CSRP Pty Ltd
[2019] FWC 4048
•18 JUNE 2019
| [2019] FWC 4048 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
CSRP Pty Ltd
(AG2019/1522)
Mining industry | |
DEPUTY PRESIDENT BINET | PERTH, 18 JUNE 2019 |
Application that transferable instrument not cover transferring employees - Sections 318 and 319 of the Fair Work Act 2009. Application granted.
[1] CSRP Pty Ltd (CSRP) has made an application (Application) for the following orders pursuant to the following sections of the Fair Work Act 2009 (FW Act):
a. pursuant to section 318(1)(a), that the HWE Mining Pty Limited Surface Mining Agreement 2012 (HWE Agreement) will not cover CSRP Pty Ltd (CSRP) or employees currently employed by Thiess Pty Ltd (Thiess) who accept an offer of employment from CSRP to perform the same or substantially the same work as they currently perform for Thiess (Transferring Employees);
b. pursuant to section 319(1)(a), that the HWE Agreement will not cover any new employees employed by CSRP to perform the same or substantially the same work currently performed by the Transferring Employees (Non Transferring Employees); and
c. pursuant to section 318(1)(b), that the CSRP Enterprise Agreement 2016 (CSRP Agreement) will cover the Transferring Employees.
(collectively the Orders)
[2] The HWE Agreement is made pursuant to section 185 of the FW Act and has a nominal expiry date of 3 October 2016. The parties to the Agreement are HWE Mining Pty Limited (HWE) and the employees of HWE working at specified surface mining operations engaged in the classifications set out in Schedule One of the HWE Agreement.
[3] According to CSRP during the term of the HWE Agreement employees employed by HWE transferred their employment to Thiess and continued to be bound by the HWE Agreement because HWE and Thiess were related entities.
[4] Mobile maintenance services and related activities at the Solomon mine site are currently provided by Thiess. With effect from 1 July 2019 Fortescue Metals Group Pty Ltd (FMG) will take over the provision of mobile maintenance and related activities from Thiess.
[5] CSRP is a wholly owned subsidiary of FMG. It is intended that CSRP will be the employer of the Transferring Employees from, or shortly after, 1 July 2019. CSRP has made offers of employment to the Transferring Employees conditional upon the Orders being granted.
[6] CSRP asserts that the HWE Agreement is a transferable instrument for the purposes of section 312 of the FW Act and that the HWE Agreement would cover CSRP and the Transferring Employees by virtue of section 313 of the FW Act if the Orders are not granted.
[7] CSRP seeks orders from the FWC that the HWE Agreement will not cover CSRP, Transferring Employees or the Non Transferring Employees and that instead the CSRP Agreement will cover them.
[8] The CSRP Agreement is made pursuant to section 185 of the FW Act and has a nominal expiry date of 25 May 2021. The parties to the Agreement are CSRP and the employees of CSRP working at operational sites above the 26th parallel that are owned or operated by FMG.
[9] CSRP has standing pursuant to sub sections 318(2) and 319(2) of the FW Act to make the Application in its capacity as the likely new employer of the Transferring Employees.
[10] I am satisfied that the Application was served by CSRP on the other parties to the HWE Agreement, and those employee organisations that ordinarily represent the industrial interests of the Transferring Employees in accordance with Rule 41, Schedule 1 of the Fair Work Rules 2013 (FW Rules).
[11] The Application was accompanied by a copy of the transferable instrument to which the Application relates in compliance with Rule 34(1) of the FW Rules.
[1] The Application was supported by a Statutory Declaration made by CSRP Transition Manager, Mr Steven Alan Sewell (Sewell Declaration).
[2] Sub sections 318(3) and 319(3) set out the matters which the FWC must take into account when deciding to make the Orders sought by CSRP in identical terms. For brevity only sub section 318(3) is set out below:
“318 Orders relating to instruments covering new employer and transferring employees
…
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.”
What are the views of the new employer?
[3] CSRP have made the Application in order to secure consistent employment arrangements between its existing employees and the Transferring Employees.
What are the views of the employees affected by the Order?
[4] CSRP undertook an extensive communication and consultation process with the Transferring Employees in advance of making the Application which is detailed in the Sewell Declaration.
[5] Between 5 February 2019 and 6 February 2019 CSRP held information sessions with the affected Thiess employees at which those employees were informed that FMG would be taking over the operation and control of the provision of mobile maintenance services and related activities from Thiess from 1 July 2019. The Thiess employees were informed that CSRP would offer them employment and were invited to complete an expression of interest form if they wished to accept employment with CSRP (EOI Form). Thiess employees who did not attend these sessions were contacted by phone or email and provided with the same information.
[6] On 29 February 2019 Thiess employees who returned an EOI Form indicating that they wished to accept employment with CSRP were sent an information pack which included a conditional letter of offer and a copy of both the CSRP and HWE Agreements.
[7] Affected employees raised concerns in relation to the remuneration contained in the conditional letter of offer. On 3 March 2019 CSRP confirmed that the cash salary and overall fixed remuneration paid to them by Thiess would be maintained if they accepted employment with CSRP.
[8] Between 4 March 2019 and 6 March 2019 CSRP held a second round of information sessions with the Thiess employees at which CSRP compared the terms and conditions of the HWE and the CSRP Agreements. Employees who attended the information sessions were provided with an employee information pack (Information Pack) to assist them understand the content of the HWE and CSRP Agreements. The Information Pack contained a document comparing the key terms of both agreements, a detailed comparison document comparing each clause of both agreements, contact details of members of FMG’s human resource team who could answer any queries employees may have, a feedback form seeking feedback from each employee on the proposal that they be covered by the CSRP Agreement rather than the HWE Agreement (Feedback Form) and a copy of both the HWE and the CSRP Agreement.
