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

RJE RESOURCES PTY LTD ENTERPRISE AGREEMENT 2024

Application for an order relating to instruments covering new employer and non-transferring employees to be employed by RJE Global Pty Ltd.

• [1] RJE Global Pty Ltd (RJE Global) has made an application pursuant to s.319(1)(b) of the Fair Work Act 2009 (Act) for an order that the RJE Resources Pty Ltd Enterprise Agreement 2024[1] (Agreement) covers it and any non-transferring employees who perform work for it in one of the classifications covered by the Agreement.

• [2] The Agreement was approved by the Commission on 23 April 2024 and has a nominal expiry date of 31 March 2028. There are no employee organisations covered by the Agreement.

• [3] The background[2] to the application is that RJE Resources Pty Ltd (RJE Resources) and RJE Global are associated entitles for the purposes of s.50AAA of the Corporations Act 2001 (Cth). On 31 March 2025, the employment of 412 employees transferred from RJE Resources to RJE Global when the business of the former was transferred to RJE Global. For reasons I will explain, the Agreement also transferred to RJE Global and now covers and applies to it and the transferring employees.

• [4] RJE is now the employing entity for the RJE group of companies, and it will be required to employ new employees from time to time. This application seeks that the Agreement also apply to the non-transferring employees, that is, any new employees.

• [5] The application was subject to a video hearing on 5 May 2025. In the lead up to the hearing, I directed that a copy of the application and certain directions that had been issued by the Commission be made available to the existing employees. Those directions provided that any of these employees could advise the Commission of concerns with the application and/or appear at the hearing. Compliance with those directions has been confirmed with the Commission.[3] No concerns have been raised.

• [6] At the conclusion of the hearing, I advised that the application would be granted and the Order made in the terms canvassed with the parties during the hearing. My reasons for doing so are briefly set out below.

• [7] Section 311 of the Act sets out the circumstances in which a transfer of business occurs. It states:

"S.311 When does a transfer of business occur

Meanings of transfer of business, old employer, new employer and transferring work

(1) There is a transfer of business from an employer (the old employer) to another employer (the new employer) if the following requirements are satisfied:

(a) the employment of an employee of the old employer has terminated;

(b) within 3 months after the termination, the employee becomes employed by the new employer;

(c) the work (the transferring work) the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer;

(d) there is a connection between the old employer and the new employer as described in any of subsections (3) to (6)."

• [8] Section 312 of the Act also indicates that a "transferable instrument" includes "an enterprise agreement that has been approved by the FWC".

• [9] Section 313 of the Act provides that "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".

• [10] I am satisfied that there was a transfer of business and that the relevant employees of RJE Resources transferred to RJE Global under the terms of the Act. I am also satisfied that the Agreement is a transferable instrument and that it now covers RJE Global and the transferring employees.

• [11] Section 314 of the Act also provides for a transferable instrument to cover other employees in certain circumstances. It states:

"314 New non-transferring employees of new employer may be covered by transferable instrument

(a) a transferable instrument covers the new employer because of paragraph 313(1)(a); and

(b) after the transferable instrument starts to cover the new employer, the new employer employs a non-transferring employee; and

(c) the non-transferring employee performs the transferring work; and

(d) at the time the non-transferring employee is employed, no other enterprise agreement or modern award covers the new employer and the non-transferring employee in relation to that work;

then the transferable instrument covers the new employer and the non-transferring employee in relation to that work.

(2) A non-transferring employee of a new employer, in relation to a transfer of business, is an employee of the new employer who is not a transferring employee.

(3) This section has effect subject to any FWC order under subsection 319(1)."

• [12] In this case, RJE Global contends that there are two modern awards that would otherwise apply to the non-transferring employees depending upon the nature of their work; being the Electrical, Electronic and Communications Contracting Award 2020 and the Building and Constructions General On-site Award 2020 (collectively, the modern awards).

• [13] As indicated above, the provisions contained in s.314 are subject to s.319 of the Act, which permits the Commission to make an Order that a transferring instrument covers non-transferring employees. This is the intended effect of the present application.

