Australian Workers' Union, The v Ixom Operations Pty Ltd
[2018] FWC 7175
•11 DECEMBER 2018
| [2018] FWC 7175 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.229 - Application for a bargaining order
Australian Workers' Union, The
v
IXOM Operations Pty Ltd
(B2018/437)
DEPUTY PRESIDENT MASSON | MELBOURNE, 11 DECEMBER 2018 |
Application for bargaining orders – application of s 176 – whether organisation is entitled to represent the industrial interests of the relevant employees – interpretation of union rules – whether relevant employees are engaged in or in connection with the chemical industry.
Introduction
[1] An application was made by The Australian Workers Union (AWU) to the Fair Work Commission (the Commission) pursuant to s 229 of the Fair Work Act 2009 (the Act) seeking bargaining orders in relation to bargaining with IXOM Operations Pty Ltd (IXOM) for a new enterprise agreement in respect of IXOM’s Marplex Laverton site.
[2] The application was made in the context of bargaining for an agreement to replace the Orica Chemicals Australia Operations Pty Ltd (Marplex Laverton Site) Enterprise Agreement 2014 1 (the Agreement). By reason of Orica Limited’s sale of its chemical division (including Marplex) in 2014 to Blackstone’s IXOM, a transfer of business occurred such that the Agreement continues to cover the relevant employees on the Marplex Laverton Site.
[3] In or about November 2016, the relevant employees of IXOM who are covered by the Agreement sought to commence bargaining with IXOM for a proposed replacement agreement. The bargaining representative for the employees was, at the time, the National Union of Workers (NUW).
[4] On 1 May 2018, the AWU wrote to IXOM and asserted that:
(i) in or about February 2018, the relevant employees resigned membership from the NUW and enrolled as members of the AWU;
(ii) in accordance with s 176 of the Act, the AWU became the default bargaining representative of the relevant employees; and
(iii) The AWU is entitled to represent the industrial interests of the relevant employees under the registered Rules of The Australian Workers Union (the AWU Rules).
[5] On 4 May 2018, IXOM replied to the AWU’s correspondence of 1 May 2018 and rejected the AWU’s assertion that it is entitled to represent the industrial interests of the relevant employees.
[6] The AWU subsequently filed its application in the Commission and sought the following orders:
“That the Respondent:
(a) recognise and bargain with the Applicant as a bargaining representative for the proposed agreement;
(b) advise the Applicant of the next five dates that the relevant officers of the Respondent are available to meet after the order is made;
(c) agree to attend, and participate in, bargaining meetings on such dates identified in paragraph (b) above as the AWU is available;
(d) attend, and participate in, such bargaining meetings as agreed in accordance with (c) above; and
(e) continue to attend, and participate in, bargaining meetings at reasonable times thereafter.” 2
[7] IXOM opposes the bargaining orders sought by the AWU on the grounds outlined in their response to the AWU on 4 May 2018, that is, the AWU is not entitled to represent the industrial interests of the relevant employees pursuant to s 176(3) of the Act. No other grounds were advanced by IXOM in opposition to the AWU application.
[8] Directions were issued for the filing of submissions and materials and the matter was listed for hearing before the Commission on 20 August 2018.
[9] The AWU called two witnesses to give evidence in the proceedings:
• Mr Henry David Mills (Mr Mills) who is employed in the role of Team Leader/Operator at IXOM’s Marplex Laverton Site; and
• Mr Mark Vella (Mr Vella) who is employed in the role of Operator at IXOM’s Marplex Laverton Site.
[10] IXOM, who were represented by Mr David Parker of AMMA, called two witnesses to give evidence in the proceedings:
• Mr Christopher John Holland (Mr Holland) who is employed in the role of IXOM’s Head of Manufacturing; and
• Mr Ron Stephen Stoman (Mr Stoman) who is employed in the role of Site Leader at IXOM’s Marplex Laverton Site.
Issues to be determined
[11] Resolution of the matter before the Commission requires the determination of whether the AWU is entitled to represent the industrial interests of the relevant employees in accordance with the AWU Rules.
[12] The question to be determined by the Commission, as agreed between the parties, is as follows:
“Is the AWU entitled to represent the industrial interests of any IXOM employee who is:
a. covered by the scope of the Agreement; and
b. proposed to be covered by an enterprise agreement to replace the Agreement, in accordance with section 176(3) of the Fair Work Act 2009 (Cth)?”
Scope of Agreement
[13] The Agreement describes its scope and application in the following terms at clause 2:
“2 Application
This Agreement shall apply to all Employees of Orica Chemicals Australia Operations Pty Ltd engaged at the Company’s workplace at 165-169 Fitzgerald Road, Laverton North, Victoria and who are engaged in a classification that falls within the classification structure set at clause 11 of this Agreement.”
[14] The classification structure which is referred to in Clause 11 is detailed in Schedule A of the Agreement and relevantly provides as follows:
“Schedule A – Classifications
The following classification structure applies to all Employees covered by this Agreement.
Operating Skill Structure
Objectives
• Define competencies that address current and future business needs
• Provide flexibility for operators to learn different skills and receive acknowledgement
• Provide a career structure for operators
• Provide a framework for managing training
Group 1 – Induction
• Safety induction, basic tools, chemical handling, product quality
Group 2 – Compulsory Auxiliary Units
1. Pre-batching small ingredients
2. Flow bin preparation – tumble blending
3. Bulk Bag handling
3 Finished goods preparation – stretch wrapping, labelling and storage
5. Warehouse duties – receiving and dispatching
6. Forklift maintenance – checks and gas bottle filling
7. Cleaning etc – Berringer, gas torch and cleaning equipment
Group 3 – Operating skills
1. Grinding Mills
2. Farrel Rotor & Single screw extruders
3. Twin screw extruders <100mm
3. Twin screw extruders >100mm
Group 4 – Auxiliary Skills
1. Receiving raw material to silos
2. Packing off South side (valve sacks, pallecons, foil bags, bulk bags etc)
3. Packing off North side (bulk bag units etc)
4. Line 13 packaging and product transfer
5. Preparing paperwork and silos
6. Quality – minor lab (product testing, injection moulders, film tower)
7. Blending of products
8. Warehouse operation
Group 5 – Shift Leader Skills
• Responsibility for all manufacturing and leadership processes, including but not limited to, deployment of resources within the shift, co-ordination of line rotation, maintaining of skills and upgrading opportunities.
• A selection process will be undertaken to determine suitable people for these roles.
Group 6 – Production Co-ordinator Skills
Site production co-ordination skills across all 3 shifts including but not limited to the following:
1. Safe operation and high housekeeping standards
2. High quality standards and resolution of quality issues
3. SAP and Production performance reporting
4. Resource planning (labour and materials)
5. Efficient and timely operation
6. Problem solving
7. Dispute resolution
8. Maintenance co-ordination
9. Co-ordination with scheduling, laboratory and commercial operations
…………………”
Statutory framework
[15] The statutory provisions in respect of bargaining are set out as follows:
“228 Bargaining representatives must meet the good faith bargaining requirements
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.
Note: See also section 255A (limitations relating to greenfields agreements).
(2) The good faith bargaining requirements do not require:
(a) a bargaining representative to make concessions during bargaining for the agreement; or
(b) a bargaining representative to reach agreement on the terms that are to be included in the agreement.
229 Applications for bargaining orders
Persons who may apply for a bargaining order
(1) A bargaining representative for a proposed enterprise agreement may apply to the FWC for an order (a bargaining order) under section 230 in relation to the agreement.”
