MRS SubZero Pty Ltd T/A MRS Services Group

[2018] FWCA 860

[2018] FWCA 860

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

MRS SubZero Pty Ltd T/A MRS Services Group
(AG2017/4263)

MRS-SG MAINTENANCE ENTERPRISE AGREEMENT 2017

Manufacturing and associated industries
DEPUTY PRESIDENT GOOLEY	MELBOURNE, 8 FEBRUARY 2018

Application for approval of the MRS-SG Maintenance Enterprise Agreement 2017.

[1] An application has been made for approval of an enterprise agreement known as the MRS-SG Maintenance Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by MRS SubZero Pty Ltd T/A MRS Services Group. The agreement is a single enterprise agreement.

[2] The Construction, Forestry, Mining and Energy Union (the CFMEU) sought leave to appear at the hearing of this matter. The CFMEU was not a bargaining representative for the Agreement. The CFMEU alleged that the appropriate award for the purpose of the better off overall test (the BOOT) was the Black Coal Mining Industry Award 2010 and not the Manufacturing and Associated Industries and Occupations Award 2010 or the Vehicle Manufacturing, Repair, Services and Retail Award 2010.

[3] That application was opposed by MRS SubZero Pty Ltd. The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) did not oppose the CFMEU being heard on the question of the relevant award for the purpose of the BOOT.

[4] I decided to permit the CFMEU to appear. On the first occasion the matter was before me, the parties were unable to provide much assistance to the Commission in relation to questions raised by the CFMEU. As I would clearly need to consider this issue I formed the view that given the role of the CFMEU in the black coal mining industry that they would be able to assist the Commission in reaching a determination of this issue.

[5] Mr Jonathon McTaggart who is the Chief Operating Officer for MRS gave evidence 1 about the company’s operation. He gave unchallenged evidence that MRS is a provider of technical services in the construction and resource industries.2 He said that MRS provides a range of structural and mechanical support services including:

(a) industrial painting and sand blasting;

(b) structural repair and fabrication to mining plant and equipment, components and industrial machinery; and

(c) complete machine rebuilds, machine repairs and diagnostic monitoring of automotive vehicles and heavy and light weight machinery in the heavy constructions and mining industries. 3

[6] Mr McTaggart gave evidence that MRS have a range of clients including mining companies, plant and equipment suppliers and mining service providers. 4

[7] Mr McTaggart said that the employees work at MRS’s workplaces and off-site. Employees may occasionally perform work at workshops or in other facilities located at client sites including construction and mining sites. 5 MRS has three workshops.6

[8] Mr McTaggart said that when employees are providing services on a client’s site they are not embedded in or supplementary to the work force of the client sites and the employees work to MRS rosters and not the client’s roster. MRS controls hours of work and start and finishing times. 7

[9] Mr McTaggart said that MRS is not under the control of a mine owner or a contractor conducting mining operations and does not undertake any mining activity with respect to the employees covered by the Agreement. Further, the employees are supervised by MRS’s supervisory employees. 8

[10] Deputy President Asbury in Transfield Services (Australia) Pty Ltd 9 and CQ Industries Pty Ltd trading as CQ Field Mining Services10 discussed the application of the Black Coal Mining Industry Award 2010 to companies that provide maintenance services to mines.

[11] Deputy President Asbury set out in the CQ Field Mining Services decision 11 the relevant authorities and I do not reproduce those authorities in this decision.

[12] She concluded as follows:

“[45] In Transfield Services (Australia) Pty Ltd I decided that the Black Coal Award did not apply to the Company in circumstances where it sought approval of an enterprise agreement to apply to employees engaged to perform maintenance and/or miscellaneous surface work at any surface mining site in Queensland where the Company had a contract to perform such work. The basis of that conclusion was that Transfield is an engineering company carrying out general work. In carrying out that work Transfield was not under the control of a mine owner or a contractor conducting mining operations. Transfield conducts maintenance, project and shutdown work and did not undertake any mining activity with respect to employees covered by the agreement. Employees were performing work including mechanical fitting, electrical and rigging and were supervised by Transfield’s supervisory employees. Employees covered by the agreement were not embedded in or supplementary to the work force of the mines at which they performed work and worked different rosters.

[46] I accept that in the present case, CQFMS undertakes manufacturing and engineering work, both on a range of sites including coal mines and in its workshops, and that employees performing such work are covered by the Manufacturing Award. Similarly, where CQFMS is undertaking a project or a discreet package of work it has contracted to perform such as shut down work on plant and equipment, the Manufacturing Award applies even where such work is undertaken at a coal mine. However, that is not the end of the matter. It is necessary for the purposes of the application of the BOOT to consider whether at the test time any current or prospective employees are or will likely be covered by the Black Coal Award.

[47] On the evidence before me I am satisfied that CQFMS employs or will employ during the term of the Agreement, employees who are covered by the Black Coal Award. I have reached this conclusion for the following reasons. The Black Coal Award has application to employers who employ persons in the black coal industry and does not exclude employers who employ persons in other industries even where the majority of employees may be in other industries. This is apparent from clause 4.1(a) and (b)(ii), which read together, make it clear that it is not necessary that an employer of an employee in the black coal mining industry is also in that industry, or substantially or principally within that industry.

