Universal Cranes (Central Qld) Pty Ltd T/A Universal Cranes
[2021] FWC 717
•16 FEBRUARY 2021
| [2021] FWC 717 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Universal Cranes (Central Qld) Pty Ltd T/A Universal Cranes
(AG2021/215)
COMMISSIONER SPENCER | BRISBANE, 16 FEBRUARY 2021 |
Application by Universal Cranes (Central Qld) Pty Ltd T/A Universal Cranes.
[1] An application pursuant to s.318 of the Fair Work Act 2009 (the Act) was made by Universal Cranes (Central Qld) Pty Ltd T/A Universal Cranes (the Applicant/UCQ) for an order relating to an instrument covering a new employer and transferring employees.
[2] The Applicant sought an Order pursuant to s.318(1)(a) of the Act, to displace the operation of s.313(1) in relation to the Universal Cranes Pty Ltd and CFMEU Collective Agreement 2013-2016 (the Agreement), to the effect that Agreement does not cover the new employer and the transferring employees.
[3] The Applicant provided the following background to the application:
• The Applicant made a conditional offer to four employees to transfer their employment from Universal Cranes Pty Ltd to the Applicant.
• The Applicant is a related entity to Universal Cranes Pty Ltd, both being entities within the Universal Cranes Group.
• On 28 May 2020, employees of the Applicant voted unanimously in support of the Universal Cranes Central Queensland Agreement 2020 (the new Agreement).
RELEVANT LEGISLATION
[4] Pursuant to s.313 of the Act:
“313 Transferring employees and new employer covered by transferable instrument
(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:
(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer…
(3) This section has effect subject to any FWC order under subsection 318(1).”
[5] Further, s.318 of the Act relevantly provides:
“318 Orders relating to instruments covering new employer and transferring employees
(1) 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.
(2) 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).
(3) In deciding whether to make the order, 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.
(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.”
APPLICANT’S SUBMISSIONS
[6] In accordance with s.311 of the Act, the Applicant made the following submissions:
• As part of their acceptance of the conditional offer, employees of Universal Cranes will transfer their employment to the Applicant. As such, their employment at Universal Cranes (the old employer) will be terminated.
• These employees will be transferring within 3 months of their termination of employment with Universal Cranes (the old employer).
• The work of these employees will be performing at the Applicant (the new employer) is the same, or substantially the same, as the work they performed at the Universal Cranes (the old employer).
• There is a connection between the Applicant (the new employer) and Universal Cranes (the old employer) as described in s.311(6) of the Act, as the Applicant is an associated entity of Universal Cranes (the old employer) at the time of the transferring employees becoming employed at the Applicant.
[7] In relation to s.312 of the Act, the Applicant submitted that the Agreement is an enterprise agreement that was agreed on 2 September 2013 and is a transferable instrument pursuant to s.312 of the Act.
[8] Mr Oliver Martin, the Group Chief Executive Officer of UCQ provided a Statement in support of the application.
CONSIDERATION
Section 318(1)(a)(i): The views of the new employer
[9] The Applicant submitted that it wished to employ the transferring employees due to their skills, experience and previous history with the associated entity Universal Cranes Pty Ltd.
[10] The Applicant said that it wished to avoid the Agreement due to its views that:
• The Agreement is outdated and does not reflect the operating requirements of the Applicant. The new Agreement, which received unanimous support from the employees of the Applicant at the time, is better to suited to the operating requirements of the Applicant; and
• Having the four transferring employees covered by the Agreement would create two categories of employees with different employment conditions – those under the Agreement and those under the new Agreement. The Applicant submitted this would be more costly to maintain and manage and may cause issues for employee morale when some employees are subject to the more favourable conditions of the new Agreement and others are not.
[11] The Applicant said that while it held a preference for employing the transferring employees, it believed that the negative commercial and business impact of the Agreement outweighed the benefits of the employees’ skills, experience and previous history with Universal Cranes Pty Ltd such that if the order is not granted, the Applicant would have no choice but to seek to employ new (non-transferring) employees under its existing agreement.
