Whitehaven Coal Limited
[2024] FWC 1256
•15 MAY 2024
| [2024] FWC 1256 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Whitehaven Coal Limited
(AG2024/833)
| Mining industry | |
| COMMISSIONER DURHAM | BRISBANE, 15 MAY 2024 |
Application for orders in relation to a transfer of business
An application has been made by Whitehaven Coal Limited (Whitehaven/the Applicant) to the Fair Work Commission (the Commission) for an order pursuant to s.318 of the Fair Work Act 2009 (the Act).
Orders Sought
The Applicant is seeking orders that under s. 318 of the Act:
1. employees currently engaged by OS ACPM Pty Ltd or OS MCAP Pty Ltd who will transfer to Whitehaven Coal Limited and work at the Daunia mine site as part of the Transaction between Whitehaven Coal Limited and BHP Mitsubishi Alliance on 8 October 2023 to acquire 100% of both the Daunia and Blackwater coal mines (the Transaction), will be covered by the BMA Daunia Mine Enterprise Agreement 2023 from the time when those employees become employed by Whitehaven Coal Limited; and
2. employees currently engaged by OS ACPM Pty Ltd or OS MCAP Pty Ltd who will transfer to Whitehaven Coal Limited and work at the Blackwater mine site as part of the Transaction will be covered by BMA Enterprise Agreement 2022 the from the time when those employees become employed by Whitehaven Coal Limited.
Whilst the Applicant sought to deal with both orders in the one application as the matters are related, separate decisions and orders will be issued for each Agreement - BMA Enterprise Agreement 2022 (Blackwater EA) and BMA Daunia Mine Enterprise Agreement 2023 (Daunia EA). As such this decision will address the application as it relates to the Daunia EA.
In support of this Application, the Applicant relies on:
1. A statement from Mr Daniel Cram, Executive General Manager – People and Culture of the Applicant dated 18 March 2024.
Background
On 18 October 2023 Whitehaven Daunia Pty Ltd (ACN 672 143 583) and Whitehaven Blackwater Pty Ltd (ACN 672 142 997) as subsidiaries of Whitehaven Coal Limited (ACN 124 425 396) entered into a transaction to acquire 100% of both the Daunia and Blackwater coal mines from BHP Mitsubishi Alliance (the Transaction). The Daunia and Blackwater workforces at these coal mines are comprised of the following cohorts of employees:
(a)employees employed by Central Queensland Services Pty Ltd and BHP Coal Pty Ltd (BMA) (BMA Employees); and
(b)employees engaged by BP Operations Services (BHP OS) through either OS ACPM Pty Ltd or OS MCAP Pty Ltd as the employing entities (OS Employees).
The BMA Employees and OS Employees perform substantially the same types of work within production and maintenance functions at the Daunia and Blackwater mines.
The BMA Employees engaged at the Daunia mine are covered by the Daunia EA and the BMA Employees engaged at Blackwater mine are covered by the Blackwater EA.
BHP OS is a BHP Group business entity providing specific production and maintenance services, through OS Employees, at Daunia and Blackwater mines through service contracts with BMA.
The service agreements between BMA and BHP OS have or will terminate as part of the Transaction.
As at the date of this Application, OS Employees are not covered by an enterprise agreement.
As part of the Transaction, Whitehaven Coal Mining Ltd (ACN 086 426 253) (Whitehaven) as a subsidiary and employing entity of Whitehaven Coal Limited has made offers of employment to the BMA Employees and OS Employees employed at the Daunia and Blackwater sites.
The Daunia EA and Blackwater EA will transfer by operation of law to bind Whitehaven and the BMA Employees who transfer to Whitehaven on completion of the Transaction by virtue of section 313 of the Fair Work Act 2009.
Whitehaven has made these offers of employment to the OS Employees providing, through common law contracts, the terms and conditions contained within the Daunia EA and Blackwater EA (as applicable).
The terms and conditions offered to OS Employees through common law contracts provide that:
(a) OS Employees' rosters and hours of work will be substantially the same as the rosters and hours of work that the OS Employees were working during their employment with the relevant OS Employing Entity; and that
(b) OS Employees' annual salaries, which will be calculated by reference to the Daunia EA and Blackwater EA (as applicable), will be based on rosters at the time of Completion.
Post completion of the Transaction, transferring OS Employees will continue to work alongside and undertake substantially similar duties to other transferring employees.
