BHP Coal Pty Ltd
[2024] FWC 833
•2 APRIL 2024
| [2024] FWC 833 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
BHP Coal Pty Ltd
(AG2024/809)
BMA ENTERPRISE AGREEMENT 2022
| Mining industry | |
| DEPUTY PRESIDENT DOBSON | BRISBANE, 2 APRIL 2024 |
Application for an order relating to instruments covering transferring employees.
This decision concerns an application by BHP Coal Pty Ltd (the Applicant/BHP Coal/New Employer) for orders pursuant to s.318(1)(a) and s.318(1)(b) of the Fair Work Act 2009 (the Act) that the BMA Enterprise Agreement 2022[1] (the Agreement) will cover transferring employees who perform transferring work for the Applicant.
Background
The Applicant is the employer of significant number of employees covered by the BMA Enterprise Agreement 2022 (BMA EA) at the Goonyella Riverside Mine, Peak Downs Mine, Saraji Mine and Blackwater Mine.
Central Queensland Services Pty Ltd (CQS/Old Employer) is the employer of the employees covered by the BMA Daunia Mine Enterprise Agreement 2023[2] (Daunia EA) who perform work at the Daunia Mine.
On 18 October 2023, Whitehaven Coal Ltd (Whitehaven), BHP Group Limited (the parent company of both the Applicant and CQS) and Mitsubishi Development Pty Ltd announced that they had reached an agreement for Whitehaven to acquire 100% ownership of both the Daunia and Blackwater mines (Divestment). As part of the Divestment, six employees of CQS who are covered by the Daunia EA will transfer to employment with the Applicant at a mine within the coverage of the BMA EA.
In February and March 2024, the Applicant made offers of ongoing full-time employment to six employees of CQS who are covered by the Daunia EA, to commence after their employment with CQS terminates (Transferring Employees). Those offers were accepted by the Transferring Employees.
The offers are on terms and conditions no less favourable overall than their current terms of employment with CQS under the Daunia EA.
The orders sought by the Applicant are as follows:
1. Pursuant to s.318(1)(a) of the Fair Work Act 2009 (Cth), the BMA Daunia Mine Enterprise Agreement 2023[3] will not cover transferring employees from Central Queensland Services Pty Ltd who perform transferring work in a classification contained in the Agreement in respect of their employment with BHP Coal Pty Ltd.
2. Pursuant to s.318(1)(b) of the Fair Work Act 2009 (Cth), an enterprise agreement, being the BMA Enterprise Agreement 2022,[4] does and will cover the transferring employees in respect of their employment with BHP Coal Pty Ltd.
3. Pursuant to s.318(4) this order will come into effect from the date of this order or when transferring employees are employed by BHP Coal Pty Ltd and start to perform transferring work, whichever is the later date.
The orders will not apply to any other transferring employee employed by the Applicant at any other location, and the transferring work will be limited to the work covered by the transferrable instrument at the relevant locations.
The affected unions have had this application served on them and were invited to express their views. They did not express any views or contest this application. I am satisfied that the matter can be determined on the papers without the need for a hearing.
Transferring employees of new employer not to be covered by transferable instrument
I am satisfied that the Agreement is a transferable instrument within the meaning of s.312 of the Act, and I observe that the Applicant accepts that the Agreement is a transferable instrument. I note that the two companies are associated entities.
The Daunia EA, the transferable instrument, in accordance with s.313(1)(a) is an instrument that covers the new employer and the transferring employee in relation to the transferring work after the transfer time that the employee becomes employed by the new employer.
Consideration of section 318
Section 318 of the Act sets out the matters the Commission must have regard to in determining if the orders sought should be granted.
Section 318 provides as follows:
“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 a person 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 starts to perform the transferring work for the new employer;
(b) the day on which the order is made.”
The application in relation to the matters to be taken into account
Section 318(3)(a)(i) – Views of the new employer
The Applicant is the new employer, who seeks, and is supportive of, the orders. The Applicant submits that the granting of the orders sought will assist to standardise the conditions so that all of its employees who are performing substantially the same work at the mines will be covered by the same industrial instrument which will enable business synergy and mitigate any negative impact on productivity and working relationships that would otherwise be required to administer multiple employment arrangements,
I accept this weighs in favour of granting the orders sought.
Section 318(3)(a)(ii) – views of the employees who would be affected by the order
The views of the employees who will be affected by the orders have been sought. All six affected employees have written to advise they support the orders sought.
I accept this weighs in favour of granting the orders sought.
Section 318(3)(b) – whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
The Applicant submits that the BMA EA is, overall, more beneficial than the Daunia EA and provided a comprehensive assessment of the differences between the Agreements.[5] More beneficial terms include rates of pay, training, paid suspension, career development and progression, bonus, personal leave, military leave, council leave, salary packaging and security of employment.
Having considered the assessment I am satisfied that the employees affected by these Orders would not be disadvantaged in relation to their terms and conditions in favour of making the orders sought.
I accept this weighs in favour of granting the orders sought.
Section 318(3)(c) – the nominal expiry date of the agreement
I note that the Daunia Agreement has a nominal expiry date of 17 November 2027 and the BMA Agreement has an expiry date of 18 January 2026. I accept this weighs against the granting of the orders sought, albeit slightly.
Section 318(3)(d) – whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
The Applicant submits that if the orders were not granted, the Applicant would suffer a negative impact on productivity due to the need to upskill the functional (Human Resources, Payroll, Health and Safety Teams) and operational teams (Supervisors, Superintendents and Managers) to apply the terms and conditions of an additional enterprise agreement.
Furthermore, the Applicant submits it would be required to maintain two separate time sheeting activities across the Production workforces which will create additional administrative burden for the site administrators and increase risk of errors if the orders sought were not made.
I accept this weighs in favour of granting the orders sought.
Section 318(3)(e) – whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
The Applicant submitted they would suffer a significant economic disadvantage if the orders sought were not made in having to incur additional expenses resulting from the application of two different agreements. That would involve the need for changes to payroll systems creating complexity and room for error for those administering them. Furthermore, the Applicant would have to fund additional training for the functional and operational teams to assist them to understand and apply the different terms and conditions.
I accept this weighs in favour of granting the orders sought.
Section 318(3)(f) – 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 little if any business synergy between the Daunia EA and the BMA EA as they provide for an entirely different set of employment conditions. The Daunia EA is customised to support the CQS specific operations and the BMA EA is customised to address the specific circumstances of each of the mines it covers.
I accept this weighs in favour of granting the orders sought.
Section 318(3)(g) – the public interest
The Applicant submits that the administrative efficiencies to be gained weigh in favour of the public interest and furthermore that the longer term interests of the Transferring Employees are likely to be better served by integrating them with the Agreement covered cohort they would join. The Applicant submits this will enhance their ability to participate in future bargaining for a replacement Enterprise Agreement. Having regard to all the material before me, I am of the view there are public interest reasons that weigh in favour of making the orders sought.
Conclusion
Having taken into the account the material provided by the Applicant in support of its application and the matters set out in s.314 and 318(3) of the Act, I am satisfied that that it is appropriate to grant the orders pursuant to s.318(1)(a) and s.318(1)(b).
Orders[6] to this effect will be issued together with this decision.
DEPUTY PRESIDENT
[1] [2023] FWCA 115; AG2023/31.
[2] [2023] FWCA 3864; AG2023/4072.
[3] [2023] FWCA 3864; AG2023/4072.
[4] [2023] FWCA 115; AG2023/31.
[5] Digital Court Book (DCB) pp.339-386.
[6] PR772988.
Printed by authority of the Commonwealth Government Printer
<AE522354 PR772987>
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