BHP WAIO Pty Ltd T/A BHP Iron Pty Ltd
[2024] FWC 2152
•13 AUGUST 2024
| [2024] FWC 2152 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Instruments covering new employer and transferring employees
BHP WAIO Pty Ltd T/A BHP Iron Pty Ltd
(AG2024/2940, AG2024/2941, AG2024/2945)
| Mining industry | |
| DEPUTY PRESIDENT O’KEEFFE | PERTH, 13 AUGUST 2024 |
Applications for orders that BHP Billiton Nickel West Northern Operations Region Safety Net Agreement 2012 not transfer – orders not granted.
BHP WAIO Pty Ltd (the Applicant) has made applications to the Fair Work Commission (FWC) under s.318 of the Fair Work Act 2009 (Cth) (the Act) for orders that the BHP Billiton Nickel West Northern Operations Region Safety Net Agreement 2012 (the BHP Nickel Agreement) not cover certain employees who have been redeployed into positions that are covered by three of the Applicant’s agreements. I have resolved to deal with all three applications together given their similarities.
Background
The factual circumstances of each of the applications are essentially the same. BHP Group Limited (BHP) made a decision to suspend its nickel operations in Western Australia, pending a review in 2027. As a result, a large number of positions covered by the BHP Nickel Agreement became redundant. BHP was able to secure alternative employment for a number of affected employees (the affected employees) within its Western Australian iron ore operations.
The alternative employment for the affected employees falls within the coverage of the following agreements:
a)Yandi Operations Agreement 2013 (application AG2024/2940)
b)Mining Area C Operations Agreement 2015 (application AG2024/2941)
c)Jimblebar Operations Agreement 2012 (application AG2024/2945)
In each case the applications seek orders that the BHP Nickel Agreement – said to be a transferring instrument - will not cover the affected employees, who are said to be transferring employees. In addition, the applications seek orders that the agreements as set out in paragraph 3 above will cover such of the relevant employees who work within their coverage.
In making the application, the Applicant states that it is adopting a “belts and braces approach” to the redeployment of the relevant employees. This is so because it concedes that it is not clear as to whether the relevant employees will be performing “the same or substantially the same” work in their new roles as they performed under the Nickel Agreement. Indeed, the Applicant submits that the work is not the same or substantially the same. As such, it may be that there has been no transfer of business as contemplated by the Act.
The conditions for a transfer of business are set out in s.311(1) of the Act, which is set out as follows:
“311 When does a transfer of business occur
(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 .”
With respect to the requirement in s.311(1)(d), the Applicant concedes that subsection 6, which is set out below, applies in this case:
“New employer is associated entity of old employer
(6) There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”
For an employee to be a transferring employee as defined they must meet the circumstances set out in s.311(1)(a) to (c). The consequence of a transfer of business where there are transferring employees - as per s.312 and s.313 of the Act – is that an enterprise agreement which covered the old employer will cover the new employer and the transferring employees. The issue in the present matters is whether s.311(1)(c) is applicable. If not, then there is no transfer of business and there are no transferring employees.
In assessing whether the work is the same, or substantially the same, I am mindful of the findings of Jagot J in Crown Sydney Gaming Pty Ltd v United Workers’ Union where her Honour observed as follows:
“…the “work” an employee performs or performed is not confined to the mere carrying out of tasks in an abstract sense. Depending on the circumstances, the conception of the “work” an employee performs or performed for the purposes of
s 311(1)(c) may include the location at which the work is performed and other aspects related to the performance of the tasks comprising the job or work..”[1]
In the current scenario it is clear the work location will change, and the work will be performed for a distinct and different business entity of BHP. I also accept the Applicant’s submission that while there may be some similar tasks performed, the work will involve different extraction and delivery processes for a different kind of mineral asset. These facts suggest that the work is not the same or substantially the same as contemplated by s.311(1)(c).
I am also mindful of the objects of the transfer of business provisions of the Act, as set out in s.309. Those objects are as follows:
“309 Object of this Part
The object of this Part is to provide a balance between:
a) the protection of employees’ terms and conditions of employment under enterprise agreements, certain modern awards and certain other instruments; and
b) the interests of employers in running their enterprises efficiently;
if there is a transfer of business from one employer to another employer.”
The legislation demonstrates a clear intent that an employee’s terms and conditions of employment are protected in circumstances where there are changes to the circumstances of the entity that employes them. Section 311(1)(d) seeks to ensure this protection is in place in a range of different scenarios, including sale of business to a new employer, outsourcing work or transfers of operations between associated entities. However, I do not think that the current circumstances are such that they fall within the ambit of these protections. This is not a case of employees doing the same or substantially the same work for a new employer who has purchased the business in which they work, or for a new employer to whom the work has been outsourced, or where an associated entity has taken over the operation.
This is instead a case where the job – and as such the actual work – is no longer required to be done because the business has been shut down. The protections for employees are to be found within the redundancy provisions at clause 22 of the Nickel Agreement. Those provisions require the employer to pay redundancy benefits where the job is no longer required. In lieu of those redundancy benefits – or at least such component as is above the National Employment Standards – the employer may find the employee “suitable alternative employment” which is a concept and a protection well traversed in case law, or another role which the employee agrees to accept.
In summary, I find that the requirement in s.311(1)(c) is not met. The relevant employees are performing different work at a different location in circumstances where their original jobs no longer exist. This is not a case of transfer of business and consequently there are no transferring employees. I should note that the details and circumstances of other potential transfers of business and / or redundancies will inevitably vary and so each situation will always need to be assessed on its facts to determine its true nature.
I note that I have sought the views of the Australian Workers’ Union (the AWU), the Communication, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (the AMWU). They were advised that I was intending to decline to make the order sought and indicated that they did not oppose that course of action, with the AMWU adding the caveat that employees’ conditions should not be reduced. I accept the submission of the Applicant that the relevant employees’ conditions will not reduce but will actually improve.
Conclusion
For the reasons set out above I conclude that the circumstances set out in each of the applications are not transfers of business as contemplated by the Act and there are no transferring employees. As such, I cannot make the orders sought under s.318 of the Act.
DEPUTY PRESIDENT
[1] Crown Sydney Gaming Pty Ltd v United Workers’ Union [2022] FCA 97 at [14]
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