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

REC Maintenance & Construction Pty Ltd Trading AS Altrad

S.318 - Application for an order relating to instruments covering new employer and transferring employees. Transferable instrument: Specialist People Enterprise Agreement 2018. New instrument: REC - Altrad Chevron Facilities Agreement 2024.

• [1] REC Maintenance & Construction Pty Ltd Trading AS Altrad (Altrad or the Applicant) has applied to the Fair Work Commission (the Commission) under section 318 of the Fair Work Act 2009 (Cth) (the Act) for an Order in relation to a transfer of business.

• [2] The transferable instrument in this matter is the Specialist People Enterprise Agreement 2018 (the Transferable Instrument).[1] The application also concerns the REC - Altrad Chevron Facilities Agreement 2024 (the Altrad Agreement).[2]

• [3] The order sought in the application relates to 31 employees (the Transferring Employees) engaged by Altrad as Trades Assistants, Scaffolders, Painter Blasters, Electrical Trades, Insulators, and Sheet Metal Workers.

• [4] The Transferring Employees are engaged to complete work at Chevron LNG facilities in Western Australia.

• [5] Prior to the Transferring Employees' engagement with Altrad, they were employed by Specialist People Pty Ltd.

• [6] The Transferring Employees are covered by the Transferable Instrument.

• [7] The Applicant seeks the following orders:
  • The Transferable Instrument shall not cover or apply to the Applicant.

• The order applies to the Transferring Employees.

• The Altrad Agreement, which covers the Applicant, shall instead cover the Transferring Employees and apply to them when they are working under its scope.

• [8] Section 318 of the Act provides:

"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.

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."

• [9] I am satisfied that the Applicant is entitled to make this application as the new employer; the Transferring Employees will perform the same or substantially the same work for the Applicant; and there is a transfer of business within the meaning of section 311 of the Act.

• [10] The effect of the order sought by the Applicant would be that the Transferable Instrument would not cover the Applicant or any of the Transferring Employees. And, instead, the Altrad Agreement would apply to the Transferring Employees.

• [11] Section 318 of the Act provides that the Commission has discretion to make the Order and, in determining whether to make the order, I must consider each of the matters in section 318(3) of the Act. I will now turn to consider these matters.

• [12] The Applicant, being the new employer, is clearly supportive of the application.

The views the employees who would be affected by the order and whether they would be disadvantaged by the order

• [13] The Applicant submits the following in relation to this criterion:

• The 31 Transferring Employees who will be affected by the making of the order agreed to transfer to Altrad. They did so by accepting contracts of employment which replicated the terms of the Altrad Agreement, which were effective from 18 December 2024.

• The Altrad Agreement was negotiated with the Australian Workers Union (AWU), the Electrical Trades Union (ETU), and another group of employees who perform the same work at the same sites as the Transferring Employees.

• The AWU, ETU, employee bargaining representatives, and the Applicant agreed for 31 Specialist People employees to be offered employment by Altrad and the Applicant agreed to seek these orders pursuant to section 318 of the Act.

• The Transferring Employees voted in favour (30 Yes to 1 No) of the terms and conditions contained in the Altrad Agreement in voting for an agreement with identical terms and conditions (Specialist People - Altrad Chevron Facilities Enterprise Agreement 2024, made with Altrad APTS Pty Ltd).

• The Transferring Employees are already paid in line with the Altrad Agreement. The Altrad Agreement is a negotiated agreement which sets out employee's actual terms and conditions.

• All employees receive a significantly better set of terms and conditions than they did prior to the Altrad Agreement being approved by the Commission.

• No employee will suffer a disadvantage in terms and conditions as a result of the making of this order.

• [14] The Commission issued Directions to the Applicant, which read as follows:

"1. The Applicant is required to provide a copy of the following material to affected employees, copied to the Fair Work Commission, by no later than 4:00PM, 8 July 2025.

ii. A copy of the Form F40 Application with attachments.

2. Any affected employees or Unions wishing to be heard must file in the Fair Work Commission, and serve a copy on the Applicant, by no later than 4:00PM 15 July 2025:

i. Submissions in relation to the application; and/or

ii. Other materials in relation to the application.

3. In the event the Commission receives material from any affected employees or Unions wishing to be heard, the Applicant will be provided with an opportunity to file any material in reply."

• [15] The Applicant complied with the requirements of the Directions. The Commission did not receive any views of substance in response to the application.

• [16] The Transferable Instrument expired on 20 November 2023. The Altrad Agreement has a nominal expiry date of 18 December 2028.

• [17] The Applicant submits that the later nominal expiry date of the newer enterprise agreement provides greater industrial stability to both the Applicant and the affected employees moving forward.

Whether the transferable instrument would have a negative impact on the productivity of the

• [18] The Applicant submits the following in response to this consideration:

• Employing staff under multiple enterprise agreements on the same site has a negative impact on productivity. Doing so creates additional steps in reporting and administering payroll and other Human Resources or Finance related systems. The making of this order will improve productivity for the Applicant.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

• [19] The Applicant makes no submissions regarding this consideration.

The degree of business synergy between the transferable instrument and any workplace instrument that covers the new employer

• [20] Noting that the Transferable Instrument provides for lower rates of pay and less beneficial terms and conditions, the Applicant submits that the Altrad Agreement it seeks to cover the Transferring Employees reflects the actual rates of pay and terms and conditions in place at the relevant facilities.

• [21] The Applicant submits that it is in the public interest to grant the order for the following reasons:

• It will result in employees being covered by a single instrument which reflects the actual rate of pay and terms when they are working for Altrad companies at Chevron Facilities.

• The Altrad Agreement is a properly bargained outcome which reflects the bargaining objectives of the Act.

• [22] I am satisfied that granting the order would not be contrary to the public interest.

• [23] In consideration of all the circumstances, and noting the contracts accepted by the Transferring Employees, I am satisfied that the order sought should be made. The Order has been issued concurrently.[3]

[3] [PR790043].

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