[16] Section 176 of the Act also sets out circumstances in which an employee organisation will be a bargaining representative of an employee who will be covered by an agreement:
“176 Bargaining representatives for proposed enterprise agreements that are not greenfields agreements
Bargaining representatives
(1) The following paragraphs set out the persons who are bargaining representatives for a proposed enterprise agreement that is not a greenfields agreement:
………..
(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if:
(i) the employee is a member of the organisation; and
(ii) in the case where the agreement is a multi-enterprise agreement in relation to which a low-paid authorisation is in operation—the organisation applied for the authorisation;
………
(3) Despite subsections (1) and (2):
(a) an employee organisation; or
(b) an official of an employee organisation (whether acting in that capacity or otherwise);
cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.”
[17] It is clear from the statutory provisions that in order for the AWU to act as a bargaining representative of the relevant employee/s pursuant to s 176(1)(b), it is necessary that at least one employee who will be covered by the proposed agreement is a member of the AWU; has not nominated another person to be his or her bargaining representative; and that the AWU is “entitled to represent the industrial interests of the employee”. That entitlement, as observed by a Full Bench in ResMed Limited v The Australian Manufacturing Workers Union 3(ResMed) is to be resolved by reference to the union’s eligibility rules.
AWU Rules
[18] The AWU contends that it is entitled to represent the industrial interests of the relevant employees in relation to the proposed agreement pursuant to Rules 5(1) and 5(7)(i) of the AWU Rules which relevantly state as follows:
“RULE 5 – ELIGIBILITY FOR MEMBERSHIP
SECTION 1
PART A
(1) Every bona fide worker, male or female engaged in manual or mental labour in or in connection with any of the following industries or callings, namely: …..of chemicals and gasses…………………………”
PART C
(7) Without limiting the foregoing or being limited in any way by the foregoing the following persons shall be eligible for membership of the Union:
……………………
(i) Persons employed or usually employed in any establishment wholly or partly engaged in or connected with the manufacture, preparation and storage (or any of them) of……, and of Acids, Alkalis and Chemicals of all kinds whether in liquid solid or gaseous form (or any of them), and work incidental thereto AND of persons employed in any type of labour in and around such establishment whose employment is incidental; to the proper carrying out of the foregoing manufacture, preparation and storage of (or any of them).
………………..”
[19] The AWU also contend in the alternative that it is eligible to represent the industrial interests of the relevant employees under Rule 5(6)(a) of the AWU Rules. The submission is made on the basis that the operators at the Marplex Laverton Site are “Machine Operators” pursuant to Rule 5(6)(a) which relevantly states as follows:
“SECTION 2
PART B
(6) Without limiting the generality of the foregoing or being limited in any way by the foregoing, persons engaged in any of the following Trades or Branches of Trades shall be eligible for membership of the Union:
(a) Engineers, Fitters, Turners, Water Meter Fitters, Tool and Gauge Makers…………………,Milling Machinists,………….and any other Machine Operators or Mechanics employed in the Engineering, Locomotive, Shipbuilding, Rolling Stock, Aircraft, Munition and Iron Trades, or in any other industry.
………………….
(b) This eligibility rule in so far as it adopts the eligibility rule of the Australian Society of Engineers prior to amalgamation with the Federated Ironworkers’ Association of Australia shall be construed as if it is the eligibility rule of the Australian Society of Engineers prior to amalgamation and shall be treated as standing alone and separate from the remaining parts of the eligibility rule.” (emphasis added)
Background and evidence
IXOM’s operation and manufacturing process
[20] IXOM’s operations are comprised of a number of distinct businesses: the Marplex plastics business and a chemical business. Marplex has been owned and operated by IXOM and its predecessor Orica since 2004 when Orica acquired the Marplex plastics business under the Marplex brand.
[21] The Marplex business comprises:
(i) trading operations that involve the importation of plastics compounds and resins from various overseas suppliers which are then on-sold directly to customers; and
(ii) manufacturing operations at the Laverton site (Marplex Laverton Site). 4
[22] The Marplex Laverton Site is IXOM’s only plastics manufacturing site and operates as a standalone facility in that it:
(i) doesn’t source materials from other IXOM sites;
(ii) doesn’t supply products to other IXOM sites;
(iii) doesn’t use any of the same or similar processing equipment to that of other IXOM sites; and
(iv) uses different raw materials in the manufacturing process to that of other IXOM sites. 5
[23] The Marplex Laverton Site operations comprise the design, manufacture and supply of thermoplastics compounds which are then supplied to manufacturing companies for use in the production of end products. For example, a polycarbonate alloy product is manufactured at the Marplex Laverton Site and supplied to an overseas company which moulds the supplied material into car door handles. 6
[24] The manufacturing process involves the use of base polymer resins sourced locally and overseas including polyethylene and polypropylene, which are essentially solid plastic materials. Additives are mixed with the base polymers prior to the manufacturing process for a range of purposes including acting as a lubricant to assist the manufacturing process; protecting the polymers from oxidisation; and discolouration and enhancing the durability and light resistance of the polymers. 7 Additives used include:
(i) powder based chemicals;
(ii) fill material including talcs, syloid and minex;
(iii) liquid chemicals including silicon, syloid and verox. 8
[25] The manufacturing process at the Marplex Laverton site was described in the following terms by Mr Holland:
“The manufacturing process involves the use of plastic extrusion machines which have been specifically designed to process polymers (plastics) and the additives (i.e. colours, lubricants, antioxidants, etc). The raw materials are fed into the extruder (either individually via separate feeders all mixed together and fed through a single feeder) in predetermined quantities depending upon the composition (grade) of plastic compound to be produced. The extruder is used to continuously melt (and mix) the raw materials creating a homogenous mix of molten plastic which is extruded through a die to produce “laces”. The laces are then passed through a water batch to cool the product so it can be pelletized into granules. One manufactured product is also put through a secondary process where the granules are passed through a grinding mill to create a fine powder which is then packaged in bulk bags.” 9
[26] The Marplex Laverton Site has four extruder lines and three plastic grinding mills. 10
[27] According to company witnesses, the manufacturing process does not involve a chemical process. Rather, it involves the melting and mixing of the base polymers with the additives. Mr Holland gave the following relevant evidence during his examination in chief:
“[MR PARKER]: Mr Holland, in your witness statement and in the summary that you've just given you spoke about the position that you held immediately prior to the position that you hold now as the site manager for the Laverton chlor-alkali plant. Could you describe in summary and briefly what is it that occurs and the Laverton chlor-alkali plant?
[MR HOLLAND]: Yes, absolutely. So the ultimate aim is to produce chlorine and chlorine-derivative products. The process involves taking salt - it actually comes from sea lake in the Mallee region of Victoria - make a brine solution out of that; the brine is purified, so it goes through some steps where components such as caustic, carbon dioxide and other materials are added to create a chemical reaction to be able to purify that brine, basically takes out calcium and magnesium as the two major impurities occurring naturally within the salt; it takes that brine solution which has been purified through an electrolysis process, so basically a large galvanic cell-type principle; anode cathode, DC voltage, voltage is used as a catalyst to make this reaction occur; it actually takes the components, so we have - be nice if I had a whiteboard to draw up - but it actually takes the components in terms of NaCl as salt, plus H20 as water, and creates sodium hydroxide, Na0H, plus hydrogen, H2, plus chlorine, Cl2; and it's actually those products that are produced as part of that chemical reaction, that electrolysis process are then used further downstream to make different materials, such as the hydrogen and the chlorine are added together, burnt in the presence of a flame, and then put through water to create hydrochloric acid; the chlorine and the caustic soda, NaOH, are added together to form what we call liquid pool chlorine, the sodium hypochlorite; and there's also another process on site which is a reaction process as a batch process, which takes paraffin oil, sparge chlorine through that to produce chlorinated paraffin, trademarked or trade name Cereclor.
