No judgment structure available for this case.

[2019] FWC 2197

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.236—Majority support determination

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
v
Pacific Industrial Company (WA) Pty Ltd T/A Pacific Industrial Company
(B2018/1054)

COMMISSIONER WILLIAMS

PERTH, 11 APRIL 2019

Application for a majority support determination – preliminary question.

[1] The Automotive, Food, Metals, Engineering, Printing And Kindred Industries Union known as The Australian Manufacturing Workers’ Union (AMWU or the Applicant) has made an application under section 236 of the Fair Work Act 2009 (the Act) for a majority support determination. The Respondent is Pacific Industrial Company (WA) Pty Ltd (PIC or the Respondent).

Background

[2] The AMWU wish to undertake bargaining for an enterprise agreement to cover employees of PIC working on construction of the Tianqi Lithium Hydroxide Processing Plant Construction Project (the Project).

[3] The Commission conducted a conference on 3 December 2018.

[4] The Respondent objects to the application on the ground that the employees are covered by the in-term Pacific Industrial Company Resource Site Enterprise Agreement 2015 (the Agreement).

[5] At a second conference held on 21 December 2018, the parties agreed a preliminary question should be determined by the Commission which concerns the application of this existing in-term Agreement.

[6] That question is:

“Does the Pacific Industrial Company Resource Site Enterprise Agreement 2015 apply to employees working on the Project?”

[7] This decision deals only with this preliminary question.

[8] At the hearing on 12 December 2018, the Applicant called Mr Glenn McLaren, the Assistant State - Secretary Western Australia of the AMWU to give evidence and the Respondent called Mr Marco Mosole the Managing Director of PIC and Mr Russell Batcock the General Manager – Operations of PIC to give evidence.

The Agreement

[9] The Agreement was approved by the Commission on 17 August 2015. 1

[10] On 5 October 2017, the Commission varied the Agreement such that by virtue of the varied Clause 4 Nominal Expiry Date, the Agreement expires four years from the date the Commission approved the Agreement. Consequently the Agreements expiry date is 16 August 2019.

[11] The application and coverage of the Agreement is provided in Clauses 2 and 3 as follows:

“2. APPLICATION

2.1 This Agreement is made between Pacific Industrial Company (WA) Pty Ltd (A.C.N. 008 895 154), as trustee for the Steelfab Unit Trust trading as Pacific Industrial Company (referred to as "the employer" or "the Company") and its employees, undertaking resource site construction work in Australia.

2.2 "Resource site construction work" includes construction work on any mining or hydrocarbon facilities, plants or residential campsites, or any other resource based site. For the avoidance of doubt, this Agreement does not apply to any employees engaged on construction sites located within any urban or suburban area.

3. COVERAGE

This Agreement covers

(a) Pacific Industrial Company (WA) Pty Ltd (A.C.N. 008 895 154); and

(b) All employees of the employer as classified within Appendix A of the Agreement and engaged in resource site construction work in Australia.”

[12] The Respondent submits that answering the preliminary question requires the Commission to consider sub Clause 2.2 and address the two limbs as follows:

“1. Is the work PIC is performing ‘resource site construction work in Australia’ as defined under the Agreement ?; and

2. Is the Project a ‘construction site located within an urban or suburban area’ as defined under the Agreement?”

Factual findings

[13] The Project is located on part of a larger parcel of land known as 61 Donaldson Road, Kwinana Beach, Western Australia (the Site).

[14] The Project involves the construction of a plant that will process Spodumene, a metal ore concentrate, into the end product, Lithium Hydroxide Monohydrate.

[15] The Spodumene is sourced from Talison Lithium from their mine at Greenbushes. Mining at the Greenbushes operations is by way of traditional drill and blast method with ore graded and stockpiled according to its mineralogical characteristics and grade.

[16] The mine at Greenbushes is located over 200 km south of the Site. The Spodumene will be transported by road to the Site for processing.

[17] The processing plant will operate on a continuous 24-hour per day basis, 365 days per year, processing approximately 160,900 dry tonnes per annum of Spodumene. This will produce up to 23,950 tonnes per annum of Lithium Hydroxide Monohydrate along with three by-products being approximately:

• 43,900 tonnes per annum dry sodium sulphate;

• 175,900 tonnes per annum alumina silicates; and

• 26,100 tonnes per annum gypsum/ limestone product.

[18] PIC is contracted to perform five scopes of work on the Project, being:

• offsite fabrication, delivery to site and installation of 14 carbon steel tanks for Phase 1;

• offsite fabrication, delivery to site and installation of 10 carbon steel tanks for Phase 2;

• offsite fabrication, delivery to site and installation of structural steel for part of Phase 2;

• offsite fabrication, delivery to site and installation of structural steel for Phase 1; and

• onsite installation of structural, mechanical and piping.

