“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Saputo Dairy Australia Pty Ltd
[2021] FWC 4085
•14 JULY 2021
| [2021] FWC 4085 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Saputo Dairy Australia Pty Ltd
(C2020/8990)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 14 JULY 2021 |
Alleged dispute about any matters arising under the enterprise agreement and the NES [s186(6)].
[1] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and Saputo Dairy Australia Pty Ltd (Saputo) are covered by the Saputo Dairy Australia Pty Ltd and the AMWU and ETU Reliability Agreement 2018 (Agreement). The Agreement remains in operation although its nominal expiry date of 30 April 2021, has passed. The Agreement applies, inter alia, to Saputo employees engaged in any of the classifications, occupations, industries or callings specified in the Manufacturing and Associated Industries and Occupations Award 2010 (Award) working at several named establishments including at “Broadway Street, Cobram, 3644 and Murray Goulburn Nutritional Factory, Cobram, 3644”.1
[2] Clause 16.4 of the Agreement deals with the engagement of contractors by Saputo and paragraph (c) thereof provides that Saputo “must ensure the conditions of contractors (including labour hire companies) engaged to do work covered by this Agreement are no less favourable than the wage rate paid to Saputo Dairy Australia employees undertaking equivalent or similar work . . .”.
[3] Saputo engages Mecrus Pty Ltd (Mecrus) to operate and maintain the boiler plant which is located at 103-109 Karook Street, Cobram (Plant). Mecrus’ employees work at the Plant and are engaged in work which falls within classifications covered by the Award.
[4] The AMWU and Saputo are in dispute about whether Saputo is obliged by clause 16.4(c) of the Agreement to ensure that Mecrus’ employees who work at the Plant have conditions of employment applied to them that are no less favourable than the wage rate paid to Saputo’s employees undertaking equivalent or similar work. That dispute is the subject of the AMWU’s application under s 739 of the Fair Work Act 2009 (Act), with which this decision is concerned. The resolution of the dispute will turn on answering the following questions formulated for the purposes of resolving the dispute by arbitration:
1. Is the boiler plant an establishment located at Broadway Street, Cobram, 3644 in accordance with clause 3.2 of the enterprise agreement?
2. Is the work performed by contracting employees similar to or equivalent to work performed by employees of the Respondent?
[5] Self-evidently, the second question need only be answered if the answer to the first question is “yes”.
[6] By way of background and context, Saputo produces, markets and distributes a wide range of dairy products for the domestic and international market and is the largest dairy processor in Australia.2 Its largest manufacturing facility is in Cobram, Victoria located at 90 Broadway Street, Cobram, Victoria, 3644 (Cobram factory).3 Products produced here include block cheese, whey powder products and retail cheese, including slices, shred and processed cheese slices.4
[7] The Cobram factory comprises milk receival, processing and pasteurising equipment, cheese vats, cheddaring towers and mozzarella cookers, powder dryers and cut and wrap machinery as well as steam reticulation including a steam turbine, refrigeration plant, large scale air compressors, cooling towers, high voltage electrical services and waste water management facilities.5 The Cobram factory occupies an entire block bordered by Broadway Street on the southern perimeter, Dillon Street on the eastern perimeter, Karook Street on the northern perimeter and Hamilton Lane on the western perimeter.6
[8] In an area of land to the west of Hamilton Lane is located another facility operated by Saputo – its Nutritionals manufacturing facility (Nutritionals factory) - which produces a range of infant nutritionals for the global dairy market.7 Its location is at 7 Schubert Street, Cobram.8
[9] Primary access to the Cobram factory is through the main entrance located on Broadway Street.9 Hamilton Lane, once a public road was purchased in 1995 and is now owned by Saputo.10 There is a security gate at each end of Hamilton Lane which is only accessible by authorised personnel and is primarily for the ingress of milk tankers and egress of product transport vehicles.11
[10] Located to the immediate west of Hamilton Lane, bordering Karook Street, is the Plant which occupies land also owned by Saputo, but as earlier noted the Plant is operated by Mecrus.12 The Plant produces and supplies steam to the Cobram factory and Nutritionals factory which is used for the purposes of heating, heat treatment or products, cleaning and sterilisation.13 The Plant’s address is, as earlier noted, 103-109 Karook Street, Cobram and may only be accessed from Karook Street or the northern end of Hamilton Lane.14
[11] Saputo requires heat to operate many of its processes including powder drying and milk and whey pasteurization which is supplied as steam which can be used to release ‘latent heat’ as it collapses to water (condensate) when it passes through a heat exchanger.15 The condensate is captured and controlled in its return to the boiler.16 Murray Goulburn decommissioned and demolished the on-site boilers in 2000 and the supply of steam to the Cobram factory has been outsourced ever since.17
[12] Murray Goulburn entered into a ‘build own operate contract’ for the supply of steam with Energy Business Australia Pty Ltd in 1999 which constructed the Plant on the north-west corner of Hamilton Lane and Karook Street.18 The Plant operates 24 hours per day, 7 days per week.19 Murray Goulburn purchased the Plant from Energy Business Australia Pty Ltd in 2014, converted the boilers to natural gas operation and entered into a services contract with Mecrus to continue to operate and maintain the Plant as Murray Goulburn did not have personnel with the appropriate qualifications and experience to assume control.20 Saputo continues with that arrangement.
