Broadspectrum (Australia) Pty Ltd T/A Broadspectrum

[2018] FWCA 4437

[2018] FWCA 4437

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

Broadspectrum (Australia) Pty Ltd T/A Broadspectrum
(AG2018/3181)

TRANSFIELD SERVICES (SANTOS HYDROCARBONS PRODUCTION & PROCESSING FACILITIES) PROJECT WORKS, MAINTENANCE SERVICES AND CENTRAL RESOURCES MANAGEMENT ENTERPRISE AGREEMENT 2015

Manufacturing and associated industries
COMMISSIONER HUNT	BRISBANE, 21 NOVEMBER 2018

Application for termination of the Transfield Services (Santos Hydrocarbons Production & Processing Facilities) Project Works, Maintenance Services and Central Resources Management Enterprise Agreement 2015

[1] On 13 July 2018 Broadspectrum (Australia) Pty Ltd T/A Broadspectrum (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Transfield Services (Santos Hydrocarbons Production & Processing Facilities) Project Works, Maintenance Services and Central Resources Management Enterprise Agreement 2015 (the Agreement). The Agreement has passed its nominal expiry date.

Legislation

[2] Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.225 of the Act. Section 226 of the Act provides as follows:

“226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

Background

[3] The application was supported by a statutory declaration of Mr Steve Patten, Employee Relations Manager, which declared, amongst other things, that there is no longer any work performed under the Agreement as the contract has been terminated.

[4] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, the Australian Workers’ Union (AMWU) and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), jointly (“the Unions”) are employee organisations covered by the Agreement.

[5] On 19 July 2018 my Associate wrote to the Unions to seek their views in relation to the application. No reply was received from either of the Unions.

One employee remains covered by Agreement

[6] Mr Patten’s statutory declaration stated:

“There is one employee who is on long term Workcover who will not return to employment. He does not receive any benefits under this Agreement.”

[7] On 3 August 2018 my Associate wrote to Mr Patten setting out my view that in order to properly consider this application it would be necessary to afford the employee an opportunity to provide his views in relation to the proposed termination of the Agreement.

[8] The Employer was requested to provide evidence to the Fair Work Commission (the Commission) that it had provided the relevant employee with a copy of the application and had afforded him a reasonable opportunity to provide his views relevant to s.226 of the Act. The Employer was further requested to provide details about the potential effect the termination of the Agreement would have on the relevant employee, including in relation to any potential effect it could have on any WorkCover entitlement held by the relevant employee.

[9] The Employer was directed to provide its response by 17 August 2018. The Employer had difficulty in contacting the relevant employee, Mr Gregory Edwards, and was granted an extension of time until 22 August 2018 to provide its response.

[10] On 22 August 2018 the Employer responded to my chambers that it had made contact with Mr Edwards by telephone. The Employer had explained to Mr Edwards that the termination of the Agreement would not “affect his rights under workers’ compensation”.

[11] The Employer stated that it had also served on Mr Edwards by post a copy of the application, Mr Patten’s declaration, together with a letter stating as follows:

“Dear Greg

Broadspectrum have lodged an application for termination of the Transfield Services (Santos Hydrocarbons production and processing facilities) Project Works, Maintenance Services and Central Resources Management Enterprise Agreement 2015 with the Fair Work Commission on 12 July 2018.

As part of the Fair Work Commission review of Broadspectrum’s application we have been requested to provide affected employees opportunity to review the termination application which has been included with this correspondence.

You are invited should you have any feedback or views on the termination request to contact Commissioner Hunt’s chambers by email [email protected].

Broadspectrum would like to reiterate that the intention to finalise the EA does not in any way affect you statutory entitlements to workers compensation. Should you have any questions that relate to workers compensation entitlements, we encourage you to contact Broadspectrum’s State Manager of Injury Management, Mr Jed Shearer, on [number].

Yours sincerely

Reuben Bird

South Australian Regional Manager; Mining & Resources”

[12] Upon considering the Employer’s email of 22 August 2018 and its undated letter, I formed the view that Mr Edwards should be contacted directly through my chambers to discuss the proposed termination of the Agreement.

[13] On 28 August 2018 my Associate contacted Mr Patten by phone to take further information about the Employer’s discussions with Mr Edwards and to obtain an appropriate contact number for Mr Edwards.

[14] On 5 September 2018 Mr Edwards was contacted by my Associate. Mr Edwards informed my Associate that he was continuing to deal with a workers’ compensation application involving the Employer. Mr Edwards was concerned about the possible effects of that the termination of the Agreement may have on his workers’ compensation claim. Mr Edwards informed my Associate that he would like to take legal advice in respect of this matter and would provide his views to chambers ‘mid-week’ in the week commencing 10 September 2018.

[15] On 13 September 2018 my Associate attempted to contact Mr Edwards by phone to take his views regarding the termination of the Agreement. Mr Edwards could not be contacted on that date.

[16] On 18 September 2018 my Associate wrote to Mr Edwards by email and asked that Mr Edwards provide his views on the termination of the Agreement by 21 September 2018. Mr Edwards did not provide his views by that date.

