BHP Coal Pty Ltd

[2024] FWCA 991

[2024] FWCA 991

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.217— application to vary an agreement to remove an ambiguity or uncertainty

BHP Coal Pty Ltd

(AG2024/599)

BMA ENTERPRISE AGREEMENT 2022

Coal industry
DEPUTY PRESIDENT O’KEEFFE	PERTH, 19 MARCH 2024

Application for variation of the BMA Enterprise Agreement 2022 – no uncertainty or ambiguity – variation not granted.

1. BHP Coal Pty Ltd (the Applicant), has applied under s 217 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (FWC) to remove an ambiguity or uncertainty said to be in the BMA Enterprise Agreement 2022 (the Agreement).

1. Section 217 of the Act provides as follows:

   217 Variation of an enterprise agreement to remove an ambiguity or uncertainty

   (1)  [FWC may vary agreement on application] The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:

   1.one or more of the employers covered by the agreement;

   2.an employee covered by the agreement;

   3.an employee organisation covered by the agreement.

2. Before the FWC can exercise the power conferred by s.217, the jurisdictional prerequisite is that an ambiguity of uncertainty must be present – see the decision of the Full Bench of the Australian Industrial Relations Commission (as it then was) in Tenix Defence Pty Limited re Tenix Defence Systems Pty Limited Certified Agreement 2001 - 2004 - PR917548 [2002] AIRC 531 at [26-36]. 

3. In the present matter, the Applicant contends that an uncertainty or ambiguity exists in two clauses in the Agreement and that s.217 can be used to remove the uncertainty or ambiguity. In the alternative, the Applicant proposes that the FWC can use s.218A to correct an error, defect or irregularity. The first clause at issue is cl.22.11 which provides as follows:

   “On termination of employment, Employees will be paid the Base Salary rate for any untaken annual leave, in addition to Bonus on leave accruals where applicable under clause 17.3(a).”

The second clause at issue is cl.23.8(a) which provides as follows:

“An Employee whose employment is terminated (apart from wilful misconduct) must, if the Employee has unused personal/ carer’s leave, be granted payment at the Employee’s Base Salary, including Bonus on leave accruals where applicable under clause 17.3.”

1. The Applicant is in the process of selling two of the mines covered by the Agreement to another company.  Most of the existing employees appear to be transferring to the new company.  As such, the Applicant submits that the clauses above should be amended to ensure that the transferring employees’ leave balances are transferred to the new employer.  It submits that the new clauses should be worded as follows, with the proposed amendments highlighted:

Cl.22.11:“On termination of employment, Employees will be paid the Base Salary rate for any untaken annual leave, in addition to Bonus on leave accruals where applicable under clause 17.3(a), other than where the untaken annual leave transfers to a new employer in the circumstances described in section 22 of the Act.”

Cl.18.3(j)“An Employee whose employment is terminated (apart from wilful misconduct) must, if the Employee has unused personal/ carer’s leave, be granted payment at the Employee’s Base Salary, including Bonus on leave accruals where applicable under clause 17.3, other than where the unused personal/carer’s leave transfers to a new employer in the circumstances described in section 22 of the Act.”

1. The Applicant submits as follows:

“When a ‘transfer of employment’, within the meaning of section 22(7) of the Act, occurs then under the National Employment Standards (NES) in the Act:

a.   untaken annual leave transfers to the new employer by operation of sections 22(5)(a), 22(6), 87 and 91 of the Act;

b.   untaken personal/carer’s leave transfers to the new employer by operation of sections 22(5)(a), 22(6) and 96 of the Act; and

c.    untaken annual leave and personal/carer’s leave is not paid out.”

Notwithstanding this, and the NES precedent provisions of cl.1.9 of the Agreement, the Applicant submits as follows:

“The Applicant seeks an order varying the provisions of the BMA EA relating to payment of annual leave and personal/carer’s leave on termination of employment to remove ambiguity and uncertainty as to how those provisions operate in conjunction with other clauses of the BMA EA and with sections 22(5)(a), 22(6), 87, 91 and 96 of the Act.”

1. Submissions on the Application were received from the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (the AMWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the ETU) and the Mining and Energy Union (the MEU).  The Unions all opposed the Agreement being varied in the manner sought by the Applicant.  The written submissions of the Unions were essentially identical and can be summarised using the submission of the MEU, which stated as follows:

“The Mining and Energy Union submits that it is not necessary for the Commission to grant the variations sought because the combined effect of the relevant enterprise agreements and the Fair Work Act 2009 (Cth), in these circumstances, is to require that the employee leave entitlements are transferred to the new employer and not paid out by the old employer.”

Consideration

1. In the first instance I should note that I am not persuaded that s.218A of the Act can be said to apply to this situation as I do not accept that there is an error, defect or irregularity in the relevant clauses in the Agreement. With respect to s.217, it appears to me that the Applicant is suggesting there may be uncertainty with respect to the correct process to be followed in the case of a transfer of business. However, before the FWC can exercise the power granted under s.217, it must first be satisfied that such an uncertainty exists.

1. I have had the benefit of examining the submissions of the AMWU, the ETU and the MEU.  I have also examined the Agreement and the relevant parts of the Act.  In summary, I am not persuaded that there is an uncertainty, given the wording of the Agreement when taken in context given the NES precedent clause in the Agreement and the relevant provisions of the Act.  It is clear that on transfer of business, a transferring employee’s entitlements to annual leave and personal/carer’s leave transfer from the old employer to the new employer, and the old employer is not required to pay out to the transferring employee the value of those balances. 

1. In such circumstances, the FWC cannot establish that it has jurisdiction to make the amendments sought by the Applicant and I therefore decline to make an order for the amendments sought. 

DEPUTY PRESIDENT

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