Baytech Trades Pty Ltd (ACN 147 997 788) v Coinvest Ltd (ACN 078 004 985)
[2015] VSCA 342
•17 December 2015
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2014 0134
| BAYTECH TRADES PTY LTD (ACN 147 997 788) | Appellant |
| v | |
| COINVEST LTD (ACN 078 004 985) | Respondent |
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| JUDGES: | MAXWELL P, TATE JA and JOHN DIXON AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 3 June 2015 |
| DATE OF JUDGMENT: | 17 December 2015 |
| MEDIUM NEUTRAL CITATION: | [2015] VSCA 342 |
| JUDGMENT APPEALED FROM: | [2014] VCC 1555 (Judge Kennedy) |
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EMPLOYER AND EMPLOYEE – Long service leave – Casual employment – Construction industry – Labour hire – Appellant labour hire company supplied specialist electricians to switchboard manufacturer – Whether ‘work of a kind’ covered by Electrical Contracting Industry Award 1992 – Whether provision of ‘electrical services’ – Whether appellant ‘electrical contractor’ – Manufacturing work distinguished – Long service leave charge not payable – Appeal allowed – Construction Industry Long Service Leave Act 1997 s 4.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr S J Wood QC with Mr B Jellis | AI Group Workplace Lawyers Pty Ltd |
| For the Respondent | Mr N Green QC with Mr J D’Abaco | Maddocks |
MAXWELL P
TATE JA
JOHN DIXON AJA:
Summary
The respondent, Coinvest Ltd (the ‘trustee’), is the trustee of the Construction Industry Long Service Leave Fund (the ‘Fund’). The Fund was established by the Construction Industry Long Service Leave Act 1997 (the ‘Act’), and under a trust deed executed by the trustee (the ‘Trust Deed’). The purpose of the Fund is to provide portable long service leave benefits to Victorian workers who perform ‘construction work in the construction industry’ in Victoria,[1] and who would otherwise not be able to access long service leave because they are casually employed by different employers.
[1]The Act s 4(1).
The appellant (‘Baytech’) is a labour hire company. One of its clients was NHP Electrical Engineering Products Pty Ltd (‘NHP’), which builds electrical switchboards and electrical panel boards. The work of building switchboards was mostly performed by NHP’s own workforce, but NHP engaged Baytech to supplement its workforce on a casual basis. The Baytech employees, who were skilled and qualified electrical fitters, built switchboards in accordance with drawings prepared by NHP. The completed switchboards were sent to NHP’s customers, where they were installed for use.
The question for determination was whether Baytech was obliged under s 4(1) of the Act to pay to the trustee a long service leave charge in respect of the work done by its employees for NHP (the ‘NHP contract work’). That liability would attach to Baytech only if those workers were employed ‘to perform construction work in the construction industry’.
As will appear, the terms ‘construction work’ and ‘construction industry’ are defined in the Construction Industry Long Service Leave Fund Rules (the ‘Rules’), which were made by the trustee pursuant to cl 5 of the Trust Deed. Because the work was electrical work, the Rules in turn required consideration of definitions in the Electrical Contracting Industry Award 1992 (the ‘Electrical Contracting Industry Award’).
Specifically, the Court had to decide whether the NHP contract work was ‘work of a kind’ for which the Electrical Contracting Industry Award fixed a rate of pay. The judge at first instance concluded that it was, on the basis of her findings that:
(a) the NHP contract work constituted the provision of ‘electrical services’; and
(b) in supplying the services of its employees to NHP to do that work, Baytech was an ‘electrical contractor’, that is, an ‘entity which contracts to provide electrical services’.
On appeal, Baytech challenged both of those findings. The focus of attention, however, was on the first finding. Baytech all but conceded that, if the NHP contract work did constitute the provision of ‘electrical services’ within the meaning of the Electrical Contracting Industry Award, then its contract with NHP could properly be characterised as a ‘contract to provide electrical services’. That is, Baytech did not seek to maintain (other than formally) that it was merely a generic supplier of labour. It accepted that it contracted with NHP to provide workers with the specialist electrical skills necessary to meet NHP’s particular requirements.
Baytech’s central argument was that, although the NHP contract work involved the application of electrical skills, it did not constitute the provision of ‘electrical services’ as defined. Baytech submitted that, properly construed, the relevant provisions of the Electrical Contracting Industry Award distinguished between the performance of work as an electrician as part of, and for the purpose of, a manufacturing business — on the one hand — and the performance of work as an electrician as part of a business of supplying electrical services under contract, on the other. NHP was clearly in the business of manufacturing, so it was said, and the NHP contract work was work done in the course of and for the purposes of that manufacturing process.
On this analysis, it was not the kind of work which ‘electrical contractors’ do when they send electricians on-site to perform particular tasks. Rather, it was ‘work of a kind’ performed by employee electricians as part of a manufacturing process. It was not, therefore, ‘work of a kind’ for which the Electrical Contracting Industry Award fixed a rate of pay.
For reasons which follow, we would uphold that submission, and allow the appeal. In place of the orders made below, we would declare that Baytech is not liable for the long service leave charge.
The relevant definitions
The relevant definitions in the Rules are these:
Construction Work means:
(a)Building trades work, Electrical trades work, Metal trades work and Other trades work; …
Electrical Trades Work means work:
(a)performed in the ‘construction industry’ in Victoria, being:
(i)work of a kind for which a rate of pay is fixed by the prescribed Electrical Contracting Award
…
Metal Trades Work means work:
(a) performed in the ‘construction industry’ in Victoria, being:
(i)work of a kind for which a rate of pay is fixed by a prescribed Metal Industry Award;
…
but does not include any work [which] involves the manufacture of any structures, fixtures, fittings, chattels or works which are not manufactured specifically for a particular building … For the avoidance of doubt:
(c)any manufacture of structures, fixtures, fittings, chattels or works in a permanently established factory or workshop is excluded from this definition of Metal Trades Work;
…
(e)any mass manufacturer of structures, fixtures, fittings, chattels or works is excluded from this definition of Metal Trades Work.
