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

Application for orders relating to instruments covering new employer and transferring employees

• [1] An application has been made by Marinus Link Pty Ptd (the Applicant or MLPL) to the Fair Work Commission (the Commission) for an order pursuant to s.318 of the Fair Work Act 2009 (the Act). The Applicant seeks an order in the following terms:

"Pursuant to s 318 of the Fair Work Act 2009 (Cth), the TasNetworks Enterprise Agreement 2020-2024 not cover:

(b) transferring employees within the meaning of s 311(2) of the Fair Work Act 2009 (Cth) who transferred their employment from Tasmanian Networks Pty Ltd (T/A TasNetworks) to Marinus Link Pty Ltd."

• [2] The Applicant seeks that the order come into operation on the day on which this order is made pursuant to s.318(4)(b) of the Act.

• [3] The application consists of a Form F40 - Application for orders in relation to transfer of business, some submissions in support of the order and a statement from Rebecca Jhonston, the Director of People & Culture.

• [4] I have determined the matter on the papers without the need for a hearing.

FAIR WORK ACT 2009 - SECT 318

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 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:

(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.

(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.

• [5] The background of this matter as set out in the Applicant's submissions as follows:

"4. MLPL was established to manage all aspects of the establishment of the Marinus Link, a proposed undersea and underground electricity and telecommunications interconnector between Tasmania and mainland Australia. MLPL will not perform any manufacturing or construction work on the Marinus Link, but will instead oversee all phases of the project from inception and consultation through to construction and commissioning.

5. When MLPL was established in December 2021, it was a wholly-owned subsidiary of Tasmanian Networks Pty Ltd trading as TasNetworks (TasNetworks). TasNetworks is a state-owned entity that owns, operates and maintains electricity transmission and distribution networks in Tasmania. It delivers electricity to consumers in Tasmania and the rest of the national electricity market via the Basslink electricity interconnector.

6. On or around 26 March 2024, MLPL became co-owned by the Australian Government, the Victorian Government, and the Tasmanian Government, each as to different shares. From that point onwards, TasNetworks no longer had any interest in MLPL (and, as a result, MLPL and TasNetworks ceased being associated entities).

7. The Transferred Employees represent a small cohort of MLPL's workforce, and perform the

(a) Information & Data Specialist;

(b) Governance Specialist;

(c) Executive Assistant CEO;

(d) Information Specialist;

(e) People Partner;

(f) Graphic Design, Multi-Media Specialist;

(g) Senior Finance Specialist;

(h) Communications & Engagement Specialist; and

(i) Land Access & Acquisitions Specialist.

8. None of these positions clearly fits within the classification bands of the TasNetworks EA (which, in any event, reached its nominal expiry date on 10 June 2024 and provided for salary increases up [to] 1 July 2023).

9. In late-May 2024, MLPL commenced a consultation process with the Transferred Employees in relation to its (at that time) proposed application to the Fair Work Commission (FWC) under s 318 of the FW Act.

10. Between 22 and 29 May 2025, each of the Transferred Employees signed an agreement with MLPL confirming their consent to MLPL's application for an order under s 318 of the FW Act (and recording MLPL's commitment to preserve certain employment entitlements for each of the Transferred Employees in the event that such an order were made)."

• [6] The TasNetworks Enterprise Agreement 2020-2024 (the Agreement) has a nominal expiry date of 10 June 2024, the Agreement continues to operate until replaced or terminated.

• [7] Section 311 of the Act sets out when a transfer of business occurs. On the evidence before me, as set out in the Form F40 and the submissions, all of the elements of s.311(1) of the Act have been met and therefore, a transfer of business has occurred within the meaning of the Act.

• [8] Section 312 of the Act details instruments that may transfer:

(1) Each of the following is a transferable instrument:

(a) an enterprise agreement that has been approved by the FWC;

(b) a workplace determination;

(c) a named employer award."

• [9] The Agreement was approved by the Commission on 11 June 2020 and pursuant to s.312(1) of the Act is a transferrable instrument.

• [10] The application has been made by MLPL, the new employer. The requirement under s.318(2) has therefore been met.

Section 318(3) - Matters that the FWC must take into account

• [11] The grounds relied on by the Applicant which are set out in the application and their submissions are outlined below.

