Ganaji Contracting Pty Ltd T/A Ganaji Contracting
[2024] FWC 1122
•27 MAY 2024
| [2024] FWC 1122 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees
Ganaji Contracting Pty Ltd T/A Ganaji Contracting
(AG2024/941)
MATERA ELECTRICAL SERVICES WOODSIDE ONSHORE ENTERPRISE AGREEMENT 2023
(ODN AG2023/1861) [AE520489]
| COMMISSIONER LIM | PERTH, 27 MAY 2024 |
Application for an order relating to instruments covering new employer and non-transferring employees.
Introduction
Ganaji Contracting Pty Ltd T/A Ganaji Contracting (Applicant) has applied to the Fair Work Commission pursuant to s 319 of the Fair Work Act 2009 (the Act) for an order in relation to a transfer of business subject to a transferable instrument, Matera Electrical Services Woodside Onshore Enterprise Agreement 2023 (MES Agreement). [1] The Applicant seeks an order for the MES Agreement to cover new, non-transferring employees of the Applicant who perform, or are likely to perform, the transferring work for the Applicant.
The application arises in the context of a transfer of business between Jelani Pty Ltd T/A Matera Electrical Services (Matera Electrical Services) to the Applicant.
Having considered all the factors set out in s 319, I am of the view that it is appropriate and not contrary to the public interest to make the order sought.
Detailed reasons for my decision follow.
Background
Matera Electrical Services held a contract for services with Woodside in the delivery of maintenance, modification and upgrade works at the Karratha Gas Plant, Pluto LNG Plant, Woodside Heli Port and the King Bay Supply Base in Western Australia (Woodside Contract).
On 31 March 2023, Matera Electrical Services, in partnership with Murujuga Commercial Ltd, established the Applicant as a new Australian Private Company.
On 1 April 2024, some liabilities and assets transferred from Matera Electrical Services to the Applicant. The same day, Matera Electrical Services employees engaged to deliver services under the Woodside Contract transferred employment to the Applicant.
Relevant legislation
Part 2-8 of Chapter 2 of the Act describes when a transfer of business occurs. Section 312(1) provides for the transfer of enterprise agreements, certain modern awards and certain other instruments if there is a transfer of business from one employer to another employer.
Section 311 of the Act relevantly provides:
“311 When does a transfer of business occur
Meanings of transfer of business, old employer, new employer and transferring work
(1)There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:
(a) the employment of an employee of the old employer has terminated;
(b) within 3 months after the termination, the employee becomes employed by the new employer;
(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;
(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).
Meaning of transferring employee
(2) An employee in relation to whom the requirements in paragraphs (1)(a),
(b) and (c) are satisfied is a transferring employee in relation to the transfer of business.
Transfer of assets from old employer to new employer
(3)There is a connection between the old employer and the new employer if, in accordance with an arrangement between:
(a)the old employer or an associated entity of the old employer; and
(b) the new employer or an associated entity of the new employer;
the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):
(c)that the old employer, or the associated entity of the old employer,
owned or had the beneficial use of; and
(d) that relate to, or are used in connection with, the transferring work.
Old employer outsources work to new employer
(4)There is a connection between the old employer and the new employer if
the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.
New employer ceases to outsource work to old employer
(5)There is a connection between the old employer and the new employer if:
(a)the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and
(b)the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.
New employer is associated entity of old employer
(6)There is a connection between the old employer and the new employer if
the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.
Sections 317 and 319 of the Act 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 nontransferring employee who performs, or is likely to perform, the transferring work for the new employer.
Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non‑transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non‑transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover 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
4.1 Transfer of business
I am satisfied that there has been a transfer of business from Matera Electrical Services to the Applicant and that the Applicant is a “new employer” pursuant to s 311(1) of the Act. This is because:
The employment of the transferring employees terminated on 1 April 2024 when they commenced their employment with the Applicant: s 311(1)(a).
The transferring employees were employed by the Applicant within three months of the termination: s 311(1)(b).
The work that the transferring employees perform for the Applicant is the same or substantially the same as the work they performed for Matera Electrical Services: s 311(1)(c).
There is a connection between Matera Electrical Services and the Applicant: s 311(1)(d).
4.2 Is there an instrument that may transfer?
The MES Agreement is an enterprise agreement that was approved by the Commission on 28 June 2023. It is therefore a transferable instrument pursuant to s 312(1)(a) of the Act.
Section 313 of the Act provides that the MES Agreement covers the Applicant and the transferring employees, subject to any order of the Commission made under s 318 of the Act. I am not aware of any such order.
Unless an order is made pursuant to s 319 of the Act, s 314 provides that the MES Agreement will not cover any non-transferring employees as the Electrical, Electronic and Communications Contracting Award 2020 (Award) covers the Applicant and any non-transferring employees.
4.3 Has an application been made in accordance with s 319(2)?
The requirements of s 319(2) have been met as the Applicant, the new employer of the transferring employees, made the application on 26 March 2024.
4.4 Should the order be made?
The Applicant seeks an order that the MES Agreement will cover all non-transferring employees of the Applicant who perform, or are likely to perform, the transferring work for the Applicant. I will now consider the matters in s 319(3) that I must take into account in deciding whether to grant the order.
Section 319(3)(a)(i) – the views of the new employer
The new employer is the applicant in this matter. The Applicant is clearly in favour of the order being granted. This factor weighs in favour of granting the order.
Section 319(3)(a)(ii) – the views of the employees who would be affected by the order
At the time this application was made, there were no non-transferring employees engaged by the Applicant.
Section 319(3)(b) – Whether any employees will be disadvantaged by the order in relation to their terms and conditions
The MES Agreement was approved last year, and it was found to be better off overall than the Award.
Based on the above, I am satisfied that there will be no disadvantage to the non-transferring employees. This is a factor that weighs in favour of granting the order.
Section 319(3)(c) – if the order relates to an enterprise agreement, the nominal expiry date of the agreement
The MES Agreement’s nominal expiry date is 28 June 2027. The Applicant did not make submissions on this point. I make no findings on this point.
Section 319(3)(d) – whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
The Applicant submits that having two different sets of industrial instruments will have a negative impact on any new non-transferring employees as they will receive lower rates of pay and conditions compared to the transferring employees covered by the MES Agreement.
Section 319(3)(e) – whether the applicant will incur significant economic disadvantage
The Applicant did not make any submissions on this consideration. I make no findings on this point.
Section 319(3)(f) – degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
The Applicant did not make any submissions on this consideration. I make no findings on this point.
Section 319(3)(g) – public interest
The Applicant submits that there are no public interest considerations that arise in making the order.
Conclusion and order
For completeness, I note that the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) is a party to the MES Agreement and was given the opportunity to be heard on this application. No objection was raised.
Having considered the matters in s 319(3), I am satisfied that the following Order should be made:
Pursuant to s 319(1)(b) of the Fair Work Act 2009 (Cth), the Matera Electrical Services Woodside Onshore Enterprise Agreement 2023 (the Agreement) covers non-transferring employees who perform, or who are likely to perform the transferring work covered by the Agreement, as employees for Ganaji Contracting Pty Ltd T/A Ganaji Contracting (the Applicant), and who are employed in roles that fall within the classification set out in the Agreement.
In accordance with s 319(4), the Order will take effect on the later of:
the day on which the order is made; or
the time when a non-transferring employee starts to perform the transferring work for the new employer.
An Order to this effect will be issued separately.[2]
COMMISSIONER
Hearing details:
Decision on the papers
[1] AG2023/1861.
[2] PR775379
Printed by authority of the Commonwealth Government Printer
<PR774363>
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