[17] On 26 September 2018, I wrote to the Employer, Mr Edwards and to the Unions noting that Mr Edwards had not provided his views on the proposed termination of the Agreement. I informed the parties that this matter would be listed for hearing by telephone to provide the parties a final opportunity to present their views on the proposed termination of the Agreement.

[18] Following the email of 26 September 2018 Mr Edwards contacted my chambers by phone. Mr Edwards indicated to my Associate that he had not provided his views as requested as he had been unable to take legal advice in respect of the proposed termination of the Agreement. Mr Edwards stated that he would make himself available for the hearing of this matter.

Hearing

[19] This matter proceeded to hearing by telephone on 28 September 2018. The following persons appeared at the hearing:

•  Appearing on behalf of the Employer were Mr Patten, Mr Bird and Mr Jed Shearer, South Australian Workers’ Compensation and Return to Work Manager;

•  Appearing on behalf of the CFMMEU was Mr Stuart Maxwell, Senior National Industrial Officer;

•  Appearing on behalf of the AMWU was Mr Stuart Gordon, State Organiser;

•  Mr Edwards appeared on his own behalf.

[20] At the commencement of the hearing, I reiterated to the parties that I must be satisfied that the termination of the Agreement would not be contrary to the public interest, taking into the account the views of any employee or union covered by the Agreement and the effect of the termination on any such employees or unions.

[21] I invited Mr Edwards to provide his views regarding the proposed termination of the Agreement and its effect on his workers’ compensation matter. Mr Edwards stated that he had taken legal advice regarding the proposed termination of the Agreement and was no longer concerned that the termination of the Agreement may adversely affect his workers’ compensation claim.

[22] I invited the Unions to provide their views on the proposed termination of the Agreement. Mr Maxwell noted that a separate enterprise agreement between a third-party employer, Workpac, and Santos had commenced after the Employer had lost its contract to provide services to Santos, which had been covered by the Agreement. Mr Maxwell stated that the CFMMEU was concerned that employees that had been engaged under the Agreement may have since been employed by Workpac to work at Santos. Mr Maxwell submitted that the transmission of business provisions set out in s.311 of the Act may apply in this case. Through further discussion during the hearing, Mr Maxwell confirmed that the CFMMEU’s sole concern related to whether there had been a transfer of assets from Broadspectrum to Workpac pursuant to s.311(3) of the Act, and the effect that that may have on the proposed termination of the Agreement.

[23] The Employer was unable to provide evidence or give suitable submissions regarding the alleged or potential of a transfer of assets during the hearing. I instructed the Employer that it would need to conduct an inquiry of whether any arrangement existed between it and Workpac that may enliven s.311(3) of the Act. I informed the parties that the Unions would be given an opportunity to consider the Employer’s response and provide its views on the response. I informed the parties that if necessary, a further hearing of this matter would be convened to resolve the CFMMEU’s concerns pursuant to s.311(3) of the Act.

[24] Section 311 of the Act sets outs when a transfer of business will have occurred from a previous employer to another employer, and states:

“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.”

[25] On 5 October 2018 the Employer provided its response to the CFMMEU’s concern. A letter from Mr Patten stated that the Employer had reviewed its records regarding the termination of its contract with Santos. The Employer had not found any arrangement existing between the Employer and Workpac, and considered that no transfer of assets had occurred pursuant to s.311(3). The Employer submitted that as no other objections to its application had been raised during the hearing, the Agreement should be terminated.

[26] The CFMMEU was invited to provide its response to the Employer’s submissions regarding the alleged transfer of assets, and was given until 12 October 2018 to do so. On 16 October 2018 communication was sent from chambers confirming that no response had been received from the CFMMEU and my decision in this matter was now reserved.

[27] Subsequently on 16 October 2018 the CFMMEU wrote that it had expected that the Employer was to file a statutory declaration sworn by an appropriate officer of the Employer and stating whether or not such officer considered whether any transfer of assets from the Employer to Workpac had occurred. Nevertheless, the CFMMEU stated that it did not maintain its objection to the termination of the Agreement.

Consideration

[28] On the information before the Commission there is no evidence of any ‘arrangement’ between the Employer and Workpac. On the information provided, the Employer lost the contract to perform work at Santos, and Workpac became the new contractor.

[29] The information provided by Mr Patten in the letter dated 5 October 2018 is accepted as evidence. It is unchallenged. I accept his evidence.

[30] I conclude that there has not been a transfer of assets between the old employer and the new employer pursuant to s.311(3) of the Act. Accordingly, I am satisfied that there are no employees covered by the Agreement, other than Mr Edwards.

[31] There being no transfer of business pursuant to the Act, I must then consider the requirements in s.226 of the Act. Based on the material contained in the statutory declarations filed in respect of this matter, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might weigh against the termination of the Agreement.

[32] Pursuant to my finding at [30], there are no employees covered by the Agreement other than Mr Edwards. Mr Edwards has availed himself of legal advice, and based on that advice, has no concerns with the Agreement being terminated.

[33] I have considered the views of the AMWU and the CFMMEU, employee organisations covered by the Agreement. There is no opposition to the application. In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[34] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[35] The termination will take effect from today, 21 November 2018.

COMMISSIONER

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