Glendell Mining Pty Ltd T/A Glendell Mining Pty Ltd
[2022] FWC 2423
•12 SEPTEMBER 2022
| [2022] FWC 2423 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Glendell Mining Pty Ltd T/A Glendell Mining Pty Ltd
(AG2022/3314)
| Black Coal Mining industry | |
| DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 12 SEPTEMBER 2022 |
Application for orders under s 318 of the Fair Work Act 2009 (Cth)
Introduction and background
Glendell Mining Pty Ltd (Glendell) operates the Glendell open cut coal mine (Glendell Mine). Glendell is part of the Glencore Group.
Adjacent to the Glendell Mine is the Mt Owen open cut coal mine (Mt Owen Mine). It is currently operated by Thiess Pty Ltd (Thiess) pursuant to a contract with Mt Owen Pty Ltd (Operating Services Agreement). Mt Owen Pty Ltd is also part of the Glencore Group.
Both the Glendell Mine and the Mt Owen Mine are owned by Glencore.
The operation of the Mt Owen Mine has been outsourced to Thiess since 2002.
In November 2021, Glencore announced that it had decided not to renew or extend the Operating Services Agreement when it expires on 31 December 2022, and that it would convert the Mt Owen Mine to an owner operator model.
Glencore currently owns 22 pieces of equipment which are operated by Thiess employees and located at the Mt Owen Mine. From 1 January 2023, this equipment will remain the property of Glencore and continue to be used at the Mt Owen Mine, but it will be used by Glendell employees. Glencore has also purchased 60 pieces of equipment it will operate at the Mt Owen Mine, but the equipment will not arrive by 1 January 2023 due to ongoing supply chain and shipping issues in connection with COVID-19. As a result, Glencore has entered into an arrangement in the form of a contract for hire with Thiess for 15 pieces of equipment.
The permanent workforce at the Glendell Mine is currently 249 employees. Of these, 199 employees are employed by Glendell in the position of “mine operations employee”, which is the title given to operation employees performing production and maintenance duties at the Glendell Mine. These employees are covered by the Glendell Mine Operations Employee enterprise Agreement 2021 (Glendell EA). The coverage of the Glendell EA also extends to employees of Glendell who are engaged at the Mt Owen Mine.
The permanent production and engineering workforce at the Mt Owen Mine is currently 389. These employees are covered by the Thiess Mt Owen Mine Enterprise Agreement 2022 (Thiess EA).
As part of its decision to operate the Mt Owen Mine, Glencore has decided that Glendell will directly employ the majority of the production and engineering workforce. Glencore has decided that the Mt Owen Mine workforce will comprise approximately 486 production and engineering employees, consisting of:
(a)approximately 187 Glendell employees who are currently working at the Glendell Mine will be used to work at the Mt Owen Mine under the terms of the Glendell EA. These employees will comprise 146 employees to perform mining work, and 41 employees to undertake maintenance;
(b)approximately 45 employees sourced from supplementary labour that are presently working at the Glendell Mine and who will be transferred to work at the Mt Owen Mine;
(c)the balance – approximately 254 employees – will be recruited for work at the Mt Owen Mine. Of that figure, Glendell is planning to engage 74 employees through a labour hire provider and directly employ 180 additional production and engineering employees. Glencore would ideally like to recruit all such 180 employees from the existing Mt Owen workforce. These employees would perform the same work that they currently perform for Thiess.
Glencore intends to make offers of employment to approximately 180 of the existing Thiess workforce at the Mt Owen Mine. Such offers will be for employment to commence with Glendell at the Mt Owen Mine on 1 January 2023, and will not be conditional on the Fair Work Commission (Commission) making the orders sought by Glendell in these proceedings.
Glendell has engaged in consultation with the CFMMEU and the affected employees in relation to its decision to insource work at the Mt Owen Mine.
Glendell seeks orders under s 318(1) of the Fair Work Act 2009 (Cth) (Act) that:
(a)the Thiess EA will not cover Glendell and any of its employees who transfer to Glendell from Thiess who were covered by the Thiess EA (Transferring Employees); and
(b)the Glendell EA will cover the Transferring Employees.
