Bluescope Distribution Pty Ltd

[2014] FWC 1117

[2014] FWC 1117

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees in agreements

Bluescope Distribution Pty Ltd
(AG2013/11985)

COMMISSIONER ROE MELBOURNE, 17 MARCH 2014

Application for an order relating to instruments covering new employer and transferring employees in agreements.

[1] On 16 December 2013, Bluescope Distribution Pty Ltd (Bluescope) made an application pursuant to Section 318(1)(a) of the Fair Work Act 2009 (the FW Act) that the OneSteel Distribution Agreement 2011-2014 (the OneSteel Agreement) not cover employees at Lot 301 Spearwood Avenue, Bibra Lake, Western Australia (Bibra Lake) who become transferring employees following the completion by Bluescope of its acquisition of the assets of OneSteel Trading Pty Ltd at Bibra Lake (OneSteel Distribution). The employees would then be covered by the BlueScope Distribution (Kewdale) Enterprise Agreement 2011 (the Bluescope Agreement) pursuant to Section 318(1)(b) of the FW Act. Bluescope also sought an Order pursuant to Section 319(1) that the non-transferring employees not be covered by the OneSteel Agreement.

[2] Bluescope is a distributor of steel products. It operates part of its distribution business from three sites at Kewdale WA. The Bluescope Agreement applies to employees at these sites and its nominal expiry date is 25 November 2014. Bluescope is in the process of acquiring (subject to final ACCC approval) the assets of OneSteel Distribution including at Bibra Lake. Bluescope intends to offer employment to the employees of OneSteel Distribution at Bibra Lake and then to consolidate one of its current operations at Kewdale with the former OneSteel Distribution operation at Bibra Lake. Bluescope seeks to have one instrument cover the employees at the merged site. The OneSteel Agreement has a nominal expiry date of 31 January 2014.

The legislation

[3] Section 318 of the FW Act 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.

Whomay 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.”

Consideration.

[4] The considerations in respect to the Section 319 aspect of the orders sought are essentially the same as the considerations in respect to Section 318 in the circumstances of this case.

[5] The applicant is likely to be the new employer and is able to make the application (Section 318(2)(a) of the FW Act).

[6] I had the benefit of comprehensive evidence from Ms Whitehead, Manager Human Resources, for BlueScope Distribution.

[7] The NUW represents some of the affected employees and is covered by the OneSteel Agreement. The NUW initially opposed the Application on a number of grounds including that the NUW believed that employees would be disadvantaged by the proposed order because there were a number of conditions in the OneSteel Agreement which were more favourable to the employees than the conditions in the Bluescope Agreement. The NUW was particularly concerned about redundancy provisions, long service leave provisions, consultation prior to changes to current hours of work arrangements, employee representation arrangements, the situation for any existing employee on accident make up pay and the appropriate classification level upon translation for slitters. I adjourned the proceedings into conciliation conference. The conference was successful in overcoming these concerns of the NUW. Following the conference Bluescope indicated that it was prepared to provide undertakings about the offer of employment which would be made to the employees and that the offer would provide for conditions of employment in addition to those provided for in the Bluescope Agreement. I am satisfied after taking into account those undertakings and the evidence of Ms Whitehead, that employees will not be disadvantaged by the order in relation to their terms and conditions of employment (Section 318(3)(b) of the FW Act).

[8] The likely employer strongly supports the proposed orders. I am also satisfied by the evidence of Ms Whitehead that there are some risks of disruption due to the different expiry dates of the two agreements and there is also some inconvenience and cost associated with having two agreements apply at the merged site following the transfer. Consideration of these factors stands in favour of granting the Application (Section 318(3)(a)(i) and 318(3)(d) of the FW Act).

[9] I am not satisfied that Bluescope would incur significant economic disadvantage as a result of the transferable instrument covering the new employer (Section 318(3)(e) of the FW Act).

[10] The OneSteel Agreement is not dramatically different from the Bluescope Agreement, however, the Bluescope Agreement clearly has greater synergy with the Bluescope business (Section 318(3)(f) of the FW Act).

[11] There are no particular public interest considerations which would stand against the granting of the Application. The granting of the application does not offend the objectives of the transfer of business provisions of the Act and strikes a balance between the protection of the employee’s terms and conditions of employment and the business interests of the employer (Section 318(3)(g) of the FW Act). The NUW does not oppose the Application.

[12] I had some concerns about the evidence in respect to the views of the employees who would be affected by the proposed Order (Section 318(3)(a)(i) of the FW Act). I was satisfied that employees had been kept informed by the NUW, OneSteel Distribution and Bluescope about the proposed terms and conditions of employment they would be offered following the acquisition if it was approved by ACCC. 1 However, I accept that at least some of the employees shared the concerns expressed by their representative the NUW. Those concerns have been resolved to the satisfaction of the NUW by the undertakings provided by Bluescope. I considered it appropriate that the employees be informed of the proposed undertakings, and in light of that further information be given an opportunity to advise the Fair Work Commission by email to my Chambers if they had any concerns about the proposed Order. In the circumstances of this case I am satisfied that the absence of any concerns could then be relied upon to make a finding that the affected employees did not oppose the making of the proposed Order. The NUW and Bluescope facilitated this process. No concerns were raised by the affected employees. I am therefore satisfied that the affected employees do not oppose the proposed Order (Section 318(3)(a)(i) of the FW Act).

[13] On the basis of the undertakings provided by Bluescope and after considering all of the factors specified in Section 318(3) of the FW Act and the similar considerations in Section 319(3) I am satisfied that it is appropriate to make the Orders sought.

[14] It is appropriate that the order shall have effect from 1 April 2014 or such later date as the Transferring Employees become employed by BlueScope.

[15] I will make the Orders pursuant to Sections 318(1) and 319(1) of the FW Act. The Orders are published separately with this decision.

COMMISSIONER

Appearances:

Mr P Richardson appeared for the NUW.

Mr K Brotherson appeared for Bluescope.

Hearing details:

2014

Melbourne

February 5

 1   Exhibit B1 and Exhibit B2.

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