Australasian Meat Industry Employees Union, The v Wangaratta Abattoirs Pty Ltd
[2020] FWCFB 41
•7 JANUARY 2020
| [2020] FWCFB 41 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Australasian Meat Industry Employees Union, The
v
Wangaratta Abattoirs Pty Ltd
(C2019/5068)
(C2019/5910)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 7 JANUARY 2020 |
Appeal against decisions [2019] FWC 5166 at Adelaide on 26 July 2019 and [2019] FWCA 5354 at Adelaide on 9 September 2019 of Commissioner Platt in matter number AG2019/351.
Introduction and background
[1] This decision concerns two appeals made under s.604 of the Fair Work Act 2009 (Act) against decisions issued by Commissioner Platt on 26 July 20191 (Interim Decision) and on 9 September 20192 (Final Decision). The Australian Meat Industry Employees Union (Appellant) has applied for permission to appeal and if granted appeals those decisions.
[2] Wangaratta Abattoirs Pty Ltd (Respondent) filed an application in the Commission on 15 February 2019, pursuant to s.185 of the Act, for approval of the Wangaratta Abattoirs Pty Ltd and the Australasian Meat Industry Employees Union Collective Agreement 20183 (the Agreement). The Agreement covers approximately 35 employees of the Respondent and has a nominal expiry date of 1 August 2021. The relevant reference instrument is the Meat Industry Award 20104 (Award).
[3] After initially conducting a conference of the parties on 17 & 28 May 2019 the Commissioner listed the matter for hearing on 9 July 2019 in order to determine a preliminary contested matter concerning the applicable ordinary hours of work provisions under the Award to be applied to ‘loadout employees’ (Loadout Employees) engaged by the Respondent. That preliminary determination was necessary for the purposes of conducting the assessment required by the better off overall test (BOOT).
[4] The Commissioner in the Interim Decision considered the applicable hours of work provisions of clause 31.2 of the Award which states as follows:
“31. 2 Ordinary hours of work
(a) The ordinary hours of work are not to exceed 38 per week or an average of 38 per week not exceeding 152 hours in 28 days.
(b) The ordinary hours of work are to be worked continuously at the discretion of the employer, except for meal breaks or other breaks prescribed in the award.
(c) The maximum number of ordinary hours which may be worked on any day or shift must not exceed 10 hours.
(d) Any hours worked outside the spread of hours listed must be paid at overtime rates.
(e) Notwithstanding the spread of hours set out in the tables in this clause, cleaners may be employed on ordinary hours between 6.30 am and midnight in any establishment under this award.
(f) Meat processing establishments (except for employees of the establishment engaged in retail and/or wholesale sales of fresh meat and/or meat products)
(i) The following table shows the spread of ordinary hours for these establishments:
Days | Spread of hours |
Monday to Friday | 6.00 am–8.00 pm |
(ii) The days on which ordinary hours are worked may include Saturday and Sunday subject to agreement between the employer and a majority of employees concerned. Agreement in this respect may also be reached between the employer and an individual employee.
(iii) If agreement is reached in accordance with clause 31.2(f)(ii) above, the following are the minimum rates to be paid:
• between midnight Friday and midnight Saturday—rate of time and a half; and
• between midnight Saturday and midnight Sunday—rate of double time.
(iv) The spread of hours listed in clause 31.2(f)(i) may be altered by up to one hour at either side of the spread or by agreement between the employer and the majority of employees concerned or, in appropriate circumstances, between the employer and an individual employee.
(v) Any work performed by an employee prior to the commencement of the spread of hours and which is continuous with the normal ordinary hours for the purpose, for example, of getting the plant in a state of readiness for processing work, may be regarded as part of the 38 ordinary hours of work.
…
(i) Meat retail establishments (including employees of meat processing establishments and meat manufacturing establishments engaged in retail and/or wholesale sales of fresh meat and/or meat products)
(i) The following table shows the spread of ordinary hours for these establishments.
Days | Spread of hours |
Monday to Friday | 4.00 am–9.00 pm |
Saturday | 4.00 am–6.00 pm |
Sunday | 8.00 am–6.00 pm |
(ii) Saturday/Sunday ordinary hourly rate
• All ordinary hours worked on Saturday between 4.00 am and 6.00 pm must be paid at the rate of time and a quarter.
• All ordinary hours worked on Sunday between 8.00 am and 6.00 pm must be paid at the rate of time and a half.
• Casuals working ordinary hours on Saturday or Sunday, as specified in this clause, receive the penalties outlined in the two dot points above, instead of the casual loading referred to in clause 15 – Casual employment.
(iii) Load out areas
Notwithstanding clauses 31.2(i)(i) and (ii) above, in loadout areas involving the receipt, storage, inspection, loadout and delivery of meat or meat products, the ordinary hours may be worked between 10.00 pm and 4.00 pm (the following day) on the days Sunday to Saturday. Ordinary time worked between 10.00 pm and 6.00 am must be paid for at time and a quarter for all purposes of the award.
(iv) Weekends off
Once every four weeks, an employee who works ordinary hours on each Sunday over a 152 hour work cycle must be given three consecutive days off which will include Saturday and Sunday. Any alternative arrangements between the employer and the employee must be by mutual agreement and in writing and signed by each of the parties.
