Innovative Asset Solutions Pty Ltd

[2021] FWC 5927

[2021] FWC 5927

FAIR WORK COMMISSION

DECISION

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

Innovative Asset Solutions Pty Ltd
(AG2021/6875)

COMMISSIONER WILLIAMS PERTH, 16 SEPTEMBER 2021

Transfer of instrument

[1] This is an application made pursuant to section 318 of the Fair Work Act 2009 (Cth) (the Act) by Innovative Asset Solutions Pty Ltd (the Applicant). The application seeks orders that the UGL Offshore Enterprise Agreement 2015 [AE418514] (the UGL Agreement) not cover the Applicant and a transferring employee and that the IAS Group Enterprise Agreement 2019-2023 (the IAS Agreement) [AE503897] will cover any former employees employed under the UGL Agreement but are now to be employed by the Applicant.

[2] The Applicant applies in its capacity as a person who is the likely new employer (section 318(2)(a) of the Act).

[3] Section 318 of the Act sets out the circumstances in which such orders may be made by the Commission, as follows:

“318 Orders relating to instruments covering new employer and 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 transferring employee because of paragraph 313(1)(a) does not, or will not, cover the new employer and the transferring employee;

(b) an order that an enterprise agreement or a named employer award that covers the new employer covers, or will cover, the transferring employee.

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 transferring employee, or an employee who is likely to be a transferring employee;

(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;

(e) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace;

(d) 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 transferring employee before the later of the following:

(a) the time when the transferring employee becomes employed by the new employer;

(b) the day on which the order is made.”

Consideration

[4] The Applicant has provided their application which addresses in detail the relevant considerations in section 318 of the Act.

[5] The view of the Applicant is that the Commission should make the orders sought.

[6] Offers of employment have been made by the Applicant to several casual employees affected by the decision of UGL Operations and Maintenance Pty Ltd (UGL) to cease their previous contract with Chevron. Instead, the Applicant is expected to take over this contract with Chevron and employ several affected employees.

The matters in section 318(3) of the Act

Section 318(3)(a)

[7] The Applicant submits that the new employer is the Applicant, who supports the application, particularly so that it will provide for transferring employees to be employed under the business entity under which the ongoing transferring work will be performed. This will also avoid the need for the complexities and costs of running payroll and administration processes for two groups of employees performing the same transferring work.

[8] The Applicant submits that discussions have been held with transferring employees who have been offered casual employment by the Applicant. Those employees have accepted the offer of employment with the Applicant conditional upon the employee proactively supporting this application.

Section 318(3)(b)

[9] The Applicant submits that the transferring employees will not be disadvantaged because the rates of pay offered and accepted by the transferring employees under the contracts are the same as the rates of pay, they received while employed by UGL in relation to the transferring work.

Section 318(3)(c)

[10] The nominal expiry date of the IAS Agreement is 2 July 2023. The Normal expiry date of the UGL Agreement is 8 April 2020.

Section 318(3)(d)

[11] The Applicant submits that the transferable instrument will have a negative impact on productivity of the Applicant’s workplace as it is likely to create significant industrial disharmony to have employees covered by two different sets of terms and conditions under two different agreements for employees performing the same work for the same employer.

[12] The Applicant submits that if the order was to be granted it could only have a positive impact on productivity as that it covers the work to be undertaken by both transferring employees and non-transferring employees, and therefore better suited to the Applicant’s operations.

[13] The Applicant further submits that productivity issues may arise if a number of different industrial instruments were to cover a single group of employees performing the same transferring work

Section 318(3)(e)

[14] The Applicant submits that should the transferable instrument cover the new employer, this would cause economic disadvantage as additional administrative and payroll costs would be incurred as a result of managing employees performing the same work for the same employer under two separate instruments.

Section 318(3)(f)

[15] The Applicant submits there is no business synergy between having both the UGL Agreement and the IAS Agreement covering the Applicant in relation to the same work, as the instruments provide for different minimum employment conditions. A greater degree of synergy for the Applicant, transferring employees and non-transferring employees would occur should the order be granted.

Section 318(3)(g)

[16] The Applicant submits that the granting of the order would provide certain consistency in relation to employment conditions. There is no evidence to suggest it would be against the public interest to issue the order.

[17] The submissions on behalf of the Applicant and the supporting material provided have satisfied me that, acknowledging there are some pros and cons when comparing the terms and conditions of employment in the UGL Agreement to the IAS Agreement overall, there is no disadvantage for the transferring employees if these orders are made.

[18] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) were invited by the Commission to make submissions in response to this application. The AMWU does not oppose the application. The CEPU has not made a submission.

[19] Taking in to account the matters to be considered in section 318(3) of the Act, I am satisfied that it is appropriate that this application be granted and an Order [PR734011] to that effect will be issued in conjunction with this decision.

Printed by authority of the Commonwealth Government Printer

<PR734010>