UGL Operations and Maintenance Pty Ltd
[2023] FWC 1093
•26 MAY 2023
| [2023] FWC 1093 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
UGL Operations and Maintenance Pty Ltd
(AG2023/1302)
| Mining industry | |
| DEPUTY PRESIDENT BEAUMONT | PERTH, 26 MAY 2023 |
Application for an order relating to instruments covering a new employer and transferring employees
This matter involves an application by UGL Operations and Maintenance Pty Ltd (the Applicant) under s 318 of the Fair Work Act 2009 (Cth) (the Act). The Applicant has applied for orders from the Fair Work Commission (the Commission) relating to employees who were previously working for Innovative Asset Solutions Pty Ltd (IAS). These employees are covered by the IAS Group Enterprise Agreement 2019-2023 (IAS Agreement).[1]
For several years, the Applicant has had a contract with its client, ‘Santos’, for the provision of maintenance services in respect of engineering, installation and maintenance works on any Santos facility. IAS, an associated entity of the Applicant, also provided Santos with several casual employees to provide maintenance services at Santos’ facilities. However, IAS did not seek to continue to provide those services and therefore the Applicant entered revised contractual arrangements with Santos to assume the maintenance works previously performed by IAS.
The Applicant has employed former casual employees of IAS to perform the maintenance work that they had previously undertaken for their old employer (the Transferring Employees).[2] However, the Applicant also has employees currently performing the same work as the Transferring Employees. Those employees are covered by the UGL Operations and Maintenance Enterprise Agreement 2023 (O&M Agreement).[3]
Bargaining for the O&M Agreement commenced on or about 8 July 2022, with formal bargaining meetings commencing in the August of that year. One of the issues that arose before the bargaining process was the question as to how ‘UGL’ proposed to provide uniform employment conditions across the Santos site given the different structures of the IAS Agreement and what was to become the O&M Agreement.[4] Once bargaining was on foot, it became apparent to UGL that employees remained concerned about agreement coverage and sought confirmation that in future all ‘Santos team members’ would have the same benefits.[5] As a consequence, the explanatory materials provided to relevant employees in the access period for the O&M Agreement, included the following:
The Agreement also provides that if the Proposed Agreement is approved by the Fair Work Commission, the Company will offer employment under the terms of the new Agreement to all employees currently employed by the Company’s associated entity Innovative Asset Solutions Pty Ltd and who work on Varanus Island, Ningaloo Vision, or Devil Creek.
The Clause also provides that within 14 calendar days of making the offer of employment to the IAS Employees, the Company will make an application to the FWC for an Order to the effect that this Agreement covers those Employees, and that the IAS EA does not cover them.
The Unions will support this application.[6]
The O&M Agreement sets out at clauses 5.2 – 5.3:
5.2 No later than 30 calendar days after the Commencement Date of this Agreement, the Company must make a written offer of employment under the terms of this Agreement (Offer of Employment) to all employees who:
(a) are currently employed by the Company’s associated entity, ‘Innovative Asset
Solutions Pty Ltd’;(b) are currently covered by the IAS Group Enterprise Agreement 2019 – 2023 (IAS
EA); and(c) work on Varanus Island, the Ningaloo Vision, or at Devil Creek (Transferring
Employees).
5.3 Within 14 calendar days of making the Offer of Employment, the Company will make an application to the FWC pursuant to s318(1) of the FW Act for an Order to the effect that this Agreement covers the Transferring Employees, and that the IAS EA does not cover the Transferring Employees. The Unions will support this application.
In directions issued on 8 May 2023, the Australian Workers’ Union (AWU), the ‘Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers' Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia were invited to make submissions in respect of the application. The AWU responded to the invitation expressing:
The AWU was a bargaining representative for the UGL Operations and Maintenance Enterprise Agreement 2023 (Agreement).
Throughout bargaining for the Agreement, the AWU sought a term in the Agreement that contained a commitment from the Applicant that the Applicant engage employees of Innovative Asset Solutions Pty Ltd who perform work on Santos sites under the terms of the Agreement. The AWU agreed to support an application made by the Applicant pursuant to s.318 of the Fair Work Act 2009 to give effect to such a commitment.