Glendell appreciates that draft order (b) above is not strictly required having regard to the coverage of the Glendell EA; it has included the proposed order for clarity and certainty.
Procedural matters
On the filing of Glendell’s application for an order pursuant to s 318 of the Act, I made the following directions:
“1. By 25 August 2022, the Applicant must file in the Commission:
- any statutory declarations it wishes to rely on in support of the orders it seeks. Such statutory declaration(s) should address the relevant statutory criteria and deal with the question of whether the applicant is “likely to be the new employer” of the employees who are covered by the Thiess Mt Owen Mine Enterprise Agreement 2022 in circumstances where, it seems, no offers of employment have been made to those employees (see TWU v Viva Energy Australia Ltd [2019] FWCFB 6212, which addresses the question of conditional offers of employment); and
- any submissions it wishes to make in support of its application.
2. By 26 August 2022, the Applicant must serve on the CFMMEU any statutory declarations and submissions filed by the applicant in accordance with direction 1 above, and the CFMMEU must undertake meetings of employees covered by the Thiess Mt Owen Mine Enterprise Agreement 2022, or otherwise communicate with such employees, to advise them of the Application and orders sought.
2B. The Applicant and the CFMMEU will use their best endeavours to arrange, by 4pm on 5 September 2022, for copies of these directions to be placed on the notice boards ordinarily used to communicate with employees covered by the Thiess Mt Owen Mine Enterprise Agreement 2022.
3. By 4pm on 5 September 2022, the CFMMEU must file in the Commission and serve on the applicant any submissions it wishes to make in relation to the orders sought by the applicant, and advise the Commission of the steps it has taken to comply with direction 2.
4. By 4pm on 5 September 2022, any employee who is affected by the order and who wishes to inform the Commission of their views in relation to the orders sought by the applicant must email their comments to [email protected].”
Glendell filed an outline of submissions dated 25 August 2022 and a statutory declaration made by Ms Leanne Frew, Commercial Manager of the Mt Owen Complex, made on 25 August 2022.
The Commission has not received any submission, witness statement, document or other communication from any employees of Thiess who work at the Mt Owen Mine.
The CFMMEU has 231 members employed in production and engineering roles at the Mt Owen Mine. The CFMMEU filed and served a statutory declaration made by Mr Chad Hanson, District Vice President of the CFMMEU, made on 31 August 2022. The CFMMEU also informed the Commission that it supports Glendell’s application for orders under s 318 of the Act, together with the submissions made by Glendell.
Section 318 of the Act
The issue I need to determine in this matter is whether or not to exercise my discretion under section 318(1) of the Act to make the orders sought by Glendell.
Section 318(2) of the Act provides that the Commission may make an order under s 318 only on application by, inter alia, “the new employer or a person who is likely to be the new employer”. In light of the uncontested evidence before the Commission that Glendell will make unconditional offers of employment to the Transferring Employees, I am satisfied that Glendell is “a person who is likely to be the new employer” within the meaning of s 318(2)(a) of the Act. I am also satisfied that there is likely to be a transfer of business within the meaning of s 311 of the Act.
Section 318(3) of the Act provides that, in deciding whether to make the order under section 318(1), I 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.”
Should the orders be made?
I consider each of the mandatory factors set out in section 318(3) of the Act below in turn.
Section 318(3)(a) - the views of the new employer and the employees who would be affected by the order
Glendell supports the orders sought by it under section 318(1) of the Act. So much is clear from Ms Frew’s statutory declaration.
I do not have any direct evidence from the Thiess employees who work at the Mt Owen Mine about their views. The CFMMEU represents the vast majority of the production and engineering workforce at the Mt Owen Mine. It is clear from Mr Hanson’s statutory declaration that the CFMMEU and its members who work at the Mt Owen Mine support the orders sought by Glendell.
This factor (s 318(3)(a) of the Act) weighs in favour of making the orders sought by Glendell.
Section 318(3)(b) – whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
Section 318(3)(b) requires a comparison between the “terms and conditions of employment” applicable to the employees with their former employer (in this case, Thiess) and those that would be applicable after the transfer of business (in this case, with Glendell) if an order under section 318(1) were made.
