Central Queensland Services Pty Ltd (CQS) T/A BHP

Case •

[2024] FWC 854

•

3 APRIL 2024
[2024] FWC 854

FAIR WORK COMMISSION
DECISION

Fair Work Act 2009

s.318 - Application for an order relating to instruments covering new employer and transferring employees

Central Queensland Services Pty Ltd (CQS) T/A BHP

(AG2024/677)

BMA CAVAL RIDGE MINE ENTERPRISE AGREEMENT 2023

Mining industry

DEPUTY PRESIDENT DOBSON

BRISBANE, 3 APRIL 2024

Application for an order relating to instruments covering transferring employees.

  1. This decision concerns an application by Central Queensland Services Pty Ltd (the Applicant/CQS/New Employer) for orders pursuant to s.318(1)(a) and s.318(1)(b) of the Fair Work Act 2009 (the Act) that the BMA Caval Ridge Mine Enterprise Agreement 2023[1] (the Agreement) will cover transferring employees who perform transferring work for the Applicant.

Background

  1. The Applicant is part of the BHP Group which owns 50% of the BHP Mitsubishi Alliance Pty Ltd (BMA). The other 50% is owned by Mitsubishi Development Pty Ltd. BMA currently manages a number of metallurgical coal mines in Central Queensland’s Bowen Basin including the Caval Ridge Mine (the Mine). The employees at that Mine are covered by the BMA Caval Ridge Mine Enterprise Agreement 2023 (BMA EA).

  1. WorkPac Pty Ltd and WorkPac Mining Pty Ltd (WorkPac/Old Employer) are engaged to provide labour hire personnel to the Applicant and are the employers of the employees covered by the WorkPac Coal Mining Agreement 2019[2] (WorkPac EA) who perform work at the Mines set out at paragraph [2].

  1. The Applicant has made offers of direct employment to 2 individuals currently employed by WorkPac and labour hired to the Applicant at the Mines, to carry out the same (or substantially the same) work that the employees presently perform for WorkPac at the Mines. In addition, the Applicant intends to make further offers of direct employment to other individuals who are employed by WorkPac, for the same (or substantially the same) work that the individuals presently perform for WorkPac at the Mines.

  1. As a result of recruiting these individuals to direct employment with the Applicant, the Applicant will insource the work which was previously performed by these individuals as employees of WorkPac, such that those employees will perform that work for the Applicant.

  1. Both of the individuals have accepted the employment offers from the Applicant and will commence that employment in accordance with that offer and will therefore be transferring employees for the purposes of s.313 of the Act.

  1. The orders sought by the Applicant are as follows:

1. Pursuant to s.318(1)(a) of the Fair Work Act 2009 (Cth), the WorkPac Coal Mining Agreement 2019[3] will not cover the Applicant and transferring employees in respect of their employment with Central Queensland Services Pty Ltd.

2. Pursuant to s.318(1)(b) of the Fair Work Act 2009 (Cth), an enterprise agreement, being the BMA Enterprise Agreement 2022,[4] does and will cover the transferring employees in respect of their employment with Central Queensland Services Pty Ltd.

3. Pursuant to s.318(4) this order will come into effect from the date of this order or when transferring employees are employed by Central Queensland Services Pty Ltd and start to perform transferring work, whichever is the later date.

  1. The orders will not apply to any other transferring employee employed by the Applicant at any other location, and the transferring work will be limited to the work covered by the transferrable instrument at the relevant locations.

  1. The affected unions have had this application served on them and were invited to express their views. They did not express any views or contest this application. I am satisfied that the matter can be determined on the papers without the need for a hearing.

Transferring employees of new employer not to be covered by transferable instrument

  1. I am satisfied that the Agreement is a transferable instrument within the meaning of s.312 of the Act, and I observe that the Applicant accepts that the Agreement is a transferable instrument. I note that there is a connection between the two WorkPac companies and the Applicant as the Applicant had outsourced the transferring work to WorkPac and the Applicant has ceased to outsource the transferring work by the transferring employees to WorkPac.[5]

  1. The WorkPac Coal Mining Agreement 2019[6], the transferable instrument, in accordance with s.313(1)(a) is an instrument that covers the new employer and the transferring employee in relation to the transferring work after the transfer time that the employee becomes employed by the new employer.

Consideration of section 318

  1. Section 318 of the Act sets out the matters the Commission must have regard to in determining if the orders sought should be granted.

  1. Section 318 provides as follows:

“Orders relating to instruments covering new employer and 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 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.

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 transferring employee or a person 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 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 transferring employee before the later of the following:

(a)   the time when the transferring employee starts to perform the transferring work for the new employer;

(b)   the day on which the order is made.”