[19] PIC has engaged employees who had the necessary skills and qualifications to satisfy the metal trade classifications which exist at Appendix A of the Agreement, being: Welders, Boilermakers, Pipe Fitters, Mechanical Fitters, Crane Drivers, Riggers, Trade Assistants and Storemen.

[20] At the time of hearing there were approximately 169 employees working on the Site.

[21] Some of those employees live in the nearby suburb of Rockingham, whilst others live as far away as Bunbury, which is approximately 145 km south of the Site.

[22] The Site is located 30.6 km from the Perth CBD and 9.5 km from Rockingham Town Centre, in a straight line. A copy of a map depicting the Site in relation to the Perth CBD and the Rockingham Town Centre is attachment PIC-11 to the Respondents submissions.

[23] The Site is 2.35 km away, in a straight line, from the nearest housing which is located on the western edge of the suburb of Medina.

[24] The Site currently contains permanent buildings and sheds; tank facilities; the main process facility, which includes various processing units made up of modules, pipe racks and structural steel; and permanent roads and walkways.

[25] The area immediately surrounding the Site includes:

• To the North:

• Synergy - Cockburn Site;

• Perth Seawater Desalination Plant;

• BGC Cement;

• Cockburn Cement Bulk Depot;

• Fremantle Ports (Kwinana Bulk Terminal);

• ATA Steel Suppliers Perth; and

• Darley Aluminium.

• To the South:

• BOC Gases;

• CSBP (manufacturer);

• Kleenheat Production Facility;

• Bayer CropScience Pty Ltd;

• Fenner Dunlop Engineered Conveyor Solutions;

• Coogee Chemicals; and

• Nalco Australia Pty Ltd (water treatment plant).

• To the East of the Site:

• Sims Metal Management (recycling centre);

• Perth Motorplex;

• Waste Stream Management Pty Ltd; and

• WA Limestone.

• To the West:

• BP Oil Refinery;

• Toxfree – TES Kwinana (Waste management service); and

• IPM Operation & Maintenance Kwinana Pty Ltd (Electricity Company).

[26] I accept that all of the above operations are adjacent to the Site and are heavy industrial businesses.

[27] The Western Australian Government's land and development agency is Landcorp. The terms Landcorp use to describe an industrial area, which are used interchangeably, are ‘Strategic Industrial Estates’ or ‘Strategic Industrial Areas’ (SIA).

[28] Landcorp's description of the Kwinana Strategic Industrial Area states that:

“The Kwinana Strategic Industrial Area (SIA) is one of Western Australia’s most important strategic industrial areas and is part of the State’s premier heavy industrial zone, the Western Trade Coast.

The Kwinana SIA ensures strategically important industry has access to serviced, well buffered and appropriately zoned land in close proximity to the Fremantle Port.

The Kwinana SIA is a specialist centre for chemical and resource-based processing industries, directly adjacent to the Fremantle ports deep water bulk materials facilities and associated road and rail and networks.”

(Underlining added)

[29] The Site is located within the Kwinana SIA.

[30] To the north of and close to the Kwinana SIA are a group of approximately 200 cottages known as the Naval Base Shacks and/or the Naval Base Caravan Park. The evidence is unclear as to whether these are exclusively holiday accommodation or whether there are some permanent residents.

[31] The Naval Base Cottages and Caravan Park are approximately 1.6 km north of the Alcoa Kwinana Refinery. This refinery is within the Kwinana SIA towards its northern boundary.

[32] It is a notorious fact that the Site is approximately 4 km south of the Naval Base Cottages and Caravan Park in a straight line.

[33] The land on which the Site is located has been classified as ‘Contaminated – Restricted Use’ under the Contaminated Sites Act 2003 (WA). Consequently its use is restricted to industrial and commercial uses.

[34] Another 18 sites immediately surrounding the Site are also classified as ‘Contaminated – Restricted Use’ under the Contaminated Sites Act 2003 (WA).

[35] Under the State Government Metropolitan Region Scheme (MRS) the Site and adjacent area are zoned as ‘Industrial’.

[36] The MRS sets out zones and reserves of land in the Perth metropolitan region. In particular, the following possible zones may apply to land subject to the MRS:

• Urban;

• Urban Deferred;

• Central City Area;

• Industrial;

• Special Industrial;

• Rural;

• Private Recreational; and

• Rural – Water Protection.

[37] The Site and its immediate surrounding area are zoned ‘Industrial’ under the MRS.