Electrical Services means:
(a)the maintenance of electric power distribution lines and all associated work; and/or
(b)the installation of electric light and power, all classes of assembly, wiring, repair and maintenance of electrical installations and appliances …
by Workers for Employers and/or by Working Sub-Contractors who contract to provide such services for which a rate of pay is prescribed under the Electrical Contracting Industry Award.
The relevant part of the Electrical Contracting Industry Award is in these terms:
INCIDENCE, SCOPE AND APPLICATION
5.1This award shall apply to the provision of electrical services by electrical contractors.
5.2 For the purpose of this clause:
5.2.1 ‘electrical contractor’ means any entity who or which contracts to provide electrical services.
5.2.2 ‘electrical services’ includes:
5.2.2.1the maintenance of electric power distribution lines and all associated work; and/or
5.2.2.2the installation of electric light and power, all classes of assembly, wiring, repair and maintenance of electrical installations and appliances including, without in any way limiting the generality of the foregoing, the assembling, installing, diagnosing, servicing and rectifying of faults in any of the following:
5.2.2.2.1electronic products (eg television receivers, video cassette recorders, audio equipment/systems, home computers, etc) and any combination of these products together with ancillary devices and/or equipment;
5.2.2.2.2radio and television transmitting devices (including LF, HF, VHF and UHF), CB radios;
5.2.2.2.3telemetry systems and ancillary equipment;
5.2.2.2.4multiple access television distribution systems;
5.2.2.2.5computers and their peripherals;
5.2.2.2.6microwave and associated equipment;
5.2.2.2.7electrically operated refrigeration and air conditioning equipment;
5.2.2.2.8telephone communication devices;
5.2.2.2.9fibre optic transmission lines and associated equipment;
5.2.2.2.10public address systems;
5.2.2.2.11domestic satellite television receivers;
5.2.2.2.12maritime electronic equipment (including depth sounders, radars, etc.);
5.2.2.2.13security alarm systems;
5.2.2.2.14fire alarm systems;
5.2.2.2.15superconductivity systems and associated equipment;
5.2.2.2.16electromagnetic devices.
5.3Providing that the award shall not apply to the manufacturing section of the business of the employers who are manufacturers or vendors of plant or equipment who install or maintain the said plant and equipment in high and low tension power stations and/or substations for the generation and/or transmission of electric power.[2]
[2]Electrical Contracting Industry Award pt A, cls 5.1–5.3.
Part B of the Electrical Contracting Industry Award defines ‘Electrical Fitter’ to mean:
an Electrical Fitter employed by an Electrical Sub-Contractor normally engaged in making, repairing or maintaining electrical machines, instruments or appliances, but does not include electrical fitters employed in the manufacturing section of a contractor’s business.[3]
[3]Ibid pt B, cl 4.4 (emphasis added).
The issues for determination, therefore, were as follows:
(i) whether, giving the words their natural and ordinary meaning, the phrases ‘construction work’ and ‘construction industry’ excluded the work of manufacturing switchboards in a factory;
(ii) whether the work undertaken by the Baytech workers in the manufacture of switchboards fell within the scope of ‘assembly, wiring, repair and maintenance of electrical installations and appliances’, in the definition of ‘electrical services’ in the Electrical Contracting Industry Award; and
(iii) whether, in its capacity as a provider of specialist electrical fitters to NHP, Baytech was an ‘electrical contractor’ within the meaning of the Electrical Contracting Industry Award.
The decision at first instance
The judge held that Baytech was liable to pay the long service leave charge. In her Honour’s view, the work undertaken by Baytech’s workers for NHP, involving the assembly and/or wiring of electrical switchboards and panel boards, was ‘construction work’ performed in the ‘construction industry’ for the purposes of the legislation. Her findings may be summarised as follows.
As a labour hire company, Baytech prepared job descriptions based on information provided by its client, which were then provided to candidates. Once candidates were placed with the client, Baytech invoiced on the basis of the hours and times that its employees worked. Its client, NHP, built electrical switchboards and electrical panel boards at its premises in Laverton North, which were used in commercial and industrial applications. Baytech and NHP had a written contract that provided for NHP to request that Baytech provide on-hired workers (and recruitment services) in accordance with various terms and conditions to perform work at NHP’s premises.
In her Honour’s view, the work performed by Baytech’s workers for NHP was electrical and the workers provided ‘electrical services’ to, or for, NHP. They were described as ‘electrical fitters’ and their work was described as applying specialised electrical theory and practical knowledge to assemble operational industrial electrical control switchgear and power distribution equipment. There was no real difference between the two terms, ‘switchboards’ and ‘panel boards’, which could be used interchangeably. (We will simply refer to switchboards).
Switchboards were designed to a specification that identified the needs of a specific installation, typically in a large commercial building. NHP then prepared drawings for the switchboard that were approved by the customer. The Baytech workers were given a folder containing drawings and built the particular switchboard from those drawings. The switchboard was then fixed inside a metal enclosure with a door. After the board was finished and tested, it was sent to NHP’s customer for on-site installation. The judge found that the work was skilled work that required electrical qualifications.
