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Railtrain’s History of Deception

Jul 30, 2021News

The Full Bench of the Fair Work Commission finally dismissed Railtrain’s application for approval of the Karijini Rail Pty Ltd Rail Operations Pilbara Enterprise Agreement 2018 (AG2018/3844).

This proposed Agreement concerned Railtrain’s contract to supply Labour Hire to Roy Hill Infrastructure Pty Ltd for their Pilbara mining operations.

Karijini, (like RSS, RTS and several other corporate entities) is a related entity of Railtrain, falling under the control of Railtrain, and is part of the “Railtrain Group”. The holding company of the Railtrain Group is Railtrain Holdings Pty Ltd and has substantially the same directors as RTS and RSS.

Before this dispute, Railtrain already had a contract with Roy Hill to supply labour hire, and an Enterprise Agreement had been in force for years covering the Railtrain workers at Roy Hill. However instead of bargaining for a new Enterprise Agreement, Railtrain sought to establish a new entity, called ‘Karijini’, which was incorporated in 2018 for the purpose of securing a new Enterprise Agreement.  

Railtrain subsequently employed two employees in Karijini, the absolute minimum to undertake bargaining, and issued them with a NERR two days after they started employment. Railtrain tried to use those two employees to approve an enterprise agreement that was designed to cover over 50 workers who were already working for Railtrain at the time!  

In a move that will be familiar to RSS and RTS employees, the employment contracts provided to the two new employees were for flat rates of pay inclusive of all applicable penalties and allowances.

The CFMMEU, the relevant Union who was deliberately cut out of bargaining, disputed this process and took the matter to the Fair Work Commission in a long and drawn-out legal battle.

In this latest decision, the Full-Bench of the FWC heard the matter and in their Judgment indicated Chris Elston gave evasive evidence, and would not disclose the real reason Railtrain incorporated a new entity instead of bargaining with its existing employees:

Q:                    Mr Elston, you’ve told the Commission that alternatives were considered and I’m not going to ask you anything else about what the alternatives were. Ultimately obviously the decision was made to incorporate Karijini employ two employees and make an agreement with those two employees, we know that?

Elston:              Correct.

Q:                    And what I want to suggest to you is that the reason that that option was taken rather than any other option was so that Railtrain could make an agreement through Karijini with two employees rather than negotiating an agreement with the workforce that was at the time performing work on the Roy Hill operations?

Elston:              After due and careful consideration the decision was made to use Karijini as the legal entity and put an EA in place through Karijini.

Q:                    Yes, I’m well aware that’s what’s happened, Mr Elston, what I’m asking you about is the reason why that option was chosen and I’ve put to you that the reason was so that there would be no necessity to negotiate a new agreement with the [existing] employees. That’s the proposition I’m putting to you. Do you agree with it?

Elston:              Do I agree that that was the basis upon which the decision was made?

Q:                    Correct?

Elston:              No, I don’t

Q:                    Yes. I’m suggesting to you that other than the reason which I put to you which you’ve just disagreed with, there was no logical reason why you should take that option, the Karijini option?

Elston:              In our discussions looking at the options a number of factors were taken into account and from an organisational perspective utilising Karijini as the appropriate vehicle to put the EA in place, was deemed to be the best and most appropriate in the circumstances.

Q:                    And why was that?

Elston:              Again, they were discussions that took place in our conversation with our legal advisor taking into account all the various and necessary factors.

Q:                    So you’re unable to tell the Commission why that option was preferred over other options?

Elston:              It was the most suitable option for our business at that particular point in time.

Q:                    Yes. I’m trying to ask – trying to give you the opportunity, Mr Elston, to explain why that was the case. I understand that that was the decision taken. Are you able to assist in any way as to why that was the preferred option rather than the other options which you considered?

Elston:              As with all the decision-making in the entire organisation you weigh up all the various factors and in this case make an advice on the relative merits of all the options, the organisation chose to utilise Karijini

Further in putting the proposed Karijini Enterprise Agreement to vote and then seeking approval, the Full Bench held that Railtrain through Karijini also misrepresented a number of critical issues and acted in contrary of the Fair Work Act, by;

  1. failing to provide the employees with a comparison between the Agreement terms and the applicable award terms;
  • not taking reasonable steps to explain the effect of the terms of the Agreement;
  • purporting to initiate bargaining before there were any employees in Karijini;
  • deliberately attempting to draft the new agreement in a way that was sufficiently “different” to weasel out of the pro-worker transfer of business provisions in the Fair Work Act;
  • selecting employees for the agreement that were not fairly chosen but were rather illegitimate and unfairly selected;
  • engaging in an exercise of corporate manipulation by creating a new entity, Karijini, to enter into a new rail operations contract with Roy Hill;
  • lying to its employees by stating that employees on maximum term contracts would be entitled to redundancy if there was no more work at the end of the Roy Hill contract, in circumstances where Mr Elston, who drafted the Agreement, knew that there was no entitlement to redundancy in that situation;

In a win for workers the Full-Bench of the Fair Work Commission not only overturned the approval of the proposed new Enterprise Agreement, but also entirely dismissed the application for approval – meaning Railtrain will have to start from scratch to have their sub-standard Agreement approved.

This long-fought battle is a massive win for workers.

Railtrain’s misleading conduct as assessed by the Fair Work Commission should serve as warning to employees of Railtrain and Rail Shuttle Services in NSW – be aware that your employer has demonstrated it is willing to engage in an exercise of corporate manipulation!

What can you do to protect yourself and your colleagues?

If you are a part of Railtrain – Sign your MSD petition!

If you are a part of Rail Shuttle Services – Vote NO on Mr Elston’s latest sub-standard EA!