CB&I Australia Pty Ltd
[2023] FWC 432
•21 FEBRUARY 2023
| [2023] FWC 432 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
CB&I Australia Pty Ltd
(AG2023/58)
| Building, metal and civil construction industries | |
| COMMISSIONER SCHNEIDER | PERTH, 21 FEBRUARY 2023 |
Application for orders in relation to a transfer of business under s. 319
On 10 January 2023, CB&I Australia Pty Ltd (the Applicant), made an application pursuant to section 319 of the Fair Work Act 2009 (Cth) (the Act) for the Fair Work Commission (the Commission) to make an order in relation to a transfer of business.
The Applicant seeks Orders in the following terms:
· That the Queensland Enterprise Agreement 2022 will cover non-transferring employees who perform, or are likely to perform, transferring work as employees for CB&I Australia Pty Ltd and are employed in roles that fall within the classifications under the Queensland Enterprise Agreement 2022.[1]
Background
The Applicant outlines the background of the matter thoroughly in the application, a summary follows:
· McDermott International Inc. and its related entities (the McDermott Corporate Group) are currently implementing an internal reorganisation. CBI Constructors Pty Ltd (CBI Constructors) is part of the McDermott Group and holds the Group's storage tank business assets in Australia and is the employing entity for employees engaged in the storage tank business.
· As part of the internal reorganisation, the Applicant has been incorporated as part of the McDermott Group so that it can acquire the business and storage tank assets of CBI Constructors and will continue to operate the storage tank business. As the internal restructure relates to CBI Constructor's storage tank construction business, roles that fall within the portfolio of current storage tank construction projects, or roles that support these projects, have been identified as roles that will transfer from CBI Constructors to the Applicant.
· To facilitate the transfer, all employees of CBI Constructors who are covered by the Queensland Enterprise Agreement 2022 (the Agreement) have been offered employment with the Applicant (the Transferring Employees). In the application, it is indicated these employees were expected to commence work on 21 January 2023. The Applicant intends on hiring new-non transferring employees who will complete the same work, or substantially the same work, as the Transferring Employees.
The Applicant submits that the work performed by the Transferring Employees will be the same, or substantially the same, as the work currently performed for CBI Constructors.
The Applicant previously sought orders, on almost identical terms, which were granted by the Commission on 12 December 2022. The Applicant notes that one of the orders granted in the previous application relates to the Queensland Enterprise Agreement 2018 which was replaced shortly after, on 15 December 2022, by the Agreement. Accordingly, due to the approval of the new agreement, the Applicant is seeking an Order consistent with the change.
The Applicant states that, in the event the Orders sought are not granted, new non-transferring employees that are subsequently engaged by the Applicant will otherwise be covered by the Building and Construction Industry General On-Site Award 2020.[2]
The matter was subject to a conference before the Commission on 14 February 2023.
Relevant Legislation
Section 313 of the Act provides:
“313 Transferring employees and new employer covered by transferable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:
(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and
....
(3) This section has effect subject to any FWC order under subsection 318(1).”
Section 319 provides:
“319 Orders relating to instruments covering new employer and non-transferring employees
Orders that the FWC may make
(1) 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 non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;
(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.
Who may apply for an order
(2) 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 non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;
(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
(3) 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
(4) The order must not come into operation in relation to a particular non-transferring employee before the later of the following:
(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;
(b) the day on which the order is made.”
Consideration
On the materials before me, I am satisfied of the preliminary matters detailed within the Act. In determining the matter, the Commission must take into account the considerations listed above in section 319(3) of the Act.
Views of the new employer
The new employer is the Applicant and is supportive of the Orders being made.
The Applicant submits that the granting of the Orders will assist the organisational restructure by minimising disruption and promoting workplace unity.
The Applicant highlights that granting the Order would assist with consistency, noting the similar orders already issued by the Commission.
This weighs in favour of the Orders being made.
Views of the employees who would be affected by the Order
The Applicant states that employees who would be affected by the Orders have not yet been engaged and therefore their views cannot be sought.
As the Applicant currently does not have any employees who would be affected by the Orders, this is a neutral factor.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
The Applicant submits that new non-transferring employees engaged after the transfer date in construction craft roles will be better off over all under the Agreement, in comparison to the terms of the Building and Construction Industry General On-Site Award 2020.
The Applicant highlights that the Agreements, by nature of the approval process, ensure the employees are better off.
I accept the above submissions.
The nominal expiry date of the agreements
The Agreement has an expiry date of 22 December 2026.
The Applicant submits that the nominal expiry date of the Agreement is a neutral consideration.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace and if the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
The Applicant submitted that the Agreement would have a positive impact on the productivity of the workplace and employee engagement as employees doing the same work are subject to uniform terms and conditions and minimum rates of pay.
The Applicant also submits that if the Orders are not granted, and employees are covered by separate instruments, it could cause unnecessary conflict owing to the two groups of employees completing the same work under different terms and rates of pay.
This weighs in favour of the Orders being made.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
The Applicant submitted that there is little business synergy between applying the terms of the Building and Construction Industry General On-Site Award 2020 and the terms of the Agreement for employees that are performing the same work.
The Applicant submits that, given that the Transferring Employees will continue to be covered by the Agreements, applying an entirely different instrument for new non-transferring employees will interfere with the Applicant's business synergies, culture, and terms.
The public interest
The Applicant submits that, granting the Order sought would ensure the protection of employees’ terms and conditions of employment by ensuring non-transferring employees are better off and enjoy more favourable terms under the Agreement, and ensure the Applicant's business is able to operate efficiently without the burden or unnecessary complications arising from its employment arrangements.
Therefore, the Applicant submits, granting the Order would accordingly further the object of Part 2-8 of the Act, which the Applicant submits is in the public interest.
This weighs in favour of the Order being made.
Conclusion
It follows that the application should be granted. The Order sought by the Applicant have been issued concurrently with this decision.[3]
COMMISSIONER
[1] [AE518592].
[2] [MA000020].
[3] [PR750969].
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<AE518592 PR750968>
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