(j) Spread of hours for particular employees performing meat retail establishment duties
Subject to clause 31 – Hours of work and notwithstanding other parts of this clause, where an employee of an establishment covered by this award is called upon to perform meat retail establishment duties, the hours of work provisions for the employee will be all the provisions associated with a meat retail establishment as contained in clause 31.2(i) herein.
…”
[5] The Commissioner noted that there was no dispute between the parties that the Respondent’s operations fell within the definition of a ‘meat processing establishment’.5 Consequently, the issue before the Commissioner was whether the ordinary hours of work of Loadout Employees engaged by the Respondent fell within clause 31.2(f) or clause 31.2(i) of the Award. The significance of that distinction, as will be apparent from a review of those clauses, is that clause 31.2(i), if it applies, permits the working of ordinary hours within a broader span of hours under the Award then is permitted under 31.2(f)(i). Determination of the applicable ordinary hours of work provisions was necessary for the BOOT assessment undertaken by the Commissioner.
[6] The Commissioner detailed the relevant evidence6 in relation to the activities of the Loadout Employees, summarised the relevant hours of work provisions in the Award7 and then reasoned the ordinary hours of work of Loadout Employees fell within the scope of clause 31.2(i)(iii) of the Award.8
[7] The Commissioner determined that employees engaged by the Respondent on loadout activities fell within the non-exhaustive description of ‘loadout’ work as described in clause 31.2(i)(iii) of the Award, and that such work was an ‘integral part’ of the Respondent’s sales process.9 The Commissioner concluded that clause 31.2(i)(iii) would apply to Loadout Employees for the purpose of the required BOOT assessment.10
[8] Having reached a finding in the Interim Decision on the issue of the applicable hours of work provisions that would apply to Loadout Employees, the Commissioner proceeded to determine the application and approved the Agreement in the Final Decision, with undertakings. The Commissioner observed in the Final Decision that the Appellant had filed an appeal in respect of the Interim Decision and that resolution of that appeal, if in favour of the Appellant, may have an impact on the BOOT assessment and potentially his approval of the Agreement.11
Grounds of appeal and submissions
[9] The Appellant’s notice of appeal in respect of the Interim Decision (First Appeal) raises five grounds which may be summarised as follows:
1. the Commissioner failed to properly set out the exception in clause 31.2 (f) as applying to those workers “… engaged in retail and/or wholesale sales…” (Ground 1);
2. the Commissioner erred in fact and law by finding that clause 31.2(i) of the Award applied to Loadout Employees or alternatively that clause 31.2(f) did not apply (Ground 2);
3. the Commissioner erred in fact and law by failing to apply a proper construction of clause 31 of the Award (Ground 3);
4. the Commissioner erred in fact and law by failing to apply the proper test to determine whether the Loadout Employees are “…engaged in retail and/or wholesale sales of fresh meat and/or meat products….” (Ground 4); and
5. the Commissioner erred in fact and law by determining that the relevant hours of work provision for the purposes the BOOT in respect of Loadout Employees is clause 31.2(i)(iii), and not clause 31.2(f) (Ground 5).
[10] The Appellant’s notice of appeal in respect of the Final Decision (Second Appeal) raises four grounds by which it is contended the Commissioner erred by:
1. relying upon and applied his previous findings in the Interim Decision as to the applicable hours of work provision, which were in error;
2. failing to consider the correct application of the Award for the purposes of the BOOT;
3. finding that the Agreement passed the BOOT; and
4. approving the Agreement.
Appellant’s submissions
[11] The Appellant’s primary submission in respect of appeal grounds 1, 2, 3 & 4 in its First Appeal is that the Commissioner failed to apply a proper construction of clause 31.2 of the Agreement. In considering that clause 31.2(i)(iii) of the Award applied to ‘employees engaged in loadout areas within the portion of the business that engages in wholesale sales of fresh meat and/or meat products’ the Commissioner erroneously placed his enquiry on the enterprise, rather than the employees, and on portions of the business rather than on the nature of the engagement of the relevant employees. The Appellant further contends that the Commissioner erroneously conducted his analysis by finding that:
• clause 31.2(i)(iii) was applicable because the exception would apply if employees worked in a portion of the business that is engaged in wholesale sales;
• the ‘loadout area’ was ‘part of the wholesale sales function’;
• the Loadout Employees were ‘an integral part of the sales process’.
[12] By this analysis the Appellant submits the Commissioner failed to ask the right question, that is, whether the relevant employees were “…engaged in retail and/or wholesale sales of fresh meat and/or meat products….”.
[13] The Appellant also contends that contrary to the Commissioner’s conclusion, the meaning of clause 31.2 is ambiguous and it is necessary to have regard to the broader context of the clause including the history of the making of the Award. Relevantly, the Award replaced three principal pre-reform awards, namely;
• Federal Meat Industry (Processing Award) 2000 (the Processing Award)12
• Federal Meat Industry (Smallgoods)Award 2000 (the Smallgoods Award)13
• Federal Meat Industry (Retail and Wholesale) Award 2000 (the Retail and Wholesale Award)14
[14] The Retail and Wholesale Award contained similar hours of work provisions15 to that now reflected in clause 31.2(i) of the Award. Relevantly, sub-clause 22.3.2 in the Retail and Wholesale Award specifically dealt with ‘Load out etc’ in similar terms to that now found in clause 31.2(i)(iii) of the Award. By comparison, the Processing Award contained hours of work provisions16 that largely reflect the hours of work provisions now found at clause 31.2(f) of the Award save that the Processing Award did not include a ‘carve out’ in respect of load out employees “…engaged in retail and/or wholesale sales of fresh meat and/or meat products….”.