The terms of the Agreement are more favourable than the IAS Group Enterprise Agreement 2019 (IAS Agreement), and the transferring employees will be working alongside employees already covered by the Agreement. Should the Fair Work Commission approve the application, the transferring employees will be better off.
The AWU has members covered by the Agreement and members currently covered by the IAS Agreement. Both groups of members have communicated their support of the application to the AWU.
Turning to whether there has been a transfer of business, it is uncontroversial that the Transferring Employees:
a) ceased employment with IAS between 21 April and 9 May 2023;[7]
b) commenced employment with the Applicant between 22 April and 10 May 2023, this being within the three months prescribed by s 311(1)(b);
c) perform the same or substantially the same work for the Applicant as they did for IAS;[8] and
d) are now employed by the Applicant, the Applicant and IAS being associated entities for the purposes of s 50AAA of the Corporations Act 2001 (Cth) therefore giving rise to the requisite connection between the old employer and new employer referred to in s 311(1)(d) (see also s 311(6) of the Act).
In the circumstances, I am satisfied there has been a transfer of business as that phrase is understood by reference to s 311(1) of the Act.
The Applicant seeks the following orders under s 318(1) of the Act:
a) pursuant to s 318(1)(a), the IAS Agreement, as a transferrable instrument, does not, and will not, cover the Applicant and the Transferring Employees; and
b) pursuant to s 318(1)(b), the O&M Agreement does, or will, cover the Transferring Employees.
The application contained detailed grounds and submissions, and was accompanied by witness statements of Peter Foolkes, Project Manager for the Applicant, and Kate-Eliza McLachlan, Operations Manager for the Applicant, together with several attachments.
Having received no objection to the application being determined on the papers, I proceeded to determine the matter by reference to and with reliance upon the grounds, submissions and other materials provided with the application.
Section 318 of the Act sets out the circumstances in which an order such as that sought by the Applicant may be made by the Commission:
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.
I have reviewed the application documentation and the accompanying material. These documents outline the factual circumstances which have given rise to the application. Further, the submissions contained in the application address the relevant legislative requirements which are asserted to provide a proper basis for the making of the orders sought.
I am satisfied this circumstance is a transfer of business as understood by reference to s 311 and that the IAS Agreement is a transferable instrument as described in s 312(1)(a). If the order under s 318(1)(a) was not made, then I consider by virtue of s 313(1)(a) the IAS Agreement would cover the Transferring Employees notwithstanding their employment with the Applicant.
It is evident that none of the Transferring Employees will be disadvantaged by the proposed orders in relation to their terms and conditions of employment. If I were to make the orders sought, the Transferring Employees will be covered by the O&M Agreement, hence establishing terms and conditions of employment until 27 March 2026, which have been shown to be advantageous compared to those the Transferring Employees currently enjoy.[9] The Applicant referred to the significant industrial disharmony that may arise if its Transferring Employees performed the same duties as existing employees and yet, were afforded different minimum entitlements. I consider the submission is not absent merit and note that the Applicant also considers that there is no business synergy between having both the IAS Agreement and O&M Agreement covering the Applicant in relation to the same work. As to whether the Applicant would incur significant economic disadvantage, the assertion is unable to be sustained on the evidence. However, I note that the absence of the orders sought, may result in some economic disadvantage due to additional administrative and payroll costs.
I have considered the factors set out in s 318(3) and have concluded that it is appropriate and not contrary to the public interest to make Orders[10] sought under s 318(1)(a) and (b). In accordance with s 318(4), the Orders shall have effect from the date the Orders are made.
DEPUTY PRESIDENT
Matter determined on the papers.
[1] AE503897.
[2] Form F40 – Application for orders in relation to a transfer of business, [2.3(4)].
[3] AE519586.
[4] Witness Statement of Peter Foolkes, [12] (Foolkes Statement).
[5] Ibid [17].
[6] Ibid [19].
[7] Fair Work Act 2009 (Cth) s 311(1).
[8] Ibid s 311(1)(c).
[9] Foolkes Statement (n 4) [20]; attachment 3 EA Comparison Table.
[10] PR761737.
Printed by authority of the Commonwealth Government Printer
<AE503897 PR761735>
0
0
0