[MR PARKER]: Mr Holland, you've there referred to chemical reactions in the process you've just described?
[MR HOLLAND]: Yes.
[MR PARKER]: What is it that you understand by the term chemical reaction?
[MR HOLLAND]: So my understanding is a chemical reaction is actually taking one material or a multiple number of materials and changing their molecular structure and creating different or other types of chemicals, materials, compounds out of that. So take the example of salt plus water, becomes caustic plus hydrogen plus chlorine, so what you get out is different to what you put in.
[MR PARKER]: Mr Holland, if I could jump forward in your statement then to paragraph 11, and I will be asking you questions about paragraphs 12 and 16 as well?
[MR HOLLAND]: Right.
[MR PARKER]: In paragraph 11 you talk about the operations at the Marplex Laverton site. Could you just compare the operations there with the operations you've just described at the Laverton chlor-alkali plant?
[MR HOLLAND]: So the Marplex Laverton site basically is taking raw materials or ingredients, predominantly powders; combining those together, putting them through an extruder, a specific plastics compounding extruder which uses the physical process of melt and mix to combine those materials together, heat and pressure, it actually forces that material via a large screw inside a barrel, pushes it through a die, and that die is basically just to take that molten material and push it through fine holes to cause laces or strands out of that; those strands are pulled through a water bath, they are cooled down, and it goes through a process of, like a die face cutter, to cut that material into small granules or small pellets. Some of them taken further on and they are ground into a fine powder for a particular customer; the remaining material is just put them through into bags, small 25 kilo bags or bulk bags, for on selling to customers.
[MR PARKER]: How does that process you've just described compare with the Laverton chlor-alkali process?
[MR HOLLAND]: The chlor-alkali process, yes. So the chlor-alkali process is where we take materials in and create something different out of them. So as I described just a moment ago, this is just taking the materials and putting them together in terms of a mix, but it's actually not changing the materials themselves, they're actually just blending, putting them together, so there's actually no chemical reaction that occurring as part of that process.” 11
[28] Both AWU witnesses, Mr Vella and Mr Wilson, expressed opinions that the manufacturing process involved a chemical reaction 12 but conceded they were neither chemists nor scientists and could not say for certain that the manufacturing process involved a chemical reaction.13 It was further conceded by Mr Mills that the process of preparing pre-blend mixes did not involve a chemical reaction.14
[29] Evidence was also adduced in relation to the production of “masterbatches” which Mr Vella states is a compounded chemical product produced to be sold and used in customer production processes, and which according to Mr Vella, represents a significant component of the site’s production. 15 The AWU sought to distinguish “masterbatch” products from other polymer compound products produced on site. Mr Holland states that he was unsure as to the ultimate use made by customers of “masterbatches” but like other products produced on site, it was a polymer plastic, which is a compound of materials including a base polymer and other additives.16
[30] In addition to the manufacturing process described above, the site also produces what are referred to as pre-blend mixes. Pre-blend mixes involve the preparation of a blend of the additives used in the above-described manufacturing process according to a batch sheet that specifies the additives to be used and in what quantities. The additives are weighed in accordance with the batch sheet, transported to a charging platform from where they are funnelled into bulk bags weighing approximately 400kg to 500kg. The bulk bags are then labelled, shrink wrapped and then transferred to the warehouse for despatch to customers.
[31] According to IXOM, the preparation of pre-blend mixes represents a small part of overall site production and is estimated to represent approximately 2.5% to 5% of total production. 17 AWU witnesses, Mr Vella and Mr Mills, disagreed with the estimated percentage put forward by IXOM and, while conceding that they did not have the production figures, opined that pre-blend mixes accounted for between 5-10% of total production.18
Operator duties
[32] Position descriptions were produced in evidence for the positions of Plant Operator - Engineering Plastics 19 and Shift Leader – Engineering Plastics.20
[33] While there is some variation in duties across the different production lines, it was uncontroversial that the operator duties involved a range of particular tasks associated with the manufacturing process including:
(i) setting up the extruders for particular jobs;
(ii) selecting and weighing all required materials, both base polymers and additives, according to the job sheet;
(iii) adding all ingredients to mixing bins or feed hoppers;
(iv) transferring material from mixing bins to the extruder;
(v) adjust and fix machine settings for extruder temperature and speed and associated equipment;
(vi) commence production by running material through the extruder onto the floor or through the cooling bath until there is a clean consistent strand like material called “laces”;
(vii) once the product is “laced up”, continue to monitor for a short period then periodically monitor the production machines as well as raw materials.
(viii) once the production line is running, undertake other duties including operation of the bagging unit which may include the bagging of 25kg bags and up to 1000kg bulk bags.
[34] In addition to the operation of the production lines, operators are also required to undertake a range of tasks associated with the clearing and cleaning of the machines at the completion of a product run and as part of the set-up of the machine prior to the next product run. These duties were characterised by Mr Vella and Mr Mills as “maintenance tasks”, a description that IXOM contested.
[35] Mr Mills summarised the following types of activities undertaken by operators in relation to the claimed “minor maintenance and cleaning” duties:
(i) stripping and cleaning the pelletiser;
(ii) stripping and cleaning the classifier;
(iii) removing pipe works and blowing down with compressed air;
(iv) removing the holding tanks and cleaning them with compressed air;
(v) removing the extruder die;
(vi) removing the vent;
(vii) removing the feeders from the feed system; and
(viii) checking there are no granules on the upper and lower floors of the feed system to ensure no cross contamination of products. 21
[36] Mr Stoman rejected the evidence of Mr Mills and Mr Vella regarding “maintenance” work being undertaken by operators. He states that they are required to undertake cleaning and clearing tasks, and in doing so, are required to disassemble and reassemble certain parts of the equipment. Furthermore, they are not qualified and do not perform maintenance or repairs on the equipment aside from basic unskilled tasks. 22 Mr Stoman referred to the presence on site of a full-time maintenance fitter who is responsible for:
(i) carrying out mechanical and maintenance work on all equipment;
(ii) repairing or replacing defective parts and equipment as required;
(iii) managing and co-ordinating the regular preventative maintenance program
for all equipment on-site; and
(iv) arranging for contractors to attend site for particular maintenance and repair
tasks as required. 23
[37] During cross examination both Mr Vella and Mr Mills variously stated in respect of the “minor maintenance duties” that they claimed operators performed:
(i) while they were both qualified fitters 24, they acknowledged that not all operators were qualified tradespersons and that it was a not requirement that operators be qualified tradespersons25;
(ii) the enterprise agreement that applies to operators at the site does not apply to the on-site fitter 26;
(iii) some hand tools are used by the operators for the purpose of pulling apart the equipment for cleaning, including spanners, screwdrivers and allen keys 27;
(iv) operators do not operate lathes or other similar equipment used for the purpose of cutting or shaping metal, although they do use hand tools to perform certain cleaning tasks 28;
(v) maintenance and repair of the equipment was the responsibility of and undertaken by the fitter 29;
(vi) operational problems may require operators do undertake some equipment troubleshooting to assist the fitter with any required equipment maintenance or repair. 30
Submissions
AWU submissions
[38] The AWU submits that it is entitled to represent the industrial interests of the relevant employees because they are:
(i) engaged in or in connection with the chemicals industry pursuant to Rule 5(1) of the AWU Rules;
(ii) employed in an establishment wholly or partly engaged in or connected with the manufacture, preparation and storage of chemicals pursuant to Rule 5(7)(i) of the AWU Rules; and
(iii) engaged as “Machine Operators” pursuant to Rule 6(a) of the AWU Rules.