[15] The Appellant described the process that led to the making of the Award and referred to one particular issue of controversy concerning consolidation of the hours of work provisions from the three principal pre-reform awards into one ‘hours of work’ clause, now found in clause 31 of the Award. As is apparent from the structure of clause 31.2 of the Award, the Full Bench in making the Award sought to maintain ordinary hours of work provisions largely according to the pre-reform award industry streams, processing, manufacturing (i.e. smallgoods), and retail and wholesale sales. The Appellant’s concern at the time was that the proposed retail and/or wholesale sales ‘carve out’ exceptions in clauses 31.2(f) & (i) had the potential to introduce a broader span of hours for employees working in processing establishments.
[16] The gravamen of the Appellant’s submission about the history of the ordinary hours of work provisions in the Award is that when the Full Bench was confronted with a contest over the ordinary hours of work that should apply in the different industry streams,17 the Full Bench decided to proceed on the basis of preserving the terms of existing pre-reform awards18. The Appellant contends that there was no provision for a broader span of hours for Loadout Employees working in processing establishments under the pre-reform Processing Award, and it would be contrary to the intention of the Full Bench in making the Award to now extend the broader span of hours expressed to apply to employees engaged in retail and wholesale sales, to loadout employees in processing establishments.
Respondent’s submissions
[17] The Respondent submits that none of the matters raised on appeal identify sufficient doubt as to warrant reconsideration, identify substantial injustice or otherwise engage the public interest.
[18] It contends that the First and Second Appeal seek to challenge particular findings of fact by the Commissioner at first instance, namely that the Loadout Employees are engaged in wholesale sales activity thereby bringing those employees within the scope of clause 31.2(i)(iii) of the Award.
[19] The Respondent contends that the Commissioner applied the Award provisions in an anodyne and uncontroversial manner. It says the Commissioner understood that the central question for him to determine was whether Loadout Employees’ ordinary hours of work were regulated by clause 31.2(f) or 31.2(i) of the Award, and whether the ‘carve out’ exceptions in those sub-clauses applied. The Respondent refers to the transcript of the hearing conducted on 9 July 2019 to support its submission that the Commissioner understood and correctly approached the task before him.19 According to the Respondent, the Commissioner correctly concluded that clause 31.2(i) was not ambiguous and having reached that conclusion applied the plain meaning of the clause, rather than searching for the objective meaning of the clause through consideration of its context and extrinsic material.
[20] The Respondent contends that having correctly construed clauses 31.2(f) & 31.2(i) of the Award and determined the construction to be unambiguous, the Commissioner made factual findings that the work performed by the Loadout Employees was an integral part of the sales process of the Respondent. It says the finding was plainly open, and in the absence of contrary evidence, it was the only finding available to the Commissioner. Having concluded that the Loadout Employees were engaged in work that was an integral part of the sales process, it necessarily followed according to the Respondent, that the Loadout Employees fell within the scope of 31.2(i) and not 31.2(f) as contended by the Appellant.
[21] The Respondent further submits that the unless the factual finding made by the Commissioner as to the Loadout Employees being engaged in sales is in error then the Interim Decision and Final Decision should not be overturned.
[22] As to the Award history, the search for ambiguity on which the Appellant had embarked was unnecessary according to the Respondent. That was because the plain meaning of clauses 31.2(f) & (i) is clear. The making of the Award according to the Respondent did no more than preserve the ordinary hours of work arrangements that had existed in the pre-reform awards, based on the three industry streams. This included with respect to persons engaged in retail and/or wholesale sales.
Permission to appeal
[23] An appeal under s.604 of the Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.20 There is no right to appeal and an appeal may only be made with the permission of the Commission. Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is in the public interest to do so. Permission to appeal may otherwise be granted on discretionary grounds.
[24] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.21 The public interest is not satisfied simply by the identification of error, or a preference for a different result.22 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters…”23
[25] Other than the special case in s.604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if leave is refused. 24
[26] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.25 However, that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.
[27] We are satisfied that the appeal grounds 3 & 4 identify an arguable case of appealable error and that the public interest is engaged. It is plainly arguable on the state of the material before us that the Commissioner failed to apply a proper construction of clause 31.2 of the Award. The Commissioner’s conclusion that clause 31.2(i) of the Award applied to Loadout Employees had implications for the subsequent BOOT assessment conducted by him. If made out on appeal, the error is of the kind identified in House v King26 and was material to his approval of the Agreement. In the circumstances, it would be manifestly unjust not to grant permission to appeal and we do so.
Consideration
The First Appeal
[28] It is convenient that we firstly deal with the First Appeal. In doing so we commence by considering Grounds 3 & 4 together as they go to the proper construction of Clause 31.2. Before turning to the grounds of appeal it is necessary to consider the proper construction of clause 31.2.
[29] Clause 31.2 of the Award prescribes the ordinary hours of work provisions that apply to workers in the meat industry. Provisions of general application are set out at clauses 31.2(a)-(e) which are then followed by sub-clauses (f)-(i), which are structured according to the three historically recognised meat industry streams, and which may apply depending on the type of establishment being operated, that is, whether the establishment is a meat processing establishment,27 meat manufacturing establishment28 or meat retail/wholesale sales establishment29.
