Broadspectrum (Australia) Pty Ltd [formerly Transfield Services (Australia) Pty Ltd] T/A Broadspectrum
[2018] FWCA 490
•24 JANUARY 2018
| [2018] FWCA 490 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
Section 222 - Application for approval of a termination of an enterprise agreement
Broadspectrum (Australia) Pty Ltd [formerly Transfield Services (Australia) Pty Ltd] T/A Broadspectrum
(AG2017/4919)
TRANSFIELD SERVICES (AUSTRALIA) PTY LTD (WOODSIDE) ONSHORE AND OFFSHORE AGREEMENT 2014
Building, metal and civil construction industries | |
DEPUTY PRESIDENT ANDERSON | ADELAIDE, 24 JANUARY 2018 |
Application for termination of the Transfield Services (Australia) Pty Ltd (Woodside) Onshore and Offshore Agreement 2014
[1] On 18 October 2017 an employer, Broadspectrum (Australia) Pty Ltd (formerly Transfield Services (Australia) Pty Ltd) applied to the Fair Work Commission (the Commission) for termination of the Transfield Services (Australia) Pty Ltd (Woodside) Onshore and Offshore Agreement 2014 pursuant to section 222 of the Fair Work Act 2009 (the FW Act).
[2] The Agreement is a single enterprise agreement. It covers the work of employees engaged onshore or offshore in the production of hydrocarbons from oil and gas fields owned or operated by Woodside Energy Limited (Woodside).
[3] The Agreement was approved by the Commission on 27 October 2014. 1 It operated from 3 November 2014. It has not yet passed its nominal expiry date, which is 27 October 2018. Variations to the Agreement were approved by the Commission on 21 March 2017.2
[4] Three industrial organisations the Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia (CEPU), the Australian Manufacturing Workers Union (AMWU) and the Australian Workers Union (AWU) were bargaining representatives for the Agreement and are covered by it.
[5] The applicant employer is entitled to apply for the termination of the Agreement under section 222 of the FW Act. That section deals with circumstances where termination of an Agreement is sought on the basis that termination has been agreed to. The applicant says that a majority of employees have agreed to terminate the Agreement in accordance with the provisions of the FW Act.
[6] The grounds on which the application are made arise from the loss of a general maintenance contract the applicant held with Woodside on production facilities covered by the Agreement. The applicant says that it lost the contract to a competitor (MWOG Pty Ltd trading as Monadelphous) in mid-2017 3 and, as a consequence, employees would not continue to be employed under the Agreement beyond 31 December 2017. The applicant says that the Agreement has become defunct, and should be terminated.
[7] There is significant background to the determination of this matter.
[8] On 26 October 2017 I issued directions 4 requiring Broadspectrum to serve the proceedings on the three trade unions covered by the Agreement. I listed the matter for hearing on 14 November 2017.
[9] On 27 October 2017 the CEPU applied under section 590(2)(c) of the FW Act (F52) for an order that Broadspectrum produce documents to inform the Commission’s consideration of the matter. In support, the CEPU filed witness statements and written submissions. The CEPU contended that it had reasonable grounds for believing that a transmission of business had occurred pursuant to section 311 of the FW Act and that, if so, the Agreement “will continue to apply to those employees performing transferring work for MWOG Pty Ltd”. 5 The CEPU contended that this would be a factor the Commission should take into account under section 223 of the FW Act:
“If a transfer of business has occurred, a significant number of MWOG Pty Ltd employees will be affected by its termination. These employees will either have transferred to MWOG Pty Ltd prior to when the Broadspectrum employees were asked to vote on the termination, or if they did vote, it was not explained to them that terminating the Transfield Agreement may affect their employment conditions once they commenced working for MWOG Pty Ltd. In these circumstances, if a transfer of business has occurred, the CEPU intends to make submissions that it would not be appropriate for the FWC to approve the termination.” 6
[10] The documents sought by the CEPU, broadly expressed, concerned any agreement or correspondence relating to the use of assets on the North West Shelf Project facilities in the Carnarvon Basin in Western Australia after 1 July 2017 between Broadspectrum, Woodside and / or Monadelphous.
