BHP Coal Pty Ltd T/A BHP
[2024] FWC 3139
•13 NOVEMBER 2024
| [2024] FWC 3139 |
| 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 T/A BHP
(AG2024/4050)
| Coal industry | |
| COMMISSIONER DURHAM | BRISBANE, 13 NOVEMBER 2024 |
Application for orders relating to instruments covering new employer and transferring employees
An application has been made by BHP Coal Pty Ltd T/A BHP (BHP/the Applicant) to the Fair Work Commission (the Commission) for an order pursuant to s.318 of the Fair Work Act 2009 (the Act).
Orders Sought
The Applicant is seeking orders that under s. 318 of the Act:
The Chandler Macleod – Queensland Black Coal Mining Agreement 2020 (Chandler Macleod EA) (or any successor agreement) does not, and will not, cover all Chandler Macleod Group Limited (Chandler Macleod) employees:
a.covered by the Chandler Macleod EA; and
b.engaged to perform work at a mine operated by BHP Mitsubishi Alliance Pty Ltd (BMA) in the Bowen Basin; and
c.who:
i.at the date of this Application, have accepted offers of employment with BHP Coal Pty Ltd (BHP); or
ii.after the date of this Application, accept offers of employment with BHP, (together, the Transferring Employees) in respect of their employment with BHP.
The BMA Enterprise Agreement 2022 (BMA EA) (or any successor agreement) does, and will, cover the Transferring Employees in respect of their employment with BHP; and
The orders shall come into operation on the later of:
a.the time when a Transferring Employee becomes employed by BHP;
b.the day on which these orders are made.
In support of this Application, the Applicant relies on:
A statement from Mr Jarrett Goos, Employee Relations Manager of the Applicant dated 1 November 2024.
Form F40 from Scott Bury, Principal Employee Relations of the Applicant dated 14 October 2024.
Background
BHP is part of the BHP Group, which owns 50% of BHP Mitsubishi Alliance Pty Ltd (BMA). The other 50% is owned by Mitsubishi Development Pty Ltd. BMA currently manages a number of metallurgical coal mines in Central Queensland’s Bowen Basin, being:
a.Goonyella Riverside Mine;
b.Peak Downs Mine; and
c.Saraji Mine.
(the Mines)
BHP is an entity of the BHP Group which employs employees to work at the Mines.
The BMA EA covers and applies to employees:
a.of BHP who perform work which is covered by Schedule A of the Black Coal Mining Industry Award 2020 (Award); and
b.who are members or eligible to be members of any of the Unions (being the Mining and Energy Union (QLD District) (MEU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU)); and
c.who are engaged at the Mines in the classifications prescribed by the BMA EA.
Chandler Macleod Group Limited (Chandler Macleod) is currently engaged to provide labour hire personnel to perform work at the Mines, under a services contract between BM Alliance Coal Operations Pty Ltd, OS ACPM PTY Ltd, OS MCAP PTY Ltd and Chandler Macleod (Services Contract). The relevant labour hire personnel who are engaged to perform work at the Mines are employed by Chandler Macleod.
BHP has made offers of direct employment to five (5) individuals who are currently employed by Chandler Macleod to perform work pursuant to the Services Contract at the Mines. BHP has made offers of employment to these individuals to carry out the same (or substantially the same) work that the employees presently carry out for Chandler Macleod at the Mines, which includes performing the roles contained within Schedule 9 of the BMA EA.
In addition, BHP intends to make further offers of direct employment to other individuals who are employed by Chandler Macleod and who perform work pursuant to the Services Contract at the Mines. The employment offers for these individuals will be for the same or substantially the same work that the individuals perform for Chandler Macleod at the Mines, including the roles contained within Schedule 9 of the BMA EA.
The Applicant states, by recruiting these individuals to direct employment with BHP, BHP will insource the work which was previously performed by these individuals as employees of Chandler Macleod, which they will continue to perform in their capacity as BHP employees. BHP will therefore not require Chandler Macleod to replace the five (5) roles with other contractor personnel pursuant to the Services Contract.
Those five (5) individuals who are subject to the Chandler Macleod EA have accepted employment offers with BHP and will commence employment in accordance with the employment offer from BHP and will therefore become Transferring Employees for the purpose of section 313 of the Act.
On 23 October 2024 my Chambers sought the views of the Transferring Employees as well as the MEU, the AMWU and the CEPU regarding this application.
