MMG Dugald River Pty Ltd T/A MMG Dugald River
[2023] FWC 315
•6 FEBRUARY 2023
| [2023] FWC 315 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
MMG Dugald River Pty Ltd T/A MMG Dugald River
(AG2023/147)
Barminco Enterprise Agreement 2018
| Mining industry | |
| DEPUTY PRESIDENT ASBURY | BRISBANE, 6 FEBRUARY 2023 |
Application for an Order relating to instruments covering new employer and transferring employees.
Background
MMG Dugald River Pty Ltd T/A MMG Dugald River (MMG) has applied to the Fair Work Commission (the Commission) pursuant to s. 318 of the Fair Work Act 2009 (the Act) for an Order relating to instruments covering a new employer and transferring employees. The application was made on 27 January 2023. MMG seeks to transfer 95 employees from Barminco Limited (Barminco) to direct employment with MMG at the MMG Dugald River Mine.
Barminco is a specialist underground hard rock mining contractor engaged by MMG to conduct mine development at MMG sites. Barminco began development at the Dugald River Mine in 2012. MMG entered into a contract with Barminco on 1 July 2016 to commence production operations at the Mine. From 15 November 2022, MMG has taken over the Run of Mine (ROM) operations from Barminco. Eleven former employees of Barminco within the ROM operations became directly employed by MMG on that date to perform the same, or substantially the same, work at the MMG Dugald River Mine. On 11 November 2022, I issued an Order pursuant to s. 318 of the Act in respect of MMG and the eleven employees pertaining to the transfer of their employment to MMG.[1]
By the present application, MMG seeks a similar Order in respect of the transfer of an additional 95 employees (transferring employees) in mobile maintenance and mining operations from Barminco to direct employment with MMG. It is stated by MMG in the application that its contract with Barminco is due to expire on 28 February 2023 and MMG will take over mobile maintenance and mining operations from Barminco from that date. MMG further states that it has made offers of employment to the 95 transferring employees and the offers have been accepted by the transferring employees. MMG describes the 95 transferring employees as comprising:
· 3 employees in the role of magazine keepers whose employment will be transferred to MMG effective 7 February 2023;
· 80 employees in various positions within the mining operations whose employment will be transferred to MMG effective 1 March 2023; and
· 12 employees in the mobile maintenance operations whose employment will be transferred to MMG effective 1 March 2023.
The effect of the proposed Order sought by MMG is that the Barminco Enterprise Agreement 2018 (Barminco Agreement), which covers the 95 transferring employees, will not cover MMG or any of the transferring employees upon the commencement of their employment with MMG on 7 February 2023 and 1 March 2023, and that the transferring employees and MMG will instead be covered by the Dugald River Enterprise Agreement 2022 (Dugald River Agreement). The Dugald River Agreement was approved by the Commission on 28 June 2022 and commenced operation from 5 July 2022.[2]
Following the transfer of employment, MMG states that the transferring employees will be employed to perform the same, or substantially the same, work within the mobile maintenance and mining operations at the Dugald River Mine and the outsourcing of the transferring work, within the meaning of s. 311(5) of the Act, will thereby cease. It is also noted by MMG that the employment of the transferring employees with Barminco will be terminated on 6 February 2023 and 28 February 2023 respectively.
MMG has filed submissions in support of the application. The application is accompanied by the witness statements of Mr Eddie Sarsero (the HR Superintendent – Australian Operations for MMG) and of Ms Ariana De Satge (HR Business Partner – Dugald River for MMG). Fourteen of the transferring employees have also provided witness statements indicating their support for the application.
While the Barminco Agreement does not cover any employee organisation, the Dugald River Agreement covers the Australian Workers’ Union (AWU) as the AWU was a bargaining representative for that Agreement. The views of the AWU were sought in respect of the present application. Through correspondence, the AWU confirmed that it does not oppose the Order sought by MMG.
Legislation
Section 318 of the Act provides:
“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.”
Consideration
Preliminary matters
On the basis of the material provided by MMG, I am satisfied that MMG is the new employer who is entitled to make the present application in accordance with s. 318(2)(a) of the Act; the transferring employees will perform the same, or substantially the same, work in mobile maintenance and mining operations at the Dugald River Mine; and there is a transfer of business from Barminco to MMG within the meaning of s. 311 of the Act.
Section 318(1) provides that the Commission has a discretion as to whether the Order sought by MMG should be made and in determining whether to exercise the discretion, I must consider each of the matters in s. 318(3) of the Act. I will now turn to consider these matters.
The views of the new employer and the employees who would be affected by the order
MMG, being the new employer, supports the application and proposed Order. MMG submits that if the Order sought were not made, it would have a negative impact on the transferring employees and its business. In this respect, MMG submits that the transferring employees would be better off under the Dugald River Agreement and having two enterprise agreements applying at the same Mine site for the same or substantially similar work would be administratively and operationally burdensome.
In relation to the views of the transferring employees, MMG submits that the transferring employees are supportive of the Order sought, noting that they have already accepted offers of employment with MMG. In this respect, the evidence of Ms De Satge is that the employees of Barminco were requested to submit an expression of interest in relation to a list of positions for which MMG was planning to recruit. Following the receipt of the expressions of interest, Ms De Satge organised a series of meetings between 10 September 2022 and 9 January 2023 to meet with the transferring employee to discuss the positions and provide information about direct employment with MMG and details of the Order sought in the present application. Employees were also given opportunity to ask questions and raise any concerns and Ms Satge states that no concerns were raised by the employees.