[30] As is made clear by the Commissioner at paragraph [10] of the Interim Decision, there was no dispute at first instance that the Respondent’s establishment was a meat processing facility, and that clause 31.2(g) of the Award which applies in respect of meat manufacturing establishments was not relevant for the purposes of this matter. Neither party challenged that finding on appeal.
[31] It is apparent from a plain reading of clause 31.2 of the Award, as the Respondent’s establishment is an meat processing establishment, that the default position for applicable hours of work is as provided for in clause 31.2(f). This is so unless an exception applies to bring any of the Respondent’s workers within the scope of the retail/wholesale sales stream of the hours of work provisions. The relevant exception in this instance is set out in clauses 31.2(f) and 31.2(i) as follows:
“(f) Meat processing establishments (except for employees of the establishment engaged in retail and/or wholesale sales of fresh meat and/or meat products)
…
(i) Meat retail establishments (including employees of meat processing establishments and meat manufacturing establishments engaged in retail and/or wholesale sales of fresh meat and/or meat products).” (Emphasis added)
[32] The question of the proper construction of an industrial instrument such as an award or enterprise agreement “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose ...”.30 In Transport Workers’ Union of Australia v Linfox Australia Pty Ltd31 Tracey J summarised the principles relevant to the proper construction of industrial instruments as follows:
“[30] In dealing with the construction of awards in Kucks v CSR Ltd [1996] IRCA 166; (1996) 66 IR 182 at 184 (Kucks) Madgwick J observed that:
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
[31] This passage was quoted with approval by two members of the High Court in Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005)222 CLR 241 at 271 ... per Kirby J, at 282–3 per Callinan J. Shortly afterwards these principles were restated by French J in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; (2006) 153 IR 426 ... at [57]:
[57] It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities — City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362 at 378–9 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned — see eg George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503–4 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):
Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.
[32] In Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 at 212 Northrop J expressly agreed with what had been said by Madgwick J in Kucksand held that Madgwick J’s observations had even stronger application to certified agreements than they did to awards.
[33] In my view, these principles have application to the construction of the instruments which are presently in dispute.
[34] Guidance as to the construction of industrial instruments may also be obtained by reference to principles which courts apply to the construction of commercial contracts. Commercial contracts should, as Kirby J held in Pan Foods Company Importers & Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd [2000] HCA 20; (2000) 170 ALR 579 ... ‘be construed practically, so as to give effect to their presumed commercial purposes and so as not to defeat the achievement of such purposes by an excessively narrow and artificially restricted construction’. An interpretation which accords with business common sense will be preferred to one which does not: see Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429 at 437.
[35] In determining whether a commercial document imposes contractual obligations regard is had to the intention of the parties: would a reasonable person conclude that the person making the alleged binding promise intend to be contractually bound by that promise. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 ... at [40] the High Court summarised the position as follows:
[40] ... It is not the subjective beliefs or understanding of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe ... That, normally requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”32
[33] These principles were also discussed and summarised in Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd33 and in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited.34
[34] Applying the established principles of construction of industrial instruments 35 it is clear then from the above that the proper construction of the clause 31.2 is that clause 31.2(f) of the Award will apply generally to the Respondent’s establishment. However, the exceptions for which provision is made in clauses 31.2(f) and 31.2(i) operate so that if any of the Respondent’s employees are ‘engaged in retail and/or wholesale sales of fresh meat and/or meat products’ asper the exclusions described above at [31], then clause 31.2(i) of the Award would apply to such employees in respect of their ordinary hours of work.
[35] As stated above, if any employees of the Respondent are ‘engaged in retail and or wholesale sales of fresh meat and/or meat products’ then clause 31.2(i) would apply to such employees. However, that is not the end of the required analysis. It is next necessary to determine which of the sub-clauses in clause 31.2(i) apply to the relevant employees. In the present case the required consideration is in respect of sub-clause 31.2(i)(iii) which deals with ‘Loadout areas’ and describes the type of work that would bring an employee within the scope of that sub-clause:
“(iii) Loadout areas
Notwithstanding clauses 31.2(i)(i) and (ii) above, in loadout areas involving the receipt, storage, inspection, loadout and delivery of meat or meat products, the ordinary hours may be worked between 10.00 pm and 4.00 pm (the following day) on the days Sunday to Saturday.”
[36] It follows from the above that the proper approach to the construction of clause 31.2 of the Award in determining which hours of work provisions apply in respect of Loadout Employees of the Respondent is as follows:
(i) First, determine into which industry stream the employer’s establishment falls for the purpose of the ordinary hours of work provision - namely, meat processing (clause 31.2(f)), meat manufacturing (clause 31.2(g)) or meat retail/wholesale sales (clause 31.2(i)).
(ii) Secondly, and relevantly for the purposes of the appeal as the Respondent’s establishment is a meat processing establishment it is necessary to determine whether the ‘carve out’ exceptions found within clauses 31.2(f) and 31.2(i) apply to the Loadout Employees. That requires an analysis of the duties performed by those employees in order to determine whether they are ‘engaged in retail and or wholesale sales of fresh meat and/or meat products’.
(iii) Finally, and if it is determined the Loadout Employees are ‘engaged in retail and/or wholesale sales of fresh meat and/or meat products’ so as to bring them within the scope of clause 31.2(i), it is necessary to determine which sub-clauses in clause 31.2(i) apply.
