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

Application for an order relating to instruments covering transferring employee s.318 - orders granted

• [1] This decision concerns an application by Central Queensland Services Pty Ltd T/A BHP (CQS/the Applicant) for orders pursuant to s.318(1)(b) of the Fair Work Act 2009 (the Act) that the BMA Caval Ridge Mine Agreement 2023[1] (the Agreement) will cover transferring employees who perform transferring work for the Applicant.

• [2] The Applicant is part of the BHP Group which owns 50% of the BHP Mitsubishi Alliance Pty Ltd (BMA). The other 50% is owned by Mitsubishi Development Pty Ltd. BMA, through the entity BM Alliance Coal Operations Oty Ltd (BMACO), currently operates a number of metallurgical coal mines in Central Queensland's Bowen Basin including the Caval Ridge Mine (the Mine). The employees at that Mine are covered by the BMA Caval Ridge Mine Enterprise Agreement 2023 (Caval Ridge EA).

• [3] FMS Group Pty Ltd T/A Field Mining Services Group (FMS/Old Employer) are engaged to provide labour hire personnel to the Applicant and are the employers of the employees covered by the FMS Employee Agreement 2025[2] (FMS EA) who perform work at the Mines set out at paragraph [2].

• [4] The Applicant has made an offer of direct employment to one (1) individual (Mr McKenzie) currently employed by FMS and labour hired to the Applicant at the Mine, to carry out the same (or substantially the same) work that the employees presently perform for FMS at the Mine. In addition, the Applicant intends to make further offers of direct employment to other individuals who are employed by FMS, for the same (or substantially the same) work that the individuals presently perform for FMS at the Mines.

• [5] Those employees are presently covered by the FMS Employee Agreement 2025.[3]

• [6] As a result of recruiting these individuals to direct employment with the Applicant, the Applicant will insource the work which was previously performed by these individuals as employees of FMS, such that those employees will perform that work for the Applicant.

• [7] Mr McKenzie has accepted the employment offer from the Applicant. Accordingly, Mr McKenzie will commence that employment in accordance with that offer and will therefore be a transferring employee for the purposes of s.313 of the Act.

• [8] The orders sought by the Applicant are as follows:

• 1. The FMS Employee Agreement 2025[4] will not cover CQS and the transferring employees (including Mr McKenzie and any future CQS employees insourced from FMS) in respect of their employment with CQS; and

• 2. The BMA Caval Ridge Mine Agreement 2023[5] will cover CQS and the transferring employees (including Mr McKenzie and any future CQS employees insourced from FMS).

• [9] The Applicant seeks that the orders will not apply to any other transferring employee employed by the Applicant at any other location, and the transferring work will be limited to the work covered by the transferrable instrument at the relevant locations.

• [10] In accordance with my directions of 10 October 2025, the views of the affected employee, the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (ETU) and the Mining and Energy Union (MEU) were sought by 4pm 23 October 2025. No views were expressed nor any objections made, and I am satisfied that the matter can be determined on the papers without the need for a hearing.

New transferring employees of new employer to be covered by transferable instrument

• [11] I am satisfied that the Agreement is a transferable instrument within the meaning of s.312 of the Act, and I observe that the Applicant accepts that the Agreement is a transferable instrument. I note that the two companies are associated entities. Section 313 of the Act sets out when transferring employees may be covered by a transferring instrument. This section provides:

"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; and

(b) while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.

(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee's employment with the old employer.

(3) This section has effect subject to any FWC order under subsection 318(1)."

• [12] The Agreement - the transferable instrument - is, in accordance with s.313(1)(a), an instrument that covers the new employer and the transferring employee in relation to the transferring work after the transfer time that the employee becomes employed by the new employer.

• [13] Section 318 of the Act sets out the matters to which the Commission must have regard in determining if the orders sought should be granted.

"Orders relating to instruments covering new employer and transferring employees

(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) 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 a person 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, 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;

Restriction on when order may come into operation

(4) The order must not come into operation in relation to a particular non-transferring employee before the later of the following:

(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;

The application in relation to the matters to be taken into account

Section 318(3)(a)(i) - Views of the new employer

• [15] The Applicant is the new employer, who seeks, and is supportive of, the order. The Applicant cites the following benefits to it would result from the issuing of the orders sought:

1. Greater payroll efficiencies in the processing of pays;
2. Better alignment of rosters across the Mine;
3. Operational synergies around crib times and shift duration;
4. Cultural synergies and mitigation of disharmony that might result from different sets of terms and conditions applying; and
5. Mitigation of the need for additional and more complex payroll requirements.

• [16] These factors weigh in favour of the orders sought being made.

Section 318(3)(a)(ii) - views of the employees who would be affected by the order

• [17] Mr McKenzie was provided with an offer of employment together with an explanatory document detailing the orders that would be sought, seeking his response as to whether he supported those orders being sought, a comparison of the Caval Ridge EA against the FMS EA and the underpinning Award. During conversations with the Applicant on both 6 August 2025 and 26 September 2025, Mr McKenzie confirmed his understanding of this information and on 30 September 2025, McKenzie accepted the offer of employment with CQS on those terms. Further, Mr McKenzie was invited to provide his views to my chambers in directions dated 10 October 2025 by 4pm 23 October 25. Mr McKenzie did not lodge any objections or make any views known that would alter that assessment.