[39] In relation to Rules 5(1) and 5(7)(i) of the AWU Rules, the AWU submits that the plastics produced at the Marplex Laverton Site are manufactured from base polymers that are heated and mixed with chemical additives and fillers; are substances that are produced by a chemical process; and are artificially created. On this basis, the AWU submits that employees covered by the Agreement are employed in or in connection with the chemical industry and are employed in an establishment that is engaged in the manufacture, preparation and storage of chemicals.
[40] The AWU referred to a prior Commission decision, that of The Amalgamated Footwear and Textile Workers Union of Australia v The Federated Ironworkers’ Association of Australia 31 (Fibremakers) on which IXOM sought to rely. In that case, Deputy President Riordan dealt with the demarcation of the entitlement of the two organisations to represent the industrial interests of textile workers employed at Fibremakers Limited. At issue was the meaning of the terms, “chemical”, “manufacture” and “storage of chemicals”. The Deputy President considered and found that Fibremakers were not engaged in or connected with the preparation, manufacture or storage of chemicals notwithstanding the presence and use of chemicals (polymer chips) which were used in the manufacturing process.
[41] The AWU submitted that the factual circumstances of Fibremakers were distinguishable from the present case in that the production process in Fibremakers was limited to heating of the base polymer material to melting point whereupon it was extruded through a spinneret which resulted in production of a synthetic man-made fibre. That production process was, according to the AWU, to be distinguished from the Marplex Laverton Site’s production process which involved the mixing of additives, including powered and liquid chemicals, with the base polymers as part of the manufacturing process.
[42] The AWU in closing submissions also referred to the production of “masterbatches” which they contended was a product designed to deliver “chemical additives” for use in the manufacturing processes of IXOM and its clients. The AWU contended that the presence of plastics in the “masterbatch” was only present to make the chemical additives easier to feed into an extruder. In support of this submission, the AWU also sought to rely in closing submissions on IXOM product data sheets.
[43] The AWU also submit that aside from the manufacturing process at the Marplex Laverton Site, employees are also involved in the “preparation and storage” of chemicals as part of the preparation of pre-blend mixes which are not used in the manufacturing process but were blended and then sold to customers.
[44] The AWU also submit that operators at the Marplex Laverton Site are “Machine Operators” and as such, come within the scope of Rule 5(6)(a) of the AWU Rules. The AWU submits that in order for the operators to be found to be “Machine Operators” pursuant to the AWU Rules, it is sufficient to bring the machines operated by the relevant employees within the description of the term “engineering machines”. The AWU submit that, as the relevant employees are responsible for the manufacture of “Engineered Polymers”, they are so called because they (the polymers) have been engineered on “engineering machines”.
[45] The AWU did not press their submission raised in their outline of submission that as the plastic grinding machines on the Marplex Laverton Site are used to grind or crush IXOM’s products to powders, they are milling machines and accordingly the operators engaged in the operation of the plastic grinding machines fall within the scope of Rule 5(6)(a) which covers “Milling Machinists”. Similarly, they did not press their earlier submission that the operation on the Marplex Laverton Site fell within the Hydrocarbons Industry. 32
IXOM submissions
[46] IXOM submit that:
(i) the manufacture of thermoplastic products does not fall within the ordinary and customary meaning of the term “chemical industry”;
(ii) therefore it cannot be said that the work performed under the Agreement is in or in connection with the “chemicals industry”; and
(iii) neither Rule 5(1) nor Rule 5(7) provides any basis for the AWU’s assertion that it is entitled to represent the industrial interests of the relevant employees.
[47] IXOM seeks to rely on Fibremakers and submits that the reasoning applied in that case is equally relevant in the present case. In Fibremakers it was concluded by Deputy President Riordan that the process of melting and extrusion of polymer did not bring it within the scope of the “chemicals industry” as the meaning of the term “chemicals” is “generally understood for the purposes of industrial relations regulation in the sense as understood by the ordinary reasonable man”. 33
[48] IXOM further submit that the mixing of additives with the base polymers as part of the manufacturing process does not, as contended by the AWU, alter or distinguish the character of the Marplex Laverton Site operations from that considered in Fibremakers.
[49] IXOM submit that the AWU Rules have an established industrial meaning in that Rule 5(1) does not operate so as to mean that workers engaged in any operations in which chemicals are used are to be regarded as engaged in or in connection with the “chemical industry”.
[50] IXOM submit that Rule 5(7) should be interpreted and applied having regard to the industry rule such that the reference to an establishment engaged in the “manufacture, preparation or storage” of chemicals is not to be interpreted as a reference to any operation that involves some handling of chemicals. It was, according to IXOM relevant to have regard to whether the operation is engaged in the “chemicals industry”.
[51] IXOM also submit that in determining whether the relevant employees engaged in work on the Marplex Laverton Site are within the “chemicals industry”, regard should also be had to the history of award coverage. IXOM points to a pattern of historical award coverage that distinguishes between the chemicals and plastics industries.
[52] IXOM further submit that the continuing industrial delineation between the chemicals and plastics industries is reflected in the making of the Manufacturing and Associated Industries and Occupations Award 2010 34 (Manufacturing Award) in that the two industries were considered separately by the then Australian Industrial Relations Commission (AIRC) during Award modernisation.
[53] IXOM also submit that the Collins English Dictionary definitions of “synthesis”, “chemical” and “chemical reaction” are of assistance to determining whether the relevant employees engaged in the operations at the Marplex Laverton Site are engaged in or in connection with the “chemical industry”. The relevant definitions are as follows:
(i) the definition of “synthesis” includes….. “the process of producing a compound by chemical reaction or a series of reactions, usually from a simpler or commonly available starting material”.
(ii) the definition of “chemical” includes….. “any substance used in or resulting from a reaction involving changes to atoms or molecules, especially one derived artificially for practical use”.
(iii) the definition of “chemical reaction” includes…… “a process that involves changes in the structure and energy content of atoms, molecules or ions but not their nuclei”.
[54] IXOM refer to the evidence that: the extrusion process is a physical process involving melting and mixing of the base polymer with additives; that there is no process of chemical synthesis or chemical reaction; and that the preparation of pre-blend mixes does not involve a chemical reaction.
[55] IXOM reject the AWU submissions that “masterbatches” are to be distinguished from the normal manufacturing process and object to the AWU’s introduction of IXOM data sheets in their closing submissions that were not adduced in evidence. IXOM also seeks to rely on the evidence of Mr Holland who states that “masterbatches” are similar to other products produced in that they are polymer plastics, i.e. compounds of materials including base polymers and other additives. 35
[56] IXOM also reject the AWU submission that some or all of the relevant employees are Machine Operators pursuant to Rule 5(6)(a) of the AWU Rules. In doing so, IXOM rely on the reasoning in Ex parte Pavlic; Re Federation of Industrial Manufacturing and Engineering Employees (Tasmanian Branch) 36 (Pavlic). In that case, the Federal Court considered the equivalent parts of the current Rule 5(6)(a) of the AWU Rules, as those parts appeared in the rules of the (by then) deregistered Australasian Society of Engineers (ASE). The Federal Court rejected the Federation of Industrial Manufacturing and Engineering Employees (FIME) Tasmanian Branch’s submissions as to the breadth of scope the term “Machine Operator” should be given.
