s.318 - Application for an order relating to instruments covering new employer and transferring employees

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

• [1] BHP WAIO Pty Ltd (BHP) has made an Application (Application) for an order pursuant to section 318 of the Fair Work Act 2009 (Cth) (FW Act). The Application seeks an order that the Mining Area C Operations Agreement 2015 (MAC Agreement) and not the Komatsu Australia Pty Ltd Pilbara Service Branch Enterprise Agreement 2025 (Komatsu Agreement) cover Mr Jonathan Freeman (Mr Freeman) and BHP during his employment with BHP (Orders).

• [2] The MAC Agreement was made pursuant to s.185 of the FW Act and has passed its nominal expiry date of 12 August 2019. The parties to the MAC Agreement are BHP and employees of BHP employed in the classifications set out in Schedule 1 of the MAC Agreement undertaking work in Mining Area C Operations.

• [3] The Komatsu Agreement was made pursuant to s.185 of the FW Act. The Komatsu Agreement has a nominal expiry date of 11 January 2028. The parties to the Komatsu Agreement are Komatsu Australia Pty Ltd (Komatsu) and employees of Komatsu who work from or report to the Service Operations Division, Service Department in the Pilbara and/or Kimberley Regions of Western Australia and who are employed to perform work within the following classifications: Field Service Technician, Field Service Technician (Residential), Field Service Technician (FIFO), Field Service Technician (HV Electrician), Field Service Technician (Auto Electrical), High Voltage Electrician, Workshop Technician, Leading Hand Technician, Materials Handler, Painter, Boilermaker, Tradesperson (unspecified), Serviceperson, Trades Assistant or Apprentice.

• [4] Komatsu Australia Pty Ltd (Komatsu) were engaged by BHP to perform mobile mechanical maintenance at the South Flank Mine Site. From 10 September 2025, the duties currently performed (Transferring Work) by the Komatsu employees will be performed by employees of BHP.

• [5] Mr Jonathon Freeman (Mr Freeman) a Komatsu employee covered by the Komatsu Agreement has accepted an offer to transfer his employment from Komatsu to BHP with effect from 10 September 2025. Since the transfer, Mr Freeman has performed the role of Technician Mechanical for BHP.

• [6] Pursuant to section 313 of the FW Act, the Komatsu Agreement will cover BHP and Mr Freeman if there is a connection between BHP and Komatsu for the purposes of section 313 and if within three months of the termination his employment with Komatsu, Mr Freeman is employed by BHP to perform work which is the same or substantially the same as the work Mr Freeman performed for Komatsu.

• [7] BHP asserts that there is a connection between itself and Komatsu for the purposes of section 313 because the work to be performed by Mr Freeman was work which BHP had outsourced to Komatsu but has now ceased to outsource that work. BHP also say that the work it proposed that Mr Freeman performs for BHP is substantially the same as the work he performed for Komatsu.

• [8] On 4 September 2025 directions were issued to BHP (Directions) which at paragraph [10] required BHP to provide a copy of the Application (and materials filed in support of the Application) and a copy of the Directions to Mr Freeman and any employee organisation which ordinarily represents the industrial interests of the employees covered by the Komatsu Agreement by 4pm Thursday 11 September 2025.

• [9] The Directions invited Mr Freeman or any employee organisation which ordinarily represents the industrial interests of the employees covered by the Komatsu Agreement wishing to be heard with respect to the Application to contact my Chambers by 4pm Thursday 18 September 2025.

• [10] On 9 September 2025 Ms Nicole Elkovich, Principal Employee Relations of BHP filed a statutory declaration confirming BHP had complied with paragraph [10] of the Directions.

• [11] Section 318(3) sets out the matters which the FWC must take into account when deciding to make the order sought by BHP as follows:

"318 Orders relating to instruments covering new employer and transferring employees

(3) In deciding whether to make the order, the FWC must take into account the following:

(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."

• [12] BHP has standing pursuant to section 318(2) of the FW Act to make the Application in its capacity as the new employer of Mr Freeman.

• [13] BHP submits that granting the Orders will

1. create employment simplicity by having the one industrial instrument apply to all employees performing the same or substantially the same work;
2. align rostering arrangement across BHP WAIO Pty Ltd;
3. create operational synergies around standard crib times and shift duration, allowing for further operational efficiencies;
4. create cultural synergies and mitigate any disharmony within the workforce and concerns from employees doing the same of similar work as to why two different sets of terms and conditions apply; and
5. mitigate the need for additional and complex payroll standards and requirements.

• [14] Mr Freeman's offer of employment advised him of BHP's intention to make this Application. He accepted the offer of employment on this basis. Neither he nor any organisation which ordinarily represents the industrial interests of employees covered by the Komatsu Agreement have contacted Chambers seeking to be heard within the period proscribed in the Directions. This suggests that he is not opposed to the Orders being made.

• [15] In the Application, BHP identified the following disadvantages to Mr Freeman of the Orders being made:

1. an increase in hours of work from 38 ordinary hours per week and additional hours attracting overtime to an average of 58.5 hours per week, inclusive of 38 nominal ordinary hours and regular additional hours that do not attract overtime;
2. an increase in span of hours from 06:00-18:00 to having no specified span of hours;
3. a reduction in flexibility for when break times are taken;
4. a loss of access to Rostered Days Off;
5. salary structure and rates are less transparent and granular;
6. a loss of entitlement to overtime, shift penalties and allowances;

• [16] However, BHP also identified a number of advantages to Mr Freeman of the Orders being made most notably an increase in pay rates, leave, superannuation and redundancy entitlements.

• [17] The nominal expiry date of the Komatsu Agreement is 11 January 2028. The nominal expiry date of the MAC Agreement is 12 August 2019. The Komatsu Agreement was negotiated more recently and may be argued to more accurately reflect current market and minimum legal requirements.

• [18] BHP say that there is little, if any, business synergy between the agreements and that if the Orders are not granted it will create significant administrative difficulties for BHP and would be operationally inefficient causing BHP economic disadvantage.

• [19] The public interest in the orders being granted must be assessed by reference to the objects of the Part of the FW Act in which section 318 appears and the FW Act more broadly.[1]

• [20] BHP identified a number of grounds as to why the Order would be in the public interest including that:

1. Mr Freeman has not objected to the Order being made.
2. The Order sought will assist to maintain a cohesive, harmonious and productive workplace.
3. The Orders sought are consistent with the objects of the FW Act because they will promote productivity within BHP's business, provide for terms that are no less and in a number of instances more beneficial to those under the Komatsu Agreement

• [21] There is nothing to suggest that the Orders would be contrary to the public interest.

• [22] In light of the above, I am satisfied that it is appropriate to make the order sought by BHP. An order to this effect will be issued with this decision.[2]

[1] Stratco (NSW) Pty Ltd [2010] FWA 7036 at [452]; Australian Laboratory Services Pty Ltd [2015] FWC 7916 at [44]

[2] PR792353.

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