s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

s.319 - Application for an order relating to instruments covering new employer and non-transferring employees

• [1] CSL Australia Pty Ltd (applicant, or CSL) has applied for orders under s.319(1)(b) and (c) of the Fair Work Act 2009 (Cth) (Act). The orders proposed in the application are in the following terms:

(1) That the Inco Ships and MUA Accolade II Ratings Enterprise Agreement 2023 and the Inco Ships and AIMPE/AMOU Accolade II Officers Collective Agreement 2023 (together, the Agreements) cover CSL Australia Pty Ltd (the 'new employer') and any non-transferring employees of the new employer in respect of their employment with the new employer falling within the scope of the Agreements rather than the applicable modern award.

(2) In accordance with section 319(4) of the FW Act, the order will operate from the day on which it is made, or 3 November 2025, whichever occurs later.

• [2] The background to this matter is set out in the application and supporting statement of the applicant's Director Human Resources, Mr. Whitfield, as follows. The applicant is a shipping company that supplies shipping services and vessel operations across Australia. Inco Ships Pty Ltd (Inco) currently supplies labour to the Accolade II vessel under a contract with Adelaide Brighton Ltd (Adbri) to transfer material for Adbri. Inco employs approximately 20 employees who are covered by two enterprise agreements, the Inco Ships and MUA Accolade II Ratings Enterprise Agreement 2023 and the Inco Ships and AIMPE/AMOU Accolade II Officers Collective Agreement 2023 (together, the Agreements). Adbri has agreed that CSL will assume responsibility for the Accolade II vessel operations and crew from 3 November 2025. CSL intends to offer employment to all current Inco employees working on the Accolade II. Any Inco employees who accept an offer of employment with CSL will cease employment with Inco and commence employment with CSL within 3 months. Those who have accepted employment will cease employment with Inco and commence employment with CSL effective 3 November 2025. Any transferring employees will perform the same work on the same vessel for CSL as they did for Inco. Inco and CSL have entered into an arrangement whereby CSL will have the beneficial use of some tangible and intangible assets of Inco that relate to, or are used in connection with, the transferring work.

• [3] By virtue of the matters described above, there will be a transfer of business within the meaning of section 311 of the Act, with a relevant connection between Inco and CSL pursuant to section 311(3) of the Act. The Agreements, as transferable instruments,[1] will transfer and apply to those transferring employees pursuant to section 313 of the Act.

• [4] CSL will likely need to employ new or existing CSL employees who are not transferring from Inco to perform work on the Accolade II vessel that is the same or substantially the same as the transferring work.

• [5] The application is made so that the Agreements will also apply to those non-transferring CSL employees performing the same or substantially the same work, rather than the applicable modern award. The applicable modern award that would otherwise apply is the Seagoing Industry Award 2020.

• [6] After the filing of the application, I directed the applicant to serve a copy of the application and the directions themselves, on the following:

(a) The other parties to the transferable instrument/s; and

(b) Any employee organisation that ordinarily represents the industrial interests of the transferring employee/s.

• [7] The parties referred to above were then directed to file and serve any material in response to the application by 10 October 2025. Nothing was received in response to those directions. The matter has been determined on the basis of written material supplied by the applicant.

• [8] Section 317 of the Act states that Division 3 of Part 2-8, Transfer of business, provides for the Commission to make certain orders if there is, or is likely to be, a transfer of business from an old employer to a new employer.

• [9] Section 319 is in the following terms:

319 Orders relating to instruments covering new employer and non‑transferring employees

(a) an order that a transferable instrument that would, or would be likely to, cover the new employer and a non‑transferring employee because of subsection 314(1) does not, or will not, cover the non‑transferring employee;

(b) an order 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 non‑transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non‑transferring employee who performs, or is likely to perform, the transferring work for the new employer.

Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non‑transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non‑transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.

(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 non‑transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(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:

(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 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;

(b) the day on which the order is made.

• [10] Section 311 sets out the circumstances in which a transfer of business occurs. It is unnecessary to set the section out in full. The uncontested material establishes that there are transferring employees (as defined in s.311(2)) in relation to a transfer of business (as defined in s.311(1)) which has occurred or is likely to occur.[2] The applicant has standing to make the application under s.319(2)(a) and the proposed order is an order of the kind contemplated by s.319(1)(b) and (c). I turn then to consider the matters listed in s.319(3) to determine whether the proposed order should be made.

Submissions and conclusions on the statutory criteria

Subsection 319(3)(a)(i) - views of the new employer, or a person who is likely to be the new employer

• [11] The applicant is the proposed new employer and supports the making of the proposed order.

Subsection 319(3)(a)(ii) - views of the employees who would be affected by the order

• [12] There are currently no employees of CSL who would be affected by the order as no existing employee of CSL has been identified to work on the Accolade II and the views of future employees cannot be ascertained. However, if the orders sought are made, when making an offer of employment CSL will specify that the relevant Agreement will apply. If the prospective employee accepts the offer, they can be taken as having expressed a view supportive of the orders.

Subsection 319(3)(b) - whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

• [13] There are no non-transferring employees of CSL. Any future non-transferring employees will not be disadvantaged by the Agreements, which have been approved by the Commission and provide terms and conditions that are more beneficial than the Seagoing Industry Award 2020.

• [14] I have considered the terms of the Agreements as filed with the application. I am satisfied that there are no employees who would be disadvantaged by the making of the proposed orders. This weighs in favour of the making of the orders.

Subsection 319(3)(c)- if the order relates to an enterprise agreement - the nominal expiry date of the agreement

• [15] Both Agreements are within their nominal term. Both have an expiry date of 30 June 2027.

Subsection 319(3)(d) and (e) - whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace and whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

• [16] There was no evidence or submission in relation to any negative impact on productivity or significant economic disadvantage. The applicant's evidence was that having a uniform baseline of terms and conditions for employees performing the same work on the Accolade II would reduce the administrative burden involved in having to administer multiple instruments to employees performing the same work and that it was expected this would have a positive impact on workplace productivity. I accept that to be the case and do not consider that there would be any negative impacts arising as a consequence of the making of the orders sought.

Subsection 319(3)(f) - the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

• [17] CSL wishes to avoid a situation where transferring employees who transition across from Inco are employed under different terms and conditions of employment compared to any non-transferring employees performing the same work. CSL submitted that there will be greater business synergy achieved by having all applicable employees of CSL working on the Accolade II under the same instruments, to avoid the inevitable and unnecessary inconsistencies and complications arising from applying multiple instruments to the same types of work. I accept that to be the case.

• [18] The applicant submitted that it would not be contrary to the public interest for the FWC to make the order sought and that making the order will assist in ensuring industrial harmony and prevent disparity between employees performing the same work. It was also submitted that the application does not raise any broader issues of public policy to which the FWC should have regard. I accept these submissions and am of the view that the making of the proposed order would be would not be contrary to the public interest.

• [19] Having regard to each of the above matters I have come to the view that the application should be granted and the order made.

• [20] The applicant accepted that the proposed order must come into operation in accordance with the requirements of s.319(4). The order which accompanies this decision is consistent with the requirements of that provision.

Appearances: Ms. R Bernasconi, solicitor for the applicant

[2] Lend Lease Engineering Pty Ltd and Ors [2014] FWC 5499 at [11] to [14].

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