Universal Cranes (Central Qld) Pty Ltd T/A Universal Cranes

[2020] FWC 5575

[2020] FWC 5575

The attached document replaces the document previously issued with the above code on 4 November 2020.

Paragraph [16] has been updated.

Mackenzie Barnes

Associate to Commissioner Spencer

Dated 4 November 2020

[2020] FWC 5575

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.318—Transfer of instrument

Universal Cranes (Central Qld) Pty Ltd T/A Universal Cranes
(AG2020/3093)

Building, metal and civil construction industries
COMMISSIONER SPENCER	BRISBANE, 4 NOVEMBER 2020

Application for an order relating to instruments covering new employer and transferring employees in agreements.

[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) for an order relating to an instrument covering a new employer and transferring employees.

[2] The Applicant sought an Order that the Universal Cranes Pty Ltd and CFMEU Collective Agreement 2013-2016 (the Agreement) will not cover the Applicant and all transferring employees from Universal Cranes Pty Ltd from the date of the Order.

[3] The Applicant provided the following background to the application:

•  Universal Cranes (Central Qld) Pty Ltd (ABN 79 636 089 524) (UCQ) made a conditional offer to 11 employees to transfer their employment from Universal Cranes Pty Ltd (ABN 53 106 292 799) to UCQ.

•  UCQ is a related entity to Universal Cranes Pty Ltd, both being entities within the Universal Cranes Group.

•  On 28 May 2020, employees of UCQ voted unanimously in support for the Universal Cranes Central Queensland Agreement 2020 (the New Agreement). This enterprise agreement was approved by the Fair Work Commission on 21 July 2020.

•  The condition of offer of employment relates to the success of this application and UCQ will not employ the transferring employees if the application is not successful.

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.”

CONSIDERATION

Section 318(1)(a)(i): The views of the new employer

[6] Mr Oliver Martin, the Group Chief Executive Officer of UCQ provided a Statement in support of the application.

[7] The Applicant submitted that:

(a) UCQ wishes to employ the transferring employees due to their skills, experience and previous history with the associated entity Universal Cranes Pty Ltd.

(b) UCQ wishes to avoid the Transferring Instrument due to its views that:

•  The Transferring Instrument is outdated and does not reflect the operating requirements of UCQ. The New Agreement, which recently received unanimous support from the employees of UCQ at the time, is better to suited to the operating requirements of UCQ.

•  It would create two categories of employees with different employment conditions – those under the Transferring Instrument and those under the New Agreement. 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.

(c) While UCQ holds a preference for employing the transferring employees, it believes that the negative commercial and business impact of the Transferring Instrument outweighs the benefits of the employees’ skills, experience and previous history with Universal Cranes Pty Ltd.

(d) If the order is not granted, UCQ will 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

[8] 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 the following material (4 Docs), which provided information to assist them with making their determination to accept the conditional offer of employment:

•  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) Further, 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.

(e) 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

•  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.

•  As such, we submit that the employees who have accepted the conditional offer are taken to be in a position of support for the application.

•  details of the employees who have accepted the conditional offer and their views are set out in the statement of Mr Oliver Martin.

•  We submit the unanimous acceptance of the conditional offers (by all 11 employees who are currently covered by the Transferring Instrument and were provided an offer) is also indicative of a positive view of the offers made and the opportunity this provides them.

Section 318(1)(b): Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[9] The Applicant submitted that the employees would not be disadvantaged by the Order in relation to their terms and conditions of employment because:

(a) The totality of CQU offer of employment represents the terms and conditions offered to the transferring employees.

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; (g) 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

[10] 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

[11] The Applicant provided that the:

(a) Transferring Instrument will have a negative impact on UCQ’s workplace. For example, the Transferring Instrument 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. It is 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, will negatively impact productivity within the enterprise. 1

(b) As such, the labour productivity, comprising the ratio output per employee, would be improved upon the success of this application, 2 as opposed to adopting the transferable instrument within the business of UCQ, in that all employees would be working within the same system of rostering and other terms and conditions as prescribed in the New Agreement. Specifically, with the example in [32] of RDOs, if a portion of CQU employees are 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 9 employees from the site, may cause issues with ongoing project requirements.”

(c) UCQ wishes to avoid the Transferring Instrument due to its views that:

•  The Transferring Instrument is outdated and does not reflect the operating requirements of UCQ. The New Agreement, which recently received unanimous support from the employees of UCQ at the time, is better to suited to the operating requirements of UCQ.

•  It would create two categories of employees with different employment conditions – those under the Transferring Instrument and those under the New Agreement. 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.

(d) While UCQ holds a preference for employing the transferring employees, it believes that the negative commercial and business impact of the Transferring Instrument outweighs the benefits of the employees’ skills, experience and previous history with Universal Cranes Pty Ltd.

(e) If the order is not granted, UCQ will 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

[12] The Applicant submitted that there are some aspects of the relative position between the New Agreement and the Transferring Instrument that will incur significant economic disadvantages to UCQ if the Transferring Instrument were to apply to employees within its enterprise.

[13] The Applicant submitted that:

(a) Clients of UCQ have indicated they will not contract with UCQ if the Transferring Instrument applies to their employees.

(b) The New Agreement reflects the current operating requirements of UCQ, the Transferring Instrument reflects the needs of a different entity, as of 2 September 2013. There are significant differences between the economic requirements of UCQ today and Universal Cranes Pty Ltd in 2013.

(c) The age of the Transferring Instrument, of which the nominal expiry of predates the application of the Code for the Tendering and Performance of Building Work 2016 (Cth) (‘Code’), means that the implementation of some clauses in the Transferring Instrument are inconsistent with UCQ’s statutory requirements under the Code. This can have severe economic effects on both UCQ’s current contracts and UCQ’s ability to tender for new work moving forward.

(d) Further, there is an increased cost to UCQ 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

[14] The Applicant submitted that there is:

(a) some synergy between the Transferring Instrument and the New Agreement, with both agreements relating to the Mobile Crane Industry. However, there are significant differences with the UCQ agreement being a stand-alone agreement with the exclusion of any awards that would apply. The Transferring Instrument is required to be interpreted in conjunction with the following awards and orders even if any of them ceases to exist:

(i) Mobile Crane Hiring Award 2010;

(ii) Queensland Industrial Relations Commission Order (No. B585 of 2003) Apprentices’ and Trainees’ Wages and Conditions (excluding certain Queensland Government entities) 2003; and

(iii) Queensland Industrial Relations Commission Order (No. B1849 of 1997) Supply of tools to apprentices.

(b) the Transferring Instrument is 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 UCQ operates.

Section 318(1)(g): The public interest

[15] The Applicant submitted:

(a) It is submitted that allowing transferring employees to commence employment with UCQ will not be contrary to the public interest. Overall, the skills and experience of the transferring employees will continue to promote the productivity of an operation that delivers quality service to the community and will diminish the community impact by ensuring ongoing employment for these employees. 4 Specifically:

(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

[16] 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. The transferring employees will be covered by the new Agreement from 4 November 2020.

[17] I Order accordingly.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

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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].

 4   Cape Byron Management Pty Ltd [2016] FWC 2576, [30].