[38] This is to be distinguished from the ‘Urban’ or ‘Central City Area’ zones which are also possible under the MRS. The extent of the land zoned as ‘Industrial’ in the immediate vicinity of the Site is bounded by: a portion of land zoned ‘Special Industrial’; and land reserved for the following public purposes Railways; Primary Regional Road; and Port Installations.

[39] The nearest area of land zoned as ‘Urban’ is 2.35 km to the east of the Site.

[40] This urban area, Medina, is separated by a buffer of land reserved for the following public purposes: Railways, Primary Regional Roads, and Parks and Recreation.

[41] Under the local government scheme, being the Town of Kwinana Town Planning Scheme No 2 (TPS2) which are required to be consistent with the MRS, the Site is zoned ‘General Industry’.

[42] Under the TPS2 there is a list of uses that are not permitted in a ‘General Industry’ zone as follows:

• Ancillary accommodation;

• Aged and/or dependent persons accommodation;

• Aged and dependent person's dwelling;

• Amusement centre;

• Aquaculture;

• Caravan park;

• Child care centre;

• Civic building;

• Commercial hall;

• Dog kennels;

• Drive-in takeaway food shop;

• Drive-in theatre;

• Equestrian uses;

• Fish shop;

• Forestry (selective);

• Grouped dwelling;

• Health studio;

• Holiday accommodation;

• Home occupation;

• Hospital;

• Hotel;

• Intensive agriculture;

• Licenced restaurant;

• Liquor store;

• Lodging house;

• Medical clinic;

• Motel;

• Multiple dwelling;

• Museum;

• Private hotel;

• Private recreation;

• Professional office;

• Public amusement;

• Residential building;

• Restricted premises;

• Retail plant nursery;

• Rural product stall;

• Shop;

• Stables;

• Tailings pond;

• Tavern; and

• Vehicle sales.

[43] The TPS2 includes Policy Areas. The Site is in ‘Area 15 – Kwinana Industrial Strip’. The policy statement for Area 15 is as follows:

“Whereas heavy industries (Class 1 and 2) have established under agreement acts and whereas airborne emissions (SO2) cause occasional nuisance to adjacent businesses and residents and whereas the overall aesthetic appearance and presentation is of a low standard and whereas the road network and accessibility is severely limited the following planning policy shall apply:

(a) The predominant use shall be general industry with the limitation that noise, vibration, groundwater pollution, airborne emissions and odours, shall not adversely affect nearby businesses or residents;

(b) Airborne emissions and noise levels shall be monitored with a view to encouraging low pollution levels for residents of the urban areas;

(c) Streets and public places shall be suitably landscaped in accordance with a management plan agreed between businesses and Council;

(d) Industrial establishments shall be encouraged to improve the landscape quality of their sites;

(e) The road network and accessibility of the industrial strip shall be improved in accordance with an overall structure plan approved by Council;

(f) Where an approved Outline Development Plan (ODP) exists for a site, industrial developments shall be undertaken in accordance with the approved ODP;

(g) Industrial developments shall be designed and constructed so as to minimise their visual impact on the locality and to blend harmoniously with the locality;

(h) Industrial developments shall ensure that public access to, and recreational use of The Wells Park Recreation Reserve is preserved, with particular attention being given to ensuring that the Reserve is appropriately buffered from any future industrial development;

(i) Subdivision design and works associated with subdivisional development shall be carried out in such a manner as to ensure minimal destruction of existing vegetation considered by Council to be worthy of preservation.”

(Underlining added)

[44] The Site is subject to State Planning Policy No 2.4 – Basic Raw Materials (SPP 2.4) which seeks to protect regionally significant resources by ensuring that they are not constrained by incompatible uses or development.

[45] Clause 6.3.3 of SPP 2.4 provides:

“There should be a presumption against the introduction of sensitive land uses which could be adversely affected by existing or potential future extractive industries unless appropriate measures can be taken to ameliorate the adverse impacts.”

[46] A ‘Sensitive Land Use’ is defined by SPP 2.4 to mean:

“Those uses that are sensitive to noise or other nuisances resulting from the extraction industry. Generally all forms of residential use, uses involving children such as kindergartens and schools and those involving doctors, hospitals and aged care facilities.”

[47] Finally State Planning Policy No 4.1 – State Industrial Buffer Policy is also applicable to the Kwinana Industrial Area, including the Site, given the location of the Site in the ‘General Industry’ zone.

[48] The ‘Background Information’ to SPP 4.1 states at paragraph 2.3:

“… the prohibitive cost to the State of purchasing the buffer around the Kwinana Industrial Area … resulted in the [Kwinana Industrial Coordinating Committee] requesting the then State Planning Commission to prepare a policy to provide subdivision and development guidance to secure the long term protection of the Kwinana Industrial Area and its buffer.”

