RCR Energy Pty Ltd

[2018] FWCA 7101

[2018] FWCA 7101

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date

RCR Energy Pty Ltd
(AG2018/4889)

RCR ENERGY PTY LTD NRG MAINTENANCE GREENFIELDS AGREEMENT 2015

Manufacturing and associated industries
COMMISSIONER HUNT	BRISBANE, 20 NOVEMBER 2018

Application for termination of the RCR Energy Pty Ltd NRG Maintenance Greenfields Agreement 2015

[1] On 3 September 2018 RCR Energy Pty Ltd (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the RCR Energy Pty Ltd NRG Maintenance Greenfields Agreement 2015 (the Agreement). The Agreement has passed its nominal expiry date.

Legislation

[2] Section 226 of the Act sets out the conditions which must be met for an agreement to be terminated pursuant to s.225 of the Act. Section 226 of the Act provides as follows:

“226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

[3] The application was accompanied by a statutory declaration in support of the termination, declared by Ms Emma Ranford, Human Resources Advisor. The statutory declaration stated, amongst other things, that there are no employees who are covered by the Agreement.

[4] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, known as the “Australian Manufacturing Workers’ Union” (AMWU) is an employee organisation covered by the Agreement. On 27 September 2018 communication was issued from my chambers to the AMWU to seek its views on the application. The AMWU indicated in response that it had been instructed that some employees remained engaged under the Agreement, and requested a further period of time to confirm its position.

[5] On 8 October 2018 the AMWU sent further correspondence to my chambers and to the Employer objecting to the application on the grounds that there remained at least six employees engaged in accordance with the Agreement. The AMWU also indicated that it had discovered a number of employees and members of the AMWU and the Australian Workers’ Union (AWU) who ought to be paid in accordance with the Agreement, but were instead engaged under a separate enterprise agreement on less favourable terms. The AMWU sought a conference between the parties in this matter.

[6] On 24 October 2018 the Employer filed to my chambers and served on the AMWU and AWU submissions in respect of its application, and a statutory declaration of Mr Gavan Dunne, Executive Manager of RCR Tomlinson Ltd, declared on 24 October 2018. As I understand it, RCR Tomlinson Ltd is a parent company of the Employer.

[7] Mr Dunne’s evidence is that no employees are currently engaged under the Agreement. The Agreement was made in respect of particular work at a worksite known as the ‘NRG power station’ under a contract which had since been revoked. All relevant employees were terminated on or around March 2016, or alternatively were transferred to other employment. He stated that any remaining works performed by the Employer at the NRG power station are performed by an associated entity to the Employer, that being RCR Energy (Gladstone) Pty Ltd under the terms of a separate enterprise agreement, the RCR Infrastructure Upgrades & Maintenance Queensland Enterprise Agreement 2016-2019.

[8] On 25 October 2018 the AMWU wrote to my chambers, to the Employer and to the AWU providing its views on the Employer’s submissions and the statutory declaration of Mr Dunne. The AMWU indicated that it was taking further instructions in respect of the Employer’s assertion that any remaining work conducted at the NRG power station was conducted in accordance with the RCR Infrastructure Upgrades & Maintenance Queensland Enterprise Agreement 2016-2019. The AMWU indicated that, in the case that the Employer was correct in its submissions, the AMWU would not object to the termination of the Agreement.

[9] A conference between the parties convened for 25 October 2018 proceeded. Mr Greg Power, Principal Consultant, Drayton’s Workplace Consulting appeared on behalf of the Employer. Mr Kegan Scherf, Industrial Advocate appeared for the AMWU. Mr Jack Harding, Organiser appeared for the AWU. Mr Dunne was available to be joined to the conference by telephone with leave of the Fair Work Commission, but did not appear in the circumstances.

[10] During the conference it was confirmed that the AMWU no longer maintained its objection to the termination of the Agreement on the grounds that employees remained employed under the Agreement. On the information before the AMWU, it was satisfied that the Employer did not employ employees pursuant to the Agreement.

[11] However, it was noted that a separate employer, the Downer Group, had taken over work at the NRG power station following the revocation of the Employer’s contract. It was suggested that relevant inquiries should be made of the Employer to confirm that there had not been a transfer of assets between the Employer and the Downer Group pursuant to s.311(3) of the Act. The Employer undertook to conduct inquiries of its own organisation and of the Downer Group.

[12] Section 311 of the Act sets out when a ‘transfer of business’ occurs, and states:

“311 When does a transfer of business occur

Meanings of transfer of business, old employer, new employer and transferring work

(1)  There is a transfer of business from an employer (the old employer ) to another employer (the new employer ) if the following requirements are satisfied:

(a)  the employment of an employee of the old employer has terminated;

(b)  within 3 months after the termination, the employee becomes employed by the new employer;

(c)  the work (the transferring work ) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d)  there is a connection between the old employer and the new employer as described in any of subsections (3) to (6).

Meaning of transferring employee

(2)  An employee in relation to whom the requirements in paragraphs (1)(a), (b) and (c) are satisfied is a transferring employee in relation to the transfer of business.