[48] An employee may be in the black coal industry regardless of the industry of his or her employer, in circumstances where the employee meets the definition in clause 4.1(b)(ii) of the Black Coal Award. The coverage clause of the Black Coal Award recognises that an employer may be in more than one industry and by virtue of clause 4.8 of the Black Coal Award, where this is so, employees are covered by the award classification most appropriate to the work the employee performs. While the cases referred to in the Note to clause 4.2 contain principles that are relevant to the construction of the coverage provisions of the Black Coal Award, it is important to note that those cases dealt with “all or nothing arguments” where an employer was either in the coal mining industry or not, consistent with the exclusions in clause 4.3 (a) – (g). The cases did not deal with companies who supply labour to coal mines in a labour hire type of arrangement where employees integrate with the employees of the mine operator or replace those employees temporarily.

[49] Consistent with the case law, employees in the workshops operated by CQFMS are not covered by the Black Coal Award, notwithstanding that they are working on equipment that is used to mine black coal. Mr Scott’s evidence establishes that employees of CQFMS go on to black coal mine sites to perform project work such as maintenance shut downs or installation of new equipment where CQFMS contracts to perform a particular package of work or project. Such employees will also not be in the black coal industry by virtue of performing such work, regardless of whether they work alongside the mine workforce.

[50] CQFMS hires employees to coal mine operators for leave coverage. In my view, these employees are or will be covered by the Black Coal Award, notwithstanding that such employees use tools and equipment provided by CQFMS, including vehicles. Where CQFMS employees are on hire to a coal mine operator, and integrate into the workforce of the coal mine operator or replace employees of the mine operator to perform work at a black coal mine, they are covered by the Black Coal Award where:

● The work is directly connected to the day to day operations of such a mine;

● Employees are employed on work within a classification in the Black Coal Award; and

● They are supervised by the coal mine operator.

[51] On the basis of the evidence before me, I am satisfied and find that some employees of CQFMS who will be covered by the Agreement are doing work within the definition of coal mining employees in clause 4.1(b)(ii) of the Black Coal Award and that there will be prospective employees doing that work. Such employees are undertaking temporary placements at coal mine sites where they are replacing employees on leave and are integrated into the mine workforce, working the same rosters and subject to the same supervision as direct employees of the mine who are also covered by the Black Coal Award. This is so even if the same employees work on other occasions at another location after the placement such as CQFMS’ workshop or another site that is not a black coal mine.”

[13] In this matter I am satisfied that employees covered by this Agreement are not covered by the Black Coal Mining Award 2010. The mere fact that MRS performs some of its work at mines does not mean that it is covered by the Black Coal Mining Award 2010. MRS provides maintenance services to the mine but its employees doing that work are not covered by the Black Coal Mining Award 2010. The employees perform maintenance work and that work is not under the control of a mine owner or a contractor conducting mining operations. Employees perform work as electricians, machinists, mechanics, boiler makers, fitters, crane drivers, painters, cleaners and trades assistants. The employees are supervised by MRS employees and are not embedded in or supplementary to the work force at the mines at which they performed work. Their hours of work and rosters are controlled by MRS.

[14] I am therefore satisfied that the relevant awards for the purpose of the BOOT are the Manufacturing and Associated Industries and Occupations Award 2010 or the Vehicle Manufacturing, Repair, Services and Retail Award 2010.

[15] I raised a number of concerns with the parties about the Agreement. MRS, in its statutory declaration filed in support of the application, sets out the more beneficial provisions and the less beneficial provisions. However, I formed the view that the statutory declaration did not disclose all the less beneficial provisions. Further, the Agreement imposed obligations on employees not imposed by the modern awards.

[16] This raised issues both in relation to the BOOT and the question of whether the employees genuinely agreed to the Agreement. 12

[17] As a consequence, MRS proffered undertakings and those undertakings were supported by the bargaining representatives.

[18] There were no submissions made or evidence called that would support a finding that the employees did not genuinely agree to the agreement.

[19] A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[20] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[21] The AMWU and CEPU, being bargaining representatives for the Agreement, has given notice under s.183 of the Act that they want the Agreement to cover them. In accordance with s.201(2) I note that the Agreement covers the organisations.

[22] The Agreement was approved on 6 February 2018 and, in accordance with s.54, will operate from 13 February 2018. The nominal expiry date of the Agreement is 5 February 2021.

DEPUTY PRESIDENT

Annexure A

 1   Exhibit A1

 2   Ibid at [8]

 3   Ibid at [9]

 4   Ibid at [10]

 5   Ibid at [15]

 6   Ibid at [16]

 7   Ibid at [17]-[18]

 8   Ibid at [19]

 9   [2014] FWC 5368

 10   [2017] FWC 5667

 11   Ibid at [38]-[44]

 12   See s.180 of Act

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