Construction, Forestry, Maritime, Mining and Energy Union

[2020] FWC 1967

[2020] FWC 1967

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

Construction, Forestry, Maritime, Mining and Energy Union
(AG2020/723)

Australian Capital Territory
DEPUTY PRESIDENT KOVACIC	CANBERRA, 8 MAY 2020

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

[1] This decision concerns an application made pursuant to s.319 of the Fair Work Act 2009 (the Act) by the Construction, Forestry, Maritime, Mining and Energy Union (the Applicant – CFMMEU) seeking an order that the Trak Building Services Pty Ltd and the CFMEU ACT Supplementary Labour Hire, Site Cleaning and Traffic Management Sector Agreement 2016 (the Agreement), 1 a transferrable instrument, applies to non-transferring employees of G&G Group Pty Ltd (G&G Group) who perform, or are likely to perform, transferring work for G&G Group. G&G Group advised that it purchased Trak Building Services Pty Ltd through an auction with the liquidator, Cor Cordis.

Relevant legislation

[2] Section 319 of the Act provides as follows:

“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.

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.”

[3] Before turning to consider each of the matters specified in s.319(3) of the Act, I note that the Applicant is covered by the Agreement and has standing pursuant to s.319(2)(c) of the Act to make the application for the order sought.

s.319(3)(a)(i) The views of the new employer

[4] G&G Group confirmed by email on 2 April 2010 that it consents to the application.

s.319(3)(a)(ii) The views of the employees who would be affected by the order

[5] The Applicant states in its application that it and G&G Group have consulted with the transferring employees who do not object to the proposed order. G&G Group advised on 2 April 2020 that it had engaged two new employees since the transfer was effected on 6 January 2020. On the 28 April 2020, the Commission wrote to the G&G Group in the following terms:

“On 17 March 2020 the Construction, Forestry, Maritime, Mining and Energy Union made an application to the Fair Work Commission pursuant to s.319 of the Fair Work Act 2009 (Cth) for an order relating to instruments covering new employer and non-transferring employees of G&G Group regarding the Trak Building Services Pty Ltd and the CFMEU ACT Supplementary Labour Hire, Site Cleaning and Traffic Management Sector Agreement 2016 (the Agreement). A copy of the application and supporting documentation is included with this letter.

In deciding whether to grant the order, the Commission is required to consider the views of the employees likely to be affected by the order.

DIRECTIONS

The following directions are issued:

1. This Letter, Directions, the Agreement, and the Building and Construction General On-site Award 2010 are to be made available to any new employees of G&G Group employed after the transfer was effected on 6 January by no later than close of business on Thursday, 30 April 2020.

2. Any new employee intending to provide their views on the order sought may do so by providing a written statement to chambers ([email protected]) by no later than close of business on Wednesday, 6 May 2020.

3. If any new employee wishes to be heard, they must advise chambers by email, by no later close of business on Wednesday, 6 May 2020.”

[6] No response has been received by the Commission regarding the above correspondence which suggests that new employees of G&G Group do not object to the proposed order.
s.319(3)(b) Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[7] The Applicant submits that no employee would be disadvantaged by the proposed order in relation to their terms and conditions of employment. The Applicant states G&G Group is not covered by any other industrial instrument meaning that in the absence of the order sought the Building and Construction General On-site Award 2010 (the Award) 2 would apply to non-transferring employees. The Agreement provides rates of pay and other monetary entitlements that are significantly better than those provided under the Award. For instance, under the Agreement the hourly rate of pay for a CW1 employee as at 1 September 2019 is $33.12 per hour whereas the equivalent rate under the Award at that time was $21.61 per hour. In addition, the terms of the Award are expressly incorporated into the Agreement (see clause 6.3 of the Agreement).

s.319(3)(c) The nominal expiry date of the agreement

[8] The Agreement has a nominal expiry date of 31 March 2020. The Applicant submits that it would be more convenient for G&G Group to have a single instrument covering both transferring and non-transferring employees who perform the transferring work. I note also that employees, both transferring and non-transferring employees, will have the opportunity to seek to bargain for a new agreement should they wish to do so in the first half of 2020. These considerations favour the making of the order sought.

s.319(3)(d) Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[9] The Applicant contends in its application that there is no evidence that the transferring instrument will have a negative impact on productivity and it would be more efficient for the G&G Group to have a single industrial instrument which covers its entire workforce.

s.319(3)(e) Any significant economic disadvantage to the new employer

[10] The Applicant submits that there is no evidence that G&G Group will incur any economic disadvantage as a result of the transferring instrument covering them in relation to non-transferring employees. I note also that G&G Group consents to the proposed order and that since 6 January 2020 it has only engaged two non-transferring employees, reinforcing the limited nature of any economic disadvantage of the order sought This supports the making of the order.

s.319(3)(f) The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[11] The Applicant contends that there is a high degree of synergy between the Agreement and the Award as the Agreement expressly incorporates the terms of the Award.

s.319(3)(g) The public interest

[12] The Applicant submits that that the making of the order will ensure that the employer is able to affect a smooth and efficient transfer of business without disruption to existing employment arrangements and ensure that non-transferring employees are not disadvantaged in contrast to their more established peers in the business. While these considerations are of importance to transferring employees and G&G Group they do not of themselves go to the public interest.

[13] There is no material before the Commission which points to the public interest being enlivened in this case.

Conclusion

[14] Taking into account each of the matters set out in s.319(3), I am satisfied that the order sought should be made.

[15] The order (PR718416) will be issued to provide that the Agreement will cover non-transferring employees who perform, or are likely to perform, transferring work for G&G Group.

Printed by authority of the Commonwealth Government Printer

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 2   MA000020