Cooper Energy Limited
[2023] FWC 1211
•24 MAY 2023
| [2023] FWC 1211 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
Cooper Energy Limited
(AG2023/1319)
| DEPUTY PRESIDENT MASSON | MELBOURNE, 24 MAY 2023 |
Application for an order relating to instruments covering new employer and non-transferring employees.
Cooper Energy Limited (Cooper Energy) has applied for an order under s.319(1)(b) of the Fair Work Act 2009 (the Act) that the APA Orbost Gas Processing Plant Enterprise Agreement (Victoria) 2022[1] (the OGPP Agreement) will cover any non-transferring employee on the later of the date of this Decision and Order or the date from which the non-transferring employee starts to perform the transferring work for Cooper Energy.
Directions were issued by the Commission on the 12 May 2023 allowing for submissions and materials to be filed in relation to the application by: Cooper Energy and the three unions covered by the OGPP Agreement, those being the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Service Union (CEPU), The Australian Workers Union (AWU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).
In accordance with the Directions issued, Cooper Energy filed material on 17 May 2023 in support of the application, including a witness statement of Ashley Haren, General Manager People and Remuneration for Cooper Energy. The AWU, AMWU and CEPU confirmed their support for the application on 23 May 2023. Given the material that has been filed, and the fact that there are currently no non-transferring employees, I have determined that the matter can be dealt with on the papers.
Background and evidence
Mr Haren provided the following relevant information in his witness statement[2].
In June 2022 Cooper Energy and the APA Group of companies entered into a sale agreement under which Cooper Energy would acquire the Orbost Gas Processing Plant (OGPP) and associated assets. Under the sale agreement;
(a)Cooper Energy will become the operator of the OGPP on the date the Major Hazard Facility License (MHFL) is transferred to Cooper Energy (the MHFL Transfer Date); and
(b)The employment of APA employees, including those currently covered by the OGPP Agreement, will transfer to Cooper Energy on the MHFL Transfer Date.
On 10 May 2023, the MHFL Transfer Date was announced as 22 May 2023[3].
The OGPP Agreement was approved by the Commission on 18 November 2022, and reaches its nominal expiry date on 30 June 2025. In the absence of an order in the form sought, the relevant non-transferring employees would otherwise be covered by the Hydrocarbons Industry (Upstream) Award 2020[4] (the Award).
The OGPP Agreement provides for terms and conditions that are more beneficial than the Award and will transfer to Cooper Energy and apply to transferring employees engaged at OGPP after the MHFL Transfer Date. According to Mr Haren, productivity would not be adversely affected by the order sought being granted and while Cooper Energy would suffer some economic disadvantage because the terms of the OGPP Agreement are more favourable than the Award, Cooper Energy seeks to achieve fairness and equity in entitlements of employees. Further, Mr Haren states that the proposed orders have been discussed with and are supported by the AWU, AMWU and CEPU.
The applicable legislation
Sections 317 and 319 of the Act relevantly provide:
“317 FWC may make orders in relation to a transfer of business
This Division provides for the FWC to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.
…
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.
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
The application for an order under s.319(1)(b) of the Act has been made by the New Employer[5]. In deciding whether to make the order sought, I must take into account the matters outlined in s.319(3) of the Act. However, before turning to consider the orders sought by Cooper Energy, it is necessary to establish whether the OGPP Agreement is a transferrable instrument that would cover Cooper Energy and the non-transferring employees, subject to an order of the Commission.
Transferable Instrument
I am satisfied that the OGPP Agreement is a transferrable instrument pursuant to s 312(1)(a) of the Act. I am further satisfied that.
- the employment of the Transferring Employees with Cooper Energy will terminate on the MHFL Transfer Date (s. 311(1)(a));
- within 3 months of termination of employment, the Transferring Employees will be employed by Cooper Energy (s. 311(1)(b));
- the work of the Transferring Employees to be performed for Cooper Energy is substantially the same or similar to the work performed by the Transferring Employees for the APA Group of companies(s. 311(1)(c)); and
- there is a connection between Cooper Energy and the APA Group of companies within the meaning of s 311(3) of the Act.
As a consequence of the above I am satisfied that the OGPP Agreement will cover Cooper Energy and non-transferring employees, subject to an order the Commission may make. It is also the case that Cooper Energy, the new employer, has made the application, thus satisfying the requirements of s. 319(2) of the Act.
Having been satisfied as to the necessary jurisdictional requirements of ss. 311 and 312 being present, I will now turn to each of the matters that I am required to consider under s. 319(3).
Section 319(3)(a) – views of the new employer and employees who would be affected
Mr Haren states that Cooper Energy wishes to engage employees in classifications on a common set of terms and conditions, regardless of whether they are transferring employees or non-transferring employees. Further, that if the order is not made, it would result in two sets of employment conditions for staff working side-by-side in the same roles, resulting in unfairness to non-transferring employees. Mr Haren also states that the OGPP Agreement provides for more generous terms and conditions than the Award. Each of the AWU, AMWU and CEPU support the application.
There are currently no non-transferring employees and I note that the OGPP Agreement will apply to transferring employees from the commencement of their employment with Cooper Energy, pursuant to s 313(1) of the Act.
The above factors weigh in favour of the granting of the order sought by Cooper Energy.
Section 319(3)(b) – whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
The OGPP Agreement provides for base rates of pay, allowances, penalty rates and redundancy provisions that are substantially more favourable than the Award. Consequently, no employees would be disadvantaged if the order were made. This weighs in favour of granting the order sought.
Section 319(3)(c) – if the order relates to an enterprise agreement--the nominal expiry date of the agreement
As stated above, the OGPP Agreement was approved by the Commission on 18 November 2022, and reaches its nominal expiry date on 30 June 2025. I regard this as a neutral factor.
Sections 319(3)(d) – whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
I accept Cooper Energy’s submission that the granting of the application is expected to enhance workplace harmony and productivity, including by avoiding the practical difficulties associated with applying two sets of terms and conditions on the site. This weighs in favour of granting the order sought.
Section 319(3)(e) – whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
It was not submitted and nor do I consider that Cooper Energy would incur significant economic disadvantage as a result of the OGPP Agreement covering it in respect of non-transferring employees. This weighs in favour of granting the order sought.
Section 319(3)(f) – the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
I note the differences between the OGPP Agreement and the Award, suggesting there would be reduced business synergy if both were to apply to Cooper Energy. This weighs in favour of granting the order sought.
Section 319(3)(g) – the public interest
I am satisfied that it is not contrary to the public interest to grant the order sought by Cooper Energy. This weighs in favour of granting the order sought.
Conclusion
Having considered each of the matters outlined in s.319(3) of the Act and the material that has been filed, I am satisfied that an order pursuant to s.319(1)(b) of the Act should be made. The Order[6] will take effect from 24 May 2023 or the date from which the non-transferring employee starts to perform the transferring work for Cooper Energy whichever is the later date.
DEPUTY PRESIDENT
[1] AE518226
[2] Witness Statement of Ashley Haren, dated 17 May 2023
[3] Witness Statement of Ashley Haren, Annexure AH-1, ASX Announcement dated 10 May 2023
[4] MA000062
[5] s.319(2) of Fair Work Act 2009.
[6] PR762448
Printed by authority of the Commonwealth Government Printer
<PR762447>
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