[13] The Plant boilers are operated by boiler attendants and their work involves monitoring temperatures, pressures and fuel delivery equipment, cleaning and servicing boilers and flues and condition water by adding chemicals. The boiler attendants constantly monitor the boilers to ensure operational safety and take immediate action in the event of an emergency situation.21 Much of this work is performed by monitoring data on the computer systems in a room that is adjacent to the boilers.22 The Plant also has a workshop, where boiler attendants can undertake minor maintenance work.23 It is estimated that boiler attendants would spend about 80% of their work time attending to the operation of the boilers, and 20% of their time undertaking basic maintenance work.24
[14] Saputo employs approximately 38 mechanical and electrical trades employees who are covered by the Agreement and undertake reliability centred maintenance at the Cobram factory.25 Saputo’s maintenance employees hold a relevant trade qualification and are based at several workshops located within the Cobram factory.26 These employees perform various maintenance checks and repairs of production equipment and services plant in accordance with the maintenance plan developed by Saputo’s maintenance planners.27 Maintenance employees are responsible for maintaining Saputo’s manufacturing processes.28 Maintenance employees do not operate any equipment or machinery except as required to return it to service and prove repair.29
[15] There are no Saputo employees at the Cobram factory holding a boiler licence nor is any such employee required to do so.30 Moreover, Saputo does not employ any person holding an appropriate license or having sufficient experience to operate the Plant.31 Saputo’s trades employees have the skills necessary to maintain the Plant’s ancillary plant but are not qualified to perform repairs on the boiler.32 Mecrus’ employees are so qualified.33
[16] Returning to the issues in dispute. The answer to the first question turns in part on the proper construction of the Agreement. The construction of provisions of an enterprise agreement begins with a consideration of the ordinary meaning of the words, read in context, taking account of the evident purpose of the provisions or expressions being construed. Context may be found in the provisions of the agreement taken as a whole, or in their arrangement and place in the agreement. The statutory framework under which the agreement is made or in which it operates may also provide context, as might an antecedent instrument or instruments from which a particular provision or provisions might have been derived. The industrial context in which an agreement is made and operates is also relevant. Thus, the language of an agreement is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. But context is not itself an end and a consideration of the language contained in the text of the agreement being considered remains the starting point and the end point to the task of construction. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach.34
[17] Clauses 3 and 4 of the Agreement are in essence the coverage clauses of the Agreement. Clause 4 provides that the Agreement “binds”, that is it “applies” to, inter alia, “the employees covered by the Agreement (as per Clause 3)”. Clause 3.1 of the Agreement sets out when the Agreement applies to a person. Relevantly it applies when the person is “engaged by the Company at one of the establishments cited in sub-clause 3.2”.
[18] Clause 3.2 provides:
3.2 The Company establishments where this Agreement applies are:
(a) Broadway Street, Cobram, 3644 and Murray Goulburn Nutritional Factory, Cobram, 3644.
(b) Kiewa East Road, Tangambalanga, 3691.
(c) Yarragon Road, Leongatha, 3953.
(d) Bundalaguah Road, Maffra, 3860.
(e) Moore Street, Rochester, 3561.