[37] Contrary to the submissions of the Appellant we do not accept that clause 31.2 is ambiguous. The structure and meaning of the clause is in our view clear and it was not in contest before us that, unless the Loadout Employees were found to be engaged in retail and/or wholesale sales, then clause 31.2(f) would apply to those employees. We now turn to consider the Commissioner’s construction of clause 31.2.
[38] The Commissioner first noted that there was no dispute between the parties that the Respondent’s operations fell within the definition of a ‘meat processing facility’.36 Consequently, the issue before the Commissioner was whether the ordinary hours of work of Loadout Employees engaged by the Respondent fell within clause 31.2(f) or clause 31.2(i) of the Award.
[39] The Commissioner summarised the relevant evidence in relation to the activities of the Loadout Employees as follows:
“[13] The Applicant engages “loadout employees”. In his evidence, Mr Cunningham describes the activities of these employees as receiving orders from the sales team (5%), obtaining the various cuts of meat from the store (which may include limited butchering of the meat (10%) required to fulfil the order), loading the meat transport vehicles (50%), determining the route of the delivery truck ensuring that the access keys to the butchers shops were included (for out of hours deliveries) and that the paper work was collated and given to the sales team to allow invoices to be prepared (25%-35%). Mr Smith (who has never visited the Applicant’s operation) did not dispute Mr Cunningham’s description of the activities performed by ‘loadout employees’ at Wangaratta.”37
[40] The Commissioner proceeded to summarise the relevant hours of work provisions in the Award as follows:
“[21] Part 5 of the Award contains the Hours of Work provision and related matters.
[22] Clause 31.2 (a)-(d) contain general provision which apply to all persons employed under the Award. The balance of the clause provides hours of work provisions which are based on the work performed.
[23] Clause 31.2(f) provides hours of work provisions for meat processing establishments except for employees of those establishments in retail and/or wholesale sales of fresh meat and/or meat products.
[24] Clause 31.2(g) provides hours of work provisions for meat manufacturing establishments except for employees of those establishments in retail and/or wholesale sales of fresh meat and/or meat products. It is not in dispute that the Applicant is not a meat manufacturing establishment and thus this provision is not relevant to the question before me.”38
[41] The Commissioner correctly proceeded on the basis that clause 31.2(g) did not apply, both parties having agreed that the Respondent’s business was not a meat manufacturing establishment.
[42] The Commissioner then reasoned that the ordinary hours of work of the Loadout Employees fell within the scope of clause 31.2(i)(iii) of the Award:
“[26] Clause 31.2(i) provides hours of work provisions for employers who are exclusively meat retail establishments and also for employees of meat processing and meat manufacturing establishments who are engaged in retail and/or wholesale sales of fresh meat and/or meat products (emphasis added). The second limb of clause 31.2(i) is applicable to the facts in this case and results in clause 31.2(i) having application. As a result, I do not accept the AMIEU’s contention that clause 31.2(f) has application to load area employees engaged in retail or wholesale trade.
[27] Clause 32.1(i)(iii) contains specific hours of work provisions for persons engaged in “loadout areas” in “meat retail establishments”.
[28] Clause 31.2(j) provides hours of work provisions for meat retail establishment duties which are not relevant to the activities of the Applicant.
[29] In my view, the relevant provisions of clause 32.1 of the Award are not ambiguous and are capable of interpretation according to their natural and ordinary meaning.
[30] The way in which clause 31.2(i)(iii) is constructed indicates to me that it applies to persons employed in loadout areas in establishments as described by clause 31.2(i). In the Applicant’s case, this includes employees engaged in loadout areas within the portion of the business that engages in wholesale sales of fresh meat and/or meat products.”39
[43] We note that the Commissioner at [26] stated that the second limb of 31.2(i) applied in respect of the Loadout Employees based on the facts of the case. It is unclear from the Interim Decision the basis on which the Commissioner formed that view. While he summarised the evidence given by Mr Cunningham as to the duties of employees in the loadout area, there was no evident analysis of whether those duties as described supported a conclusion that the employees were ‘engaged in retail and or wholesale sales of fresh meat and/or meat products’. As stated earlier in this decision, such a finding was necessary for clause 31.2(i) to have application. While stating that 31.2(i) applies, no clear finding was made by the Commissioner that the relevant employees were “engaged” in sales.
[44] At [27] the Commissioner states, incorrectly in our view, that clause 31.2 (i)(iii) contains specific hours of work provisions for persons engaged in ‘loadout areas’ in meat retail establishments. Correctly stated, clause 31.2(i)(iii) applies to employees working in loadout areas as described in clause 31.2(i)(iii), either in meat retail establishments and also to employees in meat processing or manufacturing establishments where employees are engaged in retail and/or wholesale sales and work in loadout areas.
[45] Furthermore, at [30] the Commissioner states that 31.2(i)(iii) applies in respect of the Loadout Employees of the Respondent engaged in the loadout area of the business within the portion of the business engaged in retail and/or wholesale sales. That is, in our view a misstatement of clause 31.2(i)(iii) as it wrongly focuses on where the loadout duties are performed (i.e. the portion of the business engaged in retail and/or wholesale sales) rather than focusing on the actual duties of the Loadout Employees.
[46] The Commissioner concluded that employees engaged by the Respondent on loadout activities fell within the non-exhaustive description of loadout work as described in clause 31.2(i)(iii) of the Award and that such work was as an ‘integral part’ of the Respondent’s sales process:
“[31] The next issue is: what activities does a “loadout area” include? It is evident from clause 31.2(i)(iii) that loadout area activities include the receipt, storage, inspection, loadout and delivery of meat or meat products which is part of the wholesales sales function.
