Fair Work Act 2009

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

Application for orders relating to transferable instrument - transferring instrument not to apply - section 318 - agreement covering new employer to apply

• [1] An application has been made by Fleurieu Cranes Pty Ltd (Fleurieu) pursuant to s. 318 of the Fair Work Act 2009 (the Act) seeking orders relating to a transferable instrument.

• [2] Fleurieu is an associated entity of Macweld Crane Hire Pty Ltd (Macweld) as defined in s. 50AAA of the Corporations Act 2001 (Cth).[1]

• [3] Four employees of Macweld, Milhan Kirkham, Peter Sunman, Aamish Warren and Geoffrey Fisher (Transferring Employees), who perform crane operation and/or rigging duties have their employment governed by the Macweld Crane Hire Pty Ltd Enterprise Agreement 2024 (Macweld EA).

• [4] It is proposed that their employment will transfer to Fleurieu following the approval of the orders sought and they will continue operating mobile cranes.[2]

• [5] Fleurieu and its employees performing crane operation and rigging duties are covered by the Fleurieu Cranes Pty Ltd/CFMEU Enterprise Agreement 2023 (FC EA).

• [6] Orders are sought by Fleurieu in the following terms:
  • That the Macweld EA will not apply to the Transferring Employees; and
  • That the FC EA will apply to the Transferring Employees.

• [7] For the reasons set out below, I am satisfied that it is appropriate to make the orders pursuant to s. 318 (1).

• [8] Section 318 of the Act sets out the circumstances in which an order can be made by the Commission:

(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 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, 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.

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_._

Views of Fleurieu

• [9] Fleurieu are seeking that the FC EA apply to the transferring employees instead of the Macweld EA and submit that the scope of that agreement encompasses the Transferring Employees. This weighs in favour of making the orders sought.

• [10] Each of the Transferring Employees have expressed a desire to be covered by the FC EA.[3] The Construction, Forestry, Maritime and Energy Union does not oppose the application. I consider this to weigh firmly in favour of making the proposed orders.

Will any Transferring Employees be disadvantaged by the order in relation to their terms and conditions of employment

• [11] Some provisions of the FC EA are inferior to the Macweld EA. However, some significant benefits for the Transferring Employees if they were covered by the FC EA would mean that they would be better off overall under that Agreement.

• [12] Under the FC EA the base rates of pay for the Transferring Employees is much higher, the ordinary hours per week are 36 not 38, with additional RDO's and the fares and travel payable far exceeds those in the Macweld EA.

• [13] I do not consider that the Transferring Employees would be disadvantaged by the orders sought in relation to their terms and conditions of employment and find that this weighs strongly in favour of making the orders sought by Fleurieu.

• [14] The FC EA has a nominal expiry date of 30 June 2025 and the bargaining representatives for that agreement are currently engaged in bargaining for a new agreement.[4] The Macweld EA has a nominal expiry date of 20 October 2025.

• [15] Failing to grant the orders sought would have the practical effect of preventing the Transferring Employees from participating in the current bargaining for an agreement that will cover their workplace. Accordingly, this weighs heavily in favour of making the proposed orders.

Will the Macweld EA have a negative impact on the productivity of Fleurieu

• [16] Once transferred, the Transferring Employees will, at times, work side by side with the existing employees. As a result, if the pay and conditions were not the same, it may have a negative impact on the productivity of Fleurieu where there is disputation among the workforce.[5]

• [17] The reduction in administrative and compliance costs associated with having only the FC EA apply will benefit Fleurieu.[6]

• [18] It is possible that the Macweld EA will have a slightly negative impact on the productivity of Fleurieu. I consider this a neutral consideration.

Would Fleurieu incur significant economic disadvantage as a result of the Macweld EA covering it

• [19] Based on the material before me, I do not consider that Fleurieu would incur significant economic disadvantage as a result of the Macweld EA covering it. This is a neutral consideration.

Degree of business synergy between the Macweld EA and the FC EA

• [20] In consideration of the evidence before me I consider this to be a neutral consideration.

• [21] I am not of the view that it is contrary to the public interest to make the proposed orders having regard to the material before me.

• [22] In weighing the considerations set out in s. 318 (3) of the Act, I am satisfied that it is appropriate that the Application be granted.

• [23] In accordance with s 318 (4) of the Act, the order shall take effect from the later of the following:
  • the time when the transferring employee becomes employed by the new employer
  • the day on which the order is made.

[1] Mr Freer's Witness Statement, at paragraph [8].

[2] Form F40 Application at Q2.3 paragraph [6] and Mr Freer's Witness Statement at paragraph [7].

[3]Mr Freer's Witness Statement at paragraph [15] and attachment BF-4.

[4] Form F40 Application at Q2.3 paragraph [12].

[5] Mr Freer's Witness Statement at paragraph [20].

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