[11] I heard the CEPU’s application on 31 October and 14 November 2017. I also issued further directions on 31 October and 14 November 2017. Woodside and Monadelphous intervened and made submissions.
[12] On 29 November 2017 I granted the CEPU application in a revised form. I issued an order that Broadspectrum produce documents (if any) within 14 days concerning any arrangement between it and Woodside or between it and Monadelphous concerning the use of assets on the North West Shelf Project facilities after 1 July 2017 which Broadspectrum formerly owned or had the beneficial use of. 7
[13] On 11 December 2017 Broadspectrum filed a statutory declaration to the effect that it had undertaken all reasonable steps to locate such documents but that none are known to exist or have been located. 8
[14] Following my decision on the CEPU application for an order to produce, Woodside and Monadelphous took no further part in proceedings.
[15] Neither the AMWU nor the AWU took an active role in either the interlocutory proceedings or in the substantive proceedings.
[16] On 18 January 2018 I received correspondence from the CEPU in the following terms: 9
“17 January 2018
Dear Associate,
We refer to proceeding AG2017/4919 which is listed for hearing on Tuesday 23 January 2018.
The CEPU is covered by the Transfield Services (Australia) Pty Ltd (Woodside) Onshore and Offshore Agreement 2014 (‘the Agreement’) and consequently is an employee organisation whose views must be taken into account pursuant to subsection 223(d) of the Fair Work Act 2009 (Cth) (‘the Act’).
The Agreement was the product of many years of robust negotiation by union members in Western Australia. Prior to Broadspectrum losing its contract with Woodside, more than 20 CEPU members were employed pursuant to the Agreement. Many CEPU members, including members that took up employment with MWOG Pty Ltd, will be disappointed if the Agreement is terminated considering the history of enterprise bargaining which resulted in its terms.
The CEPU understands that the Applicant conducted a ballot of the final cohort of employees to be demobilised from the Woodside facilities and that 10 of the 13 employees that cast a valid vote, cast their vote in favour of termination. The CEPU holds concerns that if a transfer of business had occurred, the number of persons covered by the Agreement would be larger than the employees identified in the Applicant’s form F24A. If this were the case, the Applicant would not have complied with section 220 of the Act.
Whilst the CEPU does not concede that a transfer of business has not occurred, there is presently insufficient evidence to demonstrate an arrangement between the Applicant and the Monadelphous Group within the meaning of subsection 311(3) of the Act. In these circumstances, the CEPU no longer presses its objection to the application.
The CEPU does not propose to enter an appearance at the hearing and appreciates that the Fair Work Commission will make a decision based on the material presently before it, and any further representations made by Broadspectrum, as to whether it is appropriate to approve the termination.
We thank the Commission for the opportunity to express our views in this matter.
Yours faithfully
Peter Carter
CEPU WA Branch”
[17] On 18 January 2018 the AMWU advised my Chambers that it, like the CEPU, would not be pressing an objection to the application and not appearing in the substantive proceedings.
[18] I conducted a hearing of Broadspectrum’s application on 23 January 2018. Broadspectrum appeared at the hearing. No other person or party appeared or intervened.
[19] I now proceed to determine Broadspectrum’s application. I do so having regard to the submissions made at the hearing of 23 January 2018 and all of the material before me. This includes the originating proceeding and the two statutory declarations of Mr Costi dated 18 October 2017 (F24A) and 11 December 2017. I also continue to have regard to the material (including the statements) filed by the CEPU but note that the earlier CEPU position is varied by the CEPU correspondence of 17 January 2018. I further note that certain of the earlier CEPU statements were unsworn or unsigned and in particular the statement of a former Broadspectrum employee and CEPU member Mr Fraser has not been the subject of cross examination.
[20] Broadspectrum submit that its application has met both the formal and substantive requirements of section 222 of the FW Act. It contends that the Commission is able to be satisfied of each of the factors set out in section 223. It submits that the Agreement should be terminated with immediate effect.