The application in relation to the matters to be taken into account

Section 318(3)(a)(i) – Views of the new employer

  1. The Applicant is the new employer, who seeks, and is supportive of, the orders. The Applicant submits that the granting of the orders sought will assist to standardise the conditions so that all of its employees who are performing substantially the same work at the Mine will be covered by the same industrial instrument which will enable business synergy and mitigate any negative impact on productivity and working relationships that would otherwise be required to administer multiple employment arrangements,

  1. I accept this weighs in favour of granting the orders sought.

Section 318(3)(a)(ii) – views of the employees who would be affected by the order

  1. The views of the employees who will be affected by the orders have been sought. Both of the affected employees have indicated they support the orders sought.

  1. I accept this weighs in favour of granting the orders sought.

Section 318(3)(b) – whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

  1. The Applicant submits that the BMA EA is, overall, more beneficial than the WorkPac Coal Mining Agreement 2019[7] and provided a comprehensive assessment of the differences between the Agreements.[8] More beneficial terms include training, process for introducing new rosters, redundancy consultation, change of shift, incentive scheme, public holidays, annual leave procedures, paid parental leave, compassionate leave, redundancy procedures, quantum of severance pay, notice of termination, death and disablement payments and employee representatives.

  1. Having considered the assessment I am satisfied that the employees affected by these Orders would not be disadvantaged in relation to their terms and conditions in favour of making the orders sought.

  1. I accept this weighs in favour of granting the orders sought.

Section 318(3)(c) – the nominal expiry date of the agreement

  1. I note that the WorkPac EA has a nominal expiry date of 27 June 2023 and the BMA EA has a nominal expiry date of 18 January 2026 and consider that the granting of the proposed orders would not disadvantage employees.

  1. I accept this weighs in favour of granting the orders sought.

Section 318(3)(d) – whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

  1. The Applicant submits that if the orders were not granted, the Applicant would suffer a negative impact on productivity due to the need to upskill the functional (Human Resources, Payroll, Health and Safety Teams) and operational teams (Supervisors, Superintendents and Managers) to apply the terms and conditions of an additional enterprise agreement as well as to reconfigure the payroll systems.

  1. Furthermore, the Applicant submits it would be required to maintain two separate time sheeting activities across the Production workforces which will create additional administrative burden for the site administrators and increase risk of errors if the orders sought were not made. Moreover, the different terms and conditions could create disharmony and unrest between the work sets of employees who are on two significantly different sets of terms and conditions for the same work performed at the same site for the same employer.

  1. Conversely the Applicant submits that productivity benefits would flow from having a single unifying instrument (the BMA EA) covering the Applicant’s workforce. This would arise from avoiding he requirement to be conversant in two industrial instruments, maintaining separate rostering, payroll and IT systems and administrative compliance including having not two but one dispute procedure and one consultation procedure.

  1. I accept this weighs in favour of granting the orders sought.

Section 318(3)(e) – whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

  1. The Applicant submitted they would suffer a significant economic disadvantage if the orders sought were not made in having to incur additional expenses resulting from the application of two different agreements. That would involve the need for changes to payroll systems creating complexity and room for error for those administering them. Furthermore, the Applicant would have to fund additional training for the functional and operational teams to assist them to understand and apply the different terms and conditions.

  1. I accept this weighs in favour of granting the orders sought.

Section 318(3)(f) – the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

  1. The Applicant submits that there is little if any business synergy between the WorkPac EA and the BMA EA as they provide for an entirely different set of employment conditions. The WorkPac EA is customised to support a labour hire business and the BMA EA is customised to address the specific circumstances of each of the mines it covers.

  1. I accept this weighs in favour of granting the orders sought.

Section 318(3)(g) – the public interest

  1. The Applicant submits that the administrative efficiencies to be gained weigh in favour of the public interest and furthermore that the longer term interests of the Transferring Employees are likely to be better served by integrating them with the Agreement covered cohort they would join. The Applicant submits this will enhance their ability to participate in future bargaining for a replacement Enterprise Agreement. Having regard to all the material before me, I am of the view there are public interest reasons that weigh in favour of making the orders sought.

Conclusion

  1. Having taken into the account the material provided by the Applicant in support of its application and the matters set out in s.314 and 318(3) of the Act, I am satisfied that that it is appropriate to grant the orders pursuant to s.318(1)(a) and s.318(1)(b.

  1. Orders[9] to this effect will be issued together with this decision.

DEPUTY PRESIDENT


[1] [2023] FWCA 1358; AG2023/1039.

[2] [2019] FWCA 4505; AG2019/1335.

[3] [2019] FWCA 4505; AG2019/1335.

[4] [2023] FWCA 115; AG2023/31.

[5] Fair Work Act 2009 (Cth) s.311(5).

[6] [2019] FWCA 4505; AG2019/1335.

[7] [2019] FWCA 4505; AG2019/1335.

[8] Digital Court Book (DCB) pp.147-218.

[9] PR773135

Printed by authority of the Commonwealth Government Printer

<AE504188  PR773136>

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