The judge reasoned that the mischief which the Act sought to remedy was to provide portable long service leave benefits to workers in the ‘construction industry’ who would otherwise be unable to qualify by reason of the itinerant nature of their employment. Given this purpose in providing benefits for a category of the workforce, the scheme was generally entitled to a beneficial construction. This approach was adopted by the judge in considering the concepts of ‘construction work’ and ‘construction industry’.
The judge concluded that the workers were normally engaged in the assembly and wiring of electrical installations and appliances. Her Honour said:[4]
[4]Baytech Limited v Coinvest Pty Ltd [2015] VCC 1555 [71]–[78] (‘Reasons’).
I accept that the work undertaken by the Workers at NHP constitutes the assembly and wiring of various electrical components. Thus each of the workers need to ‘assemble’ various parts and then ‘wire’ them together resulting in an electrical switchboard or panel board.
[The Managing Director of Baytech] accepted that the core task performed by the electrical fitters employed by the defendant at NHP was to assemble components and general wiring. [A Director of NHP] also agreed that the services provided involved assembly and wiring of electrical components to form electrical switchboards.
It is true, as [Baytech] highlighted, that the workers did not actually engage in the ‘installation’ of the switchboards. However, the term ‘assembly’ is important and suggests a broad concept beyond the actual act of ‘installation’ (as used in the first line of the definition). Thus, the acts contemplated go beyond the act of ‘installing’ and extend to ‘assembly’ and ‘wiring’. In fact, an ‘assembly of an electrical installation’ is actually contemplated by the clause and is to be given some meaning.
The Macquarie Dictionary defines an installation as ‘a system of machinery or apparatus placed in position for use’ while the Merriam-Webster Dictionary defines it as including ‘something (such as a piece of equipment) that is put together and made ready for use’.
Although it is true that the switchboards were not formally placed in position at NHP’s premises, they were certainly ‘assembled’ there according to specifications which would enable them to be installed at a particular premises. Seen in this light, I consider that the workers were engaged in the assembly and wiring of an electrical installation. The reference to ‘all classes’ and the beneficial construction to be utilised also support such a finding.
Although I consider that ‘installation’ and ‘appliances’ are, in context, used disjunctively, I am also of the view that a switchboard can be properly characterised as an ‘appliance’. The Macquarie dictionary defines appliances as including an ‘instrument, apparatus or device’ while the Oxford Dictionaries Online definition includes ‘a device or piece of equipment designed to perform a specific task’.
I consider such words are broad enough to include the electrical switchboards which would be incorporated within the terms ‘apparatus’, and/or ‘device or piece of equipment’ designed to regulate and distribute electricity’.
Accordingly I am satisfied that the workers were engaged in the assembly and wiring of electrical installations and appliances.
Further, on the basis of the true character of the services provided by the workers established on the evidence, Baytech was contracting to provide electrical services. The judge reasoned that the exclusion in cl 4.4 — for electrical fitters in the manufacturing section of an electrical contractor’s business — did not apply, as there was no evidence that Baytech had a manufacturing section. It was solely a labour-hire company.
The judge rejected Baytech’s contention that the term ‘construction industry’ had a natural and ordinary meaning which did not include manufacturing work carried out in a factory. That the term extended beyond what might be thought ‘natural’ was evident from the concept of ‘allied’ industries, which included ‘electrical services’. The judge reasoned that, although manufacturing work was excluded from the definition of ‘metal trades work’ in the Rules, this was not the case with ‘electrical trades work’. If the makers of the Rules had wished to exclude manufacturing work from the concept of electrical trades work, it would have been relatively easy for them to do so, a fact that weighed against any general exclusion of manufacturing work.
Baytech had relied on a Memorandum of Understanding, made in conjunction with the Electrical Contracting Industry Award, which discussed potential problems arising out of an overlap between the Electrical Contracting Industry Award and the Metal Industry Award. Her Honour concluded that this was not relevant, saying:[5]
[A]s indicated already, the task before the court is whether the workers were performing work ‘of a kind’ for which a rate of pay was fixed by the [Electrical Contracting Industry Award]. The question is not posed as to whether the Award itself would be ‘used’ to actually prescribe the terms and conditions of the workers’ employment. In any event the fact that an ‘overlap’ was cited suggests that the classifications in the [Electrical Contracting Industry Award] may otherwise have application to workers also covered by the [Metal Industry Award].
[5]Reasons [125].
The judge concluded that the definition of ‘construction industry’ in the Rules had to be applied, rather than some general ‘ordinary’ meaning of the phrase. The NHP contract work entailed the assembly or wiring of an ‘electrical installation or appliance’. It was carried out in the ‘Allied Construction Industry’, because it was the carrying out of ‘electrical services’, and was therefore work in the ‘construction industry’ within the meaning of the Rules.
Issues on appeal
Five grounds of appeal were raised. The appellant proposed, however, that they be regrouped and dealt with as two broad grounds.[6] Thus it was contended that the judge erred:
(c) in concluding that the phrase ‘assembly, wiring, repair and maintenance of electrical installations and appliances’ included the building of electrical switchboards at NHP’s factory (revised ground 1); and
(d) in construing the phrase ‘contracts to provide electrical services’ as including a labour hire agreement (revised ground 2).
[6]Grounds 1, 2 and 4 were not separately pressed, being subsumed into the grounds being advanced. Grounds 3(b) and 5(c) were abandoned. For ease of reference these grounds will be referred to as ‘revised ground 1’ and ‘revised ground 2’.
As already noted, Baytech effectively abandoned the second ground, although it was formally maintained. Baytech sought to develop and rely on an alternative ground (for which leave was required) based on the definition of ‘electrical fitter’ (set out above). The contention was that the NHP contract work was performed by workers ‘employed in the manufacturing section of a contractor’s business’. Baytech submitted that, if it was an ‘electrical contractor’ under the Rules, then it should be viewed as a contractor which had a ‘manufacturing section’, comprising the electrical fitters who did the NHP contract work.
