DT Infrastructure Pty Ltd
[2023] FWC 1787
•24 JULY 2023
| [2023] FWC 1787 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
DT Infrastructure Pty Ltd
(AG2023/2148)
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 24 JULY 2023 |
Application for orders relating to transferable instrument.
On 27 June 2023, DT Infrastructure Pty Ltd made an application for orders pursuant to s 319(1)(b) of the Fair Work Act 2009 (Cth) (Act). The application is made in the context of a transfer of business from Downer EDI Works Pty Ltd to DT Infrastructure. The orders are sought in the following terms:
1. That the Downer EDI Works Pty Ltd Victorian Rail Enterprise Agreement 2021 - 2024 (Agreement)[1] covers non-transferring employees who perform or who are likely to perform the transferring work covered by the Agreement, as employees for DT Infrastructure Pty Ltd, and who are employed in roles that fall within the classifications set out in the Agreement.
2. The above order shall take effect in respect of each non-transferring employee from the date from which they commence performing the transferring work as employees of DT Infrastructure Pty Ltd.
For the reasons that follow, I am satisfied that the orders should be made.
Context
In February 2023, Downer EDI Works entered into an agreement to sell its Australian Transport Projects business to a wholly owned Australian subsidiary of the Gamuda Berhad group of companies (Gamuda).[2] The wholly owned Australian subsidiary of Gamuda is DT Infrastructure.[3] The asset sale was completed on or around 20 June 2023.[4]
An announcement made by Gamuda regarding the completion of the transaction identified the following:[5]
“Over 1,100 staff and a forecast work in hand of approximately $2 billion are transferring to [DT Infrastructure] as part of the AU$212 million sale.”
The employment of 15 employees covered by the Agreement transferred from Downer EDI Works to DT Infrastructure on or about 20 June 2023.[6] Mr Adam Leary, General Manager, People and Culture for DT Infrastructure who was previously employed by Downer EDI Works, filed a statement with the Commission in which he deposes that, “[t]he work to be performed by the transferring employees in their employment with DT Infrastructure is identical to the work they were performing as employees of Downer.”[7]
DT Infrastructure considers that a transfer of business occurred on or shortly after 20 June 2023, and, pursuant to s 313 of the Act, is of the view that the Agreement covers the transferring employees and DT Infrastructure.[8]
The Australian Rail, Tram and Bus Industry Union (RTBU) is covered by the Agreement. It was served with the application materials at the time DT Infrastructure filed this application. Among this material is correspondence from the RTBU to Mr Leary dated 26 June 2023.[9] The RTBU states that it supports DT Infrastructure’s application for an order under s 319 of the Act which would ensure that any new employees of DT Infrastructure employed after the transfer of business will also be covered by the Agreement.
The RTBU was provided with an opportunity to present any further views to Chambers with respect to the application, but no additional material was received.[10]
Consideration
Preliminary matters
On the basis of the matters set out above at [3]-[6], I am satisfied that there has been a transfer of business from Downer EDI Works to DT Infrastructure. Relevantly, the employment of 15 employees of Downer EDI Works was terminated and within three months, those employees became employed by DT Infrastructure. The work performed by the transferring employees for DT Infrastructure is said to be identical to that performed for Downer EDI Works. Further, there is a connection between Downer EDI Works and DT Infrastructure on account of the acquisition and use of the assets.[11]
Upon the transfer of business, the RTBU continued to be covered by the Agreement.[12]
Substantive matters
In deciding whether to make the orders sought, I must take into account the factors set out in s 319(3) of the Act. I consider these matters in the analysis that follows.
The views of the new employer or a person who is likely to be the new employer and the views of the employees who would be affected by the order (s 319(3)(a))
DT Infrastructure wishes to ensure that all of its employees performing the same or similar work are covered by the same terms and conditions. Accordingly, it supports the making of the proposed orders.[13]
DT Infrastructure has not employed any non-transferring employees to perform the transferring work.[14] Further, DT Infrastructure confirmed that this remained the position as at close of business on Friday 21 July 2023.[15] Having regard to these matters, I am satisfied that there are no employees to whom the proposed orders may affect.
The correspondence from the RTBU to DT Infrastructure states that it supports the making of the orders.[16] In the circumstances detailed above at [7], I am satisfied that this reflects the RTBU’s view.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment (s 319(3)(b))
In the event the orders are not made, the Building and Construction General On-Site Award 2020 (Award) will apply to any non-transferring employees by operation of s 314(1) of the Act.