[21] Broadspectrum contend there was no transfer of business between it and its competitor, Monadelphous. It says that its service contract was with Woodside and neither did that contract constitute a transfer of business. As there was no transfer of business at law, then that cannot be a relevant factor in dealing with its section 222 application.
The Law
[22] This matter is to be determined in accordance with the provisions of sections 222 and 223 of the FW Act which state as follows:
“222 Application for the FWC’s approval of a termination of an enterprise agreement
Application for approval
(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to FWA for approval of the termination.
Material to accompany the application
(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.
When the application must be made
(3) The application must be made:
(a) within 14 days after the termination is agreed to; or
(b) if in all the circumstances FWA considers it fair to extend that period—within such further period as FWA allows.
223 When FWA must approve a termination of an enterprise agreement
If an application for the approval of a termination of an enterprise agreement is made under section 222, FWA must approve the termination if:
(a) FWA is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc) in relation to the agreement; and
(b) FWA is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and
(c) FWA is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and
(d) FWA considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”
Consideration
[23] I now deal with each of the relevant statutory provisions.
Section 222(1) Application for approval
[24] The application has been made by Broadspectrum. This entity was the employer of employees covered by the Agreement. It is a party to the Agreement. It has standing to make the application, and has done so. Section 222(1) has been complied with.
Section 222(2) Material to accompany application
[25] As required by rule 26 of the Fair Work Commission Rules 2013, the application has been accompanied by a statutory declaration in the approved form by Mr Costi as an officer or authorised employee of the applicant setting out the basis on which the Commission can be satisfied that the requirements of section 223 of the FW Act have been met. Section 222(2) has been complied with.
Section 222(3) When application must be made
[26] The application was made on 18 October 2017. The evidence of Mr Costi, which I accept, was that the termination was agreed to on 17 October 2017. The application has been made within 14 days after the termination was agreed. Section 222(3) has been complied with.
Section 223(b) and (c) Agreement by employees
[27] Under section 221(1) of the FW Act the termination of a single enterprise agreement is agreed to when a majority of the employees who cast a valid vote approve the termination. On the facts before me, I am satisfied that a majority of employees voted in favour of termination by way of secret ballot on 16 and 17 October 2017. The evidence is that fifteen employees were covered by the Agreement at that time. Thirteen of fifteen cast a valid vote. Ten of the thirteen voted in favour of termination.
Section 223(c) No Other Reasonable Grounds
[28] Under section 223(c) of the FW Act the Commission needs to be satisfied that there are no other reasonable grounds for believing that the termination was not agreed by the majority of employees. In considering this matter I have had regard to the fact that only fifteen employees were employed under the Agreement at the relevant time. Broadspectrum’s evidence is that this was the total number of employees remaining employed under the Agreement on the voting dates (16 and 17 October) notwithstanding substantially more persons having been employed under the Agreement in the months prior. Broadspectrum explained this by reference to the fact that its employment of a large number of employees under the Agreement ceased in the weeks preceding the vote consequent on Broadspectrum winding down its operations after having lost the general maintenance contract, and the new contractor commencing operations and in some instances having engaged former Broadspectrum employees. I am satisfied that there are no reasonable grounds to believe that persons who were or should have been employees of Broadspectrum at the relevant time were unable to participate in the vote and cast a valid vote. On that basis, I am satisfied that a majority of employees under the Agreement cast a valid vote in favour of its termination. Sections 223(b) and (c) have been complied with.
Section 223(a) Reasonable opportunity to decide
[29] Section 220(2) of the FW Act provides that before making a request that its employees approve the termination, an employer must:
“(a) take all reasonable steps to notify the employees of the following:
(i) the time and place at which the vote will occur;
(ii) the voting method that will be used; and
(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.”
[30] On the material before me, and in particular the evidence of Mr Costi in his statutory declaration of 18 October 2017 I am satisfied that the employer complied with the formal requirements of this provision in terms of notifying employees of the logistics for casting a vote by secret ballot and providing a reasonable time frame for doing so.