[49] Clause 1 sets out the following objectives of SPP 4.1:

“(1) To provide a consistent Statewide approach for the definition and securing of buffer areas around industry, infrastructure and some special uses.

(2) To protect industry, infrastructure and special uses from the encroachment of incompatible land uses…”

[50] A buffer is defined in SPP 4.1 as an:

“area within which sensitive uses are either restricted or prohibited;

‘Sensitive uses’ are defined to include ‘residential dwellings, major recreational areas, hospitals, schools and other institutional uses involving accommodation.”

The AMWU Submission

[51] Clause 2 (Application) of the Agreement relevantly provides as follows;

“2.1 This Agreement is made between Pacific Industrial Company (WA) Pty Ltd (ACN008 895 154), as trustee for the Steelfab Unit Trust trading as Pacific Industrial Company (referred to as "the employer" or "the Company") and its employees, undertaking resource site construction work in Australia.

2.2 “Resource site construction work” includes construction work on any mining or hydrocarbon facilities, plants or residential campsites, or any other resource based site. For the avoidance of doubt, this Agreement does not apply to any employees engaged on construction sites located within any urban or suburban area.”

[52] Relying upon Clause 2.2, PIC contends the PIC Agreement applies because the Kwinana Lithium Plant is:

• a “mining facility”, “plant” or “any other resourced based site”; or

• not a construction site located “within any suburban or urban area”.

[53] The AMWU submits that even if the Project involves the construction of a “plant” which forms a part of a “resource based site”, the Agreement does not apply because the Project is a construction site located within an “urban or suburban area.”

Construction Site

[54] The starting point in relation to the correct interpretation of Clause 2 of the Agreement is a consideration of the ordinary words used in the Agreement, having regard to the context or purpose in which those words are used.

[55] The terms ‘construction site’ and/or ‘construction work’ are not defined in the PIC Agreement. Both are defined widely under the Building and Construction General Onsite Award 2010 (Award).

[56] Clause 5 (Incorporated Instrument) of the Agreement incorporates the Award into the agreement, and relevantly provides;

“(a) This Agreement shall be read an interpreted wholly in conjunction with the Building and Construction General Onsite Award 2010 (Incorporated Instrument).

(b) The terms and conditions of the Incorporated Instrument will be binding upon the employer and employees covered by this agreement during its operation if not otherwise prohibited by law.

(c) Where this Agreement is silent, the terms of the Incorporated Instrument in so far as it has application shall continue to cover and regulate the terms and conditions of employment in all other respects. In the event of any inconsistency between the Incorporated Instrument and a provision of this Agreement, the Agreement shall

prevail to the extent of any inconsistency unless contrary to law.”

[57] The Award, by virtue of Clause 4.1 (Coverage), coversemployers throughout Australia in the ‘onsite building, engineering and civil construction industry’.

[58] Clause 4.10(c) of the Award, for the purposes of Clause 4.1 includes in its definition of ‘metal and engineering construction’, work at a construction site, which is specifically

established for the purpose of “constructing, fabricating, erecting and/or installing; “plant, plant facilities and equipment in connection with the extraction, refining and I or treatment of minerals, chemicals and the like.”

[59] The words used in Clause 4.1 do not qualify or confine the application of the Award in the way Clause 2.2 limits the application of the Agreement with the use of the words “or

any other resource based site.”

[60] Rather the Award applies without exception, to all metal and engineering construction sites, including those in ‘urban or suburban’ areas, whether ‘resource based’ or not.

[61] It follows the term ‘construction site’ for the purposes of Clause 2.2 of the Agreement similarly needs to be viewed widely and includes all construction sites, including any ‘resource based’ sites.

‘Resource’

[62] In relation to Clause 2.2, ‘resource’, is a term which is well understood. ‘Resource’ in its ordinary sense is a reference to the mining and hydrocarbons industries and means the mineral being mined (as in this case Lithium) or the gas/oil, that is being extracted or processed.

[63] In the context of the Agreement, it is reasonable to conclude a ‘resource based construction site’, to which the Agreement applies, means a construction site at a mine, a processing plant, an LNG gas plant or the like.

[64] On this interpretation, it follows there will be a connection between what is being constructed and the resource which is being extracted, refined and/or processed.

‘Based’ means the location of the resource

[65] In contrast, the use of the word ‘based’ raises two competing constructional choices. The Macquarie Dictionary (Macquarie)in its definition of base includes “to locate the main part of (a business or enterprise, etc).” 2

[66] On one view, it may be said ‘based’ means the place at which the resource is being mined or extracted. By this interpretation, the use of the word ‘based’ requires the construction site to be at the location of the place where the resource is mined or extracted for the Agreement to apply.

