Lend Lease Engineering Pty Ltd (formerly known as Abigroup Contractors Pty Ltd) (ACN 000 201 516)

[2015] FWC 6375

[2015] FWC 6375

FAIR WORK COMMISSION

DECISION

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

Lend Lease Engineering Pty Ltd (formerly known as Abigroup Contractors Pty Ltd) (ACN 000 201 516)
(AG2015/5473)

Manufacturing and associated industries
DEPUTY PRESIDENT LAWRENCE	SYDNEY, 22 SEPTEMBER 2015

Application in relation to order for transfer of business - s318.

[1] On 11 September 2015, Lend Lease Engineering Pty Ltd (formerly known as Abigroup Contractors Pty Ltd) (ACN 000 201 516) (the Applicant) lodged an application seeking an order pursuant to s.318 of the Fair Work Act 2009 (the Act) which relates to a transferrable instrument in the context of a transfer of business.

[2] The application arises from the restructure of the Australian construction businesses of the Lend Lease Group that was announced in 2013.

[3] The restructure involved the rationalisation of corporate structures and numerous name changes. It was subject of a number of dispute notifications by the Construction, Forestry, Mining and Energy Union (CFMEU) earlier this year which were dealt with in conference by me.

[4] Ultimately a number of s.318 applications have been lodged by Lend Lease corporate entities. Five of these applications were dealt with in a decision by Vice President Hatcher on 15 August, 2014 [2014] FWC 5499. I have dealt with another application on 24 December 2014, [2014] FWC 9431 which applied to the same entities as this application.

[5] The details of the restructure are set out by the Vice President in his decision and I do not intend to repeat them.

The Relevant Legislation

[6] Sections s.317 and 318 relevantly 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.

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;

(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 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.”

Why the s.318 Order should be made

[7] The order sought by the Applicant provides that the Baulderstone Pty Ltd NSW Civil Engineering Enterprise Agreement 2012 [AE894631] not cover seven employees in respect of their employment with Lend Lease Engineering Pty Ltd (formerly known as Abigroup Contractors Pty Ltd) (ACN 000 201 516) and that the Abigroup Contractors Pty Ltd New South Wales Engineering Agreement 2013-2016 will cover them in respect of their employment in New South Wales.

[8] In deciding whether to make the order pursuant to s.318 the Commission must take into account all of the matters set out in s.318(3) above.

[9] The application addresses each of these matters. In addition they are addressed in the witness statement of Jeremy Hanrahan, the Lend Lease National Industrial Relations Manager which was attached to the application.

[10] In summary, the Applicant submits that the section has been complied with and the order should be granted because:

• The new employer and the employees support it as evidenced by the questionnaire completed and the ballot conducted.

• Most of the employees will not be disadvantaged as evidenced by the detailed comparisons provided.

• The different expiry dates of the agreements mean that uncertainty will result if the order is not made.

• Productivity will be harmed and the employer suffer economic harm if two agreements operate side by side on projects in New South Wales.

• Industrial harmony will be promoted by one agreement applying on New South Wales projects.

• Certainty and productivity will be enhanced by the making of the order.

[11] The CFMEU and the Australian Workers’ Union (AWU) are not opposed to the application being approved.

Conclusion

[12] In view of the extensive documentary material provided by the Applicant, and the consent of the CFMEU and the AWU, I am satisfied that an order pursuant to s.318 should be made. The Order (PR571925) will operate from 22 September 2015.

DEPUTY PRESIDENT

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<Price code A, AE894631  PR571927 >