• [18] These factors weigh in favour of the orders sought being made.

Section 318(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

• [19] The Applicant submits that the transferable instrument is more beneficial overall than the FMS EA. An assessment of the differences demonstrates the majority of terms are considerably more beneficial to Mr McKenzie and any transferring employees in future. These include:

1. Higher wages over the life of the agreement;
2. Better training opportunities;
3. More beneficial terms for the introduction of rosters, redundancy consultation, notices of shift changes, incentive schemes, public holiday entitlements, annual leave procedures, paid parental leave entitlements, compassionate leave entitlements, severance pay entitlements, notice of termination, death and disablement payments; and
4. Employee representative rights.

• [20] These factors weigh in favour of the orders sought being made.

Section 318(3)(c) - the nominal expiry date of the agreement

• [21] The nominal expiry date of the FMS EA is 27 May 2029 and, for the Caval Ridge EA, this date is 11 May 2027. The FMS EA provides greater certainty than the Caval Ridge EA, as its nominal expiry date is two years later; however, the expiry of the Caval Ridge EA on 11 May 2027 provides an opportunity for employees to seek more beneficial entitlements than the conditions already in place.

• [22] These factors weigh neutrally in respect of the orders sought being made.

Section 318(3)(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace

• [23] The Applicant submits that there would be a negative impact on productivity if the orders sought were not made because:

1. It would require a significant investment of cost and time to develop and implement configuration changes to the payroll system;
2. There would be a requirement to upskill functional (HR, Safety and Payroll) and operational (Management) roles to understand and apply the different terms and conditions of employment in the FM EA;
3. Two separate time sheeting activities would be required, increasing administrative burden and creating additional risk of inaccuracies;
4. Of the potential for disharmony created as a consequence of employees working side by side being paid differently and subjected to different terms; and
5. Of the impact on those employees working side by side created by the complexity of managing those two sets of terms and conditions.

• [24] The Applicant further submits that there could only be a positive impact on productivity as the Caval Ridge EA is a bespoke agreement that is better suited to the Applicant's operations at the Mine. In addition, the Applicant submits that productivity benefits would flow from having one rostering, payroll and IT system and the ability to deal with operational issues with one universal approach (eg dispute settlements, consultation and change and redundancy requirements), this simplification reducing the Applicant's administrative cost and burden.

• [25] I am satisfied that there would be no negative impact on productivity upon making the orders sought and this weighs in favour of the orders sought being granted.

Section 318(3)(e) - whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

• [26] The Applicant submits that there would be no significant economic disadvantage in making the orders but that there would be such a disadvantage if the orders were not made, as the issues set out in paragraph [23]-[24] have either a direct or indirect financial impact.

• [27] I consider that if the orders sought were made, the Agreement's coverage of transferring employees would not cause any significant economic disadvantage, and this weighs in favour of the orders sought being granted.

Section 318(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

• [28] The Applicant submits that there is no business synergy between the FMS EA and the Caval Ridge EA as the former reflects a labour hire operation and the latter is specifically focused on a single cohort of employees to work only at the mine.

• [29] These factors weigh in favour of the orders sought being made.

• [30] The Applicant submits that the Commission's task is "in weighing the public interest associated with the protection of (transferring) employees" ... terms and conditions of employment against the public interest in facilitating and employer ... to run its enterprise efficiently."[6]

• [31] The Applicant further submits that maintaining a cohesive, harmonious and productive workplace is a matter of public interest. The Applicant notes that the Caval Ridge EA is more beneficial overall as compared to the FMS EA and this is supported by Mr McKenzie's acceptance of the employment offer made.

• [32] The Applicant finally submits that there are no issues of public interest that would sit against the orders sought being made.

• [33] These factors weigh in favour of the orders sought being made, albeit slightly.

• [34] Having taken into the account the material provided by the Applicant in support of its application and the matters set out in s.313 and s.318(3) of the Act, I am satisfied that that it is appropriate to grant the order pursuant to s.318(1)(a); that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a transferring employee who performs, or is likely to perform, the transferring work for the new employer will not apply; and that, pursuant to s.318(1)(b), an instrument that already covers the new employer/Applicant/CQS, will instead cover the transferring employee/s.

• [35] An order[7] to this effect will be issued together with this decision.

[1] [2023] FWCA 1358; AG2023/1039.

[2] [2025] FWCA 1750; AG2025/1276.

[3] [2025] FWCA 1750; AG2025/1276.

[4] [2025] FWCA 1750; AG2025/1276.

[5] [2023] FWCA 1358; AG2023/1039.

[6] Australian Laboratory Services Pty Ltd [2015] FWC 7916 at [48].

[7] PR793214.

Printed by authority of the Commonwealth Government Printer