Section 318(1)(a)(ii): The views of the employees who would be affected by the order
[12] The Applicant submitted that the employees would support the making of the Order because:
(a) Only the employees who have indicated the acceptance of the conditional offer of employment would be affected by this application;
(b) These employees were provided with documentation, which provided information to assist them with making their determination to accept the conditional offer of employment. The documentation provided included:
• A Universal Cranes Information Pack for Transferring Employees;
• The Universal Cranes Conditional Offer of Employment;
• The new Agreement; and
• The Employment Contract and its Schedules.
(c) These documents outlined:
• the nature of the conditional offer of employment, being that it was conditional upon the success of this application;
• that the employees leave entitlements would transfer with them and that they would not need to serve a qualifying or probation period. A comparative table was also provided outlining the key differences between the Transferring Instrument and the New Agreement.
(d) If the employees had any questions or required any further information, they were advised to contact either Mr Mark Happer or Ms Kelly Frost from UCQ management, or to seek alternative advice.
[13] The Applicant said that the Conditional Letter of Offer also required employees to agree to the following and provide their signature in acceptance of each of the following:
“• I have received, read, understood and been given the opportunity to consider the following:
• The Universal Cranes Information Pack for Transferring Employees
• The Universal Cranes Conditional Offer of Employment
• The Universal Cranes Central Queensland Agreement 2020
• The Employment Contact and its schedules.
• I understand that the Universal Cranes Offer of Employment is conditional upon the Fair Work Commission ordering that the Universal Cranes Central Queensland Agreement 2020 will cover and apply to my future employment with Universal Cranes.
• Based on the above undertakings, I hereby accept the Universal Cranes Conditional Offer of Employment as a positive option for me considering there is no further employment with my previous employer.
• I am happy to provide a statement to the Fair Work Commission to support Universal Cranes’ application for orders.”
[14] As such, the Applicant submits that the employees who have accepted the conditional offer are taken to be in a position of support for the application.
[15] The details and signatures of the employees who accepted the conditional offer and their views were set out in the statement of Mr Oliver Martin.
[16] The Applicant submitted that the unanimous acceptance of the conditional offers by all four employees who are currently covered by the Agreement and were provided an offer was also indicative of a positive view of the offers made and the opportunity this provided them.
Section 318(1)(b): Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment
[17] The Applicant submitted that the employees would not be disadvantaged by the Order in relation to their terms and conditions of employment because the totality of the Applicant’s offer of employment represents the terms and conditions offered to the transferring employees.
[18] The application set out a table summarising any material differences between the new Agreement and the Agreement:
| Term | Universal Cranes Central Queensland Agreement 2020 | Universal Cranes Pty Ltd and CFMEU Union Collective Agreement 2013-2016 |
Relationship to Awards and Agreements | This is a stand-alone agreement and will apply to the exclusion of all federal agreements or awards. It is to be read in and interpreted in conjunction with the National employment standards (NES). | This agreement is intended to be interpreted in conjunction with: 1. The Mobile Crane Hiring Award 2010; 2. Queensland Industrial Relations Commission Order (No. B585 of 2003), Apprentices and Trainees Wages and Conditions (Excluding certain Queensland Government entities) 2003; 3. Queensland Industrial Relations Commission order (No B1849 of 1997) Supply of tools to apprentices. |
Consultation | The consultation clause in the agreement reflects the model consultation clause from the Fair Work Regulations. | This is a more restrictive consultation clause that heavily involves the CFMEU even without an employee appointing the CFMEU as a representative on their behalf. |
Dispute Resolution | The Dispute Resolution clause in the agreement sets out 4 steps and requires that any outcome of arbitration is consistent with the Code for the Tendering and Performance of Building Work 2016. | There is no requirement in this Dispute Resolution clause that any outcome is consistent with the Code for the Tendering and Performance of Building Work 2016. Unions are to represent their covered employees even without appointment by the employee. |