Although Baytech had made no such submission at trial, we would grant Baytech leave to rely on the additional ground. The trustee opposed leave being granted, although only faintly. There was no point of procedural fairness, as the trustee was able to deal substantively with the issue raised.[7] Ground 2 and the alternative ground can be considered together.
[7]Coulton v Holcombe (1986) 162 CLR 1.
Appellant’s submissions
Baytech’s written submission argued that the judge had adopted an incorrect approach to construing the statutory scheme. It contended, generally, that:
(e) the High Court has emphasised the primacy of the text;
(f) the legislative history of the Act demonstrated Parliament intended specific limits for the scheme;[8]
[8]In the Second Primary Reading Speech (Victoria, Parliamentary Debates, Legislative Assembly, 7 October 2004, 784 (Robert Hulls, Attorney-General)) Mr Hulls stated ‘a number of definitions are clarified to ensure that the scheme applies to workers performing “construction work” in the “construction industry”. This will limit the potential for other work groups or industries to seek coverage.’
(g) the rules provided, in precise detail, for the scope of their application;
(h) the drafter of the rules had chosen to pick up and apply the provisions of the Electrical Contracting Industry Award;
(i) the Act conferred a benefit on some employees but a financial burden on some employers and reflected a compromise;[9] and
(j) the relevant context of the Act was that it was addressed to ‘construction work’ in the ‘construction industry’. Those terms had a natural and ordinary meaning which did not include manufacturing work carried out in a factory.[10]
Its submissions were developed in connection with its specific grounds.
[9]Carr v Western Australia (2007) 232 CLR 138 [5]–[7] (Gleeson CJ) (‘Carr’): ‘the question is then not: what was the purpose or object underlying the legislation? The question is: how far does the legislation go in pursuit of that purpose or object’.
[10]EPM Concrete Pty Ltd v B & CL Long Service Leave Payments Corp (1985) 23 IR 422.
Revised ground 1
Baytech submitted that the definition of ‘electrical services’, and particularly the phrase ‘assembly, wiring, repair and maintenance of electrical installations and appliances’, did not extend to the process of manufacture. According to the written submission:
The switchboards were built at the premises of NHP on an assembly line and no worker ever left the factory of NHP. They were built for external clients for industry and commercial use.
The trial judge held that the workers were engaged in the assembly and wiring of an electrical installation, because the switchboards were ‘assembled’ according to specifications that would enable them to be later installed elsewhere.
The trial judge should have found that ‘electrical installations and appliances’ has, when read in context, a necessarily on-site character [which] is not satisfied in this case. Her Honour should have adopted the definition in the Macquarie Dictionary of an installation being: ‘a system of machinery or apparatus placed in position for use’. This interpretation is consistent with the ordinary meaning of ‘electrical service’, which is inapposite to describe the manufacture of an electronic product. It also reflects the genus of the words used in cl 5.2.2.
That the phrase should be so interpreted was said to be evident from the context of the Rules in seven different respects, three of which arose from matters extraneous to the Rules while the remaining matters were found within the Rules themselves. First, the Act was concerned with imposing a long service leave charge in respect of every worker employed by the employer to perform ‘construction work’ in the ‘construction industry’. If manufacturing products in a factory qualified as ‘construction work’ in the ‘construction industry’, the common understanding of that concept would be unreasonably strained. The evidence did not support a conclusion that the switchboards were exclusively for use in the commercial building industry. The limiting qualifier on the definition of ‘construction work’ was not the definition of ‘construction industry’ but the definition of ‘electrical trades work’.
Secondly, the question of what constituted ‘construction work’ turned on proper construction of the Electrical Contracting Industry Award. The definition of ‘construction industry’ required consideration of the meaning of ‘electrical services’, which in turn was a defined term. There was significant overlap between the definitions of ‘electrical services’ in the Rules and under the Electrical Contracting Industry Award, and the definition of ‘electrical trades work’ in the Rules.
The trustee’s case at trial was that the relevant workers were engaged in ‘work of a kind’ described by the classification of ‘electrical fitter’ under the electrical Contracting Industry Award.[11] As noted earlier, the definition was in these terms:
An electrical fitter employed by an Electrical Contractor normally engaged in making, repairing or maintaining electrical machines, instruments or appliances, but does not include electrical fitters employed in the manufacturing section of a contractor’s business.[12]
[11]Reasons [60].
[12]Electrical Contracting Industry Award 1992 pt B, cl 4.4.
Clause 5.1 of the Electrical Contracting Industry Award provided that the award ‘shall apply to the provision of electrical services by electrical contractors.’ Clause 5.2 provided that an electrical contractor means ‘any entity who or which contracts to provide electrical services’. Baytech submitted that the definition of ‘electrical services’ in the Electrical Contracting Industry Award must be read in the context in which the award was made, including the textual clues within the award, the Rules and the Act.
As noted earlier, cl 5.2.2 provided that electrical services includes
the installation of electric light and power, all classes of assembly, wiring, repair and maintenance of electrical installations and appliances including, without in any way limiting the generality of the foregoing, the assembling, installing, diagnosing, servicing and rectifying of faults in any of the following …
Baytech submitted that electricians were generally covered by either the Metal Industry Award or the Electrical Contracting Industry Award. Moreover, it was said, there was no dispute, at trial or on appeal, that electrical fitters working in manufacturing were covered by the Metal Industry Award and that the work being performed at NHP — whether by Baytech’s workers — or by NHP’s workers was covered by the Metal Industry Award.
Under the Rules, work in the ‘construction industry’ excluded ‘metal trades work’ that involved manufacture. By contrast, there was no carve-out for manufacturing in the definition of ‘electrical trades work’ in the Rules. Baytech submitted that the Rules specifically dealt with electrical fitters working in manufacturing and excluded such work from the statutory scheme. It submitted that those specific provisions precluded use of the general provision — the definition of ‘electrical trades work’ and the concept of work of a kind for which a rate of pay was fixed under the Electrical Contracting Industry Award — to include in the statutory scheme work that involved manufacture.[13]
[13]Saraswati v The Queen (1991) 172 CLR 1.
According to the Baytech submission, it was not contemplated that ‘electrical trades work’ and ‘metal trades work’ would overlap. The judge wrongly rejected its contention that the context in which the Electrical Contracting Industry Award was made demonstrated that there was no overlap between it and the Metal Industry Award. The judge held that there could be overlap between the two awards and, that accordingly, the exclusion under the Metal Industry Award was irrelevant. Baytech submitted that although, in theory, more than one award can apply to the same work, the Electrical Contracting Industry Award should not be read in this way in respect of electrical fitters working in manufacturing.
According to the submission, an overarching interpretative principle, founded on a memorandum that was Appendix 5 to the Electrical Contracting Industry Award, should have been applied. The memorandum evinced a common understanding that the awards not be construed as overlapping, such that the Electrical Contracting Industry Award did not extend to work covered by the Metal Industry Award unless that work was carried out by an electrical contractor.
Baytech submitted that the NHP contract work fell within the opening limbs of the definition of ‘metal trades work’ in the Rules, but was then excluded by the manufacturing exemption. Baytech pointed to evidence that the workers placed with NHP were selected on the basis of NHP position descriptions for electrical fitters. The NHP electrical fitters were covered by the Metal Industry Award and the Baytech workers did exactly the same work. There was never intended to be any overlap and the judge was in error when she said:
The task before the court is whether the workers were performing work ‘of a kind’ for which a rate of pay was fixed by the [Electrical Contracting Industry Award]. The question is not posed as to whether the Award itself would be ‘used’ to actually prescribe the terms and conditions of the workers’ employment. In any event the fact that an ‘overlap’ was cited suggests that the classifications in the [Electrical Contracting Industry Award] may otherwise have application to workers also covered by the [Metal Industry Award].[14]
[14]Reasons [125].
Baytech pointed out that the coverage of the Metal Industry Award was defined by industry descriptions,[15] whereas the Electrical Contracting Industry Award applied to a class of employers (‘electrical contractors’).[16] According to Baytech, four clues could be identified within the terms of the Electrical Contracting Industry Award which showed that the judge had construed the term ‘electrical services’ too broadly. First, the inclusive definition of ‘electrical services’ was inapt to describe making goods in a factory. Secondly, cl 5.3 maintained, in respect of an electrical installation or appliance, a distinction between installation and maintenance, on the one hand, and manufacture, on the other. That distinction was apposite in understanding the distinction between manufacturing and construction.
[15]See Metal Industry Award 1984 pt 1, cl 2(b) ‘the industries and callings covered by this award are the engineering, metal working and fabricating industries in all their branches, and all industries allied thereto and include mechanical and electrical engineering … the manufacture, erection and installation, maintenance and repair of all forms of electrical machinery, apparatus, and appliances … .
[16]See Electrical Contracting Industry Award 1992 pt A, cl 3.2.1: ‘Part B of this award shall … be binding on the Electrical Contractors Federation Victoria, its officers and its members …’ .
Whether Baytech was a manufacturer depended on how the contract to provide electrical services was characterised, an issue that ought to be determined by reference to the NHP contract work. The contract between Baytech and NHP provided for Baytech to supply workers to ‘perform work at the principal’s premises and in accordance with the principal’s detailed brief,’ and for ‘the worker to perform tasks to a similar nature to that for which his skills are required …’. Before the judge there was evidence of the work for which NHP required the workers. The work performed is described above at para 16.
Thirdly, the industry allowance payable under the Electrical Contracting Industry Award for disabilities associated with on-site work lacked the usual permanent amenities associated with factory work. Finally, there was the exclusion in the definition of ‘electrical fitter’ for the purposes of electrical contracting work in pt B cl 4.4 of the award, set out above.[17]
[17]See [20] above.
Although none of these four contextual clues was decisive in reading down the phrase ‘assembly, wiring, repair and maintenance of electrical installations and appliances’, the combination was said to give contextual flavour to the types of installations and appliances with which the Electrical Contracting Industry Award was concerned. Because the scheme dealt with ‘construction work’ in the ‘construction industry’, work that was actually the manufacturing of products in a factory, and excluded from metal trades work, should not be considered as electrical contracting work. The NHP work was electrical work in the course of manufacture, indistinguishable from the work performed by NHP’s employees. It was not ‘assembly, wiring, repair, or maintenance’ of a kind to which the Electrical Contracting Industry Award applied.
Revised ground 2 and alternative ground
As noted earlier, ground 2 as drafted contended that Baytech was merely a labour hire company supplying workers to a client under an agreement, and could not therefore be characterised as an electrical contractor providing electrical services. As we have said, however, Baytech effectively abandoned this ground and concentrated instead on its alternative ground.
According to this alternative argument, if the character of the NHP contract work meant that Baytech was not just a provider of labour hire services but was a provider of electrical services, an equally broad view must be taken of the exclusion in the definition of ‘electrical fitter’. As noted above, that definition excludes ‘electrical fitters employed in the manufacturing section of a contractor’s business’.[18] On that basis, Baytech contended, the judge should have found that the NHP contract work was performed by Baytech workers employed ‘in the manufacturing section of a contractor’s business’, Baytech being that contractor. Accordingly, the Baytech workers were not ‘electrical fitters’ under the Electrical Contracting Industry Award.
[18]See [12] above.
Baytech accepted that, as a labour hire business, it did not in a literal sense have a manufacturing section. It submitted, nevertheless, that the exclusion should be viewed as applicable. The NHP contract workers should be regarded as ‘employed in the manufacturing section’ of Baytech’s business, because:
(k) they were engaged in manufacturing work; and
(l) when engaged in this work, they were employed in that section of Baytech’s business that was made up of workers engaged in manufacturing work.
This interpretation, according to the submission, resulted in a coherent interpretation of the Electrical Contracting Industry Award. It meant that all workers who performed the same kind of work (in this case, manufacturing work in a factory) were treated alike. Taking an approach that focuses on substance rather than form, like work should be treated alike. It was pointed out that, at trial, the trustee had accepted, for the purposes of cl 4.4, that NHP had a manufacturing section and that Baytech’s workers worked alongside NHP’s workers doing the same work.
Respondent’s submissions
The trustee submitted that the judge’s focus was rightly on the nature of the work undertaken by the Baytech workers. It was irrelevant that the work was performed under a labour hire agreement between Baytech and its client, and equally irrelevant that the work might be characterised as manufacturing work done in a factory.
The judge had correctly concentrated on the definitions in the Rules and had rejected Baytech’s contention that the phrase ‘construction work in the construction industry’ had a natural and ordinary meaning which excluded manufacturing work. The judge carefully and correctly analysed the definitions in the Rules of the relevant terms. It was plainly open on the evidence to find that Baytech had contracted to provide electrical services to NHP. If the work answered the description ‘electrical services’, it mattered not that the workers were employed by a labour hire company or were direct employees. If the work came within the scope of the rule, whether or not it might also be work for the purposes of a manufacturing process, it attracted a long service leave charge under the statutory scheme.
In argument, counsel for the trustee accepted that there was a legitimate conceptual distinction between work done in the course of a business of providing electrical services and work done in the course of a manufacturing business. Counsel maintained, however, that this distinction did not govern the outcome. ‘Construction work’ was defined to include ‘electrical trades work’, which through the definition of ‘allied construction industry’ included carrying out ‘electrical services’. Carrying out ‘electrical services’ included ‘assembly, wiring, repair and maintenance of electrical installations and appliances’.
According to the trustee, the fact that the work might have had a manufacturing aspect was relevant but not conclusive. The trustee accepted that NHP operated a manufacturing business and that the switchboards were assembled at its premises in a process of manufacturing. But this was no more than a factor to be weighed in the balance, as the judge had correctly done.
The Baytech workers were highly skilled electricians but their work could not be solely characterised as an integral part of the manufacturing process. It was the particular skills which the Baytech workers brought to the process which attracted the ‘electrical trades’ definition in the Rules. The fact that the work met the description of ‘metal trades work’ did not preclude the work also having the character of ‘electrical trades work’ under the Rules.
The trustee urged the court to reject Baytech’s contention that the characterisations were mutually exclusive. It submitted that the definitions sat on a continuum. The question was not whether the work could be characterised as ‘electrical services work’ but whether it was solely manufacturing work. The judge was entitled to conclude that the work was at the electrical trades end of that continuum and her answer to the narrow question whether the work was of a kind for which a rate of pay was set by the Electrical Contracting Industry Award, not the Metal Industry Award, was correct.
The trustee submitted that it was not to the point whether the Electrical Contracting Industry Award would apply to workers covered by the Metal Industry Award. The judge correctly rejected Baytech’s contention to the contrary, since all that the Rules required was that the work be ‘of a kind’ for which a rate of pay was fixed by the Electrical Contracting Industry Award. The trustee pointed out that the definition of ‘electrical trades work’ did not carve out manufacturing work, while the definition of ‘metal trades work’ did. This was said to show that, if the work fell within the definition of ‘electrical trades work’, it was within the statutory scheme. The drafters of the Rules might have easily excluded manufacturing work generally, but did not.
The trustee conceded that the Metal Industry Award was capable of applying to Baytech’s workers at NHP as well as to NHP’s workers performing identical work. Its contention was that Baytech did not have a manufacturing section, and had conceded as much, and that the exclusion found in the definition of ‘electrical fitter’ in the Electrical Contracting Industry Award was inapplicable.
General principles: approach to interpretation
As already noted, the trial judge identified the purpose of the Act as being to provide portable long service leave benefits to workers in the ‘construction industry’ who would otherwise be unable to qualify by reason of the itinerant nature of their employment. In her Honour’s view, given that this purpose was beneficial for a category of the workforce, the scheme was generally entitled to a beneficial construction.
With respect, her Honour’s conclusion about the beneficial purpose of the legislation was undoubtedly correct. But the Act also made clear that the beneficial purpose was to be achieved by imposing burdens on employers. The purpose of the very detailed provisions in the Rules was to define, with some precision, the circumstances in which benefits were to be conferred and corresponding burdens imposed. It is by giving primacy to the text that the interpreting court fulfils its task of discerning how far the legislature decided to go in the effectuation of its purpose.
We draw attention here to the caution expressed by Gleeson CJ in Carr:[19]
That general rule of interpretation [that a construction that would promote the purpose of the Act is to be preferred to a construction that would not promote the purpose] may be of little assistance where a statutory provision strikes a balance between competing interests, and the problem of interpretation is that there is uncertainty as to how far the provision goes in seeking to achieve the underlying purpose or object of the Act. Legislation rarely pursues a single purpose at all costs. Where the problem is one of doubt about the extent to which the legislation pursues a purpose, stating the purpose is unlikely to solve the problem. For a court to construe the legislation as though it pursued the purpose to the fullest possible extent may be contrary to the manifest intention of the legislation and a purported exercise of judicial power for a legislative purpose.
[19](2007) 232 CLR 138, 143 [5].
In Victims Compensation Fund v Brown,[20] Spigelman CJ observed that it was not appropriate to apply the principle of liberal construction to a clause clearly intended to be one of limitation. His Honour said:[21]
[20](2002) NSWLR 668.
[21]Ibid 671–2 [9]–[12].
In a passage that has been frequently cited with approval, the Supreme Court of the United States said in Rodriguez v United States, at 525–526:
… No legislation pursues its purposes at all costs. Deciding what competing values will or will not be sacrificed to the achievement of a particular objective is the very essence of legislative choice — and it frustrates rather than effectuates legislative intent simplistically to assume that whatever furthers the statute's primary objective must be the law.
In the present proceedings, the Respondent submitted that the purpose was to compensate victims. Even if we were to accept a legislative purpose stated at that level of generality, that would not entail that any ambiguity must be construed in such a way as to maximise compensation (cf Favelle Mort Ltd v Murray). In any event, the very specificity of the provisions of the legislation indicate that the legislative purpose is to provide compensation in accordance with the and not otherwise.
The issue before the Court is the determination of the circumstances in which compensation is payable. The Court is not required to give the most expansive possible interpretation of such circumstances.
Specifically, the Court is not required to give words a meaning other than their primary meaning, unless the context indicates that that should be done.[22]
[22]Citations omitted.
On appeal to the High Court, Heydon J (with McHugh ACJ, Gummow, Kirby, and Hayne JJ agreeing) agreed with the approach adopted by Spigelman CJ:[23]
The question is a narrow one and it is possible to answer it briefly. It could be answered very briefly, merely by stating that the answer propounded by Spigelman CJ was correct for the reasons he advanced. In deference to the extremely careful judgments of the majority in the Court of Appeal, however, a longer answer is called for.
[23]Victims Compensation Fund Corporation v Brown (2003) 201 ALR 260, 263 [12] (citations omitted).
In MyEnvironment v VicForests,[24] where one of the purposes of the relevant legislation was to protect the habitat of the Leadbeater’s Possum, the Court of Appeal was invited to construe the relevant provisions expansively with a view to furthering this legislative purpose. Warren CJ said that, while there was no doubt that the authorities endorsed a purposive approach to statutory construction, the authorities also showed that caution was required before interpreting a particular provision expansively because of an underlying purpose of the legislation. The Chief Justice observed:[25]
In my view, the authorities can be seen as supporting two related propositions. First, that it is rarely, if ever, the case that legislation pursues a single purpose to the fullest extent possible. Rather legislation is typically the result of a carefully considered attempt at balancing multiple and sometimes competing objectives. To assume that the apparently confined words of a provision must be given an expansive operation on the basis of what is perceived to be the legislation’s primary purpose may frustrate rather than effectuate legislative intent.
[24](2015) 42 VR 456.
[25]Ibid 462 [14].
Tate JA said:[26]
When construing legislation that has a multiplicity of purposes, or seeks to strike a balance between competing interests, it is necessary to keep in mind the observation of Gleeson CJ in Carr v Western Australia that the purposive rule of statutory interpretation, embodied in Victoria in s 35(a) of the Interpretation of Legislation Act 1984, is of limited assistance in construing legislation, or regulatory instruments, that embrace numerous potentially conflicting objectives in relation to which the court has to determine from the language used where the intended balance lies. In that context, he expressly eschewed the adoption of a construction that furthered the pursuit of one of the competing objectives to the greatest extent possible while leaving the other objectives unfulfilled.
[26]Ibid 497–8 [148] .
Drawing on the passage from the judgment of Gleeson CJ in Carr set out above, Tate JA concluded that the complexity of the statutory scheme and the competing aims apparent in the regulatory context showed that there had been ‘a compromise’. In the legislative scheme before the court, the ‘purpose or object’ identified did not compel any particular construction, nor was it possible to identify a single purpose or objective. The fact that the legislative scheme was directed at the fulfilment of multiple purposes meant that the ‘correct construction ... must depend on the words used’, within the relevant context.[27]
[27]Ibid 500 [155].
Applying these principles, we would uphold Baytech’s submission that the Rules provide, in precise detail, for the scope of their application and that some aspects of the Rules limit, rather than expand, the cover provided by the legislative scheme. The Act confers a benefit on some employees but a financial burden on some employers, and reflects a compromise of purposes. In ways relevant to the question at trial, the scope of the legislative scheme is constrained.
We turn to consider the question of whether the NHP contract work was ‘work of a kind’ for which a rate of pay was prescribed by the Electrical Contracting Industry Award.
Analysis
The question raised by the appeal is one of construction, which must therefore be resolved by application of the ordinary rules of construction. Primacy must be given to the relevant text — in this case, of the Rules and of the Electrical Contracting Industry Award — construed in the context of those instruments read as a whole.
The trustee’s contention, which the judge upheld, was that the NHP contract work was ‘electrical trades work’ within the meaning of the Rules, as it was ‘work of a kind for which a rate of pay was fixed’ by the Electrical Contracting Industry Award. This was so because it was ‘work of a kind’ which fell within the definition of ‘electrical services’ in Part 5 of the Electrical Contracting Industry Award.
It will assist to set out again the relevant clauses in Part 5 that Award:
5.2.2 ‘electrical services’ includes:
5.2.2.1the maintenance of electric power distribution lines and all associated work; and/or
5.2.2.2the installation of electric light and power, all classes of assembly, wiring, repair and maintenance of electrical installations and appliances including, without in any way limiting the generality of the foregoing, the assembling, installing, diagnosing, servicing and rectifying of faults in any of the following:
…
5.3Providing that the award shall not apply to the manufacturing section of the business of the employers who are manufacturers or vendors of plant or equipment who install or maintain the said plant and equipment in high and low tension power stations and/or substations for the generation and/or transmission of electric power.
Several points may be noted about this definition. First, the common characteristic of the types of electrical services listed in cl 5.2.2 is that they involve the application of electrical skills to the installation or servicing/maintenance of an electrical appliance (whether large or small) in the place where the appliance is to perform — or already performs — its function. Thus the list of services includes:
·the maintenance of power lines;
·the installation of electric light and power; and
·the repair and maintenance of electrical installations and appliances.[28]
[28]Electrical Contracting Industry Award 1992 pt A, cl 5.2.2.
Secondly, the types of service contemplated are listed in groups, the composition of which also assists in characterising the services. Thus, cl 5.2.2.2 speaks of:
·‘assembly, wiring, repair and maintenance’; and
·‘assembling, installing, diagnosing, servicing and rectifying of faults’.
Read as a whole, and read together, as they must be, these composite phrases clearly contemplate that the provider of electrical services will, as necessary, perform one or more of those services in relation to the relevant appliance. Whether the particular appliance has merely to be installed, or must be assembled before being installed, the character of the work is the same. It is ‘on-site work’, as Baytech submitted. ‘Wiring’ would ordinarily be a part of installation. Servicing, repair and ‘rectifying of faults’ would, of course, be services provided later in the life of the appliance. But all of the service delivery will occur at the place of installation.
Thirdly, the phrase ‘electrical installations and appliances’ is itself instructive. In its ordinary meaning, the word ‘installation’ means something which has been installed, not something which is to be installed in the future. Thus the standard dictionary definitions of ‘installation’ are as follows:
·‘system of machinery or apparatus placed in position for use’;[29] and
·‘an apparatus, system etc that has been installed for service or use’.[30]
[29]Susan Butler (ed), Macquarie Dictionary (Macquarie Dictionary Publishers, 5th ed, 2009) 864.
[30]Lesley Brown (ed), The New Shorter Oxford English Dictionary (Clarendon Press, 3rd ed, 1993) vol 1, 1381.
It follows that, contrary to the judge’s view, the service of ‘assembly’ cannot meaningfully apply to an ‘installation’ because, by definition, it has already been assembled and installed. Accordingly, the NHP contract work of building switchboards could not have constituted the ‘assembly … of an installation’. Of course, the other electrical services listed in the definition — wiring, repair and maintenance — are all appropriately applied to an installation. More broadly, the character of an ‘installation’ — as something already in place — reinforces what we have said about the character of the services here contemplated. They are services performed in installing an appliance, or servicing it once it is installed.
On this view, although the word ‘assembly’ when read literally would cover the work of an electrician in assembling an appliance as part of a process of manufacture, the context shows that it was not intended to have that meaning here. Rather, it was intended to cover an electrician who assembles (and then installs) an appliance on site, not an electrician who assembles it for supply by the manufacturer to a customer.
This reading of the definition is reinforced by cl 5.3. As can be seen, an express distinction is there drawn between work done in the manufacturing of a particular item of equipment, on the one hand, and work done in installing or maintaining such plant and equipment in power stations, on the other. The latter is covered by the Electrical Contracting Industry Award, the former is not.
That the Electrical Contracting Industry Award recognises a clear distinction between the manufacture of electrical appliances and their installation and maintenance is further reinforced by the definition of ‘electrical fitter’, on which Baytech relied. As previously noted, electrical fitters are covered by the Electrical Contracting Industry Award if they are normally engaged in ‘making, repairing or maintaining electrical machines, instruments or appliances’ but not if they are ‘employed in the manufacturing section of a contractor’s business’.[31]
[31]Electrical Contracting Industry Award 1992 pt B, cl 4.4.
As noted earlier, Baytech’s alternative argument was that, if in respect of the NHP contract it was to be characterised as an ‘electrical contractor’ providing ‘electrical services’ within the meaning of cl 5.1 of the Electrical Contracting Industry Award, then those of its employees who worked at NHP should be characterised as ‘electrical fitters employed in the manufacturing section’ of Baytech’s business. In the event, it is unnecessary to resolve this question. As we have said, the relevance of the definition of ‘electrical fitter’ is that it reinforces the distinction on which Baytech principally relies, between electricians who provide ‘electrical services’ within the meaning of the Electrical Contracting Industry Award, and electricians who work in manufacturing.
If, contrary to our view, work done by electricians in the manufacture of electrical appliances did fall within the definition of ‘electrical services’, this would have very wide implications indeed. Clause 5.2.2.2 lists a wide range of electrical appliances, from computers to satellite receivers and radars.[32] If the work of electricians in manufacture were included, then it would extend to the manufacture of appliances of all these different kinds.
[32]Ibid pt A, cl 5.2.2.2.
For these reasons, the NHP contract work was not ‘work of a kind’ to which the Electrical Contracting Industry Award applied. The relevant genus, as we have explained, is the provision of electrical services connected with, and for the purposes of, installation and maintenance of electrical appliances at the premises where they are used or to be used.
Accordingly, the appeal must be allowed and the judge’s orders set aside.
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