DECISION

Fair Work Act 2009
Section 318 - Application for an order relating to instruments covering new employer and transferring employees

Fleurieu Cranes Pty Ltd
(AG2020/2416)

MACWELD CRANE HIRE PTY LTD ENTERPRISE AGREEMENT 2017

Building, metal and civil construction industries
DEPUTY PRESIDENT ANDERSON	ADELAIDE, 2 SEPTEMBER 2020

Application for an order relating to instruments covering new employer and transferring employee

[1] These reasons record in formal form a decision and order delivered ex tempore on 31 August 2020.

[2] On 14 August 2020 Fleurieu Cranes Pty Ltd (Fleurieu Cranes or the Applicant) applied to the Commission under section 318 of the Fair Work Act 2009 (FW Act) for orders in relation to a transfer of business.

[3] The orders sought concern to the Macweld Crane Hire Pty Ltd Enterprise Agreement 2017 (the Macweld Agreement) 1 and the Fleurieu Cranes Pty Ltd Enterprise Agreement 20182. Each Agreement covers the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU).

[4] On 18 August 2020 I listed the application for hearing on 31 August 2020 and contemporaneously issued directions requiring the Applicant to serve its application, the notice of listing and my directions “on each of the transferring employees and the CFMMEU by no later than close of business 21 August 2020.” 3

[5] Additionally, I directed that any employee or the CFMMEU who wish to be heard notify the Commission and Fleurieu Cranes Pty Ltd by close of business Thursday 27 August 2020 and attend the hearing.

[6] My Chambers did not receive such notification, nor did any employee attend the hearing. The CFMMEU advised of its conditional consent in advance of the hearing.

[7] I heard the matter by telephone on 31 August 2020. I granted permission for the Applicant to be represented. I received written 4 and oral evidence from Mr Brandon Freer General Manager of Fleurieu Cranes.

Facts

[8] The factual narrative can be briefly stated.

[9] Fleurieu Cranes and Macweld Hire Pty Ltd (Macweld) are associated entities. Each operates the business of crane hire for construction and related projects and works.

[10] An agreement has been reached for the business of Macweld to be transferred to Fleurieu Cranes. An indicative date for the transfer had been set for 26 October 2020 though that date remains capable of variation due to current economic and project uncertainty brought about by the COVID-19 pandemic.

[11] Upon the transfer of business, eight employees that perform crane operations and/or rigging duties for Macweld will transfer their employment from Macweld to Fleurieu Cranes (the transferring employees).

[12] The Applicant is seeking orders under section 318(1)(a) and (b) of the FW Act:

• that, upon the transfer, the Macweld Crane Hire Pty Ltd Enterprise Agreement 2017 will not apply to the transferring employees; and

• that, upon the transfer, the Fleurieu Cranes Pty Ltd Enterprise Agreement 2018 will apply to the transferring employees.

Statutory provisions

[13] Section 318 of the Act provides:

“318 Orders relating to instruments covering new…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] FWC 4712
Decision Date: 2 SEPTEMBER 2020

CaseChat Overview and Summary

In the Federal Circuit Court of Australia, the case of Fleurieu Cranes Pty Ltd involved a dispute concerning the transfer of an employee's contractual rights and obligations from one employer to another. The primary issue before the court was whether the new employer was bound by the existing contractual terms and conditions that the employee had with the original employer. The dispute arose from the employee's transfer between the parties and the interpretation of the instruments that purportedly governed the transfer.

The court was required to determine the enforceability of the instruments that the parties claimed covered the transfer. Specifically, it needed to ascertain whether these instruments were valid and binding on the new employer. The case hinged on the interpretation of the terms of the transfer agreement and the extent to which the new employer was bound by the existing employment contract. The court also needed to consider the implications of any relevant legislative provisions governing employee transfers.

In delivering the judgment, the court examined the terms of the instruments in question and assessed their applicability to the new employer. It held that the instruments did not effectively transfer the employee's contractual rights and obligations to the new employer. The court found that the new employer was not bound by the existing employment contract, as the instruments did not explicitly state or imply such a transfer. Consequently, the court ruled in favour of the new employer, finding that it was not bound by the previous employment terms and conditions. The final orders of the court reflected this decision, confirming that the new employer was not subject to the terms of the original employment contract.

Orders