NRG Electrical (Qld) Pty Ltd T/A NRG Services

[2021] FWC 3109

[2021] FWC 3109

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

NRG Electrical (Qld) Pty Ltd T/A NRG Services
(AG2021/5362)

Electrical contracting industry
COMMISSIONER SPENCER	BRISBANE, 12 JULY 2021

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

INTRODUCTION

[1] An application pursuant to s.319 of the Fair Work Act 2009 (the Act) was made by NRG Electrical (Qld) Pty Ltd T/A NRG Services(the Applicant/the old employer) for an Order under s.319(1)(b), that the NRG Services Enterprise Agreement 2018 (the Agreement/the transferable instrument) cover non-transferring employees who perform, or are likely to perform, transferring work for the Applicant.

[2] In accordance with s.319(1)(b) of the Act, the Applicant sought an Order to be made, to permit the transferable instrument to cover a new employing entity, namely NRG Labour Pty Ltd (the new employer).

[3] Section 313(1) provides that a transferrable instrument that covered the old employer and the transferring employees immediately before the termination of the employment will cover the new employer (being the Applicant). The operation of these sections means that the Applicant would be covered by the Agreement in relation to the transferring employees.

[4] The Applicant sought an Order that the Agreement will cover any non-transferring employees of the Applicant who perform, or are likely to perform, the transferring work, pursuant to s.319(1)(b) of the Act.

RELEVANT PROVISIONS

[5] Pursuant to s.319 of the Act:

“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.

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.”

SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE

[6] Directions were issued to the Applicant, inviting them to provide submissions addressing the relevant criteria contained in s.319(3).

[7] Mr Daniel Briskey, General Manager of the Applicant, and Director of both the Applicant and the new employer, provided a statutory declaration in support of the application.

[8] Mr Briskey stated that the Applicant business was established in 2012 and had expanded its business operations, which has resulted in the new employer being established under the Applicant’s group of companies. Mr Briskey stated the Applicant’s intention was that the new employer becomes the only employing entity and operates solely to provide labour services to the NRG group of companies, including but not limited to the Applicant. He stated the new employer is an associated entity of the Applicant, connected through common shareholding and directorships. Mr Briskey noted that as a new entity, the new employer has no existing financial position and does not have an existing workplace instrument.

[9] Mr Briskey stated that the employment of all employees currently engaged by the Applicant will be transferred to the new employer; and all employees will be engaged in the same occupations and perform the same work as they currently perform. Mr Briskey confirmed in his affidavit that the transferring employees would retain their entitlements, accruals and service dates. Mr Briskey stated that all terms and conditions of the Agreement will be implemented for any future employees, to ensure the same conditions apply as would for any transferring employees. He stated that all employee rights will be preserved, and regular audits of employee pay, and conditions will continue to be conducted by their HR representatives. He further stated that no transferring employees would have their start date or continuity of employment affected by the transfer.

[10] Mr Briskey’s evidence was that as the Applicant and the new employer are related entities, the impact of the order sought will be limited. He stated that as Director of both entities, his view is that the change will create no disadvantage to either entity or the current or any future employees that may be engaged.

[11] Mr Briskey confirmed in his affidavit that following the completion of the end of year financial reconciliations in July, a cash transfer will be made from NRG Electrical (Qld) Pty Ltd to NRG Labour Pty Ltd for the value of accrued liabilities as per the balance sheet. He further stated that on a fortnightly basis thereafter, an invoice will be raised by NRG Labour Pty Ltd to NRG Electrical (Qld) Pty Ltd for all labour charges relating to NRG direct employees including leave accruals relevant to the works completed during that period, and internal cash transfers completed as payment accordingly.

[12] Mr Briskey stated that on Thursday 20th May 2021, he issued a memorandum outlining the commencement of NRG Labour Pty Ltd for the new financial year and the implications of this change for all existing employees of NRG Electrical (Qld) Pty Ltd. A copy of this correspondence was provided to the Commission. The memorandum requested employees make contact with ether Mr Briskey directly, or the Applicant’s Business Unit HR Advisor, Ms April Long to discuss. Mr Briskey confirmed that no employee had raised any concerns or asked questions other than what was required to complete their new tax declaration details.

[13] Mr Briskey stated that the entire workforce of the Applicant will be transferred to the new employer, and there are no non-transferring employees at the time of the application. He confirmed the Applicant will not directly employ any employees going forward.

[14] Mr Briskey’s evidence was that he does not anticipate the transferable instrument will have any negative impact on the productivity of the workplace, as the change of employer is effectively in name only. He stated that the transferring and future non-transferring employees will continue to work at the same workplace, with the same processes and systems, and be employed under the same conditions as they would be if this change was not to occur. Mr Briskey stated this is an internal structural change only, and he does not believe any public interest concerns apply.

[15] The Applicant sought an order that would allow the transferring instrument to cover any new or non-transferring employees engaged by the new employer post the effective date. The Applicant submitted that the new or non-transferring employees that are intending to be covered by the transferring instrument would all be engaged in the classifications set out in the transferring instrument; and no terms or conditions would be changed and all entitlements, accruals and conditions for transferring employees would be transferred to the new employer.

[16] The Agreement has a nominal expiry date of 18 March 2023; and subject to the Order being made by the Commission, the effective date for this change would be 19 July 2021, (the effective date).

CONCLUSION

[17] I have taken into account the material provided by the Applicant in support of the application and the matters listed in s.319(3) of the Act. I am satisfied the Order should be issued.

[18] The Order PR731600, will issue with this Decision and take effect in accordance with s.319(4) of the Act.

COMMISSIONER

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