Section 223(d) Appropriate to approve the termination
[31] Under section 223(d) of the FW Act the Commission needs to be satisfied that it is appropriate to approve the termination taking into account the views of employee organisations.
[32] The CEPU no longer presses its objection to the termination. In particular, it does not assert that a transmission of business occurred between Broadspectrum and Monadelphous or Broadspectrum and Woodside. It does not concede that a transmission did not occur, but says there is insufficient evidence to enable it to make that case.
[33] Section 311 of the FW Act sets out the circumstances where a transfer of business occurs for the purposes of the Act:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(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 (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3) There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a) the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c) that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Old employer outsources work to new employer
(4) There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5) There is a connection between the old employer and the new employer if:
(a) the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b) the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
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.”
[34] The issue postulated in the initial CEPU submission was that there may be a connection between the old employer (Broadspectrum) and the new employer (Monadelphous) of the form envisaged by section 311(3); that is, that an arrangement may exist whereby Monadelphous has the beneficial use of assets that were owned or beneficially used by Broadspectrum and that are now used in connection with the transferring work.
[35] While I take into account the fact that the proponent of that submission (the CEPU) no longer presses the submission, I am required to be independently satisfied that the statutory requirements for termination of the Agreement have been met.
[36] I accept that had a transfer of business occurred between Broadspectrum and Monadelphous or Broadspectrum and Woodside then the basis of the application for termination would be affected given that a transfer of business would mean that the Agreement would have continuing effect on the transferring employees, and not be defunct as the applicant now claims. In addition, the pool of employees who would have been eligible to vote on the termination would in all likelihood have been larger than fifteen.
[37] Any such finding must, however, be based on evidence. There is no evidence before me to find that a transfer of business occurred within the meaning of the FW Act when Broadspectrum demobilised its operations after losing the general maintenance contract. The unsworn statement of Mr Fraser concerns his employment circumstance only and is not evidence of an arrangement between corporate entities. Section 311(3) requires the existence of a commercial arrangement concerning the use of assets between the old and new employing entities not just termination of a person’s employment by one and an offer of employment to that person by the other. In any event, Mr Fraser’s statement is untested, and without it being tested or agreed I could not reliably make findings from it. The statutory declaration of Mr Costi of 11 December 2017 satisfies me that there are no documents in the possession or control of Broadspectrum which could be relevant to that question and in particular the existence or otherwise of a commercial arrangement.
[38] No other employee organisation has put a view that it would be inappropriate to terminate the agreement.
[39] In these circumstances, I am satisfied that it is appropriate to approve the termination of the Agreement within the meaning of section 223(d). The statutory requirements have been met. Persons bound by the Agreement at the relevant time have, by majority, agreed to terminate it. There are no reasonable grounds for believing that the employees have not so agreed. The Commission approves the termination.
[40] Under section 224 of the FW Act a termination operates from the day specified in the decision to terminate the Agreement. As the Agreement no longer has persons employed under its terms there is no prejudice to any party or person from the termination taking immediate effect. The termination of the Transfield Services (Australia) Pty Ltd (Woodside) Onshore and Offshore Agreement 2014 will take effect from today’s date, 24th January 2018.
[41] I publish an Order to this effect.
DEPUTY PRESIDENT
1 [2014] FWCA 7628, Deputy President Gostencnik
2 [2017] FWCA 1614, Commissioner Platt
3 Attachment JES2 to CEPU Statement of James Stedman (undated) Monadelphous announcement re ASX Release dated 21 June 2017
4 Directions, Deputy President Anderson, 26 October 2017
5 CEPU Written Submissions (undated) paragraph 23
6 CEPU Written Submissions (undated) paragraphs 28 - 29
7 Decision [2017] FWC 6304; Order PR 598171 29 November 2017 per Deputy President Anderson
8 Statutory Declaration of Zev Costi 11 December 2017
9 Letter CEPU WA to Associate to Deputy President Anderson dated 17 January 2018 received under cover of email 18 January 2018
Printed by authority of the Commonwealth Government Printer
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