PRC Hire Pty Ltd - [2023] FWC 2607

[2023] FWC 2607

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

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

PRC Hire Pty Ltd

(AG2023/3598)

Building and construction industry
DEPUTY PRESIDENT BEAUMONT	PERTH, 11 OCTOBER 2023

Application for an order relating to instruments covering a new employer and transferring

employees

PRC Hire Pty Ltd (the Applicant) has applied under s 318 of the Fair Work Act 2009 (Cth) (the Act) for certain orders in respect of a transfer of business. The orders sought relate to employees who were previously employed by Vertigo Group Pty Ltd (Vertigo) and covered by the Vertigo Enterprise Agreement 2020 (Vertigo Agreement)[1] but are now employed by the Applicant. The Applicant and its employees are covered by the PRC Hire Pty Ltd and CFMEU (WA) Enterprise Agreement 2020-2024 (PRC Agreement).[2] The nominal expiry date of the PRC Agreement is 30 December 2024 in contrast to that of the Vertigo Agreement, which is 5 October 2024.

Vertigo and the Applicant are both associated entities within a business group (the Group).[3] The Group provides structural steel and precast concrete erection services throughout Western Australia.[4] The Applicant’s employees perform work in relation to the installation of structural steel and precast panels, in addition to the movement of mechanical items.[5] Scopes of work currently include work on METRONET rail construction sites and the construction of the Kwinana Waste to Energy Facility Project.[6] Employee classifications working on these particular projects include rigger, boilermaker, crane driver, labourer and dogmen.

Whilst the Applicant was established in November 2012, Vertigo was established in November 2019, as an internal labour hire company for the Group providing labour to the Applicant.[7] The Vertigo employees purportedly perform work on the same projects as the Applicant’s employees and are employed in the same classifications.[8]

Whilst most of the ‘blue collar’ employees within the Group are said to have been employed by the Applicant, there nevertheless remains a number who remain employed by Vertigo.[9] In or around November 2022, the Group decided to exclusively engage new employees via the Applicant[10] and recently brought forward the decision to transfer employees of Vertigo across to the Applicant.[11]

According to the Applicant, the reason for bringing forward the decision was threefold:

a)   in response to changes proposed by the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Cth) which seek to restrict the use of labour hire arrangements (including internal labour hire);
b)   on review of the decision in Appeal by The Australian Worker’s Union,[12] the Vertigo Agreement may be challenged, and the risk of a dispute mitigated if the terms of the Vertigo Agreement are no longer relevant; and
c)   to ensure that employees of the Group can receive the benefits of the PRC Agreement, which has more favourable terms and conditions than the Vertigo Agreement.

All seven Vertigo employees accepted employment with the Applicant (Transferring Employees) on 3 October 2023,[13] having resigned…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] FWC 2607
Decision Date: 11 OCTOBER 2023

CaseChat Overview and Summary

PRC Hire Pty Ltd sought orders under the Fair Work Act 2009 to transfer the terms and conditions of seven employees from the Vertigo Enterprise Agreement 2020 to the PRC Hire Pty Ltd and CFMEU (WA) Enterprise Agreement 2020-2024. These employees had previously been employed by Vertigo Group Pty Ltd but were now employed by PRC Hire Pty Ltd, which is an associated entity within the same business group. The Vertigo Enterprise Agreement was set to expire on 5 October 2024, whereas the PRC Enterprise Agreement was set to expire on 30 December 2024, providing more favourable terms and conditions for employees.

The legal issues before the court were whether the transfer of business qualified under section 311 of the Act and whether the orders sought under section 318 of the Act were appropriate. The Applicant argued that the transfer of business was necessary to avoid potential challenges to the Vertigo Enterprise Agreement and to ensure all employees within the Group received the benefits of the PRC Enterprise Agreement. The employees in question accepted the transfer and acknowledged that the terms and conditions under the PRC Enterprise Agreement were at least as beneficial as those under the Vertigo Enterprise Agreement.

The court considered the views of the new employer, the transferring employees, and the potential impact of the orders on the terms and conditions of employment, productivity, and the public interest. The court found that the transfer of business qualified under the Act, and that the Vertigo Enterprise Agreement was a transferable instrument. The court also found that none of the transferring employees would be disadvantaged by the proposed orders and that the orders were in the public interest. The court concluded that it was appropriate to make the orders sought under section 318(1)(a) and (b) of the Act.

The court ordered that the Vertigo Enterprise Agreement would not cover the Applicant and the transferring employees and that the PRC Enterprise Agreement would cover the transferring employees. The orders came into effect from the date they were made.

Orders