[32] When the evidence of Mr Cunningham is considered, the employees concerned are clearly involved in the loading of meat and/or meat products and assist with the undertaking of the delivery function by the manner in which the product is loaded, organising the delivery route and provision of client’s access keys. In my view this work falls within the non-exhaustive description of loadout work contained in clause 32.1(i)(iii). Mr Cunningham’s evidence confirms that at Wangaratta, this work is an integral part of the sales process. Whilst the evidence is that loadout operators may perform limited butcher work (which could include “sawyer” work), in my view this work is incidental to the loadout work and not at such a level which prevents the proper characterisation of their work as loadout work.” 40
[47] The Commissioner’s consideration of whether clause 31.2(i)(iii) applied to the Loadout Employees of the Respondent appears to proceed on the basis that those employees were “engaged” in sales. As previously stated, no such finding was made by the Commissioner. Nevertheless, the analysis of the duties of the Loadout Employees and the conclusion that the work fell within the description of loadout duties is unremarkable.
[48] The Respondent submits that the Commissioner approached and undertook the task of construction of clause 31.2 in an anodyne and uncontroversial manner. We disagree. At no stage in the Interim Decision does the Commissioner appear to have analysed the duties of the Loadout Employees in the context of whether in performing those duties they could be said to be “engaged in retail and/or wholesale sales of meat and/or meat products”. The Commissioner appeared to conflate the required analysis with whether the duties of the Loadout Employees fitted within the description in clause 31.2(i)(iii). As we have previously stated, such an enquiry only becomes necessary once the precondition for the application of clause 31.2(i) is established, namely, that the relevant employees were “engaged” in sales.
[49] The Respondent submits that the Commissioner made the necessary finding at [32] that the work of the Loadout Employees was an “integral part of the sales process”. Accepting the Commissioner’s conclusion on that point to be correct, it falls short of a finding that those employees were “engaged” in sales. Nor do we accept that it can be inferred from that finding that Loadout Employees were engaged in sales. True it may be that the work of the Loadout Employees was “integral” to the Respondent’s sales process, just as product packaging, loading and delivery may be “integral” to any retail or wholesale sales activity. Whether in the present case the Loadout Employees were “engaged” in sales is a different enquiry that requires an objective assessment of the duties of the Loadout Employees.
[50] We turn to deal with the Appellant’s submissions about the history of the making of the Award in the context of the proper construction of clause 31.2. The Appellant submits that the structure of ordinary hours provisions in the Award essentially preserved the industry streams that existed in the pre-reform awards. This it says supports its argument on construction of clause 31.2 because the pre-reform Processing Award did not have separate hours of work for loadout work.
[51] It is apparent from a review of the various submissions made by the Appellant41 and AMIC42 prior to the making of the Award, that the issue of the ordinary hours of work provisions was in contest before the relevant Full Bench in AM2008/42, particularly because it had the potential in the Appellant’s view to introduce a broader span of hours into processing establishments. For its part, AMIC resisted the Appellant’s contention at the time that the proposed ordinary hours of work provisions that were ultimately incorporated into the Award altered the pre-reform award hours of work arrangements that applied in respect of retail and wholesale sales employees’ hours of work arrangements.
[52] The key point made by AMIC in its submissions to the Full Bench at the time was that employees engaged in retail and wholesale sales within processing and smallgoods establishments were not covered by the respective Processing and Smallgoods Awards as those awards did not contain classifications for sales staff. Accordingly, the Retail and Wholesale Award had been applied to such employees and as such the aggregation of the pre-reform awards hours of work provisions into a consolidated clause that preserved the industry streams, did not alter the position in relation to applicable ordinary hours of work provisions.
[53] While there is some force to the Appellant’s argument that the pre-reform Processing Award did not contain extended ordinary hours provisions for loadout employees, there was insufficient material before the Commissioner or before us that addresses the ordinary hours of work arrangements that applied in respect of wholesale sales activities within processing establishments under the pre-reform Processing Award. It is unnecessary for us to make definitive findings on the particular submission advanced by the Appellant because as we have previously stated, the proper construction of the clause is clear on a plain reading, and in any event it is uncontroversial the Award provision preserved the ordinary hours of work arrangements that had existed in the pre-reform awards, based on the three industry streams, including for employees engaged in retail and/or wholesale sales.
[54] For the reasons outlined above we consider the Commissioner failed to apply the correct approach to the construction of clause 31.2. In failing to do so he did not make the correct enquiry, namely whether Loadout Employees are ‘engaged in retail and or wholesale sales of fresh meat and/or meat products’. That was the key question requiring determination andwhich,if found in the affirmative, would mean that clause 31.2(i) applied to Loadout Employees.
[55] As disclosed in the Interim Decision the Commissioner did not approach the required task correctly in order to construe clause 31.2. Nor were required findings as to whether Loadout Employees were “engaged in retail and/or wholesale sales of fresh meat and/or meat products” made. Notwithstanding those errors the Commissioner concluded that clause 31.2(I)(iii) applied and as such fell into error. Appeal grounds 3 & 4 are upheld. Therefore, it is unnecessary for us to deal with the remaining appeal grounds.
Are Loadout Employees engaged in retail and or wholesale sales of fresh meat and/or meat products?