1. Consideration of the s.319 application

• [14] Section 319 of the Act states:

(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:

(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;

• [15] RJE Global is entitled to bring the application, which relies upon the terms of s.319(1)(b) of the Act to, in effect, extend the coverage of the Agreement to the non-transferring employees.

• [16] In dealing with the application, the Commission is required to have regard to each of the matters in s.319(3) in determining whether an Order should be made. I now turn to deal with each of those considerations.

The views of the new employer - s.319(3)(a)(i)

• [17] RJE Global as the applicant and the new employer supports the application and the Order that it proposes should be made.

The views of the new employees - s.319(3)(a)(ii)

• [18] There were no new employees at the time of the application, and it is unclear whether this remains the case at this point. However, the process which was undertaken prior to the hearing also provided any new employees with an opportunity to raise concerns with the application, should they have wished to do so.

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

• [19] I am satisfied that the employees would not be disadvantaged in relation to their terms and conditions of employment by the making of an Order. This is also consistent with the fact that the Agreement was relatively recently found by the Commission to meet all of the approval requirements of the Act, including in effect, that the employees would be better off overall with the approval of the Agreement than remaining under the terms of the modern awards.[4]

Nominal expiry date of the agreement - s.319(3)(c)

• [20] The nominal expiry date of the Agreement is 31 March 2028. This indicates that the instrument is both relatively contemporary and has a reasonable nominal life ahead.

Negative impact on Productivity - s.319(3)(d)

• [21] I am satisfied that there will be no negative impact on productivity if the Order is made. In contrast, if the Order is not made and transferring and non-transferring employees are on different terms and conditions of employment, this may have a negative impact on employee cohesion and in turn upon workplace productivity.

Economic disadvantage for the new employer - s.319(3)(e)

• [22] The Agreement's coverage of non-transferring employees will not cause any significant economic disadvantage to RJE Global. It provides more beneficial terms and conditions than the modern awards, however, it already applies to all of its present agreement-covered workforce. Further, if the Order is not made, it will be required to maintain two different payroll systems and potentially different rostering arrangements, and this would be an economic disadvantage.

Degree of business synergy between the Agreement and any workplace instrument that already covers the new employer - s.319(3)(f)

• [23] "Business synergy" may have wide connotations in the present context. This would include a consideration of the differences between the Agreement and, in this case, the modern awards, with a view to how consistent they are with the business activities and operations of RJE Global. There are differences between the terms and conditions of the Agreement and the modern awards. It is likely that RJE Global could conduct its business under either. However, given the circumstances of this matter, this consideration does not suggest that the Order not be made. That is, the modern awards do cover RJE Global but do not presently apply, at least with respect to the transferring employees.[5] In that light, the existing practical impact of that aspect is limited. Further, if the Order is granted it will confirm a single framework of regulation that has been negotiated and approved by the Commission in the same general context in which it has applied and will continue to apply. Importantly for the future business synergy, that means that the Agreement, if applying to all relevant employees, including the non-transferring employees, would be more consistent with the business and operations of RJE Global.

Public interest - s.319(3)(g)

• [24] The public interest in this context is influenced by the objects of this Part of the Act in s.309 and those adopted by the Act more broadly.

• [25] The granting of the application is consistent with those objects.

• [26] Having considered each of the matters in s.319(3) of the Act I am satisfied that it is appropriate for an Order to be made.

• [27] In accordance with s.319(4) of the Act, the Order will not come into operation in relation to each non-transferring employee until the later of the following:

• the time when the non-transferring employee starts to perform the transferring work for the new employer; or
• the day on which the order is made.

• [28] The Order[6] is issued in conjunction with this decision.

K Itsines (of EMA Legal), with permission, with R Johnson and S Harradine for RJE Global Pty Ltd

[2] Facts drawn for the Affidavit of Robin Johnson, Director and CEO of RJE Global - exhibit 1.

[3] Affidavit of Sarah Harradine, General Manager - Compliance with RJE Global - exhibit 2.

[5] Due to the application of the Agreement - s.47 and s.57 of the Act.

[6] PR786520.

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