Mitchcon Pty Ltd

[2023] FWC 2905

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

Mitchcon Pty Ltd

(AG2023/3448)

Building, metal and civil construction industries
COMMISSIONER CONNOLLY	MELBOURNE, 9 NOVEMBER 2023

Application for an order relating to instruments covering new employer and non-transferring employees.

Background

On 28 September 2023, Mitchcon Pty Ltd (Mitchcon or Applicant) made an application to the Fair Work Commission (the Commission) under section 319 of the Fair Work Act 2009 (Cth) (the Act) in respect of the operation of the MITCHCON AUSTRALIA PTY LTD and the CFMEU (Victorian Construction and General Division) Subcontractors Concrete Pumping Enterprise Agreement 2020-2023 (the Agreement) to non-transferring employees.

The Agreement was approved on 28 July 2021 and has a nominal expiry date of 30 June 2023.

The Application seeks an Order pursuant to s.319 of the Act to enable the Agreement (the transferrable instrument) to cover non-transferring employees who perform, or is likely to perform, the transferring work for Mitchcon (the new employer).

The application stated that on 1 October 2023, a transfer of business occurred where the employees of Mitchcon Australia Pty Ltd (ABN: 83 101 069 470) [the old employer] covered by the Agreement were transferred to the new employer. The new employer is the parent company of the old employer.

In summary, I am satisfied that:

a)A transfer of business has occurred (as defined in s.311),

b)the Agreement is a transferable instrument (as defined in s.312),

c)transferring employees will continue to be covered by the Agreement (per s.313),

d)unless an Order is made under s.319, non-transferring and any new employees will otherwise be covered by the Building and Construction General On-site Award 2020 (the Award),

e)it is appropriate to make the Order under s.319 so that transferring employees, non-transferring employees and any new employees performing the same work for the new employer are all covered by the same Agreement.

Relevant Legislation

Part 2-8 of Chapter 2 of the Act describes when a transfer of business occurs and s.312(1) of the Act 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.

Sections 317 and 319 of the Act 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.
…

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 non‑transferring 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.”

The Transfer of Business

The Applicant submits that pursuant to s.311(1) of the Act, a transfer of business occurred on 2 October 2023 and:

a)the transfer of business was of Mitchcon Australia Pty Ltd (ABN:83 101 069 470) (the old employer) to Mitchcon Pty Ltd (ABN: 82 060 623 752) (the new employer).

b)all on-site employees of the old employer and the new employer are construction workers engaged in building and construction work performing concrete pumping as pump operators and hose men.
c)the transferrable instrument will transfer with the transferring employees.
d)any new employees employed by the new employer (non-transferring employees) performing transferring work will not be covered by the transferrable instrument.
e)non-transferring employees will be covered by the Building and Construction General On-site Award 2020 (the Award).

The application was made by Mitchcon Pty Ltd Director, Mr Jacob Mitchell, who also provided a witness statement dated 11 October 2023 and was accompanied by a written submission prepared and filed by the Applicant’s representative, Master Builders Victoria. In reliance on this uncontested evidence, I am satisfied that a transfer of business has occurred.

A “transferrable instrument” includes “an enterprise agreement that has been approved by the FWC” as provided by s.312(1)(a) of the Act, which states:

“313 Transferring employees and new employer covered by transferrable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employees employment with the old employer, then:
(a)the transferrable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer:”

Accordingly, pursuant to s.311 of the Act, I am satisfied that there has been a transfer of business and the employees of the old employer are “transferring employees” within the meaning of the Act.

I am also satisfied that the Agreement listed is a transferrable instrument that will cover Mitchcon and the transferring employees in accordance with s.313(1)(a).

Section 314 of the Act provides for a transferrable instrument to over other employees in certain circumstances as follows:

“314 New non-transferring employees of new employer may be covered by transferrable instrument

(1) If:
a)A transferrable instrument covers the new employer because of paragraph 313(1)(a); and
b)After the transferrable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and

c)The non-transferring employee performs the transferring work; and

d)At the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;

then the transferrable instrument covers the new employer and the non-transferring employee in relation to that work.
(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.
(3) This section has effect subject to any FWC order under subsection 319(1).”

In this instance, the Building and Construction General On-site Award 2020 would otherwise apply to the non-transferring employees. Therefore, the condition in s.314(1)(d) cannot be satisfied and the Agreement will not otherwise cover non-transferring employees.

The Applicant further submits that it is seeking parity of terms and conditions within its workforce and for the instrument covering their terms of conditions of employment to reflect the reality of non-transferring employees performing the transferring work.