[67] If on this interpretation, ‘based’ means where the resource is located, the second sentence of Clause 2.2 has some important work to do. The second sentence clarifies the term ‘resource based’ so that it means a construction site must be where the resource is located, for the Agreement to apply and this will not (for the avoidance of any doubt), be in any ‘urban or suburban areas’.

[68] On this view of Clause 2.2 and the words ‘resource based’ are well understood, particularly since mineral/oil and gas deposits are not located in any urban or suburban areas.

[69] Support for this argument is also found in the words used in Clause 2.2 as the construction of ‘residential campsites’ for resource projects does not occur and would not be necessary, in urban or suburban areas.

[70] If for the purposes of resolving any ambiguity on the use of the words ‘resource based’, regard is had to the construction work which PIC is, and has traditionally been involved in, the term ‘resource based’ should be taken to mean where the resource is being extracted. This is because there is evidence the metal and engineering constructionwork PIC has previously been, and is currently involved in, mostly involves work at remote or regional areas.

[71] If this interpretation of ‘based’ is accepted, then it follows the Agreement does not apply because the Project is not a construction site where the resource is located. The Agreement would not apply on this interpretation of the words used in Clause 2.2 because the Project is not a ‘resource based’ site.

‘Based’ involves a connection with the resource

[72] The alternative interpretation is that “based” must be read together with the word “resource”.

[73] When the words “resource based” are read together, it logically follows that the plant, facility or other structure being constructed, must be related to or have a connection to the commodity being mined, refined or processed.

[74] The Macquarie, in its definition of “base”, also includes “foundation; basis” and “the principal element or ingredient of something.”

[75] lf this interpretation of “resource based” is preferred, the second sentence of Clause 2.2 still has work to do, but the task is quite different.

[76] It is submitted that although a construction site may be “resource based”, as it includes the construction of a plant or a facility at which a resource is refined or processed, regardless of its location, the Agreement will not apply, if the construction site is in an urban or suburban area.

[77] On this interpretation of Clause 2.2, it makes no difference that a construction site may be resource based. This is because of the breadth of the definition of a construction site under the Award, which applies as a result of its incorporation into the Agreement.

[78] In the circumstances it does not matter if the Project is a “resources based construction site” because the construction site is in an urban or suburban area, and therefore the Agreement does not apply.

‘Urban’ or ‘Suburban’ area

[79] The construction of Clause 2.2 of the Agreement advanced by the AMWU-requires the Commission to resolve the dispute between the parties over the meaning of the words ‘urban’ and ‘suburban’.

[80] On the Respondent's argument, the Project is a construction site in an “industrial area”.

[81] The AMWU submits that even if this is right, the categories of ‘industrial area’ and urban/suburban are not mutually exclusive. The Kwinana Industrial Area still falls within an urban and/or suburban area.

[82] If the Respondent had wanted the Agreement to apply in ‘industrial areas’ that fall within urban and/or suburban areas, it would have been simple for the drafters of the agreement to have crafted a term to this effect.

[83] Like the term ‘construction site’, the words ‘urban’ and ‘suburban’ are not defined under the Agreement. The Macquarie Dictionary includes in its definition or ‘urban’ 3as; “of, relating to or comprising a city or town"; and "occurring or situated in a city or town”.

[84] The Macquarie Dictionary, in its definition of ‘Suburban’ 4 includes the following; “relating to, inhabiting or being in a suburb or the suburbs of a city or town”.

[85] The AMWU submits that as the Kwinana Lithium Project self-evidently falls within the city and /suburb of Kwinana therefore, the Agreement does not apply.

[86] If the plain and ordinary meaning of the words ‘urban and suburban’ by reference to the Macquarie definitions is in anyway unclear, there is extrinsic material, both persuasive and objective that supports the interpretation which the AMWU advances.

[87] By way of example, the Australian Bureau of Statistics notes the Kwinana Industrial area falls within the “significant urban area of Perth” 5

[88] Similarly maps produced by Landcorp denote industrial areas which are in regional areas, as distinct from the greater Perth ‘suburban area’. It is apparent from these materials the Kwinana Strategic Industrial Area falls within the ‘City of Kwinana’ 6

[89] The resource based construction work which PIC has previously been, and is currently involved in, mostly involves work at remote locations or in regional towns and areas. This provides further contextual support for the argument the Agreement was not intended to apply to resource based construction sites in the Perth metropolitan area.

[90] The argument the Kwinana Industrial area is neither ‘urban nor suburban’ is not an interpretation a reasonable person would understand these words to mean.

