage a single workplace culture.
Views of affected employees
[10] BMC submitted that employees will not be disadvantaged when compared to the relevant award or general industry standards or market rates. It noted that the BMC Agreement was negotiated with the relevant union - the Construction, Forestry, Mining and Energy Union (CFMEU) as was the Leighton Agreement.
[11] Employment with BMC will be offered on the basis that any employee who accepts employment will be covered by the BMC Agreement. It was the Applicant’s submissions therefore, that any employee who accepts employment is indicating a willingness to be covered by the BMC Agreement.
Whether employees would be disadvantaged in regards to their terms of employment
[12] BMC submitted that employees will not be disadvantaged, as terms and conditions under the BMC Agreement are financially superior in earnings, leave, superannuation and redundancy when compared to the Leighton Agreement. Additionally, employees will be eligible for a production bonus.
Whether the Leighton Agreement would have a negative impact on the productivity of the BMC workplace / Whether BMC would suffer economic disadvantage
[13] The Applicant submitted that it would suffer economic disadvantage if the orders are not made, as it would be required to maintain two payroll systems going forward. Additionally, the new employees would not be eligible for a significant production bonus, which may result in productivity decreases and weaken workforce integration.
Degree of business synergy between the two agreements
[14] BMC acknowledges that the agreements are similar in some respects, but submitted that the significant differences in salary and other benefits (including the BMC production bonus) result in minimal synergy between the agreements.
Public interest
The Applicant submitted that granting the order sought would not be against public interest.
Respondent submissions
[15] The CFMEU initially made submissions in a comparison table comparing the two agreements and indicated differences in relation to some allowances, such as the emergency response team allowance. The comparison table has been taken into account and assessed against the comparison response provided by the Applicant. The CFMEU later withdraw their objection to the Application.
[16] The CFMEU provided an example comparison for a tradesperson. Under the Leighton Agreement, including super, living away from home allowance, leading hand allowance, emergency response team allowance, loyalty bonus and tool allowance, the total rate is $155 823.04. Under the BMC Agreement, including super and the 100% incentive bonus, the rate is $155 710.38.
Applicant submissions in reply
[17] The Applicant made brief submissions in reply to the CFMEU’s comparison table. It submitted that it needs to fill 200 positions by 3 September 2012. It has received approximately 7 800 external applications. 107 Leighton employees have applied for positions within BMC and it has constantly communicated to these employees that offers will only be made if BMC has certainty that the BMC Agreement will apply. Assessment and screening of the Leighton applicants has been put on hold until BMC has certainty about agreement coverage.
[18] In response to the CFMEU’s table, BMC acknowledges that when looked at in isolation, certain terms are different and may appear disadvantageous to employees. BMC submitted that under the Act there is no requirement that the agreements be the same. The BMC Agreement is a greenfields agreement that was negotiated with the CFMEU in the spirit of setting up a new venture, where practices and procedures will be developed as the business grows.
[19] BMC submitted that granting the order sought will be advantageous to Leighton employees, as it will give them the opportunity to be considered for employment with BMC.
[20] The Applicant also provided a ‘reply’ comparison table. This table noted that certain allowances not payable under the BMC Agreement (eg leading hand, trainer/assessor allowances) may be alternatively compensated by appointment to a higher level. It was noted that the advantage of the incentive/production bonus was highlighted. BMA stated, in regard to the living away from home allowance payable under the Leighton Agreement, that its advice is that employees would not be “ATO living away from home allowance” eligible, as they are offered permanent employment and provided village accommodation and therefore not required to maintain another residence apart from their primary home.
Conclusion
[21] The submissions and comparison table on the Agreement have been taken into account in accordance with the criteria in s.318 of the Act. I am satisfied on the material that the making of the Order is in the public interest and that employees will not be disadvantaged.
[22] The transfer of business ‘provides long term certainty on applicable workplace arrangements, along with certainty of administration and labour costs’. 1 The provision of accommodation may mean some employees will lose the ATO living away from home allowance but in lieu will be provided with accommodation. Furthermore, the Order sought when viewed against the Agreement comparison documents do not demonstrate a disadvantage particularly when the access to the production bonus is taken into account.
[23] An Order pursuant to s.318 of the Act relating to instruments covering a new employer and transferring employees has been made [PR523954].
COMMISSIONER
1 Applicant’s submissions dated 9 May 2012
Printed by authority of the Commonwealth Government Printer
<Price code C, PR523823>
0
0
0