[9] Between 6 March 2019 and 14 March 2019, Transferring Employees who did not attend one of the information sessions were telephoned and the key differences between the HWE Agreement and the CSRP Agreement were explained to them. They were also provided with a copy of the Information Pack.
[10] CSRP has made conditional offers of employment to 230 Thiess employees.
[11] 212 Thiess employees completed and returned a Feedback Form.
[12] 203 Thiess employees indicated their support for the Application.
[13] 198 Thiess employees indicated that they were satisfied that the terms of employment offered by CSRP were the same as, or similar to, their employment conditions with Thiess.
[14] 209 Thiess employees indicated that they wanted to be covered by the CSRP Agreement.
[15] 203 Thiess employees indicated they would prefer to be employed under CSRP’s terms and conditions of employment.
[16] In accordance with directions issued to parties on 24 May 2019 (Directions) CSRP forward an invitation to Thiess employees who wished to be heard with respect to the Application to contact the FWC by 4pm Thursday 6 June 2019. No Transferring Employees contacted Chambers within this timeframe or by the date of this decision.
[17] In light of all of the above I am satisfied that the majority of Transferring Employees support the Application and that none oppose it.
Would employees be disadvantaged by the Order in relation to their terms and conditions of employment?
[18] The HWE Agreement and the CSRP Agreement are both minimum rates agreements. Employees’ actual take home pay is set out in their contract of employment with Thiess.
[19] CSRP propose to convert the Transferring Employees’ current hourly remuneration with Thiess into an annual salary. According to CSRP given the 11% superannuation provided for by the CSRP Agreement if the Orders are made the Transferring Employees will receive a higher fixed remuneration that they currently receive.
[20] In addition, CSRP submit that the CSRP Agreement provides for a number of benefits that are not currently available to Transferring Employees under the HWE Agreement. According to CSRP if the Orders are made Transferring Employees will have the benefit of:
a. up to 4 days of paid compassionate leave per occasion (above the entitlement in the National Employment Standards and the HWE Agreement);
b. 13 weeks of long service leave after 10 years’ continuous service, 6.5 weeks for every 5 subsequent years and the ability to take pro-rata long service leave after 5 years continuous service (above the entitlement in the Long Service Leave Act1958 (WA) and the HWE Agreement);
c.
superannuation at the rate of 11% (above the current statutory entitlement and the entitlement in the HWE Agreement of 9.5%); and
d. an additional week of redundancy pay (above the entitlement in the National Employment Standards and the HWE Agreement).
[21] CSRP have also undertaken to recognise Transferring Employees’ service with Thiess for the purpose of calculating their entitlements to annual leave, long service leave, parental leave and personal/carer’s leave.
[22] In light of the above I am satisfied that the Transferring Employees would not be disadvantaged by the Orders in relation to their terms and conditions of employment.
What is the nominal expiry date of the HWE Agreement?
[23] The nominal expiry date of the HWE Agreement is 3 October 2016.
[24] CSRP submit that given that the HWE Agreement is well passed its nominal expiry date and the CSRP Agreement will be within its nominal term for another 2 years, the Orders will ensure greater certainty for Transferring Employees and a longer period of stability in industrial relations for mining operations at the Solomon Hub.
[25] I am satisfied that the nominal expiry date of the HWE Agreement weighs in favour of the Orders being made.
Would the HWE Agreement have a negative impact on the productivity of CSRP’s workplace?
[26] CSRP submit that continuing to apply the HWE Agreement would have a negative impact on productivity at the workplace because there will be two sets of different terms and conditions applying to employees performing the same work. I accept that this will increase the regulatory and administrative burden on CSRP and may lead to disharmony in the workplace where employees working side by side have the benefit of different conditions.
Would CSRP incur significant economic disadvantage as a result of the HWE Agreement applying to it?
[27] CSRP submit that it would suffer operational and administrative inefficiencies and increased administrative costs from having to administer the HWE Agreement in parallel with the CSRP Agreement.
[28] I accept that this would increase the regulatory and administrative burden on CSRP and is likely to be associated with increased administrative costs. I am not however satisfied that on the evidence before me that this would constitute a ‘significant’ economic disadvantage.
What business synergy exists between the HWE Agreement and the CSRP Agreement?
[29] There are currently approximately 5,367 FMG/CSRP employees. The Transferring Employees represent less than 4.5% of the total workforce. CSRP submit that the maintenance and administration of divergent payroll and other systems for an employee group that represents less than 4.5% of the workforce will result in financial and operational difficulties and potentially create disharmony amongst employees in the workplace.
[30] I am satisfied that there is limited business synergy between the two agreements. This weighs in favour of the Orders being granted.
What is the impact on the public interest if the Orders are made?
[31] There is no guarantee that the Transferring Employees would continue to remain employed by Thiess after 1 July 2019..
[32] The making of the Orders would result in the Transferring Employees being able to maintain secure, permanent employment with CSRP.
[33] In circumstances where the Transferring Employees have expressed their interest in commencing employment with CSRP, I am satisfied that it is in the public interest for the Orders to be made.
[34] There is no evidence before me of any other issues of public interest that would impact on the Orders sought being made.
Conclusion
[35] In light of the above, I am satisfied that it is appropriate to make the Order sought by CSRP. An order to this effect (PR 709241) will be issued with this decision.
DEPUTY PRESIDENT
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<AE897215 PR709240 >
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