Accordingly, Mitchcon is seeking to apply the same minimum terms and conditions to all its employees who perform transferring work by means of this application for an Order under s.319(1)(b) of the Act.

Consideration

Section 319(2) - Who may apply for an order?

The application has been made by Mitchcon Pty Ltd, the new employer. This meets the requirements of s.319(2) of the Act.

Section 319(3)(a)(i) - Views of the new employer.

Mitchcon Pty Ltd has made the application under s.319 of the Act and supports the making of the Order sought.

Section 319(3)(a)(ii) - Views of the employees who will be affected by the order.

The Applicant’s submissions in support of its application indicates that there are no current non-transferring employees employed by the new employer. On 28 September 2023, an email attached to the application was sent to all employees covered under the transferrable instrument regarding the company restructure and transfer of business.

In the week commencing 2 October 2023, the Applicant held a series of meetings with the transferred employees in relation to the company restructure and transfer of business. Employees were informed that the transferrable instrument would transfer with transferring employees to the new employer. Information was also provided regarding the particulars of the Order being sought for new non-transferring employees at the new employer.

On 6 October 2023, my Chambers issued directions seeking the Applicant provide a copy of its submissions to any Union and/or employees impacted by the application and requested any party who had views regarding the application to advise my Chambers by close of business on 20 October 2023.

On 11 October 2023, the Applicant filed a witness statement authored by Mr Jacob Mitchell indicating it had complied with my directions. Specifically, that on 10 October 2023, the Applicant sent an email to all employees covered under the Agreement providing an explanation of the application under s.319 and the copy of my directions. Further, that on 11 October 2023, a similar email was sent to the CFMEU (Victorian Construction and General Division).

The CFMEU was a bargaining representative for the Agreement that is the subject of this Application and is covered by the Agreement.

The Applicant has provided email correspondence from a Lita Gilles, CFMEU (Victorian Construction and General Division) EBA Organiser advising that they support the application.

The employer submits that, in response to the above, there have been no issues raised by the current workforce at the new employer in relation to the Orders sought.

Additionally, there have been no issues raised by employees or their representatives with my Chambers in response to the notices provided as indicated above.

As a consequence, and in all the circumstances, I have formed the view that this factor views in favour of granting the Order sought.

Section 319(3)(b) - Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment.

The Applicant submits that no transferring employees will be disadvantaged by the Order sought. Further, it submits that the transferable instrument’s terms and conditions are substantially more advantageous and beneficial to employees in comparison to those under the Award and that the employees’ representatives have provided written confirmation in support of the application.

I have also had regard to the fact that the transferable instrument was approved by the Commission.

Having consider all the material before me, I am satisfied that employees will not be disadvantaged by the Order in relation to their terms and conditions of employment and therefore, this factor weighs in favour of granting the Order sought.

Section 319(3)(c) - If the order relates to an enterprise agreement—the nominal expiry date of the agreement.

The nominal expiry date of the Enterprise Agreement is 30 June 2023 and has passed. The terms of the Agreement will continue to apply until the Agreement is formally replaced or terminated.

This factor does not weight against the granting of the Order sought.

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, if granted, the effect of the Order will be to assist in promoting workplace productivity of the non-transferring employees due to the terms and conditions of the transferring instrument being substantially more beneficial.

I am persuaded by the merits of these submissions and have formed the view that this factor weighs in favour of granting the Order.

Section 319(3)(e) - Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer.

The Applicant submits that the workplace productivity and employee benefits outweigh any economic disadvantages of the transferrable instrument covering the new employees of the new employer.

Based on these submissions and the material presented, I have formed the view that this factor weighs in favour of granting the Order.

Section 319(3)(f) - The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer.

The Applicant submits that if the Order is not made and the transferring and non-transferring employees are left on different terms and conditions of employment, this may have a negative impact on business synergy if both were to apply to the Applicant.

I consider this factor weighs in favour of granting the Order sought.

Section 318(3)(g) - the public interest.

Based on the materials contained in the Form F40 application, and the additional materials provided to me, including the submissions of Applicant and the witness statement of Mr Jacob Mitchell, I am satisfied that it would not be contrary to the public interest to make the Order sought and that that granting of the Order would provide more certainty and consistency in relation to employment conditions for both employees and the employer.

Conclusion

Having considered each of the matters outlined in s.319(3) of the Act and the material that has been filed, I am satisfied that an order pursuant to s.319 of the Act should be made in respect of this application. The Order[1] will be issued concurrently with this decision.

COMMISSIONER

[1] PR767985.

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Mitchcon Pty Ltd [2023] FWC 2905

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[2023] FWC 2905

9 NOVEMBER 2023