[57] The Federal Court in Pavlic relevantly stated:
“An analysis of r 2A leads to the conclusion that the phrase “Machine Operator” must have had a more restricted meaning than that for which Counsel for Ms Pavlich contended. The only aspect of the duties of Ms Pavlic that was relied on to bring her within the rule was her driving of a forklift truck. Assuming that this constituted a substantial portion of the duties, it could not bring her within the meaning of that phrase in the rule. If it did, the rule would be broad enough to encompass any person, employed in any industry, operating a machine. Word processor operators, gardeners using lawnmowers, clerks using calculators, people making garments, canteen staff making espresso coffee and all truck and car drivers would be included. It is plain from its context that the phrase “Machine Operator” has a particular meaning, commonly understood in relation to what are known colloquially as the “metal trades”. It means a person operating machine designed for the manufacture of articles from solid materials, usually metal. Examples are metal presses, milling machines and lathes, although there are no doubt many more. Such machines may be used in the manufacture of goods in the Engineering, Locomotive, Shipbuilding, Rolling Stock, Aircraft, Munition and Iron Trades, where those trades constitute the businesses of employers. They may also be used in “any other industry”, when the people who are employed to operate them make or repair parts for the maintenance of machinery and equipment used in the production of goods or the performance of other tasks. If it is necessary to resolve ambiguity in a rule relating to conditions of eligibility, resort may be had to the rule specifying the description of industry in or in connection with which the organisation was registered……. The relevant rule of the society r 2 specified “Engineering” as the industry. That rule supports the restriction of the phrase “Machine Operators” in r 2A(a) to what might properly be called operators of engineering machines.” 37
[58] IXOM submit that in light of Pavlic, the parts of Rule 5(6)(a) relied upon by the AWU are to be applied as if they appeared in the ASE rules and are to be interpreted in light of the industry in which the ASE was registered, that of “Engineering”. Accordingly, the term “Machine Operator” is properly a reference to operators of types of engineering or metal working machines.
Approach to interpretation of union rules
[59] The principles of interpretation of union rules were helpfully summarised by a Full Bench in the Australian Manufacturing Workers Union (AMWU) v ResMed Limited 38(ResMed), where the Full Bench stated as follows:
“[34] The general principles applicable to the interpretation of union eligibility rules are well established. As relevant to this appeal, they may be summarised as follows:
(1) Union eligibility rules will be construed objectively: R v Williams; Ex parte Australian Building, Construction Employees’ and Builders Labourers’ Federation.
(2) The nature of union eligibility rules means that they should be construed liberally rather than narrowly or technically: R v Cohen; Ex parte Motor Accidents Insurance Board; Co-operative Bulk Handling Ltd v Waterside Workers’ Federation of Australia; Electrical Trades Union of Australia v Waterside Workers’ Federation of Australia (No. 2).
(3) It is permissible to have regard to any common understanding among people concerned with relevant industries and particularly with industrial matters of the ordinary application of the words used, and to the previous use of the words in the relevant organisation’s rules and in statutory provisions, decisions, determinations, awards, reports and other papers concerned with the relevant industry or industries: R v Williams; Ex parte Australian Building, Construction Employees’ and Builders Labourers’ Federation. Federal awards, including consent awards, made by Commonwealth industrial tribunals at a time when the legislative award-making power was founded upon the industrial disputes power in s.51(xxxv) of the Constitution, are important sources in this respect since a union may only be a party to an industrial dispute involving employees eligible to be its members: Co-operative Bulk Handling Ltd v Waterside Workers’ Federation of Australia.
(4) If there is ambiguity as to the meaning of words in the eligibility rules, assistance may be sought in the terms of the industry rule (subject to it being understood that the scope of the eligibility rule is not restricted by the scope of the industry rule): R v Gough; Ex parte Municipal Officers’ Association.
(5) Words in an eligibility rule should not be read in isolation such as to give the rule a wide and indefinite scope of operation that is unlikely to have been intended: R v Gough; Ex parte Municipal Officers’ Association; Construction, Forestry, Mining and Energy Union v CSBP Ltd.
(6) Terms used in union eligibility rules should not be interpreted statically in accordance with the meaning they bore at the time that they were first introduced into the rules. Although such terms will have a fixed connotation, they bear a changing denotation - that is, they may be interpreted in accordance with their appropriate current meaning, taking into account changing technologies and methods of work: Co-operative Bulk Handling Ltd v Waterside Workers’ Federation of Australia. This may mean that eligibility rules may cover industries or callings not known when the rules were originally drafted: R v Isaac; Ex parte Transport Workers’ Union.
(7) The words “in or in connection with” are words of expansion. However, for the requisite connection to be established, the work of the employees in question must be referable or significant to the work of the second group of employees with whom there is said to be a connection. It is not sufficient that the work of the relevant employees makes it possible for an employer to conduct a business involving the performance of work by the second group of employees: Federated Miscellaneous Workers Union of Australia v Colonial Sugar Refining Co. Ltd.” 39(footnotes omitted)
Consideration
Rule 5(1) of the AWU Rules
[60] I turn first to consider whether employees engaged to perform work for IXOM on Marplex Laverton Site are engaged in the chemical industry pursuant to Rule 5(1) of the AWU Rules.
[61] The evidence as to the nature of the manufacturing operations on the Marplex Laverton Site was summarised at paragraphs [22]-[27]. I am satisfied on the evidence that the primary process undertaken on the site is that of the manufacture of thermoplastics through the melting and extrusion of base polymers that have been mixed and blended with additives. It is not contested that the manufacturing process involves the use of additives including some chemicals, both in a liquid and powdered form.
[62] As regards the AWU submissions regarding “masterbatches”, IXOM datasheets submitted by the AWU in closing submissions were not in evidence in the proceedings. I am consequently unwilling to place any weight on that material or the submissions made in reliance on that material. There is insufficient evidence before me to persuade me that the nature of the “masterbatch” product manufactured is of such a character as to distinguish it from other products produced on the site. In fact, the evidence of Mr Holland, which I accept, is that “masterbatch” production, like other production on site, involves the manufacture of polymer plastics which are blends of base polymers and additives.
[63] I am also satisfied that there is what may be described as an ancillary activity undertaken on site, that of preparing pre-blend mixes of additives, as summarised at paragraph [30]. The pre-blend mixes contain a range of additives (including some chemicals) that are mixed according to customer requirements, weighed, bagged and then despatched or warehoused for subsequent despatch to Marplex’s customers. The pre-blend mixes are not processed through the manufacturing process of mixing, heating and extrusion.
[64] There was some difference in the evidence of the witnesses as to what percentage the pre-blend mixes represented of overall production. Mr Stoman states that pre-blend mixes represent between 2%-5% of overall site production, whereas Mr Vella and Mr Wills expressed opinions that the figure was between 5%-10%, but both Mr Vella and Mr Wills conceded that they did not have the production data that Mr Stoman had knowledge of. I prefer the evidence of Mr Stoman given his role of Site Leader and his direct knowledge of the site production figures including that of pre-blend mixes.
