MCA Engineering Group Pty Ltd

[2014] FWC 5819

[2014] FWC 5819

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

MCA Engineering Group Pty Ltd
(C2014/5401)

MINE CONSULTANTS, AUSTRALIA ENTERPRISE AGREEMENT 2013

Mining industry
COMMISSIONER LEWIN	BRISBANE, 27 AUGUST 2014

Application for an order relating to the Mine Consultants, Australia Enterprise Agreement 2013 to cover a new employer and non-transferring employees.

Introduction

[1] This is an application made by MCA Engineering Group Pty Ltd (MCA Engineering) on 15 July 2014 under s 319 of the Fair Work Act 2009 (the Act) for an order that the Mine Consultants, Australia Enterprise Agreement 2013 (the Agreement) will cover:

“all ‘non-transferring employees’ employed by the Applicant in transferring work, for the same period that the agreement covers those non-transferring employees of the Applicant that are employed in the classifications set out in Schedule 1 of the Enterprise Agreement and perform work for the Applicant”.

Legislative scheme

[2] Section 319 of the Act sets out the powers of the Fair Work Commission (the Commission) to make the order and the matters it must take into account in deciding whether to make that order, relevantly, as follows:

“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:

...

(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...

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...

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:

...

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

Background

[3] The Agreement was approved on 10 September 2013 and as at 31 December 2013 applied to Mine Consultants Australia, the old employer. On or around 31 December 2013 Mine Consultants Australia transferred most of its business and assets to MCA Engineering, the new employer, along with 76 transferring employees. By operation of s 313 of the Act, the Agreement applied to each of the transferring employees upon their employment with MCA Engineering.

[4] Since the transfer of business, MCA Engineering has employed a number of non-transferring, or new, employees who were covered by the Mining Industry Award 2010 upon their employment with MCA Engineering and hence were not automatically covered by the Agreement due to s 314 of the Act.

[5] MCA Engineering intends to employ further non-transferring employees throughout the life of the Agreement. The Agreement provides terms and conditions of employment whereby persons employed under the terms of the Agreement are better off overall than if they would have been employed under the Mining Industry Award 2010.

[6] MCA Engineering has, however, on the assumption that the non-transferring employees would ultimately be covered by the Agreement, entered into binding contracts with the non-transferring employees to apply the superior terms and conditions of the Agreement to them.

Consideration

[7] I am satisfied MCA Engineering has standing to make the application under s 319(2)(a) of the Act as it is the new employer.

[8] I now turn to consider the factors enumerated under s 319(3) of the Act.

The views of the new employer or a person who is likely to be the new employer

[9] The views of the new employer are clear. MCA Engineering has made the application for the order and submits that the making of the order will have a positive impact on the productivity of its workplace. MCA Engineering further submits that, from a human resources, business and efficiency perspective, it would be desirable for the Agreement to apply equally to transferring and non-transferring employees and that the purpose of making the Agreement was to improve the productivity of employees to whom it applied.

The views of the employees who would be affected by the order

[10] I held a hearing in Brisbane with the representatives of MCA Engineering on 22 July 2014. On 23 July 2014, MCA Engineering issued letters to its non-transferring employees outlining the nature of the application, how the orders sought would affect non-transferring employees and gave those non-transferring employees an opportunity to provide comments or to object to the application.

[11] Per the affidavit of Ms Jane Ann Holman, Human Resources Advisor at MCA Group, MCA Engineering received no responses from the non-transferring employees.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[12] The employees working under the terms and conditions of the Agreement are better off overall than under the terms and conditions of the Mining Industry Award 2010. In addition, MCA Engineering has entered into binding contracts with the non-transferring employees to apply the terms and conditions of the Agreement to them.

If the order relates to an enterprise agreement — the nominal expiry date of the agreement

[13] The nominal expiry date of the Agreement is 9 September 2017.

Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

[14] MCA Engineering submitted the application of the Agreement to its workforce would have a positive impact on its workplace.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[15] MCA Engineering did not suggest it would incur significant economic disadvantage as a result of being covered by the transferable instrument.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[16] MCA Engineering did not address this point.

The public interest

[17] MCA Engineering submitted the public interest supported the orders being made.

Conclusion

[18] Taking into account the matters in s 319(3) of the Act, based on the material provided in the application and provided subsequent to the hearing, I am satisfied that it is appropriate to make the orders sought. That order will issue as PR554625 concurrently with this decision.

COMMISSIONER

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