Mt Arthur Coal Pty Limited T/A BHP Mt Arthur Coal

[2024] FWC 1165

[2024] FWC 1165

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.318 - Application for an order relating to instruments covering new employer and transferring employees

Mt Arthur Coal Pty Limited T/A BHP Mt Arthur Coal

(AG2024/1328)

Coal industry
COMMISSIONER CRAWFORD	SYDNEY, 3 MAY 2024

Application for orders relating to instruments covering new employer and transferring employees – orders made

Background

1. An application has been made by Mt Arthur Coal Pty Limited (Mt Arthur) to the Fair Work Commission (the Commission) for orders pursuant to s.318 of the Fair Work Act 2009 (FW Act). Mt Arthur’s application was filed on 19 April 2024.

1. Mt Arthur is an entity in the BHP Group. The BHP Group owns and operates the Mt Arthur coal mine in the Huner Valley, New South Wales. Mt Arthur has employees that work at the Mt Arthur coal mine.

1. Ready Workforce Pty Ltd (CMG), which is a division of Chandler MacLeod, has employees that are currently engaged to perform haulage truck operations and trainer assessor duties at the Mt Arthur coal mine. From 14 May 2024, the duties performed by the CMG employees will commence being performed by employees of Mt Arthur.

1. Offers of employment have been made by Mt Arthur to seven CMG employees to commence working for Mt Arthur on 14 May 2024. Six of these offers had been accepted when the application was filed.

1. The effect of the orders sought by Mt Arthur is that the Chandler MacLeod Northern District of NSW Black Coal Mining Agreement 2015 (CMG Agreement) will not cover the former CMG employees that commence working for Mt Arthur on or after 14 May 2024 (Transferring Employees) and that the Mt Arthur Coal Enterprise Agreement 2023 (MAC Agreement) will cover the Transferring Employees.

1. The Mining and Energy Union (MEU) confirmed on 24 April 2024 that is supports the Commission making the orders sought by Mt Arthur. The MEU is covered by the CMG Agreement and the MAC Agreement following its recent transition out of amalgamations.    

LEGISLATION

1. The relevant provisions in the FW Act are:

“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

Transfer of business

1. Section 311 of the Act sets out when a transfer of business occurs. I am satisfied it is likely that there will be a transfer of business within the meaning of s.311(1) of the Act based on Mr Arthur’s application.

Transferable instrument

1. Section 312 of the Act details instruments that may transfer:

“312 Instruments that may transfer

Meaning of transferable instrument

(1) Each of the following is a transferable instrument:

(a) an enterprise agreement that has been approved by the FWC;

(b) a workplace determination;

(c) a named employer award.…”

1. The CMG Agreement was approved by the Commission on 4 June 2015. It is a transferrable instrument within the meaning of s.312(1) of the FW Act.

Who may apply for an order?

1. The application has been made by Mt Arthur, the new employer of the Transferring Employees. The requirement under s.318(2) has therefore been met.

Section 318(3) – Matters that the FWC must take into account

Section 318(3)(a) – the views of the new employer and the employees who would be affected by the order

Section 318(3)(a)(i) – the views of the new employer

1. Mt Arthur supports the making of the orders sought.  

Section 318(3)(a)(ii) – the views of the employees

1. I am satisfied based on the acceptance of offers of employment from Mr Arthur by six of the Transferring Employees that they support the making of the orders.

1. The MEU supports the making of the orders. 

1. The views of Mt Arthur and the employees weigh in favour of making the orders. 

Section 318(3)(b) – whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

1. I am satisfied based on a comparison of the CMG Agreement and the MAC Agreement and the material filed by Mt Arthur that employees will not be disadvantaged by the orders. This factor weighs in favour of making the orders.  

Section 318(3)(c) – if the order relates to an enterprise agreement—the nominal expiry date of the agreement

1. The CMG Agreement nominally expired on 11 June 2018. The Mt Arthur Agreement will not nominally expire until 9 June 2027.

1. I consider this factor weighs in favour of making the orders because the result will be employees being covered by a more contemporaneous instrument with superior conditions.   

Section 318(3)(d) – whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace

1. I accept it will be inefficient and unproductive for Mt Arthur to have different industrial instruments applying to its direct employees performing the same work at the Mt Arthur coal mine. This factor weighs in favour of making the orders.

Section 318(3)(e) – whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

1. Mt Arthur has argued it will suffer economic disadvantage via operational efficiencies being minimised and a loss of productivity from industrial disharmony if the orders are not made. I suspect these issues would not be substantial but accept this factor weighs marginally in favour of making the orders.

Section 318(3)(f) – the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

1. The instruments are reasonably similar and the orders are unlikely to have a significant impact on business synergy. I consider this to be a neutral factor. 

Section 318(3)(g) – the public interest

1. I am satisfied it is in the public interest to make the orders sought. The orders will generate operational benefits for Mt Arthur. The orders will also result in improved employment conditions for the Transferring Employees. This factor weighs in favour of making the orders.

Conclusion

1. Taking into account each of the matters set out in s.318(3) of the Act, I am satisfied that the orders as sought should be granted. The orders will be issued concurrently with this decision.

1. The orders will come into operation on 3 May 2024.

COMMISSIONER

Determined on the papers.

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