[65] The manufacturing process at the Marplex Laverton Site may be distinguished from the operations considered by Deputy President Riordan in Fibremakers. In Fibremakers, the manufacturing process involved the melting and extrusion through spinnerets of only the base polymers without additives. That process may be contrasted with the Marplex Laverton Site which involves the mixing of the base polymers with some additives prior to melting and extrusion. The AWU submits that the difference in the manufacturing process is sufficient to bring the scope of the operations on the Marplex Laverton Site within the ordinary meaning of the term “chemical industry”.
[66] Were it the case that the use of chemicals in a particular operation or production process meant that such operations fell within the “chemical industry”, many operations otherwise accepted as falling within different industries would be held to be in the “chemical industry”. The use of chemicals within production processes is routine across many industries including mining, manufacturing and hydrocarbons. It is not sufficient, in my view, for there to merely be a presence of chemicals either in the production process or finished product to bring an operation within the scope of the “chemical industry”. That would be of such a broad scope as to be inconsistent with the ordinary meaning of the term “chemical industry” as used and understood in the industrial relations context.
[67] I am not persuaded that the use of additives mixed with the base polymers in the production process transforms the nature of the operations from one of thermoplastics manufacture to one of chemical manufacture. Nor am I persuaded that the preparation of the pre-blend mixes, given the small overall percentage that activity represents in overall site production, establishes that the Marplex Laverton Site is engaged in the “chemical industry”.
[68] I am fortified in my view as to the nature of the Marplex Laverton Site operations being in the plastics industry by the absence, on the evidence before me, of any chemical reaction/s or synthesis in either the manufacturing process or pre-blend mix preparation. I am satisfied on the evidence that the manufacturing process involves mechanical mixing, heating, extrusion, cooling and in some cases, grinding/milling of the thermoplastic product. The pre-blend mix preparation involves mixing, weighing and bagging. Neither activity, in my view, has a character that would bring it within the scope of what is generally understood in the industrial relations context as being within the “chemical industry”.
[69] I am further satisfied that the history of award making supports the distinction between the chemical and plastics industries as generally understood. This can be seen in the pre-modern Awards that operated within the chemical and plastics industries, those being:
(i) the pre-modern award of the Artificial Fertilisers and Chemicals Industry Award 2001 40 (Chemicals Award) to which the AWU was a party;
(ii) the pre-modern award of the Rubber, Plastic and Cable Making Industry General Award 1998 41(Plastics Award) to which the NUW was a party; and
(iii) the pre-modern award of the Plastics, Resins, Synthetic Rubbers and Rubbers (Plastic Sheet Fabrication) Award 1999 42(Plastic Sheet Fabrication Award) to which the Liquor, Hospitality and Miscellaneous Union was a party.
[70] That product and industry distinction was reinforced in the making of the Manufacturing Award in which chemicals and plastics are separately referenced within the Coverage clause of the Manufacturing Award. Clause 4 of the Manufacturing Award relevantly provides as follows:
“Clause 4 Coverage
……………….
4.9 Manufacturing and Associated Industries and Occupations means:
(a) the following industries and parts of industries:
(i) the manufacture, making, assembly, processing, treatment, fabrication and preparation of:
(ii) the products, structures, articles, parts or components set out in clause 4.10; or
(iii) the materials or substances set out in clause 4.10; or
(iv) any products, structures, articles, parts or components made from, or containing, the materials or substances set out in clause 4.10.
………………………
4.10 For the purposes of clause 4.9(a)(i), the products, structures, articles, parts, components, materials and substances include:
………………………
(v) thermoplastics and thermo-setting plastics, cellulose plastics, perspex, cellulose acetate butyrate, polymethyl methacrylate, nylon 66, polyethylene terepthalate, acronitrile-butadiene-styrene, epoxy resins, laminates of all descriptions, polymers of all descriptions and all long chain organic materials generally known as plastics.
………………………
(aa) artificial fertilizers, chemicals, alkalis and all processes involving
…………………….”
[71] It is also of some significance that the AWU Rules explicitly provide for and distinguish the coverage of “plastics” preparation and manufacture but such coverage is confined to the State of Queensland. The AWU Rules relevantly provide as follows:
“RULE 6A – ADDITIONAL ELIGIBILITY FOR ADMISSION TO MEMBERSHIP IN THE STATE OF QUEENSLAND
(1) Notwithstanding Rule 5 and 6, and without limiting the generality of those rules, this Rule 6A does not apply outside the State of Queensland.
………….
(1) Subject to this Rule 6A every bona fide worker male or female, engaged in manual or mental labour in or in connection with any of the following industries or callings namely:
……………
139. All employees engaged in or in connection with the handling, preparation and manufacture of plastic or rubber materials including compounds thereof, duperite, Bakelite, casein or similar compositions, synthetic rubberlikes, guttaperchalikes, rubberlike plastics, thermoplastics and thermosetting plastics, nitrocellulose, leathercloth, elastomers, and the processing and fabrication of products or articles therefrom.
………..” (emphasis added)
[72] Having regard to the above, I am not persuaded that employees of IXOM who are engaged at the Marplex Laverton Site within the coverage of the Agreement are “employed or usually employed in or in connection with” the “chemical industry”. In reaching this view, I have had particular regard to the nature of the operations on the Marplex Laverton Site, the common understanding of the meaning of the term “chemical industry” and the pattern of historical award coverage. Therefore, the AWU is not entitled to represent the industrial interests of the relevant employees pursuant to Rule 5(1) of the AWU Rules.
Rule 5(7)(i) of the AWU Rules
[73] Before turning to consider whether the relevant employees engaged by IXOM to perform work under the Agreement at the Marplex Laverton Site are “employed or usually employed in any establishment wholly or partly engaged in or connected with the manufacture, preparation and storage (or any of them) of……, and Chemicals of all kinds whether in liquid solid or gaseous form…” pursuant to Rule 5(7)(i) of the AWU Rules, it is useful to consider some relevant authorities.
[74] The scope of the present Rule 5(7) was considered by Moore J, President of the Conciliation and Arbitration Commission in the matter of The Federated Ironworkers Association of Australia (FIA) 43. In that matter, His Honour was determining an appeal of a decision in which an application by the Federated Ironworkers Association of Australia to alter its eligibility rules had not been consented to by the Industrial Registrar. For the purpose of the present matter, the relevant FIA eligibility rule that was considered by His Honour included Rule 3(1)(i) which is now replicated at Rule 5(7)(i) of the AWU Rules as a consequence of the amalgamation of the AWU and FIA.
[75] His Honour as part of his decision was considering, in the context of the FIA’s application to alter its coverage rule with respect to the uranium industry, whether the then existing FIA rules enabled coverage of the relevant work, which included the storage of chemicals. That required consideration of the relationship between Rule 3(1)(i) (of the then FIA Rules) and the relevant industry rule which was then expressed in similar terms to the current Rule 5(1) of the AWU Rules. In doing so, His Honour considered competing constructions of Rule 3(1)(i) of the FIA Rules and concluded that it was necessary to read that rule in conjunction with the industry rule.
[76] His Honour in referring to Rule 3(1)(i) and considering the interaction of that rule with the relevant industry rule stated as follows:
“A good deal or argument took place about the meaning of this paragraph. It was argued by the FIA that the words "wholly or partly engaged in or connected with" were words of qualification to the word "establishment" in other words the test was whether the establishment were engaged wholly or partly in the manufacture etc.
