Paper Australia Pty Ltd T/A Opal Australian Paper
[2022] FWC 3175
•1 DECEMBER 2022
| [2022] FWC 3175 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Paper Australia Pty Ltd T/A Opal Australian Paper
(AG2022/4499)
| DEPUTY PRESIDENT MASSON | MELBOURNE, 1 DECEMBER 2022 |
Application for orders relating to instruments covering new employer and transferring employees.
An application has been made pursuant to s. 318 of the Fair Work Act 2009 (the Act) by Paper Australia Pty Ltd T/A Opal Australian Paper (Opal) seeking an order from the Fair Work Commission (the Commission) that the Qube Logistics (Vic) Pty Ltd Workplace Agreement 2020 (the Qube Agreement)[1] not cover Opal and transferring employees currently employed by Qube Logistics (Vic) Pty Ltd (the Transferring Employees).
The application was accompanied by a signed witness statement dated 27 October 2022 prepared by Mr Rodney Beales who is the General Manager Workplace Relations for Opal Commercial Services Pty Ltd, a wholly owned subsidiary of Opal.
Directions were issued by the Commission on the 7 November 2022 allowing for submissions and materials to be filed in relation to the application by; Opal, any Transferring Employees and the Transport Workers’ Union (TWU) which is a party to the Qube Agreement.
No submissions or materials were received from any of the Transferring Employees. The TWU advised the Commission in correspondence dated 28 November 2022 that it did not oppose the application.
Background
Mr Beales provided the following relevant information in his witness statement[2].
Opal has a pulp and paper manufacturing facility, the Maryvale Mill, in the Latrobe Valley, Victoria and has for several years outsourced the functions of the internal railway station at the Maryvale Mill (the Transferring Work) to Qube Logistics (Vic) Pty Ltd (Qube). Opal has recently entered into a commercial agreement with Qube to cease outsourcing the Transferring Work and intends to offer employment to several employees who currently perform the Transferring Work. The Qube Agreement applies to the employment of seven of the eleven employees who currently perform the Transferring Work[3].
Under the terms of the commercial agreement entered into between Opal and Qube, the commencement of employment of the Transferring Employees with Opal is contingent upon the s.318 order being made in the terms sought by Opal[4].
Mr Beales states that if the Commission makes the order in the terms sought, the Opal Australian Paper & CFMEU Manufacturing Division – Maryvale Mill Agreement 2021 – 2024[5] (the Opal Agreement) which currently applies to 515 employees, will apply to employment of the Transferring Employees on their employment by Opal[6].
Statutory Provisions
Section 318 of the Act sets out the circumstances in which an order may be made by the Commission in respect of a new employer and Transferring Employees:
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
Before turning to consider the order sought by Opal it is necessary to establish that the Qube Agreement is a transferrable instrument and would cover Opal and the Transferring Employees, subject to any order of the Commission.
Transferable Instrument
I am satisfied that the Qube Agreement is a transferrable instrument pursuant to s 312(1)(a) of the Act. I am further satisfied that;
(i)the employment of the Transferring Employees with Qube will terminate on the execution of the terms of the commercial agreement entered into between Opal and Qube subject to the making of the s.318 order by the Commission (s. 311(1)(a));
(ii)within 3 months of termination of employment, the Transferring Employees will be employed by Opal (s. 311(1)(b));
(iii)the work of the Transferring Employees to be performed for Opal is substantially the same or similar to the work performed by the Transferring Employees for Qube (s. 311(1)(c)); and
(iv)there is a connection between Qube and Opal as described in s 311(5), in that Opal will cease to outsource Transferring Work to Qube (s. 311(1)(d)).
As a consequence of the above I am satisfied that the Qube Agreement will cover Opal and Transferring Employees, subject to any order the Commission may make. It is also the case that Opal, the new employer, has made the application, thus satisfying the requirements of s. 318(2) of the Act.
Having been satisfied as to the necessary jurisdictional requirements of ss. 311 and 312 being present, I will now turn to each of the matters that I am required to consider under s. 318(3).
The views of the new employer and Transferring Employees
Opal seeks that the Qube Agreement does not operate in its business in respect of Transferring Employees and that the Opal Agreement covers the Transferring Employees[7]. No Transferring Employees provided their views in relation to the application while the TWU advised that it did not oppose the application. These factors weigh in favour of the granting of the order sought by Opal.
Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
Mr Beales in his witness statement provided a detailed comparison of the terms and conditions that would apply to the Transferring Employees under the Opal Agreement versus the Qube Agreement[8]. The comparison revealed that while there were a range of benefits that were comparable between the two agreements, the Opal Agreement also included various terms and conditions that were more beneficial than the Qube Agreement, including the following;
ordinary hours of work under the Opal Agreement are 36 hours per week or 35 hours per week for shiftworkers versus 38 hours under the Qube Agreement;
more generous superannuation contributions under the Opal Agreement;
more generous overtime penalty rates under the Opal Agreement;
more generous shift penalty rates under the Opal Agreement;
the Long Service Leave accrual rate is higher under the Opal Agreement;
Redundancy entitlements are more beneficial under Opal Agreement, and includes the pay-out of accrued personal/carers leave; and
higher base rates of pay under the Opal Agreement.
Having reviewed the comparison of key terms and conditions in the Opal Agreement versus the Qube Agreement, I am satisfied in the circumstances that Transferring Employees will not be disadvantaged by the order sought in relation to their terms and conditions of employment. In fact, they will be entitled to terms and conditions of employment under the Opal Agreement that are on balance more favourable than the terms and conditions of employment under the Qube Agreement. The absence of any demonstrable disadvantage weighs in favour of the granting of the order sought.
If the order relates to an enterprise agreement—the nominal expiry date of the agreement
The nominal expiry date of the Qube Agreement is 27 July 2023, whereas the nominal expiry date of the Opal Agreement which would cover the Transferring Employees, is 31 December 2024. If the order sought were granted than Transferring Employees will be covered by the Opal Agreement and will be able to participate in bargaining for a replacement agreement on the Opal Agreement reaching its nominal expiry date. This factor does not weigh against the application for the order sought. It is therefore a neutral consideration.
Whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
The transferable instrument would, on Mr Beales evidence, require Opal to maintain terms and conditions of employment in respect of Transferring Employees performing similar duties and functions to the balance of Opal’s production workforce who are employed under the terms of the Opal Agreement. This would negatively manifest in respect of Opal’s time and attendance and payroll systems which would need to be configured to pay in accordance with the Qube Agreement, a process Mr Beales states would take several months and incur significant cost[9].
I am satisfied that not making the s.318 order sought would create operational inefficiencies and give rise to negative productivity impacts flowing from the requirement to administer the terms of the Qube Agreement covering a small number of Transferring Employees on a site on which approximately 515 production employees are covered by the Opal Agreement. This weighs in favour of granting the order sought.
Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer
Opal submits that it would, if the s.318 order is not granted in the terms sought, suffer significant economic disadvantage and specifically payroll administrative difficulties arising from the requirement to maintain and comply with the Qube Agreement for a small number of employees[10]. I agree. This weighs in favour of granting the order sought.
The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer
The Opal Agreement already covers Opal and its employees engaged in production roles at the Maryvale Mill within the scope of that agreement. The terms of that agreement are on balance more favourable than the Qube Agreement. The differences between the two agreements would be problematic if both agreements applied to the same class of employees (i.e. production workers). To that extent, I am satisfied there is a lack of synergy between the transferable instrument and the Opal Agreement which covers Opal and several hundred of its production employees. This weighs in favour of the order sought by Opal.
The public interest
I am satisfied that it is not contrary to the public interest to grant the order sought by Opal. This weighs in favour of granting the order sought.
Conclusion
Having considered the application and supporting material and taking into account each of the requirements in s. 318(3) of the Act, I am satisfied that the order sought should be granted.
An Order (PR748474) will be separately issued with this Decision and will take effect on 1 December 2022.
DEPUTY PRESIDENT
[1] AE513391
[2] Witness Statement of Rodney Beales, dated 27 October 2022
[3] Ibid at [5]-[8]
[4] Ibid at [10]
[5] AE510695
[6] Witness Statement of Rodney Beales, at [11]
[7] Ibid at [9]
[8] Ibid, Annexure A, Comparison of terms and conditions in Opal Agreement and Qube Agreement
[9] Witness Statement of Rodney Beales, at [19]-[21]
[10] Ibid at [23]
Printed by authority of the Commonwealth Government Printer
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