Mmd Australia (West) Pty Ltd T/A Mmd

[2024] FWC 2557

[2024] FWC 2557

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

Mmd Australia (West) Pty Ltd T/A Mmd

(AG2024/3573)

Manufacturing and associated industries
DEPUTY PRESIDENT O’KEEFFE	PERTH, 18 SEPTEMBER 2024

Application for orders relating to a transferable instrument

1. MMD Australia (West) Pty Ltd (the Applicant) is a part of the MMD Group, which also includes MMD Australia Pty Ltd. In mid-2024 the MMD Group underwent an internal restructure which resulted in the Perth-based employees of MMD Australia Pty Ltd being offered and accepting employment with the Applicant. I am satisfied from the statement tendered by Mr Morne Coetzee that the work the employees are now performing for the Applicant is the same work as they were performing for MMD Australia Pty Ltd. I am also satisfied that the employees’ employment with MMD Australia Pty Ltd has been terminated, they became employees of the Applicant immediately after that termination and that the Applicant and MMD Australia Pty Ltd are associated entities. As such, I am satisfied that the employees are transferring employees for the purposes of s.311(2) of the Fair Work Act (the Act).

1. Prior to the transferring employees being engaged by the Applicant they were covered by the MMD Australia Pty Ltd Enterprise Agreement 2023 (the Agreement)[1]. In accordance with s.313 of the Act the Agreement is now taken to cover the Applicant in relation to the transferring employees.

1. The Applicant has not at the time of making application employed any non-transferring employees to perform the same work as the transferring employees. However, the Applicant is seeking an order that the Agreement apply to any non-transferring employees that it may engage in the future to perform such work.

1. In deciding whether to grant such an order, the Commission must take into account the matters in s.319(3). My consideration of those matters is set out below.

The views of the Applicant– s.319(3)(a)(i)

1. The application was accompanied by a statement made by Mr Morne Coetzee, Director at the Applicant. In his statement, Mr Coetzee sets out several advantages for the Applicant in ensuring that it has all employees working under the same employment conditions and makes it clear that the Applicant supports the application. This matter weighs in favour of making the order.

The views of Employees – s.319(3)(a)(ii)

1. As there are no non-transferring employees currently engaged by the Applicant, it is not possible to determine the views of employees. This matter is not relevant in consideration of the order.

Whether any employees would be disadvantaged by the order – s.319(3)(b)

1. The transferring employees all maintained their previous terms and conditions by virtue of the transfer of the Agreement. If the order was not granted, any non-transferring employees who were employed would have their terms and conditions determined by the Manufacturing and Associated Industries Award 2020 (the Award). The Agreement was approved by Deputy President Grayson in January 2024. I have obtained a copy of the Better Off Overall Test (BOOT) analysis performed by the FWC at the time of approval. It is clear that at the time of approval, the Agreement provided for substantially superior conditions that the Award. Although the Award base rates have increased since that time, the rates of pay in the Agreement are still substantially higher than the Award and the Agreement would clearly still pass the BOOT. Given this, I am satisfied that no employee would be disadvantaged by the order. This matter weighs in favour of making the order.

The nominal expiry dates of relevant agreements – s.319(3)(c)

1. The nominal expiry date of the Agreement is 1 June 2027. This matter weighs in favour of making the order.

Whether the transfer of the Agreement would have a negative impact on the Applicant’s productivity – s.319(3)(d)

1. The Applicant submits that the terms of the Agreement have been tailored to its particular circumstances and as such there would be no negative impact on productivity. I accept that this is the case. This matter weighs in favour of making the order.

Whether the Applicant would incur significant economic disadvantage as a result of the Agreement covering non-transferring employees - s.318(3)(e)

1. The Applicant submits that the terms of the Agreement are already in operation and that it would suffer no economic disadvantage as a result of the order. I accept that this is the case. This matter weighs in favour of making the order.

Whether there is business synergy between the Agreement and any other workplace instrument that covers the Applicant – s.318(3)(f)

1. The Applicant is covered by the Award. However, the Applicant submits that while the Award is incorporated to some extent in the Agreement, there would be greater business synergy if the same industrial instrument applied to all employees. I accept that this is the case. This matter weighs in favour of making the order.

The public interest – s.319(3)(g)

1. Section 318(3)(g) requires the Commission to take into account ‘the public interest’.

1. There is public interest in supporting employers and employees entering into an enterprise agreement which provides for terms and conditions of employment that are more beneficial than the Award safety net. Given that non-transferring employees will receive a higher base rate and more beneficial conditions under the Agreement than under the Award, I am satisfied that the orders are in the public interest.

Conclusion

1. Taking into account the matters in s.319(3), I am satisfied that it is appropriate to grant the application. I will make orders under s.319(1) that the Agreement will apply to non- transferring employees who perform the same work as transferring employees. An order will be issued separately in PR779369.

DEPUTY PRESIDENT

[1] AE523511.

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<AE523511  PR779368>