[56] Having concluded that the Commissioner failed to determine whether Loadout Employees were ‘engaged in retail and/or wholesale sales of fresh meat and/or meat products’ it is convenient now to consider that question. In undertaking that task, it is necessary to objectively assess the duties of Loadout Employees in order to ascertain whether they are “engaged” in wholesale sales of the Respondent.
[57] It must be said at the outset that the Commissioner was not assisted by an abundance of material that went to the respective duties and responsibilities of sales and loadout team members. There was for example no details on classifications, position descriptions or letters of engagement tendered as evidence of respective duties and responsibilities. The evidence, such as it was, went to general descriptions of the work undertaken in the sales and loadout areas.
[58] Before turning to the evidence of the nature of tasks and duties undertaken by sales and loadout team members it is convenient to consider whether the Award contains relevant classifications that might inform an understanding of wholesale sales work. Unhelpfully, there are no classifications within the Award that provide for wholesale sales duties. The only references to ‘salesperson’ within the Award are found at clause 3 ‘Definitions and interpretation’ and at Schedule B ‘Classification Structure’, clause B.2.4, where ‘salesperson’ is separately defined. Significantly, in both the definition at clause 3 and at B.2.4, ‘salesperson’ is defined in a manner that confines the classification to retail establishments. The following definition is found at clause 3:
“salesperson means an employee (not a general butcher) engaged to effect retail sales of meat and/or meat products, and who may also perform cutting of meat for weight, wrapping and preparation or meat offered for sale”
[59] While the Appellant contends that an inference can be drawn from the ‘salesperson’ definitions in the Award that similar duties should be assumed with respect to wholesale sales thus limiting wholesale sales duties to a narrow range of tasks, we find no support for that in the terms of the Award. It is therefore necessary for us to approach the task of assessing whether Loadout Employees are ‘engaged in retail and or wholesale sales of fresh meat and/or meat products’ by reference to the duties that Loadout Employees undertake objectively assessed against the wholesale sales work performed in the Respondent’s establishment.
[60] The evidence before the Commissioner as to the duties of the Loadout Employees was summarised at [13] of the Interim Decision and is reproduced by us at [39] above. There was no dispute between the parties as to the accuracy of the Commissioner’s summary of the duties of Loadout Employees and we accept that summary to be correct. Based on the Commissioner’s summary the following breakdown (in time) of Loadout Employees duties is clear:
• receiving orders from the sales team - 5%;
• obtaining the various cuts of meat from the store (which may include limited butchering of the meat required to fulfil the order) – 10%;
• loading the meat transport vehicles - 50%; and
• delivery truck route planning, liaising with butcher shops re out of hours delivery, collation and provision of paperwork to the sales team to allow invoice preparation - 25%-35%.
[61] Further relevant evidence before the Commissioner as to the nature of the sales and loadout teams’ structure and duties may be summarised as follows:
• the Respondent’s sales team are exclusively engaged in wholesale sales.43 Approximately 98% of the Respondent’s sales are made to local butcher shops in the southern NSW and northern Victoria regions;44
• the sales and loadout teams work different ordinary hours with the sales team commencing at approximately 6.30am45 and while there is some variability in hours the loadout team generally commences between midday and 2pm;46
• •the sales team take and receive orders, engage directly with customers, organise sales and determine what product is to be sold;47
• once orders are taken by the sales team, they (the orders) are then passed on to the loadout team for collation. This includes ‘mark-up’ of the product which means product selection for specific customers;48
• Loadout Employees do take orders from customers after sales team staff have left the site for the day. This work represents approximately 5% of Loadout Employees’ duties;
• there is generally no interchange of staff on a given shift between the sales and loadout teams although there are one or two employees that are capable of interchanging and have done so in the past;49
• neither the sales team nor loadout teams have sales targets;50
• Loadout Employees have limited telephone contact with customers, although there may be a need for some contact arising for example from late orders, late order cancellations, changes in customer start and finishing times that impact on delivery requirements;51and
• Loadout Employees do not “cold call” customers regarding sales52 and spend limited time developing customer relationships.53
[62] It is clear enough based on the evidence that the nature of work undertaken, and duties performed by the sales and loadout teams, are separate and distinct. There are different hours of work and clearly different duties undertaken by the respective teams, save for the small amount of order taking (5% of their duties) that Loadout Employees may undertake after sales team staff have left site for the day which is incidental to their primary duties. The duties of Loadout Employees involve the receiving of orders from the sales team, preparation of the orders, loading the delivery truck, delivery route planning and paperwork preparation for the purpose of invoicing by the sales team.
[63] The principle purpose54 of the loadout role is that of order collation, loading and delivery of fresh meat to customers. We agree with the Commissioner’s conclusion that those duties are integral to the sales process, just as the slaughter and processing of livestock is integral to the sales process. It is trite that without freshly processed meat there can be no sales. Most if not all activities within the Respondent’s establishment are ultimately integral to the wholesale sales process. After all, the purpose of the Respondent’s business is to slaughter, process, sell and deliver fresh meat to its customers with the objective of making a profit from those sales.