[91] If PIC's argument is accepted, less intensive industrial areas in other suburbs of the Perth metropolitan area (for example Malaga, Canning Vale, Welshpool, Kewdale) could also be viewed as non-urban or not suburban, which is plainly not the case.

[92] It is submitted the Commission should not accept the restrictive use of the words ‘urban’ and ‘suburban’ being advanced by the Respondent. The AMWU submits the second sentence of Clause 2.2 should be construed broadly and give it the meaning a reasonable person would understand the words ‘urban’ and ‘suburban’ to mean.

Further matters

[93] For all of the reasons advanced in the preceding paragraphs, the AMWU submits the

Commission should, on the preliminary point, conclude the Agreement does not apply because the Project is a construction site in an urban or suburban area.

PIC’s Submission

[94] By consent of both parties the Commission directed that, prior to further hearing of this Application, a preliminary question should first be determined, being:

Does the Pacific Industrial Company Resource Site Enterprise Agreement 2015 apply to employees working on the Project?

[95] PIC submits that this requires the Commission to address two-limbs, being:

a. Is the work PIC is performing ‘resource site construction work in Australia’ as defined under the Resource Construction Agreement?; and

b. Is the Project a ‘construction site located within an urban or suburban area’ as defined under the Resource Construction Agreement?

[96] PIC submits that the Commission should find that the Resource Construction Agreement does apply to employees working on the Project, and answer the first limb in the affirmative, and the second limb in the negative.

[97] PIC also submits that if the answer to the first limb is “yes”, then having regard to the words “For the avoidance of doubt…” in Clause 2.2, it is not strictly necessary to determine the second limb.

[98] If, however, the Commission determines that the Resource Construction Agreement did not apply, some of the evidence of Mr McLaren would be relevant to the remaining issues in the case, and PIC would seek to respond with evidence and submissions on those matters at a later time.

PIC has three enterprise agreements

[99] PIC has three enterprise agreements, all of which were put in place to cover the work that PIC undertakes for its various clients. For example:

• Employees who perform fabrication work at PIC’s workshop, located at 42 Hope Valley Road, Naval Base, WA, 6165, are covered by the Pacific Industrial Company Workshop Enterprise Agreement 2015 (Workshop Agreement).

• Employees who perform commercial building construction work, at various locations in urban or suburban areas, are covered by the Pacific Industrial Company (WA) Pty Ltd On-site Enterprise Agreement 2014 (Commercial Construction Agreement).

• Employees who perform resource based construction work, at various locations on resource sites, are covered by the Resource Construction Agreement.

Is the work PIC is performing ‘resource site construction work in Australia’ as defined under the Resource Construction Agreement?

[100] The principles of interpreting an enterprise agreement were established in AMWU v Berri Pty Ltd [2017] FWCFB 3005.

[101] PIC submits that it is performing resource site construction work in Australia as defined under the Resource Construction Agreement.

The Resource Construction Agreement ‘applies’ to PIC and the employees working on the Project

[102] Section 52 of the FW Act provides for when an enterprise agreement applies to an employer or employee or employee organisation, as follows:

“(1) An enterprise agreement applies to an employee, employer or employer or employee association if:

(a) the agreement is in operation; and

(b) the agreement covers the employee, employer or organisation; and

(c) no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.

Enterprise agreements apply to employees in relation to particular employment

(2) A reference in this Act to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment.”

[103] Relevant to PIC and employees engaged on the Project, section 53(1) of the Act provides that:

“… (1) An enterprise agreement covers an employee or employer if the

agreement is expressed to cover (however described) the employee

or the employer…”

[104] To that end, PIC submits that the Resource Construction Agreement:

• is in-term, and has a nominal expiration date of 17 August 2019; 7

• expressly covers PIC, and all employees as classified within Appendix A engaged in ‘resource site construction work in Australia’;2 and

• no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.

The Project meets the description of ‘resource site construction work in Australia’

[105] It appears uncontroversial between the parties that the Project is located within Australia, and that lithium is a ‘resource’ – it is listed as an ‘alkali metal’ on the periodic table of elements, alongside other well-known ‘resources’ such as gold, silver, iron and nickel.

[106] The Resource Construction Agreement broadly defines ‘resource site construction work’ at Clause 2.2, being:

“construction work on any mining or hydrocarbon facilities, plants or residential campsites, or any other resource based site.”

[107] The Applicant’s submissions ignore the broad and alternative nature of the definition, and focusses only on the statement ‘any other resource based site’.

[108] PIC submits that the Commission should ignore any submissions to this effect. PIC submits that on a plain reading of the definition, the Project could relevantly constitute either a ‘mining facility’, a ‘plant’ that was part of a mining operation, or alternatively, ‘any other resource based site’.