To date, two of the Transferring Employees have written confirming support of the application. On 6 November 2024, the AMWU confirmed their support of the orders sought in the application, noting no response was received from the MEU or CEPU.
Statutory provisions
Section 318(3) of the Act sets out those matters the Commission must have regard to in determining if the orders sought should be granted.
Section 318 provides as follows:
318 Orders relating to instruments covering new employer and transferring employees
Orders that the FWC may make
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
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
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
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
Matters that the FWC must take into account
318(3)(a)(i) – views of BHP
BHP wishes to ensure that employees of BHP who perform work covered by Schedule A of the Award at the Mines are covered by a common set of terms and conditions, which is currently achieved by the BMA EA.
BHP seeks to standardise conditions so that all of its employees (the Transferring Employees and its employees who are not Transferring Employees) who are performing substantially the same work at the Mines are covered by the same industrial instrument, which will enable business synergy and mitigate the negative impact on productivity and work relationships of having to manage and administer multiple employment arrangements with employees performing the same or substantially the same work within the same employing entity.
Moreover, in BHP’s view, granting the Orders will:
a. create employment simplicity by having the one industrial instrument apply to current employees of BHP at the Mines as well as Transferring Employees;
b. align rostering arrangements across the Mines;
c. create operational synergies around standard crib times and shift duration, allowing for further operational efficiencies;
d. create cultural synergies and mitigate any disharmony within the workforce at the Mines and concerns from employees doing the same or similar work as to why two different sets of terms and conditions apply; and
e. mitigate the need for additional and complex payroll standards and requirements.
318(3)(a)(ii) – views of the employees who would be affected by the order
Ms Jessica Duffus and Ms Holly Ackermann provided their views on 28 and 29 October 2024 respectively. Both provided brief submission stating they had no objections, and that they agreed to the application.
The Form F40 states that when the relevant individuals received their offers of employment, they also received the following information to permit them to make an informed decision as to whether accept the offer of employment, including:
a. A cover letter which:
i.outlined BHP’s intention to seek a section 318 order so that the BMA EA would apply in respect of the individual’s employment with BHP (as opposed to the Chandler Macleod EA);
ii.asked the relevant individuals to indicate by return email whether they support BHP’s application for a section 318 order, and the application of the BMA EA to their employment with BHP; and
iii.iii. informed the individuals that if they had any questions about the section 318 application or their proposed employment with BHP, they should raise these questions with the hiring team.
b. A document comparing the BMA EA against the Black Coal Mining Industry Award 2020.
c. A document comparing the BMA EA against the Chandler Macleod EA, which included links to both instruments.
The F40 goes on to state that each relevant individual has:
a. indicated their support for BHP’s application for a section 318 order and the
b. application of the BMA EA to their employment; and
c. has accepted an offer of employment with BHP.
318(3)(b) – whether the affected employees will be disadvantaged by the order
The Applicant states that, overall, the Transferring Employees will not be disadvantaged in relation to their terms and conditions of employment when employed by BHP.
Further, the BMA EA, which commenced operation on 19 January 2023, represents an agreed outcome between the relevant BHP employees and BHP, and provides for terms and conditions which are tailored to BHP’s operational requirements at the Mines. In contrast, the Chandler Macleod EA is customised to Chandler Macleod’s specific business operations as a labour hire provider to its clients across various sites.
The Applicant submits that there are numerous aspects of the BMA EA which are more beneficial than the terms of the Chandler Macleod EA, including in relation to: training, paid suspension, career development and progression, career progression and recruitment, process for introducing new rosters, continuous improvement procedures, consultation, change of shift, bonus, public holidays, personal leave, paid parental leave, military leave and council leave, salary packaging, security of employment, redundancy procedures and quantum of severance pay, accommodation and commute arrangements, employee representatives, death and disablement payments, gym membership and fire brigade training.
318(3)(c) – nominal expiry date
The nominal expiry date of the Chandler Macleod EA was 5 March 2024. While the nominal expiry date of the BMA EA is 19 January 2026.
The Applicant states that this means that the Transferring Employees will have certainty around their terms and conditions for a significantly longer period of time under the BMA EA than the Chandler Macleod EA.
318(3)(d) – negative impact on productivity
BHP submits that it would cause a negative impact on productivity of its workplace if the Orders sought are not made, as BHP would be required to:
(a) Invest in a significant activity to onboard the Chandler Macleod EA, including development and changes to payroll system configurations.