[64] We accept that Loadout Employees perform tasks that are necessary, essential or fundamental to the wholesale sales of the Respondent. Without order collation, loading and delivery, meat sales cannot occur. The fact that Loadout Employees perform tasks necessary or essential to the sales process does not mean they are “engaged” or occupied in wholesale sales. They perform tasks that are wholly different in nature to the tasks performed by members of the sales team whose duties involve direct and regular contact with customers for the purpose of achieving wholesale sales for the Respondent. The evidence reveals that there is a clear distinction between the work performed by Loadout Employees and that of the sales team in our view. The latter group is engaged in sales whereas the former is engaged in the collation, loading and delivery of the sold product.
[65] It follows from the above that we find that Loadout Employees are not ‘engaged in retail and or wholesale sales of fresh meat and/or meat products’, that the carve out exceptions in clauses 31.2(f) & (i) do not apply, and as a consequence clause 31.2(f) applies in respect of the ordinary hours of work for Loadout Employees for the purpose of the required BOOT assessment.
Second Appeal
[66] Having concluded that the Commissioner erred in finding that clause 31.2(i)(iii) applied to Loadout Employees it follows that the Final Decision of the Commissioner was infected by that error. The BOOT assessment conducted in respect of Loadout Employees proceeded on the basis of an incorrect application of clause 31.2(i)(iii).
[67] The Commissioner failed to apply the correct construction of clause 31.2 of the Award for the purposes of the BOOT assessment. Ground 2 of the second appeal is upheld so it is unnecessary for us to deal with the remaining grounds of appeal.
Conclusion
[68] The implications for the BOOT assessment of the Agreement, having regard to application of clause 31.2(f) to Loadout Employees, was not the subject of submissions or evidence before us. We are unable to conclude whether the errors identified by us would have altered the decision to approve the Agreement. We therefore consider the appropriate course of action is to uphold the appeals, quash both the Interim Decision and Final Decision and remit the application for approval of the Agreement to Commissioner Platt for redetermination. We note that no other matters were raised before us that go to the approval requirements of the Agreement having not been satisfied.
[69] In remitting the application for re-determination the proper course will be for the Commissioner to consider the evidence and material relied on in the first instance proceedings and allow additional submissions and evidence in relation to the BOOT assessment for Loadout Employees having regard to the application of clause 31.2(f) to those employees in respect of their ordinary hours of work.
Disposition
[70] We order as follows:
(1) permission to appeal is granted;
(2) the appeal is upheld;
(3) the decisions in [2019] FWC 5166 and [2019] FWCA 5354 are quashed; and
(4) the application for approval of the Wangaratta Abattoirs Pty Ltd and the Australasian Meat Industry Employees Union Collective Agreement 2018 (Matter AG2019/351) is remitted to Commissioner Platt to determine consistent with the penultimate paragraph of this decision.
DEPUTY PRESIDENT
Appearances:
P Russell for the Appellant
D Trindade, Solicitor for the Respondent
Hearing details:
2019
Melbourne
14 October 2019
Outlines of submissions:
Appellant, 10 September 2019
Respondent, 3 October 2019
Printed by authority of the Commonwealth Government Printer
<PR715706>
1 [2019] FWC 5166
2 [2019] FWCA 5354
3 AE504704
4 MA000059
5 [2019] FWC 5166 at [10]
6 Ibid at [13]
7 Ibid at [21]-[24]
8 Ibid ay [26]-[30]
9 Ibid at [31]-[32]
10 Ibid at [33]
11 [2019] FWCA 5354 at [11]
12 AP781451CRV
13 AP805128CRV
14 AP805114CRV
15 Ibid, clause 22
16 AP781451CRV, clause 21
17 See AMIEU submission to the Full Bench in AM2008/42 dated 12 June 2009 at [28] and Australian Meat Industry Council (AMIC) submissions to the Full Bench dated 1 July 2009 at [77]-[79]
18 [2009] AIRC 450 at [133]
19 Appeal Book, p.78, Transcript of proceedings 9 July 2019 at PN34-PN36, PN41
20 Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
21 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46].
22 GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
23 [2010] FWAFB 5343, (2010) 197 IR 266 at [24] – [27].
24 Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481.
25 Wan v AIRC (2001) 116 FCR 481 at [30].
26 (1936) 55 CLR 499
27 Clause 31.2(f)
28 Clause 31.2(g)
29 Clause 31.2(i)
30 Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241, 246 [2] per Gleeson CJ and McHugh J
31 [2014] FCA 829; (2014) 318 ALR 54
32 Ibid at 58-61 [30]-[35]
33 [2014] FWCFB 7447
34 [2017] FWCFB 3005
35 AMWU v Berri Pty Ltd[2017] FWCFB 3005 at [19]
36 [2019] FWC 5166 at [10]
37 Ibid at [13]
38 Ibid at [21]-[24]
39 Ibid at [26]-[30]
40 Ibid at [32]
41 Submissions to the Full Bench in AM2008/42 dated 12 June 2009 at [28]
42 Submission of the Australian Meat Industry Council (AMIC) to the Full Bench dated 1 July 2009 at [77]-[79]
43 Appeal Book at p.81, PN69
44 Appeal Book at p.82, PN74
45 Appeal Book at p.84, PN94-PN95
46 Ibid, PN89
47 Appeal Book at p.85, PN99-PN102
48 Appeal Book at p.82, PN75-PN76
49 Ibid, PN106
50 Appeal Book at p.84, PN96-PN98
51 Appeal Book at p.85, PN103
52 Appeal Book at p.86, PN113-PN115
53 Appeal Book at p.87, PN118-PN119
54 Carpenter v Corona Manufacturing, (2002) 122 IR 387 at [9]
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