Some of the transferring employees have provided witness statements and they gave substantially similar evidence that they met with Ms Satge to discuss the offers of direct employment with MMG and were advised that they would continue to perform their current duties at the Dugald River Mine after the transfer. They were also provided with a summary of the terms and conditions contained in the Dugald River Agreement; a document comparing the terms of the Barminco Agreement with those of the Dugald River Agreement; and details of the proposed Order sought in the present application. The employees state that they understood the effect of the Order on their ongoing employment and are supportive of the proposed Order.
I accept the uncontested evidence of MMG and the transferring employees and find that this factor weighs in favour of making the proposed Order.
Whether any employees would be disadvantaged by the order
MMG submits that, with some limited instances such as long service leave entitlements, the transferring employees will not be disadvantaged if the order is made. MMG states that the transferring employees will be better off overall under the more beneficial terms of the Dugald River Agreement than they are under the terms of the Barminco Agreement. In particular, Mr Sarsero states that the annualised salaries offered to the transferring employees under the Dugald River Agreement are higher than the salaries provided in the Barminco Agreement. The transferring employees similarly state that their annualised average earnings at Barminco are less than the salary offered to them under the Dugald River Agreement.
I am satisfied that the transferring employees will not be disadvantaged overall if the proposed Order is made. This factor weighs in favour of making the Order.
The nominal expiry date of the agreement
The nominal expiry dates for the Barminco Agreement and Dugald River Agreement are 15 March 2023 and 28 June 2026 respectively. While the Barminco Agreement is yet to reach its nominal expiry date, MMG submitted that the Dugald River Agreement will provide greater certainty as to the terms and conditions of employment for the transferring employees for a longer period of time. This weighs in favour of making the order.
Whether the transferable instrument would have a negative impact on the productivity of the
new employer’s workplace
MMG submits that there would be an administrative burden associated with applying two different industrial instruments. MMG states that if the orders sought were not made, then this would create two sets of employment terms and conditions notwithstanding the fact that the transferring employees and any current or non-transferring employees would be performing the same, or substantially similar, work. MMG further states that it is inefficient and unproductive for MMG to process different payroll interpretation and rostering rules, noting that MMG did not bargain for the Barminco Agreement.
In addition, the evidence of Mr Sarsero is that if the orders were not made, significant administrative and operations issues would arise because:
· The rostering arrangements in the Barminco Agreement are very different from the Dugald River Agreement. It is said that significant operational difficulty would arise in relation to the current fly-in-fly-out and on-site accommodation arrangements. These arrangements have been designed based on all employees working a similar roster, taking into account the fact that Cloncurry Airport can only hold a limited number of flights at any one time. Dugald River rosters have been designed around flight availability and issues with flight availability would arise if another roster pattern were required to be maintained; and
· The transferring employees are being integrated into the processing department which currently works on the Dugald River roster pattern. If the orders were not made, the integration of the transferring employees into the crew could not happen as MMG would be required to maintain a Barminco roster pattern.
I accept these submissions and that these matters weigh in favour of making the proposed Order.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
MMG submits that an administrative burden would result if it were required to administer two different industrial instruments and two sets of employment conditions for employees performing the same work.
I accept that if the proposed order were not made, there is potential for MMG to suffer economic disadvantage as a result of administrative burden associated with the interpretation and application of two different enterprise agreements. Given the submissions of MMG on this issue are uncontested, I accept that this factor weighs in favour of the making the proposed Order.
The degree of business synergy between the transferable instrument and any workplace instrument that covers the new employer
MMG submits that there are substantial operational differences, particularly with respect to roster cycles, between the Barminco Agreement and the Dugald River EA Agreement, which would create administrative burden if MMG were required to apply both industrial instruments. It is asserted by MMG that there is limited business synergy between the two Agreements.
Having regard to the operational differences between the Barminco Agreement and Dugald River Agreement and the potential for administrative burden if MMG were required to apply both instruments, I accept that there is limited synergy between the two Agreements and this factor weighs in favour of making the proposed order.
The public interest
MMG submits that it is in the public interest for the proposed Order to be made. In this respect, MMG states that the Dugald River Agreement contains terms and conditions that, on an overall basis, are more beneficial than the Barminco Agreement. To the extent that there is any disadvantage in relation to a specific term or condition of employment, MMG said that the terms of the Dugald River Agreement are not significantly less advantageous. Further, the Order sought by MMG is said to be consistent with the object in s. 309 of the Act as the interests of the transferring employees will be safeguarded and there is no overall disadvantage in the employment conditions for the transferring employees.
I accept these submissions and these matters weigh in favour of making the proposed Order.
Conclusion
Having considered the matters required by s. 318(3) of the Act, I am satisfied that the Order sought should be made and I issue the Order[3] accordingly.
DEPUTY PRESIDENT
[1] PR747875.
[2] Application by MMG Dugald River Pty Ltd T/A MMG Dugald River [2022] FWCA 2126.
[3] PR750265.
Printed by authority of the Commonwealth Government Printer
<PR750264 >
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