The contrary argument of the objectors is that the words "wholly or partly engaged in or connected with" relate back to the words "employed or usually employed", that is that the qualification relates to employee not to employer. In other words it is the employee who has to be "wholly or partly engaged in" etc. and not the employer. Reading the paragraph as a whole it seems to me that the argument of the FIA is to be preferred though the rule is by no means unambiguous. The words "wholly or partly engaged in or in connection with" follow immediately after the word "establishment" and on ordinary rules of construction would prima facie relate to that word. The alternative argument leads to a phrase "employed or usually employed • • • • • wholly or partly engaged in "which is virtually tautological and would seem to make redundant either the words "employed or usually employed" or "wholly or partly engaged".
Either interpretation can lead to what may appear to be absurd results. Establishments such as hospitals would certainly store chemicals and on the first interpretation all their employees would be eligible for membership of the FIA whereas on the second only those who stored chemicals would. Either result would appear to me to be unintended. Although the conditions of eligibility for membership of a union cannot be cut down by the description of the industry in its rules (Dunlop Rubber Case (97 CLR 71)) it is proper to look at the description of the industry in its rules in order to interpret the conditions of eligibility rule. The constitution rule contains the following:
"Employed or usually employed in connection with the Artificial Manures, Fertilizers, Acids, Alkalis and Chemical Industries"
This provision went into the rules of the FIA when it amalgamated with the Chemical Workers Union as did Rule 3(1)(i) the meaning of which was in issue. It seems to me that reading both provisions together employees in the artificial manures, fertilizers, acids, alkalis and chemical industries are covered by Rule 3(1)(i) but that employees of employers not in those industries are not.” 44 (emphasis added)
[77] In adopting His Honour’s reasoning applied in FIA, Deputy President Riordan succinctly summarised the implications of a broad construction as contended by the FIA in Fibremakers and as now similarly contended by the AWU in the present matter, when he stated as follows:
“One example of storage of chemicals for subsequent use is that of a retail pharmacy where a wide range of pharmaceutical drugs are regularly maintained for authorised sale on prescription to patients. To suggest that the persons who are employed in respect of the storage of such chemicals are eligible for membership of the FIA would be an industrial relations absurdity and be clearly beyond the intention of its rules.” 45
[78] The Deputy President went on to describe the nature of the “storage” of polymer chips within Fibremaker’s operations and the relevance of that in the context of the scope of the then industry and eligibility rules of the FIA. He relevantly stated as follows:
“According to the evidence in this case, polymer chip is imported in bags, boxes or in full shipping container loads. It is stored on the premises as Bayswater where it is subsequently used in the production process. There are four large silos each with a capacity of 80 tonnes in which the polymer chip is stored. The issue is whether this can be classified as storage of chemicals for the purposes of the FIA eligibility rule or its description of industry rule. It most certainly could not, on the broadest possible definition, be said to be sufficient to permit a finding that Fibremakers is part of the chemical industry.
In my view the word “storage” in the context of the FIA eligibility rule is to describe work associated with a task or function which has its purpose the storage of chemicals. That is to say a place where chemicals are kept prior to their use for some other purpose or for future sale or use. It is not to be interpreted to cover storage in quantities required for the purpose of production of some other product which is the purpose at Fibremakers. Such an interpretation would clearly be unreasonable and be contrary to the intended scope of the relevant rules.
The correct impression to be gained from the evidence in this case is that the polymer chip is kept in four silos for use in the reasonably immediate future in the production process. Because it is vital to the production process the requirements of prudent management require a reasonable stock to be kept on hand at any given time so as to avoid possible disruption of the production process due to lack of stock. But this is entirely different concept to storage at a place where chemicals may be stored for the purpose of future sale.
It is difficult to imagine a place of work where some chemicals are not stored for use in particular enterprises. Chemicals kept for use in the production process, for cleaning, painting, the operation of office equipment such as photocopying machines, for the extermination of pests or treatment of injuries, which occur in the workplace, strictly speaking, and by the use of a strict literal definition, represent the storage of chemicals. But this is clearly not what is intended in the FIA conditions of eligibility rule or description of industry in connection with which it is registered.” 46
[79] IXOM’s operations on the Marplex Laverton Site are substantially the same as that considered by Deputy President Riordan in Fibremakers save for two key differences, those being:
(i) the production process on the Marplex Laverton Site involves the mixing of additives (including chemicals) with the base polymer prior to the melting and extrusion process; and
(ii) the preparation of pre-mix batches of additives for sale to IXOM customers which represents between 2%-5% of site production.
[80] I do not regard the differences I have identified above at [79] as so significant as to distinguish the circumstances in Fibremakers or the reasoning of Deputy President Riordan from the matters before me and I respectfully adopt the reasoning of the Deputy President in Fibremakers. My reasons for that follow below.
[81] I have previously described and considered the nature of the manufacturing process at the Marplex Laverton Site. It cannot, in my view, be said that the operations on the site involves the “manufacture” or “preparation” of chemicals, notwithstanding the mixing of additives with the base polymers and that the end products contains chemicals. The nature of the production process, that of mechanical mixing, heating, extrusion and the absence of any chemical reaction/s or synthesis in the production process is central to my conclusion.
[82] Furthermore, the mixing and bagging of additives (including some chemicals) as pre-blend mixes cannot in my view be said to involve the “manufacture” or “preparation” of chemicals. While the AWU contend that the preparation of pre-blend mixes involves the “preparation” of chemicals, therefore bringing that work within the scope of Rule 5(7)(i), I do not accept that submission.
[83] My reasons for rejecting the AWU submissions are that the mixing and bagging of the additives are ancillary to the production process, involve the use of the same materials as used in the production process, save for the base polymers, and represents less than 5% of site production.
[84] As regards the “storage” of chemicals, I respectfully adopt the reasoning of Deputy President Riordan in Fibremakers. Just as the Deputy President was prepared to accept that polymer stored on the Fibremakers site was a “chemical”, I am also prepared to accept that base polymers and some of the additives stored on the Marplex Laverton Site are also chemicals. Storage of the base polymers and additives does not have as its purpose, storage for a purpose of other than the manufacture of thermoplastic products or the ancillary activity or pre-blend mixes. Those operational features are in clear contrast with, for example, a bulk storage facility used for the purpose of storing particular chemicals prior to the sale and distribution of those chemical to customers. The Marplex Laverton Site is a production facility and cannot be characterised as a storage facility, in whole or in part in my view.
[85] In rejecting the AWU submissions, I have also had regard to and adopt the reasoning of Moore J in FIA that the industry and eligibility rules need to be read together. The preparation of pre-blend mixes does not, in my view, alter the character of the operations from one engaged in the plastics industry to that of one engaged in the chemicals industry. Having found that employees engaged by IXOM in its Marplex Laverton Site are engaged in the plastics industry, not the chemical industry, it follows from the reasoning of Moore J in FIA that, in reading the AWU’s industry and eligibility rules together, such employees cannot be brought within the scope of the AWU Rules by reason of Rule 5(7)(i) when those employees are not engaged in the chemical industry.
Rule 5(6)(a)
[86] The AWU contend that the operators are “Machine operators” pursuant to Rule 5(6)(a) of the AWU Rules by reason of their operation of “engineering machines”, that of the production equipment used by IXOM in the manufacturing process at the Marplex Laverton Site.