(b) Upskill the functional (Human Resources, Payroll, Health and Safety teams) and operations teams (Supervisors, Superintendents and Managers) to apply the terms and conditions of an additional enterprise agreement (Chandler Macleod EA) at the Mines.
(c) Maintain two separate time sheeting activities across the Production workforces which will create additional administrative burden for site administrators and increase risk of inaccuracies.
(d) Maintain two significantly different sets of terms and conditions for the one work force and which, for the Transferring Employees, would be inferior in key respects, as noted above, to the rest of BHP’s employees at the Mines. This has the potential to lead to disharmony within the workforce and questions from employees working side-by-side with each other as to why two significantly different sets of terms and conditions apply between employees doing the same or substantially the same work at the same site for the same employer.
BHP further submits that if the Orders were to be granted it could only have a positive impact on productivity as the BMA EA is specific and bespoke to the Mines and is therefore better suited to BHP’s operations.
Productivity benefits will also flow from having a single unifying instrument (the BMA EA) covering BHP’s workforce who perform work covered by Schedule A of the Award at the
Mines, both Transferring Employees and employees who are not Transferring Employees. This includes:
a. Avoiding the cost and administrative burden of BHP having to be conversant and comply with two industrial instruments for an otherwise undifferentiated workforce;
b. Avoiding maintaining the relevant rostering, payroll and IT systems attached to those
two instruments; and
c. The negative impact on productivity arising from the administrative and compliance
burden on Supervisors of having to familiarise themselves and comply with distinct
regimes under the two instruments (e.g. dispute settlement procedures, consultation and change procedures and redundancy requirements).
318(3)(e), (f) – economic disadvantage and degree of business synergy
BHP submit it would suffer significant economic disadvantage (in the form of additional expense) if the Chandler Macleod EA were to apply to Transferring Employees. BHP would incur additional expenses resulting from:
a. the application of two agreements for employees performing work under Schedule A
of the Award at the Mines, which would require system changes to our existing payroll
system and would create complexity for those administering it;
b. additional training for the functional (Human Resources, Payroll, Health and Safety
teams) and operations teams (Supervisors, Superintendents and Managers) to
understand the terms and conditions of an additional enterprise agreement (Chandler
Macleod EA) at the Mines;
c. the negotiation of replacement enterprise agreements once the agreements have
passed their nominal expiry dates.
Should the transferable instrument cover BHP, this would cause economic disadvantage as operational efficiencies would be minimised and potential loss of productivity from industrial disharmony would be increased.
BHP submits that there is little, if any, business synergy between the Chandler Macleod EA and BMA EA as they provide for different employment conditions.
Relevantly, the Chandler Macleod EA is customised to Chandler Macleod’s specific business operations as a labour hire provider to its clients across various sites, whereas the BMA EA befits its direct engagement of employees at the Mines.
318(3)(g) – public interest
BHP submit that maintaining a cohesive, harmonious and productive workplace is a matter of public interest. This is particularly so for a large institution like BHP which has a significant workforce of approximately 1750 direct employees at the Mines.
Further, BHP’s interests in enhancing productivities through the proposed Orders are aligned with those of the Transferring Employees, given the BMA EA provides terms and conditions which are no less favourable overall, and in a number of instances more beneficial than those under the Chandler Macleod EA. This is supported by the fact that the relevant individuals who were provided with offers of employment and an explanation that BHP would be making the Application, accepted those terms.
The longer-term interests of the Transferring Employees are likely to be better served by being treated as an integrated agreement-covered cohort together with their colleagues who are covered under the BMA EA. This is likely to enhance their ability to participate in bargaining for new terms and conditions of employment around the nominal expiry date of BMA EA. As noted above, the nominal expiry date of the BMA EA is 19 January 2026, while the Chandler Macleod EA has already passed its nominal expiry date. On that basis, the BMA EA has a materially longer nominal life, therefore securing superior benefits over a longer period of time.
There are therefore no issues of public interest in this matter that would impact against the Orders sought being made.
I have reviewed the application documentation, and the accompanying material provided. These documents outline the circumstances which have given rise to the application. Further, the submissions contained in the application address the relevant legislative requirements which are asserted to provide for a proper basis for the making of the orders sought.
I am satisfied that the requirements of s.318 of the Act have been met. Orders will be issued with this Decision.
COMMISSIONER
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