Redundancy | Full time employees will be entitled to three weeks ordinary pay per year of service with the employer if made redundant. After two years continuous service the entitlement to redundancy will convert to severance pay and the employee will be paid the same entitlement as redundancy independent of whether they resign or are terminated due to redundancy by the Employer. Employees who were previously members of industry Redundancy funds prior to the commencement of the agreement such as the Building Employees Redundancy Trust will have their payments to these funds terminated. | The company will utilise the Building Employees Redundancy Trust to meet all liabilities for severance and redundancy payments. |
Wages and Wage Related Matters | There are minimal requirements enshrined in the agreement relating to Time and Wage records. | There are specific requirements as to the particulars of details to payment of each employee that must be adhered to under this agreement. It is important that the company is aware of and complies with these requirements under the agreement. |
Superannuation | Employees are entitled to a 11% Employer contribution for all ordinary time worked. | Employees are entitled to a 15% Employer contribution for all ordinary time worked. |
Pay Rates | The ordinary hourly rate of pay for a full time tradesperson level 6 Employee from 1 January 2020 is $45.00. This will be increased by CPI as a minimum on the 1st of July each year. | This figure was $37.37 at 1 July 2015. |
Allowances | The following allowances apply under this agreement: (a) Travel Allowance; (b) Overnight Allowance/Distant Work Allowance; (c) Tool Allowance; (d) Shift Allowance; (e) Project Top Up Allowance; and (f) Leading Hand Allowance. Other allowances under the Mobile Crane Hiring Award are incorporated into the base ordinary hourly rate. | The following allowances apply under this agreement: (a) Fares and Travel Allowance; (b) Car Allowance; (c) Sleeper cab allowance; (d) Overnight Allowance; (e) Project Top Up Allowance; (f) Site Allowance; Living Away from Home Allowance. |
Casual Employees | When calculating overtime rates, casual loading will not apply under the agreement. | When calculating overtime, the applicable overtime rate and the casual loading will apply under the agreement. |
Personal Leave | Employees will accrue personal leave entitlements of 10 days per calendar year. This accrues on Calendar weekly basis. | Employees will accrue personal leave as follows under the agreement.: 1. Three days in the first month and then one additional day at the beginning of each of the next nine calendar months will be available in the first year of employment; 2. Twelve days at the beginning of the employees second and each subsequent year will commence on the anniversary of engagement. |
Section 318(1)(c): The nominal expiry date of the transferable instrument
[19] The transferable instruments have the following nominal expiry dates:
• Universal Cranes Pty Ltd and CFMEU Collective Agreement 2013-2016 – 30 June 2016; and
• Universal Cranes Central Queensland Agreement 2020 – 28 July 2023.
Section 318(1)(d): Whether the transferable instrument would have a negative impact on the productivity of the Applicant's workplace
[20] The Applicant submitted that the Agreement would have a negative impact on the Applicant’s workplace. The Applicant gave as an example that the Agreement provides for the use of Industry Calendar Rostered Days Off (RDO) which provides for a different set of requirements to the utilisation of an RDO while working on construction sites and penalties for working on set dates that do not exist in the New Agreement. The Applicant submitted that effecting two systems of RDO utilisation and the penalties associated within one enterprise, where employees performing the same kind of work in close proximity are engaged under two sets of employment terms and conditions, would negatively impact productivity within the enterprise.1
[21] The Applicant submitted that the labour productivity, comprising the ratio output per employee, would be improved upon the success of the application and granting of the Order,2 as opposed to adopting the transferable instrument within the business of the Applicant, in that all employees would be working within the same system of rostering and other terms and conditions as prescribed in the new Agreement.
[22] The Applicant referred to the RDO example and submitted that if a portion of the Applicant’s employees were required by their agreement to take specific days off due to the industry calendar or get paid penalty rates for their time on that day, other employees may feel resentment, or the specific date of the RDO removing four employees from the site, may cause issues with ongoing project requirements.