On 16 November 2023 and 22 February 2024, Whitehaven communicated its intention to the Mining & Energy Union (MEU), Australian Workers Unions (AWU), Electrical Trades Union QLD & NT (ETU) and Australian Manufacturing Workers' Union (AMWU) (together, the Unions) to file a section 318 Application to seek an order that OS Employees be covered by the Daunia EA or Blackwater EA (as applicable).
To date, Whitehaven has received written consent and support of the Unions, apart from the AWU who have agreed with Whitehaven that they do not need to express their support or otherwise.
Through the orders sought, Whitehaven is seeking to align the terms and conditions of the OS Employees with the wider cohort of transferring BMA Employees workforce, by providing OS Employees with the terms and conditions of employment contained in the Daunia EA and Blackwater EA (as applicable).
Statutory provisions
Section 318 of the Act relates to the application sought by the Applicant. Section 318(3) of the Act sets out those matters the Commission must have regard to in determining if the orders sought should be granted.
Section 318 provides as follows:
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.
Consideration
Matters that the FWC must take into account
318(3)(a)(i) – views of Whitehaven
Whitehaven's position is that the terms and conditions of employment of the OS Employees should be aligned with the wider cohort of BMA transferring employees. This will ensure that post the Transaction:
(a) the whole of the production and maintenance employee cohort at the Daunia and Blackwater mines receive the same or substantially the same terms and conditions of employment and are covered by the same enterprise agreements; and
(b) the terms and conditions that OS Employees receive under the Daunia EA or Blackwater EA (as applicable) are more favourable than the terms and conditions that would otherwise apply to the OS Employees under the Black Coal Mining Industry Award.
The orders sought by Whitehaven reflect the public position that Whitehaven has taken. Namely, that OS Employees at Daunia and Blackwater mines will be offered permanent roles on terms and conditions aligned with the applicable enterprise agreements.
318(3)(a)(ii) – views of the employees who would be affected by the order
No views have been provided by the employees to my Chambers, however Whitehaven's understanding is that OS Employees who would be affected by the orders sought are in favour of the making of the orders.
Whitehaven's intention to provide OS Employees with terms and conditions of employment in accordance with the Daunia EA and Blackwater EA has been communicated to OS Employees at both Daunia and Blackwater mine. OS Employees have been supportive of Whitehaven's proposal.
318(3)(b) – whether the affected employees will be disadvantaged by the order
Whitehaven submits the OS Employees would not be disadvantaged by the orders sought. To the contrary, OS Employees will receive substantially more beneficial terms and conditions of employment under the protection of a binding enterprise agreement if the orders sought by Whitehaven are made.
The terms and conditions of employment provided by the Daunia EA and Blackwater EA are significantly more beneficial to OS Employees than the terms and conditions that would otherwise apply to them in accordance with the Award.
If the orders sought are not made, the OS Employees will not have the protection of an enterprise agreement although they are working alongside and performing substantially similar roles to the transferring BMA employees (OS Employees and BMA Employees) who would be covered by the Daunia EA and Blackwater EA.
318(3)(c) – nominal expiry date
The Daunia EA has a nominal expiry date of 17 November 2027, and the Blackwater EA has a nominal expiry date of 19 January 2026.
318(3)(d) – negative impact on productivity
Whitehaven submits the OS Employees will work alongside and undertake substantially similar duties to other transferring employees. Alignment of terms and conditions of employment within a single employee cohort will improve productivity as opposed to having a negative impact on it.
Making the orders sought by Whitehaven would increase operational efficiencies by removing the need for Whitehaven to administer separate sources of employment terms and conditions under different industrial instruments and contracts within a single employee cohort.
318(3)(e), (f) – economic disadvantage and degree of business synergy
Whitehaven submits that they do not have an enterprise agreement in place that would otherwise cover any transferring OS or BMA Employees in respect of operations at Daunia or Blackwater mines.
318(3)(g) – public interest
Whitehaven submit there is a significant public interest in ensuring that there is no differentiation between the terms and conditions of employment being provided to employees within a single cohort at the Daunia and Blackwater mines.
The orders sought by Whitehaven are consistent with the "Same Job Same Pay" measures introduced through the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, by ensuring that OS Employees receive the higher wages that are paid to workers under the Daunia EA and Blackwater EA for the same or similar work.
I have reviewed the application documentation and the accompanying material including the Statement provided. These documents outline the 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 for a proper basis for the making of the orders sought.
I am satisfied that the requirements of s.318 of the Act have been met. Orders will be issued with this Decision.
COMMISSIONER
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