[109] Certainly, members of the media, the AMWU, and the Western Australian Parliament, have publicly stated as much.

[110] There is no sensible basis to the Applicant’s submission that the Agreement can only apply to locations where the resource is mined or extracted, and this is contrary to the plain words of the Agreement.

[111] Moreover, and in response to the Applicant’s submission that mineral and oil and gas resources are located throughout Western Australia, including within urban and suburban areas. This is a matter of logic and common sense; minerals and oil and gas deposits obviously developed a long time ago; well before and regardless of the location of any later urban settlement or development.

[112] The Agreement does not define ‘construction work’, however it seems there is no dispute that the Project involves construction work. In addition, Clause 5(a) provides that the Agreement “shall be read and interpreted wholly in conjunction with the Building and Construction General On-site Award 2010 (Award).”

[113] Clause 4.10(c) of the Award does provide a definition of construction, which PIC submits closely resembles the scopes of work it is undertaking on the Project. PIC submits that there is no sensible basis for any assertion that the work it is performing could be characterised as anything but ‘construction work’ as defined in the Award.

[114] For the reasons outlined above, PIC submits that the Commission should therefore answer the first question in the affirmative – yes, PIC is performing resource site construction work in Australia as defined under the Agreement.

Is the Project a ‘construction site located within an urban or suburban area’ as defined under the Resource Construction Agreement?

[115] The evidence is the Project is located on part of a larger parcel of land known as 61 Donaldson Road, Kwinana Beach, Western Australia.

[116] Clause 2.2 of the Resource Construction Agreement provides inter alia that:

“For the avoidance of doubt, this Agreement does not apply to any employees engaged on construction sites located within any urban or suburban area.”

(Emphasis added)

[117] This leads to the second question being whether the Site can be said to be located ‘within any urban or suburban area’. But, as mentioned above, it is not strictly necessary to decide this question, if the Commission determines that the Agreement applies, relying on the first sentence of Clause 2.2.

[118] While the Resource Construction Agreement does not contain a definition of the terms ‘urban’ or ‘suburban’, their meaning can be determined having regard to:

• the dictionary definition of the terms ‘urban’ and ‘suburban’;

• the characteristics of the Site with reference to any activities and physical construction currently located on and nearby to the Site, together with any physical constraints; and

• the legal framework of the urban planning for the Site and its surrounding area as provided by planning instruments prepared at state, regional and local level.

[119] PIC submit that the Site is not located within an ‘urban’ or ‘suburban’ area as that term is properly understood.

Ordinary Meaning

[120] The Respondent accepts and repeats the definitions of ‘urban’ and ‘suburban’ as set out in paragraphs 46 and 47 of the Applicant’s submissions, being:

• relating to or comprising a city or town’;

• or situated in a city or town’; and

• to, inhabiting or being in a suburb or the suburbs of a city or town’.

[121] Each of these definitions contains a definition of ‘urban’ or ‘suburban’ vis-à-vis the concept of a ‘city’ or ‘town’. However, when this is applied to the particular characteristics of the Site:

• As a matter of fact, the Site is located 41.2 km from the Perth CBD and 9.5 km from Rockingham Town Centre.

• When the information referred to in the Applicant’s submissions is analysed, it can be seen that the Site and its surroundings are further defined by the Australia Bureau of Statistics (ABS) as ‘Kwinana Industrial’ with a population of 25. The ABS Urban Centres and Localities (UCLs) provide “the most detailed definition of individual urban areas as small as 200 people”, meaning that Kwinana Industrial’s population is too low for the detailed description of ‘urban’.

[122] This, therefore, differentiates the industrial nature of the Site and its surrounding area from its more general context; and

• Contrary to the Applicant’s submissions, restricting the meaning of ‘urban’ or ‘suburban’, in the context of the Agreement, to remote locations is not logical or appropriate. It requires the Commission to ignore a plain and literal reading of the words in the Agreement. Remote locations clearly include cities or towns (for example, Kalgoorlie, Port Hedland or Karratha).

Physical description of the Site including activities undertaken on the Site and any physical constraints

[123] The physical characteristics of the Site, taken together with the activities authorised to be undertaken on the Site, confirm the industrial nature of the Site as distinct from being a more general ‘urban’ or ‘suburban’ place.

Physical Description

[124] The Site currently contains:

• permanent buildings and sheds;

• tank facilities;

• the main process facility, which includes various processing units made up of modules, pipe racks and structural steel; and

• permanent roads and walkways.

[125] The area surrounding the Site includes at least 21 other individual heavy industry businesses.