[23] The Applicant submitted it wished to avoid the Agreement due to its views that:
• The Agreement is outdated and does not reflect the operating requirements of the Applicant;
• The new Agreement, which recently received unanimous support from the employees of the Applicant at the time, is better to suited to the operating requirements of the Applicant;
• It would create two categories of employees with different employment conditions – those under the Agreement and those under the new Agreement, which would be more costly to maintain and manage and may cause issues for employee morale when some employees are subject to the more favourable conditions of the new Agreement and others are not;
• While the Applicant held a preference for employing the transferring employees, it believed that the negative commercial and business impact of the Agreement outweighs the benefits of the employees’ skills, experience and previous history with Universal Cranes Pty Ltd; and
• If the order was not granted, the Applicant would have no choice but to seek to employ new (non-transferring) employees under its existing agreement.
Section 318(1)(e): Whether the Applicant would incur significant economic disadvantage as a result of the transferable instrument covering the Applicant
[24] The Applicant submitted that there are some aspects of the relative position between the new Agreement and the Agreement that would incur significant economic disadvantages to the Applicant if the Agreement were to apply to employees within its enterprise. The Applicant submitted:
(a) Clients of the Applicant had indicated they will not contract with the Applicant if the Agreement applied to their employees;
(b) The new Agreement reflected the current operating requirements of the Applicant, while the Agreement reflected the needs of a different entity, as of 2 September 2013, and there were significant differences between the economic requirements of the Applicant today and Universal Cranes Pty Ltd in 2013;
(c) The age of the Agreement, of which the nominal expiry of predates the application of the Code for the Tendering and Performance of Building Work 2016 (Cth) (the Code), meant that the implementation of some clauses in the Agreement are inconsistent with the Applicant’s statutory requirements under the Code. This could have severe economic effects on both the Applicant’s current contracts and the Applicant’s ability to tender for new work moving forward; and
(d) There was an increased cost to the Applicant in additional administrative and payroll costs associated with maintaining two sets of conditions for employees performing the same work. 3
Section 318(1)(f): The degree of business synergy between the transferable instrument and any workplace instrument that already covers the Applicant
[25] The Applicant submitted that while there is some synergy between the Agreement and the new Agreement, with both agreements relating to the mobile crane industry, however there are significant differences with the new Agreement being a stand-alone agreement with the exclusion of any Awards that would apply. The Applicant submitted that the Agreement must be interpreted in conjunction with the following Awards and orders even if any of them ceased to exist:
• Mobile Crane Hiring Award 2010;
• Queensland Industrial Relations Commission Order (No. B585 of 2003) Apprentices’ and Trainees’ Wages and Conditions (excluding certain Queensland Government entities) 2003; and
• Queensland Industrial Relations Commission Order (No. B1849 of 1997) Supply of tools to apprentices.
[26] The Applicant said the Agreement was designed to deal with operations encompassing a wider range of regions, while the new Agreement has been designed with the nature and scope of the region in which the Applicant operates.
Section 318(1)(g): The public interest
[27] The Applicant said it would be in the public interest for the transferring employees to be engaged under the New Agreement and commence employment with UCQ as:
(i) the proven skills of the transferring employees will add value to a productive operation, ensuring UCQ continues to remain competitive and active in the local region;
(ii) in the absence of transferring employees, UCQ will employ employees that may require extensive training within the operation and procedures of the United Cranes Group, this will have an impact on UCQ’s ability to maintain its current contracts and its ability of provide efficient and high-quality mobile crane hire services in the region; and
(iii) given that UCQ is a more competitive entity in the region when compared to Universal Cranes Pty Ltd, with a currently expanding client base, it would be contrary to the public interest to deny the transferring employees the opportunity to voluntarily accept UCQ’s offer of employment.
CONCLUSION
[28] Taking into account the matters in 318(1)(a) and (b) of the Act, I am satisfied that it is appropriate to make an Order in the terms as out set by the Applicant.
[29] The transferring employees will be covered by the new Agreement from 16 February 2021.
[30] I Order accordingly.
COMMISSIONER
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1 Health Care Australia Pty Ltd [2017] FWC 1107, [18].
2 Nokia Solutions and Networks Australia Pty Ltd T/A Nokia Group v Professionals Australia[2017] FWC 4849, [49].
3 Thiess Pty Ltd T/A Thiess [2015] FWC 595, [17].
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