DT Infrastructure considers that the terms and conditions of the Agreement are superior to the Award.[17]
On 21 July 2023, DT Infrastructure filed with the Commission a document summarising the key differences between the Agreement and the Award. The rates of pay under the Agreement are significantly higher than the Award. Further, in summary, the Agreement is more favourable to employees than the Award in certain respects, including:
(a) there are additional allowances under the Agreement, and corresponding allowances are more generous;
(b) overtime penalties and certain shift penalties are higher under the Agreement;
(c) the Agreement contains more favourable hours of work;
(d) the entitlement to personal and carers leave is superior under the Agreement; and
(e) the Agreement provides for miscellaneous benefits such as income protection, and a more favourable accident make up pay provision.
There are no significant disadvantages to any employees by being covered by the Agreement instead of the Award.
Having regard to the above matters, I am satisfied that any non-transferring employees performing the transferring work will not be disadvantaged in relation to their terms and conditions of employment if the orders are made.
If the order relates to an enterprise agreement--the nominal expiry date of the agreement (s 319(3)(c))
The nominal expiry date of the Agreement is 31 October 2024. I am satisfied that this is a matter which does not militate against the making of the orders.
Whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace (s 319(3)(d))
DT Infrastructure submits, and I accept, that the Agreement does not, and would not, have a negative impact on the productivity of its workplace. It submits that the Agreement contains competitive rates and benefits and will continue to apply to it as a transferable instrument,[18] regardless of whether the orders are made.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer (s 319(3)(e))
DT Infrastructure has established its budget on the assumption that the Agreement will cover any “directly engaged workers.” DT Infrastructure submits, and I accept, that it will not incur any economic disadvantage in the event of the orders being made.[19]
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer (s 319(3)(f))
As earlier stated, in the absence of the orders being made, the Award would apply to any non-transferring employees of DT Infrastructure who perform the work otherwise covered by the Agreement.
I consider that there is little business synergy between these two instruments. The document filed by DT Infrastructure summarising the key differences between the Agreement and the Award demonstrates that the arrangements for the performance of work are different. For instance, the Agreement provides for a 36 ordinary hour working week compared to a 38 ordinary hour week under the Award. The structure within which shift work is performed also differs between the instruments.
The public interest (s 319(3)(g))
DT Infrastructure submits that it is in the public interest to make the orders sought because the Agreement (a) contains superior terms and conditions of employment when compared to the Award, (b) will assist in achieving job security, (c) has as its objectives, among other things, the continuation of train operations with minimal service disruptions, and ensuring the Agreement operates in a manner that promotes client service and economy of operations, (d) will contribute to achieving a harmonious industrial relations environment and enables relevant employees to be subject to the same terms and conditions for the performance of work covered by the Agreement, (e) contains terms and conditions that extend to apprentices and trainees which enables the engagement of apprentices and trainees, and (f) will promote and support safe operations.[20]
The notion of public interest refers to matters that might affect the public as a whole.[21] Having regard to the material before me, I do not consider there to be any public interest reasons that weigh against making the orders sought.
Conclusion and disposition
In deciding whether to make the orders, I am required to take into account all the matters in s 313(3) of the Act. Having regard to the above considerations, I am satisfied that the orders sought by DT Infrastructure, which are supported by the RTBU, ought to be made.
I will make an order that pursuant to s 319(1)(b) of the Act, the Downer EDI Works Pty Ltd Victorian Rail Enterprise Agreement 2021 – 2024 (Agreement)[22] covers, or will cover, a non-transferring employee who:
(a) performs or is likely to perform the transferring work covered by the Agreement as an employee of DT Infrastructure Pty Ltd; and
(b) is employed by DT Infrastructure Pty Ltd in a role that falls within the classifications set out in the Agreement.
Pursuant to s 319(4) of the Act, the order will take effect in respect of each non-transferring employee from the date on which the employee commences performing the transferring work as an employee of DT Infrastructure Pty Ltd.
An order giving effect to this decision will be issued separately in PR764451.
DEPUTY PRESIDENT
[1] [2011] FWCA 6930; AE514106
[2] Statement of Adam Leary dated 27 June 2023 at AL-1
[3] Ibid at AL-2
[4] Ibid at [13]
[5] Ibid
[6] Ibid at [13] and [17]
[7] Ibid at [20]
[8] Ibid at [23]
[9] Ibid at AL-4
[10] Directions sent by email on 19 July 2023
[11] Fair Work Act 2009 (Cth) s 311(1) and (3)
[12] Fair Work Act 2009 (Cth) ss 315(3)
[13] Statement of Adam Leary dated 27 June 2023 at [26]-[28]
[14] Ibid at [24] and [29]
[15] Email from D Sleeman to the Commission dated 19 July 2023; see also, Statement of Adam Leary dated 27 June 2023 at [29]-[31]
[16] Statement of Adam Leary dated 27 June 2023 at AL-4
[17] Ibid at [33]
[18] Ibid at [37]-[38]
[19] Ibid at [39]
[20] Form F40 at [2.3]
[21] See Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 at [23]
[22] [2011] FWCA 6930; AE514106
Printed by authority of the Commonwealth Government Printer
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