Authorised activities

[126] The construction and activities undertaken on the Site require planning and environmental approvals. For the purposes of the determination of the Planning Approval, the Project was described as an application to construct and operate a Lithium Hydroxide Processing Plant (including related infrastructure). It is intended that the plant will produce in total 48,000 tonnes per annum of lithium hydroxide that will be exported for the use in lithium batteries. The plant is to operate 24 hours per day throughout the year.

[127] The Works Approval granted in September 2016 under the Environmental Protection Act 1986 (WA) is for the purpose of: ‘Metal Smelting or refining; premises on which metal ore, metal ore concentrate or metal waste is smelted, fused, roasted, refined or processed’.

Physical Constraints

[128] The Site is classified as ‘Contaminated – Restricted Use’ under the Contaminated Sites Act 2003 (WA) (CS Act).

[129] The consequential restriction of activities on the Site are as follows:

“restricted to use for industrial and commercial land uses, excluding primary schools, childcare facilities and other sensitive commercial land uses.”

[130] Another 18 sites immediately surrounding the Site are also classified as ‘Contaminated – Restricted Use’ under the CS Act.

[131] The physical constraint of contamination of the Site and the surrounding areas means that, as a matter of fact, the Site is only suitable for limited uses. Other, broader activities, ordinarily possible in an ‘urban’ or ‘suburban’ area are simply not permissible.

[132] When considered in the light of the physical characteristics of the surrounding area, the Planning Approval and the Works Approval, it is submitted that the Site is clearly not in an ‘urban’ or ‘suburban’ area.

Planning Instruments Applying to the Site

[133] Urban planning instruments set out the urban planning rules for the Site, including the types of activities which may be undertaken in an area.

[134] The evidence is that each of these planning instruments demonstrate the industrial nature of the Site and its surroundings, as opposed to being classified as an ‘urban’ or ‘suburban’ area.

[135] The following possible zones may apply to land subject to the Metropolitan Region Scheme (the MRS):

• Urban;

• Urban Deferred;

• Central City Area;

• Industrial;

• Special Industrial;

• Rural;

• Private Recreational; and

• Rural – Water Protection.

[136] The Site and its immediate surrounding area are zoned ‘Industrial’ under the MRS. This is to be distinguished from the ‘Urban’ or ‘Central City Area’ zones which are also possible under the MRS.

[137] The extent of the land zoned as ‘Industrial’ in the immediate vicinity of the Site is then bounded by:

• a portion of land zoned ‘Special Industrial’; and

• land reserved for the following public purposes:

• Railways;

• Primary Regional Road; and

• Port Installations.

[138] The nearest area of land zoned as ‘Urban’ is 2.35 km to the east of the Site, but is separated by a substantial buffer of land reserved for the following public purposes:

• Railways;

• Primary Regional Roads; and

• Parks and Recreation.

Kwinana Town Planning Scheme

[139] The Site is also subject to a local scheme being the Town of Kwinana Town Planning Scheme No 2 (TPS2). The Site is zoned ‘General Industry’ under this scheme.

[140] Clause 4.6 of TPS2 contains the zoning table which sets out the permissibility of uses in the ‘General Industry’ zone.

[141] The following uses are not permitted in the ‘General Industry’ zone:

• Ancillary accommodation;

• Aged and/or dependent persons accommodation;

• Aged and dependent person's dwelling;

• Amusement centre;

• Aquaculture;

• Caravan park;

• Child care centre;

• Civic building;

• Commercial hall;

• Dog kennels;

• Drive-in takeaway food shop;

• Drive-in theatre;

• Equestrian uses;

• Fish shop;

• Forestry (selective);

• Grouped dwelling;

• Health studio;

• Holiday accommodation;

• Home occupation;

• Hospital;

• Hotel;

• Intensive agriculture;

• Licenced restaurant;

• Liquor store;

• Lodging house;

• Medical clinic;

• Motel;

• Multiple dwelling;

• Museum;

• Private hotel;

• Private recreation;

• Professional office;

• Public amusement;

• Residential building;

• Restricted premises;

• Retail plant nursery;

• Rural product stall;

• Shop;

• Stables;

• Tailings pond;

• Tavern; and

• Vehicle sales.

[142] All of these uses (which are not allowed) are the types of land use typically associated with urban or suburban land use.

[143] In addition, the Site does not contain a ‘Residential Planning Code’ designation as would ordinarily be expected in an area in which residential dwellings are generally permissible. This is obviously because residential dwellings are simply not contemplated here.

[144] TPS2 also provides for Policy Areas within the Scheme Area.

[145] The Site is in ‘Area 15 – Kwinana Industrial Strip’.

[146] The Policy Statement for Area 15 states as follows: