Baiada Farms Pty Ltd

[2021] FWCA 3564

[2021] FWCA 3564

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Baiada Farms Pty Ltd
(AG2021/5162)

BAIADA FARMS PTY LIMITED TAMWORTH FARMS ENTERPRISE AGREEMENT 2021 - 2025

Agricultural industry
COMMISSIONER JOHNS	MELBOURNE, 22 JUNE 2021

Application for approval of the Baiada Farms Pty Limited Tamworth Farms Enterprise Agreement 2021-2025.

[1] An application has been made for approval of an enterprise agreement known as the Baiada Farms Pty Limited Tamworth Farms Enterprise Agreement 2021-2025 (Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (Act). It has been made by Baiada Farms Pty Ltd (Baiada). The Agreement is a single enterprise agreement.

[2] The Employer has provided written undertakings. A copy of the undertakings is attached at Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. The undertakings are taken to be a term of the Agreement.

[3] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[4] The Australian Workers’ Union (AWU) and the Australasian Meat Industry Employees Union (AMIEU) have both given notice under s.183 of the Act that they want the Agreement to cover them. Only a bargaining representative can be covered by the Agreement.

[5] On 20 May 2021 the AWU gave notice that it opposed the AMIEU being named by the Commission as being covered by the Agreement pursuant to s 201(2) of the Act. The AWU contended that the Commission does not have jurisdiction to identify the AMIEU as being covered by the Agreement because the AMIEU was prohibited from being a bargaining representative for the Agreement due to the operation of s 176(3) of the Act. The AWU contended that the prohibition arises because the AMIEU is not entitled to represent the industrial interests of any employee covered by the Agreement. Consequently, the AWU submitted, the AMIEU is not entitled to provide a written notice to be covered by the Agreement pursuant to s 183(1) of the Act.

[6] I sought submissions from the AMIEU and Baiada about the coverage issue. All parties were content for me to decide the issue on the papers.

[7] For its part Baiada was agnostic about the issue. It advised the Commission that it “is happy to continue working with both employee organisations in the future.”

[8] The AMIEU maintained that it is entitled to represent the industrial interests of employees covered by the Agreement, and accordingly, there is no barrier to the AMIEU being a bargaining representative or to the Commission noting that the AMIEU is covered by the Agreement pursuant to s.201(2) of the Act. In short, the AMIEU contends that a plain reading of its eligibility rules permits the union to represent the industrial interests of Baiada employees covered by the Agreement, because those employees are employed ‘in’ or ‘in connection’ with the meat industry.

[9] It is not in dispute that the enterprise covered by the Agreement consists of chicken growing sheds in Northern NSW, and the employees who work in those growing sheds. The AMIEU explained that,

“6. The growing sheds form part of an integrated process for hatching, growing, and processing chicken owned and operated by Baiada, such that the entire production chain is vertically integrated. In summary:

6.1. the chickens are first hatched in a hatchery;

6.2. the chickens are then transported to one of several growing sheds where they are grown until ready for processing (these sheds being the enterprise covered by the Agreement);

6.3. the chickens are then transported from the growing sheds to a Baiada processing facility where they are killed and prepared for sale.

7. The sole purpose of the growing sheds is to provide chicken for Baiada’s processing facility; the chickens are not sold to any other third-party.”

[10] The eligibility rule of the AMIEU is a conventional industry rule and is expressed as follows:

The Union shall consist of all persons of good character who are employed in any position in or in connection with, or who are usually employed in, or who are qualified and desire to be employed in:-

4.1 the Butchering and Meat Industry, Refrigerating Industry, or in any kindred industry handling or processing the products of the Meat Industry or of Meat (being defined as any product derived from tissue) in the Commonwealth; and… (Emphasis added)

[11] The AWU’s contention that the AMIEU is not entitled to represent the industrial interests of the employees covered by the Agreement is founded on the historically well understood distinction between farms, hatcheries and meat processing. The AWU also relies upon an undertaking given by the AMIEU in 2019. The AWU explained that,

31. On 12 September 2019, Graham Smith, the Federal Secretary of the AMIEU, provided a written undertaking to the AWU in response to an AWU objection to an AMIEU application to vary its eligibility rules. A copy of the undertaking is filed by the AWU in conjunction with these submissions.

32. The AMIEU’s undertaking relevantly provided:

The AMIEU agrees the insertion of the word “processing” in Rule 4.1 will not be relied upon to assert coverage over work performed on farms in the agricultural industry.

33. The undertaking demonstrates the AMIEU is well aware that work on farms is understood as being part of the agricultural industry and not the meat industry.

[12] In deciding the issue of whether the AMIEU is entitled to represent the industrial interests of employees covered by the Agreement, I accept that I must apply the following principles:

a) It is irrelevant to the construction of an eligibility rule that there may be another union which might represent a given employee. The scope of an eligibility rule should not be read down by reference to the rules of other industrial organisations. 1
b) Eligibility rules must be interpreted liberally and according to their ordinary and popular meaning. 2
c) Eligibility turns on the trade or business of the employer. 3
d) It is necessary to identify the ‘substantial character’ of the employer’s activities. 4
e) The words ‘in connection with’ have an expansive effect and ‘a sufficient connection may be … found in an occupation which takes place either before or after the actual work which itself identifies the industry in question.” 5
f) 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. 6

[13] I acknowledge the AWU’s submissions about the traditional industrial distinctions between work on farms, in hatcheries and work in meat processing. Those distinctions are reflected in Modern Awards. Modern Awards are a useful tool in identifying the substantial character of an employee’s work. However, those matters do not confine me in deciding whether Baiada is ‘in’ the meat industry or whether the work of the hatching and growing sheds is ‘in connection’ with the meat industry. Award coverage and union eligibility rules apply different tests. The traditional industrial distinctions do not assist me in understanding the plain meaning of the AMIEU’s eligibility rules. The words ‘in connection with’ are expansive. It must necessarily follow that it is permissible for the AMIEU’s eligibility rules to cover persons who are not ‘in’ the meat industry.

[14] The fact that the Baiada Group has structured its industrial arrangements in accordance with the traditional industrial distinctions is also not determinative of the matter. Nor is the fact that a separate legal entity operates:

a) its processing facility under a separate enterprise agreement, and
b) both the farms and hatchery operations under a different enterprise agreement.

[15] In this matter Baiada’s business is the slaughter of chicken for sale and consumption. As its website attests, Baiada is “one of the largest chicken meat producers in Australia.” 7 It is undeniably in the meat industry.

[16] If I am wrong that the employees covered by the Agreement working in the hatching and growing sheds are ‘in’ the meat industry, then they are engaged in work ‘in connection’ with the meat industry.

[17] There is a chain of processes before the chook loses its head. That process includes the hatching and growing of chickens. That occurs in the sheds in respect of which the Agreement applies. Without the hatching and growing of chickens there is no roast chook on Sunday.

[18] While I accept that the sheds are geographically separate from the slaughter-house the whole process is vertically integrated. The Baiada Group maintains effective management and control over the entire operation. For these reasons, I reject the AWU’s submission that “the work of employees on Baiada’s poultry farms is clearly not referable or significant to the work of employees at the processing facility.” What I am required to determine is a question of fact, and in this matter the facts do not demonstrate that this is merely the supply of goods or materials between two distinct businesses.

[19] I am also not persuaded that the undertaking provided by the AMIEU in 2019 affects its eligibility rules. The eligibility rules have a plain meaning. If the AMIEU is now in breach of an undertaking that it would not “assert coverage over work performed on farms in the agricultural industry” that is not determinative of the task before me.

[20] For these reasons I am satisfied that both the AWU and the AMIEU are bargaining representatives for the Agreement. Noting that both, have given notice under s.183 of the Act that they want the Agreement to cover them, in accordance with s.201(2) I note that the Agreement covers both organisations.

[21] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 29 June 2021. The nominal expiry date of the Agreement is 4 May 2025.

COMMISSIONER

Annexure A

 1   CFMEU v CSBP Limited [2012] FCAFC 48 at [48].

 2   R v Cohen; Ex parte Motor Accidents Insurance Board [1979] HCA 46 at [23].

 3   Re Federated Liquor and Allied Industries Employees’ Union of Australia; Ex parte Australian Workers Union (Poon Bros) (1976) 51 ALJR 266 at 268.

 4   R v Isaac; Ex parte Transport Workers Union [1985] HCA 80 at [16].

 5   Harnischfeger of Australia Pty Ltd [2005] AIRC 890

 6   The Australian Manufacturing Workers’ Union (AMWU) v ResMed Limited [2014] FWCFB 3501 at [26](7).

 7   by authority of the Commonwealth Government Printer

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