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

"MLPL and each of the Transferred Employees support making the application.

This weighs in favour of the application being granted."

• [13] As part of their lodgement materials the Applicant has also provided a number of signed documents on behalf of employees demonstrating their support of the application and variation to the terms and conditions of their employment should the Commission make the orders sought.

• [14] I have taken into account the views of the employer and the employees who would be affected by the order, including the effect of not granting the application. In the circumstances, this matter weighs in favour of making the order sought.

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

"None of the Transferred Employees would be disadvantaged by the order. After an extensive consultation process, MLPL has agreed to preserve all relevant employment entitlements for the Transferred Employees - and, in the case of two of the Transferred Employees, to "buy out" an existing entitlement. This weighs in favour of the application being granted."

• [16] I have taken into account whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment. I am satisfied that there will be no disadvantage to employees. In the circumstances, this matter weighs in favour of making the order sought.

Section 318(3)(c) - if the order relates to an enterprise agreement - the nominal expiry date of the agreement

• [17] The Enterprise Agreement has a nominal expiry date of 10 June 2024. This matter is a matter which weighs in favour of making the order sought.

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

"The TasNetworks EA has a negative impact on the productivity of MLPL's workforce. This is because the current situation - whereby the Transferred Employees are covered by a different industrial instrument to the rest of the MLPL workforce - requires significant manual intervention to ensure that the Transferred Employees receive all applicable benefits and entitlements in accordance with the TasNetworks EA. It also involves double-handling, in that the TasNetworks EA is applied to the employees, and then salary advice from Mercer to ensure that the Transferred Employees receive appropriate remuneration (given the TasNetworks EA only provided for salary increases up to 30 June 2023). On top of that MLPL applies its own policies, which are better aligned to its business. This reduces productivity in payroll administration. By contrast, in the event that the FWC were to make the order, there would be a positive impact on the productivity of MLPL's workplace, as there would be a greater alignment of terms and conditions of employment across the entire MLPL workforce, which would in turn lead to increased simplicity and efficiency in payroll administration. In other words, the Transferred Employees would be properly integrated in to the MLPL workforce. This weighs in favour of the application being granted."

• [19] I have taken into account whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace. I am satisfied that there would be no negative impact on the productivity of the new employer's workplace. In the circumstances, this matter weighs in favour of making the order sought.

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

"MLPL has not incurred significant economic disadvantage as a result of the TasNetworks EA covering MLPL. Nonetheless, this is a neutral consideration; the fact that MLPL has not incurred significant disadvantage does not weigh against the application being granted."

• [21] I have taken into account whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer. I am satisfied that the employer would not incur significant economic disadvantage. In the circumstances, this is a neutral consideration.

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

"There is little business synergy between the TasNetworks EA and MLPL, as the TasNetworks EA refers to employment types, concepts and practices that do not apply to the MLPL workplace (such as shiftworkers, fault rectification, and repair work). Indeed, MLPL does not presently, and will not in the future, undertake the activities of electricity transmission or distribution. However, the inquiry mandated by s 318(3)(f) of the FW Act is between the TasNetworks EA and "any workplace instrument" that already covers MLPL. No other enterprise agreement already covers MLPL. Whether any award covers the Transferred Employees depends on each individual role. In any event, this is a neutral consideration, especially in circumstances where MLPL has agreed to preserve any applicable entitlements under the TasNetworks EA."

• [23] I have taken into account the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer. I am satisfied that there is a degree of business synergy between the transferable instrument and any workplace instrument, likely a Modern Award or Awards that already covers the new employer. In the circumstances, this matter weighs slightly in favour of making the orders sought.

"As MLPL is a government-owned entity, there is a public interest in its efficient operation. However, considered in context, this is a relatively neutral consideration."

• [25] I have taken into account whether it is in the public interest to grant the order sought and agree with the submissions of the Applicant. This is a neutral consideration.

• [26] Having considered the matters above, it is apparent that all matters either weigh towards the granting of the application sought or are neutral. Taking into account each of the matters set out in s.318(3) of the Act, I am satisfied that the order as sought should be granted. The order[1] will be issued concurrently with this decision.

• [27] The order will come into operation on 17 June 2025 pursuant to s.318(4)(b) of the Act.

[1] PR788185.

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