While the terms and conditions of employment to which an employee is entitled (including under an enterprise agreement) with a new employer may be different to those provided by a former employer prior to the transfer of business, the Commission should consider whether “overall, the employees would not be disadvantaged”[1] by making an order under section 318 of the Act. In the event that employees would be disadvantaged overall to any significant extent by the making of an order under section 318 of the Act in relation to their terms and conditions of employment, this factor would, in my view, weigh considerably against granting an order under section 318.[2]
If the orders sought by Glendell were made, the Transferring Employees’ terms and conditions of employment with Glendell would be governed by the Glendell EA. I accept the unchallenged evidence given by Ms Frew in her statutory declaration that the Glendell EA has a number of superior benefits for employees compared to the Thiess EA, including higher minimum rates of pay and an entitlement to participate in a performance incentive scheme with higher maximum potential bonus payments than the Thiess performance payment scheme.
On an overall basis, I am satisfied that the Transferring Employees will not be disadvantaged in relation to their terms and conditions of employment if the proposed orders were made and the Glendell EA applied to their employment. This factor (s 318(3)(b) of the Act) weighs in favour of making the orders sought by Glendell.
Section 318(3)(c) – the nominal expiry date of the relevant agreements
The nominal expiry of the Thiess EA is 31 December 2022. The nominal expiry date of the Glendell EA is 6 October 2024. Under the Glendell EA, the Transferring Employees will have certainty around their terms and conditions of employment for a greater period of time than under the Thiess EA. Conversely, the Transferring Employees will not be able to bargain with their employer for a new enterprise agreement for a longer period of time under the Glendell EA compared to the Thiess EA.
On balance, I consider this factor (s 318(3)(c) of the Act) to weigh slightly against the making of the orders sought by Glendell.
Section 318(3)(d) – whether the Thiess EA would have a negative impact on the productivity of the new employer’s workplace
I accept Ms Frew’s uncontested evidence that if the Thiess EA transferred to Glendell there would be a negative impact on the productivity of the workforce in circumstances where the Transferring Employees are to be fully integrated into the existing Glendell workforce yet subject to different terms and conditions of employment.
This factor (s 318(3)(d) of the Act) weighs in favour of making the orders sought by Glendell.
Section 318(3)(e) – whether Glendell would incur significant economic disadvantage as a result of the Thiess EA covering Glendell
I accept Ms Frew’s uncontested evidence that Glendell would be unlikely to suffer any ‘significant economic disadvantage’ as a result of the Thiess EA applying to Glendell, but Glendell would incur additional administrative costs if it had to apply both the Glendell EA and the Thiess EA to different employees doing the same work at the Mt Owen Mine.
This factor (s 318(3)(e) of the Act) is neutral in my consideration of the orders sought by Glendell.
Section 318(3)(f) – the degree of business synergy between the Thiess EA and the Glendell EA
I accept Ms Frew’s uncontested evidence that the differences between the Thiess EA and the Glendell EA means there is limited business synergy between the two instruments.
This factor (s 318(3)(f) of the Act) weighs in favour of making the orders sought by Glendell.
Section 318(3)(g) – the public interest
Making orders in the terms sought by Glendell would be consistent with the objects of Part 2-8 of the Act, in that they would provide an appropriate a balance between the protection of employees’ terms and conditions of employment under enterprise agreements and the interests of Glendell in running its enterprise efficiently.
I am satisfied that making the orders sought by Glendell would be in the public interest. This factor (s 318(3)(g) of the Act) weighs in favour of making the orders sought by Glendell.
Conclusion
Having considered each of the matters set out in s 318(3)(a) to (g) of the Act, I am satisfied that it is appropriate in the circumstances to exercise my discretion to make the orders sought by Glendell. The matters which weigh in support of the orders clearly outweigh the matters which weigh against the orders.
Orders [PR745734] will be issued with this decision.
DEPUTY PRESIDENT
[1] Stratco (NSW) Pty Ltd [2010] FWA 7036 (Stratco) at [25]
[2] Stratco at [25]; Sonic HealthPlus Pty Ltd [2015] FWC 6460 at [95]; CSIRO at [101]
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