[19] As the introductory words to 3.1 make clear, the Agreement will only apply to a person who otherwise falls within the descriptions of coverage in paragraphs 3.1(a)-(c) if the person is engaged at one of the establishments identified in clause 3.2. Although clause 3.2 has 5 paragraphs, it identifies 6 establishments. This is the proper reading of clause 3.2, and in particular paragraph 3.2(a) which identifies two establishments. Lest there be doubt about this the history of the provision in the predecessor agreements show that the Murray Goulburn Co-operative Co. Limited Reliability Agreement 2011-2014 (2014 Agreement) contained the following:
3.2 The Company establishments where this Agreement applies are:
3.2.1 Broadway Street, Cobram, 3644.
3.2.2 Kiewa East Road, Tangambalanga, 3691.
3.2.3 Commercial Road, Koroit, 3282.
3.2.4 Yarragon Road, Leongatha, 3953.
3.2.5 Bundalaguah Road, Maffra, 3860.
3.2.6 Moore Street, Rochester, 3561.
[20] When the Murray Goulburn Co-operative Co. Limited and the AMWU and ETU Reliability Agreement 2014-2018 commenced operation and replaced the 2014 Agreement, clause 3.2 provided:
3.2 The Company establishments where this Agreement applies are:
(a) Broadway Street, Cobram, 3644 and Murray Goulburn Nutritional Factory, Cobram, 3644.
(b) Kiewa East Road, Tangambalanga, 3691.
(c) Commercial Road, Koroit, 3282.
(d) Yarragon Road, Leongatha, 3953.
(e) Bundalaguah Road, Maffra, 3860.
(f) Moore Street, Rochester, 3561.
[21] As is evident from the above, over the period of the operation of three enterprise agreements, the establishments at which the agreements operated changed by removing the Koroit establishment and adding the Nutritionals factory establishment.
[22] In order for clause 16.4(c) of the Agreement to impose an obligation on Saputo to ensure Mecrus’ employees’ conditions while working at the Plant are no less favourable than the wage rate paid to Saputo employees undertaking equivalent or similar work, it must first be shown that the Plant is one of or part of one of the “establishments” listed in clause 3.2. If it is not, the Agreement does not apply at the Plant and the obligation in clause 16.4(c) is not enlivened.
[23] It is uncontroversial that Saputo operates two factories in Cobram.35 It also seems uncontroversial that these two factories are separately identified establishments in that:
• the first, the Cobram factory, is located at 90 Broadway Street and produces as earlier noted block cheese, whey powder products and retail cheese, including slices, shred and processed cheese slices; and
• the second, the Nutritionals factory, is located at 7 Schubert Street, Cobram on land adjacent to the Cobram factory and operates as a separate manufacturing facility producing a range of infant nutritionals for the global dairy market.
[24] The Plant has a separate address (103-109 Karook Street, Cobram) and is, as earlier noted, located at the north-west corner of Hamilton Lane and Karook Street. It seems plain that the Plant is not an establishment at either Broadway Street, Cobram, 3644 or Murray Goulburn Nutritional Factory, Cobram, 3644, as described in clause 3.2 of the Agreement.
[25] The AMWU’s submissions appear to treat the factories identified at paragraph 3.2(a) as one establishment.36 This construction of the paragraph is rejected for the reasons already given. However, it matters little because the AWWU’s contention that the Plant is part of the “Cobram Site” as it describes it, and the reasons for that contention have the same operative effect if paragraph 3.2(a) is treated as describing one establishment or two.
[26] The question that next arises is whether the Plant may be said to form part of either of the establishments in clause 3.2(a) of the Agreement.
[27] The AMWU contends that the Plant is part of the “Cobram Site” because the Plant:
• Forms part of the Cobram Site because of its physical and geographical features and its functional role in relation to the two factories.
• Is located between the Cobram factory and the Nutritionals factory.
• Is now owned by Saputo.
• The Cobram factory and the Plant are separated by Hamilton Lane which is no longer a public road and the land occupied by the road is owned by Saputo. It functions as a private road for the use by Saputo.
• The Nutritionals factory and the Plant share a boundary.
• There are numerous service connections between the steam plant and the two factories, including the steam lines themselves, and water, gas and electricity connections.
• Is an integral component of Saputo’s operations in Cobram. The constant supply of steam, at the requisite pressure, is necessary for the operation of both factories.
• Has as its only purpose the supply steam to the two factories.37
[28] Although none of the above matters is in dispute,38 these matters do not support the contention for which they are advanced. In my view, for the reasons which follow, the Plant is not an establishment located at Broadway Street, Cobram, nor is it part of the establishment described as “Murray Goulburn Nutritional Factory, Cobram” in the Agreement.
[29] First, the Agreement sets out the address of each establishment at which the Agreement operates. It operates by reference to the location of the establishments (or by description of the establishment) not by reference to the relationship between one establishment to another, or the proximate or relative location of one establishment to another.