[87] The interpretation of “Machine operator” in what now appears in Rule 5(6)(a) of the AWU Rules was squarely dealt with by the Federal Court in Pavlic. A key passage from that decision, reproduced at paragraph [57], stands as authority for the following propositions in my view:
(i) the term “Machine Operator” has a particular meaning commonly understood in relation to what are known as metal trades.
(ii) the term “Machine Operator” refers to persons operating machines designed for the manufacture of articles from solid materials, usually metal.
(iii) examples of machines, while not exhaustive, include metal presses, milling machines and lathes.
(iv) the machines may be used in the Engineering, Locomotive, Shipbuilding, Rolling Stock, Aircraft, Munition and Iron Trades, where those trades constitute the businesses of employers.
(v) the machines may also be used in “any other industry”, where required for the making or repair of parts for the maintenance of machinery and equipment used in the production of goods or the performance of other tasks.
(vi) any ambiguity regarding the interpretation of the rule may be resolved by reference to the relevant industry rule, that being “Engineering”.
[88] The duties of operators were summarised above at paragraphs [32]-[35] of the decision. The only real area of contest in the evidence was that of whether operators were required to undertake “maintenance” duties. Mr Vella and Mr Mills expressed the view that the nature of their work associated with the clearing, cleaning, set-up and troubleshooting of the machines was “maintenance”, a characterisation that Mr Stoman and Mr Holland resisted.
[89] The duties performed by the operators on the Marplex Laverton Site can be summarised as base material (polymer and additive) preparation and mixing, equipment set up, start up and monitoring, bagging and despatch. In addition, operators are also required to clear and clean production equipment which may include the assembly and/or disassembly of some equipment with the use of hand tools where required. Troubleshooting of production problems may also be required.
[90] True it is that Mr Vella and Mr Wills are qualified tradesmen. The possession of such qualifications is not, however, a mandatory requirement to fill an operator role on the Marplex Laverton Site. Nor is it the case that all of their colleagues on the site are tradespersons. There is nothing unusual about operators in many manufacturing or processing industry environments holding trade qualifications. That does not, however, mean the role they are filling becomes one of a trades role. It is ultimately necessary to examine the nature of work rather than the qualifications possessed by the persons filling the role.
[91] The characterisation of equipment clearing and cleaning and troubleshooting as maintenance is misconceived in my view. The work described falls reasonably within the description of operator duties and does not bring those employees within the definition of “Machine Operator”. I am satisfied on the evidence that the operators are neither performing nor required to perform tradesperson duties on the site. Those duties are undertaken by a dedicated tradesperson on the site whose classification and employment is not covered by the Agreement.
[92] The operator duties described at paragraphs [32]-[35] of the decision and summarised immediately above possess none of the features that would bring the role of operator on the Marplex Laverton Site within the description of “Machine Operator” within Rule 5(6)(a). The operators on the Marplex Laverton Site:
(i) are not engaged in the performance of metal trade work;
(ii) do not manufacture articles from solid materials, including metal;
(iii) do not operate metal presses, milling machines, lathes or similar equipment;
(iv) are not engaged in any of the specific industries identified in the rule;
(v) do not make or repair parts for other machinery or equipment used in the production process; and
(vi) are not engaged in the engineering industry.
[93] I have also considered the submission of the AWU that the thermoplastic products produced on the Marplex Laverton Site are “engineered” therefore the equipment used to produce them are thus “engineering machines”. Such a construction would allow an extremely broad range of continuous production equipment to fall within the description of a machine, the operation of which would result in that person being a “Machine Operator” for the purpose of Rule 5(6)(a). This would be so even if it could not be argued that such persons were in the identified industries or the engineering industry or were making or repairing articles/equipment for use in the production of other products. I do not accept that such a broad construction is intended in the AWU Rules.
[94] It follows from the above that operators engaged by IXOM on the Marplex Laverton Site and whose employment is covered by the Agreement are not “Machine Operators” pursuant to Rule 5(6)(a) of the AWU Rules. Consequently, the AWU is not entitled to represent their industrial interests pursuant to that rule.
Conclusion
[95] I am satisfied that the relevant employees covered by the Agreement are engaged by IXOM as operators at its Marplex Laverton Site. I am further satisfied that the relevant employees are:
(i) not engaged in or in connection with the chemicals industry pursuant to Rule 5(1) of the AWU Rules;
(ii) are not engaged in an establishment wholly or partly engaged in or connected with the manufacture, preparation and storage of chemicals pursuant to Rule 5(7)(i) of the AWU Rules; and
(iii) are not engaged as “Machine Operators” pursuant to Rule 6(a) of the AWU Rules.
[96] It follows from my conclusions above that the answer to the question to be determined is as follows:
The AWU is not entitled to represent the industrial interests of any IXOM employee who is;
a. Covered by the scope of the Agreement; and
b. Proposed to be covered by an enterprise agreement to replace the Agreement, in accordance with section 176(3) of the Fair Work Act 2009.
[97] As a consequence of the above, the AWU application for bargaining orders pursuant to s 229 of the Act is dismissed. An order giving effect to this decision will be issued in conjunction with the decision.
DEPUTY PRESIDENT
Appearances:
P. Reilly for the Applicant.
D. Parker for the Respondent.
Hearing details:
2018.
Melbourne.
August 20.
Printed by authority of the Commonwealth Government Printer
<PR702573>
1 AE412576.
2 AWU’s Form F32 – Application for a bargaining order, dated 31 May 2018.
3 [2014] FWCFB 2418 at [10].
4 Exhibit R3, Witness Statement of Mr. Christopher John Holland, dated 29 June 2018, at paragraph [8].
5 Ibid, at paragraph [9].
6 Ibid, at paragraph [11].
7 Exhibit R4, Witness Statement of Mr Ron Stephen Stoman, dated 27 July 2018, at paragraphs [12]-[13].
8 Exhibit A2, Witness Statement of Mr Mark Vella, dated 20 July 2018, at paragraph [16].
9 Exhibit R3, at paragraph [16].
10 Exhibit A1, Witness Statement of Mr David Henry Mills, dated 20 July 2018, at paragraph [13].
11 Transcript at PN79-PN81.
12 Ibid at PN217, PN321.
13 Ibid at PN227-PN228, PN354-PN358.
14 Ibid at PN263.
15 Ibid at PN307-PN309.
16 Ibid at PN131-PN132.
17 Exhibit R4, at paragraphs [14]-[19].
18 Transcript at PN221, PN424.
19 Exhibit R3, Annexure CH-1.
20 Ibid, Annexure CH-2.
21 Exhibit A1, at paragraph 57.
22 Exhibit R4, at paragraph [10].
23 Ibid at paragraphs [7]-[11].
24 Transcript at PN220, PN326
25 Ibid at PN384-PN388.
26 Ibid at PN252-PN253, PN393-PN394.
27 Ibid at PN329, PN446.
28 Ibid at PN444-PN450.
29 Ibid at PN251, PN398.
30 Ibid at PN390-PN392.
31 Print J3022.
32 Transcript at PN36.
33 Print J3022 at page 5.
34 MA000010.
35 Transcript PN131-PN132.
36 (1993) 51 IR 31.
37 Ibid at page 34.
38 [2014] FWCFB 3501.
39 Ibid at [34].
40 AT805513CRV.
41 AT794720CRV.
42 AP792347.
43 Print E7532.
44 Ibid at page 3.
45 Print J3022 at page 6.
46 Ibid.
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