Transfer of assets from old employer to new employer

(3)  There is a connection between the old employer and the new employer if, in accordance with an arrangement between:

(a)  the old employer or an associated entity of the old employer; and

(b)  the new employer or an associated entity of the new employer;

the new employer, or the associated entity of the new employer, owns or has the beneficial use of some or all of the assets (whether tangible or intangible):

(c)  that the old employer, or the associated entity of the old employer, owned or had the beneficial use of; and

(d)  that relate to, or are used in connection with, the transferring work.

Old employer outsources work to new employer

(4)  There is a connection between the old employer and the new employer if the transferring work is performed by one or more transferring employees, as employees of the new employer, because the old employer, or an associated entity of the old employer, has outsourced the transferring work to the new employer or an associated entity of the new employer.

New employer ceases to outsource work to old employer

(5)  There is a connection between the old employer and the new employer if:

(a)  the transferring work had been performed by one or more transferring employees, as employees of the old employer, because the new employer, or an associated entity of the new employer, had outsourced the transferring work to the old employer or an associated entity of the old employer; and

(b)  the transferring work is performed by those transferring employees, as employees of the new employer, because the new employer, or the associated entity of the new employer, has ceased to outsource the work to the old employer or the associated entity of the old employer.

New employer is associated entity of old employer

(6)  There is a connection between the old employer and the new employer if the new employer is an associated entity of the old employer when the transferring employee becomes employed by the new employer.”

[13] On 19 November 2018 the Employer filed to my chambers and served on the AMWU and AWU further submissions regarding its inquiries into the possible transfer of assets to the Downer Group, and a further statutory declaration of Mr Dunne declared on 19 November 2018.

[14] It was conceded that both the Employer and the Downer Group had had the beneficial use of facilities and workshops located at the NRG power station in the course of completing the relevant works. The facilities located at the NRG power station were not owned by the Employer or by the Downer Group.

[15] In his statutory declaration, Mr Dunne stated that assets owned by the Employer had been removed from the NRG power station by the Employer upon termination of the Employer’s contract to perform work at that site. Mr Dunne stated that the Employer had used facilities and workshops present at the NRG power station in the course of performing work at the site. No arrangement had been reached between the Employer and the Downer Group regarding the use of facilities present at the NRG power station.

[16] The Employer submitted that it had made inquiries of the Downer Group regarding the potential transfer of assets, but had received no response from the Downer Group.

[17] The Employer submitted that there was no ‘arrangement’ between the Employer and the Downer Group relating to the beneficial use of the NRG power station facilities as required by the terms of s.311(3) of the Act. The Employer referred to the decision in Zabrdac v Transclean Facilities Pty Ltd 1andsubmitted that for there to be an ‘arrangement’ between the Employer and Downer Group, there must be communication, the reaching of an understanding and an expectation of a particular outcome. Further, the Employer referred to the decision in Watson v Oliver-Ramsay Group Pty Ltd2, where it was held that in the circumstances of a ‘re-tender’ for work, no arrangement existed between a former employer and a new employer that had taken over work at the relevant site, but rather any arrangements existed separately between each employer and the client in that matter.

[18] The Employer submitted that there was no transfer of assets between it and the Downer Group and that the Agreement should be terminated.

[19] Mr Dunne stated that five employees of RCR Energy (Gladstone) Pty Ltd continue to perform work at the NRG power station site and that those employees are engaged pursuant to the RCR Infrastructure Upgrades & Maintenance Queensland Enterprise Agreement 2016-2019. Those five employees had not previously been engaged by the Employer under the Agreement.

[20] In correspondence dated 19 November 2018, the AMWU communicated that having received the statutory declaration of Mr Dunne, together with the Employer’s submissions, it no longer opposed the application for termination of the Agreement.

Consideration

[21] On the information before the Commission there is no evidence of any ‘arrangement’ between the Employer and the Downer Group. On the evidence, the Employer packed up and left the NRG power station relevant to that particular contracting work, and the Downer Group became the new contractor.

[22] Mr Dunne’s evidence is clear, concise and unchallenged. I accept his evidence.

[23] I conclude that there has not been a transfer of assets between the older employer and the new employer pursuant to s.311(3) of the Act. Accordingly, I am satisfied that there are no employees covered by the Agreement.

[24] There being no transfer of business pursuant to the Act, I must then consider the requirements in s.226 of the Act. Based on the material contained in the statutory declarations filed in respect of this matter, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might weigh against the termination of the Agreement.

[25] Pursuant to my finding in [23], there are no employees covered by the Agreement.

[26] I have considered the views of the AMWU, an employee organisation covered by the Agreement. There is no opposition to the application. In consideration of the material before me relevant to s.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.

[27] In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.

[28] The termination will take effect from today, 20 November 2018.

COMMISSIONER

Appearances:

Mr Greg Power, Drayton’s Workplace Consulting, for the Applicant;

Mr Jack Harding for the Australian Workers’ Union;

Mr Kegan Scherf for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the “Australian Manufacturing Workers’ Union”.

Hearing details:

25 October 2018, Brisbane

 1   [2011] FWA 4492.

 2   [2015] FWC 221.

Printed by authority of the Commonwealth Government Printer

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