[30] Second, the address of the Plant is 103-109 Karook Street, Cobram. It is not Broadway Street. The address of the Cobram factory is 90 Broadway Street and it, not the Plant, is the establishment that is captured by the words “Broadway Street, Cobram, 3644” in clause 3.2(a) of the Agreement.
[31] Third, the Plant is not accessible from Broadway Street and may only be accessed via Karook Street or the north-west end of Hamilton Lane,39 thus indicating separation of location.
[32] Fourth, the Plant is not the Murray Goulburn Nutritional Factory, Cobram, 3644, which when regard is had to transfer of ownership in 2018 is properly construed as a reference to the Nutritionals factory which is located at 7 Schubert Street. Although located very near to the Cobram factory (at 90 Broadway Street) and to the Plant (at 103-109 Karook Street), it is a neighbour, not a resident. It is not located at either address and is not part of that which is described as the Murray Goulburn Nutritional Factory, Cobram, 3644.
[33] Fifth, the property title for 90 Broadway Street on which the Cobram factory sits shows the boundaries of the land. The boundaries do not extend to the land upon which the Plant is located.40
[34] Sixth, the Certificate of Title for 103-109 Karook Street, Cobram on which the Plant sits shows the boundaries of this property. The boundaries do not extend to and are not connected to the 90 Broadway Street land.41
[35] Seventh, the Plant, although important for the operation of the factories adjacent, has since its inception had distinct and separate operation for which the responsibility has been in the hands of a contracted third party. It was once wholly owned by another entity. It is to be remembered that Murray Goulburn purchased the Plant from Energy Business Australia Pty Ltd in 2014 and converted the boilers to natural gas operation. It then entered into a services contract with Mecrus to continue to operate and maintain the plant. Neither before nor after acquisition was the Plant located elsewhere than at 103-109 Karook Street, Cobram. Both before and after acquisition, the Plant was important to the operation of the factories. When before acquisition, the plant was an establishment owned by another, by what feat of magic did that establishment cease to be a separated establishment in the hands of Murray Goulbourn and now Saputo? None, because it did not cease to be so. It remains a separate establishment.
[36] The simple point is this. The Agreement operates at “establishments” at identified locations or by description. The Plant is and has since its commissioning been, an establishment separately identifiable by both its description and location. It is not part of the Cobram factory nor the Nutritionals factory. That the Plant is important to the operation of the adjacent factories is by the by in as much as transport, logistics, wholesale and retail are also important. The Plant is a separated establishment which is neither at the location in clause 3.2(a) nor part of the establishment described therein.
[37] It follows that the Agreement does not operate at the Plant and clause 16.4(c) of the Agreement has no work to do vis a vis the employment conditions of Mecrus’ employees who work at the Plant.
[38] The answer to the first question is “no”. It is unnecessary to answer the second question. The dispute is resolved accordingly, and the application is dismissed.
DEPUTY PRESIDENT
Appearances:
J. Gardner of the AMWU for the Applicant
A. Lambert solicitor for the Respondent
Hearing details:
2021
Melbourne (via video link)
27 May 2021
Written submissions:
Applicant, 22 April 2021
Respondent, 13 May 2021
Printed by authority of the Commonwealth Government Printer
<PR731616>
1 Saputo Dairy Australia Pty Ltd and the AMWU and ETU Reliability Agreement 2018, clauses 3.1(a) and 3.2(a)
2 Exhibit 7 at [7]
3 Ibid at [8]
4 Ibid
5 Ibid at [9]
6 Ibid at [10]
7 Ibid at [13]
8 Ibid
9 Ibid at [11]
10 Ibid at [12]
11 Ibid
12 Ibid at [14]
13 Ibid
14 Ibid at [15]
15 Ibid at [19]
16 Ibid
17 Ibid at [20]
18 Ibid at [21]
19 Ibid at [22]
20 Ibid at [24]
21 Ibid at [27]
22 Ibid
23 Ibid at [28]
24 Ibid at [29]
25 Ibid at [36]
26 Ibid at [37]
27 Ibid
28 Ibid at [38]
29 Ibid
30 Ibid
31 Ibid at [39]
32 Ibid
33 Ibid
34 See WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197] and the authorities referred to therein; see also King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [122]-[130] and the authorities referred to therein.
35 Outline of Applicant’s Submissions at [7]; Respondent’s Outline of Submissions at [10];
36 Outline of Applicant’s Submissions at [15]
37 Ibid at [19]-[29]
38 Respondent’s Outline of Submissions at [12]-[13]
39 Exhibit 7 at [15]
40 Exhibit 7, Annexure RM-2
41 Ibid, Annexure RM-3
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