CENTRAL QUEENSLAND SERVICES PTY LTD
[2019] FWC 5003
•18 JULY 2019
| [2019] FWC 5003 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
CENTRAL QUEENSLAND SERVICES PTY LTD
(AG2019/39)
BMA RAIL ENTERPRISE AGREEMENT 2018
DEPUTY PRESIDENT LAKE | BRISBANE, 18 JULY 2019 |
Application for approval of the BMA Rail Enterprise Agreement 2018.
Introduction
[1] An application has been made under s.185 of the Fair Work Act 2009 (the Act) for approval of an enterprise agreement known as the BMA Rail Enterprise Agreement 2018 (the Agreement) by Central Queensland Services Pty Ltd (CQS).
[2] The Agreement is to cover work performed by locomotive drivers hauling coal from predominately the Applicant’s mines to port facilities.
[3] The Construction Forestry Maritime Mining and Energy Union (CFMMEU) and one of its officials, Mr Stephen Smyth, wish to be heard in respect of the application for the approval of the Agreement.
[4] Further, the CFMMEU wants to be covered by the Agreement and gave notice pursuant to s.183 of the Act that it wants the Agreement to cover it. 1
[5] The present agreement, the BMA Rail Greenfields Agreement 2013, 2 covers the Rail, Train and Bus Union (RTBU) and was made between the Applicant and the RTBU.
[6] The original question for determination in this application for approval was whether or not the CFMMEU is or could have been a bargaining representative (default or otherwise) to the Agreement. It flows from this issue that should the CFMMEU be a bargaining representative, then the Agreement may cover it, pursuant to s. 183 of the Act.
[7] As part of hearing this application I made certain disclosures to the parties regarding my ownership of shares in the Applicant’s parent company and my professional history with the Applicant. I invited parties to make submissions with respect to these disclosures. No party pressed an objection to my determining the matter.
Chronology
[8] On 13 July 2017 the Applicant commenced bargaining for the Agreement to replace the present agreement. 3
[9] The Agreement was made on 21 December 2018 with 47 of 48 eligible employees casting valid ballots. 25 of the 47 voting employees voted in favour of approving the Agreement. 4
[10] On 4 January 2019 the Applicant lodged the Agreement for approval with the Fair Work Commission (FWC).
[11] On 4 January 2019 the RTBU filed a Form F18 in the application and indicated that the RTBU wished to be covered by the Agreement and that the RTBU supported the approval of the Agreement. 5
[12] On 4 January 2019 the Australian Federated Union of Locomotive Employees (AFULE) filed a Form F18 in the application and indicated that the AFULE wished to be covered by the Agreement and that the AFULE supported the approval of the Agreement. 6
[13] On 11 January 2019 the CFMMEU wrote to the FWC requesting documents relevant to the approval of the Agreement and stated that the union wished to be heard in relation to the approval of the Agreement.
[14] On 8 February 2019 the matter was allocated to my chambers for hearing and determination.
[15] On 26 February 2019 a directions conference was listed to determine future directions regarding the hearing and determination of the application for the approval of the Agreement. Directions were set at this conference to first determine the issue of eligibility and standing of the CFMMEU and/or Mr Smyth to be bargaining representatives to the proposed Agreement or, in any event, if the CFMMEU and/or Mr Smyth should be heard in the exercise of my discretion. Submissions were invited from all parties and a hearing was subsequently set down for 9 April 2019 to determine these issues.
[16] On 26 March 2019 the CFMMEU filed a Form F18 in the application and indicated that the union wished to be covered by the Agreement and did not support the approval of the Agreement. 7
[17] On 28 March 2019 following the receipt of all submissions from the parties my chambers wrote to parties indicating that I had read the submissions and could form a preliminary impression either way on the issue of the standing of the CFMMEU and/or Mr Smyth. It was hoped that irrespective of the standing issue if the Commission was minded to allow the CFMMEU and Mr Smyth to be heard on a discretionary basis, it could expedite a decision on the approval or otherwise of the Agreement. I then issued directions to vacate the hearing to determine standing on 9 April 2019 and proposed converting this to a further conference to consider issues which may otherwise prevent the agreement from being approved. I then invited submissions from the parties on issues relevant to the agreement being approved or otherwise.
[18] On 1 April 2019 the Applicant wrote to the Commission asking for a further mention or directions conference. At this conference the Applicant submitted that the issue of the CFMMEU and/or Mr Smyth’s standing as bargaining representatives was one that needed to be determined definitively. This was because, according to the Applicant, this determination would have ramifications for coverage under the Agreement pursuant to s. 183 and subsection 201(2) of the Act. This was particularly the case given that the CFMMEU at this point had filed a Form F18 indicating that the union wanted to be covered by the Agreement. It was on this basis that the Applicant submitted that the original directions, as set on 26 February 2019, should be adhered to.
[19] The CFMMEU and Mr Smyth submitted that they ought to be allowed to provide submissions on their standing as bargaining representatives, whether or not they should be heard on a discretionary basis and whether or not the Agreement should be approved. The CFMMEU and Mr Smyth submitted that all of these issues should be heard in their totality and a decision reserved on all matters after all issues had been fully ventilated.
[20] Later on 1 April 2019 I opted for a midway point between the parties’ positions. I then issued directions to reinstate the earlier directions and directed that the hearing on 9 April 2019 would be held to determine the issue of the standing of the CFMMEU and/or Mr Smyth to be bargaining representatives. I also permitted the CFMMEU and/or Mr Smyth an opportunity to provide a two page submission on issues relevant to the Agreement being approved or otherwise without deciding whether or not they were to be heard on a discretionary basis pursuant to s. 590 of the Act.
[21] On 3 April 2019 the CFMMEU and Mr Smyth provided a two page submission on the issues they considered relevant to the Agreement being approved, or not (noting that the CFMMEU’s position was that the Agreement should not be approved).
[22] On 9 April 2019 I heard oral submissions from the Applicant, the RTBU and the CFMMEU and Mr Smyth on whether the CFMMEU and/or Mr Smyth were permitted to be bargaining representatives and/or if they should be heard on a discretionary basis. At this point, the AFULE had taken a view that their submissions in this matter would mirror the submissions of the RTBU.
[23] At the conclusion of that hearing I reserved my decision for determination.
Background
[24] In determining whether or not the CFMMEU and/or Mr Smyth were bargaining representatives reference is made to the facts in this case, the relevant statutory authority, the CFMMEU’s Rule 2D and the past decisions of Australia’s industrial tribunals which have grappled with similar circumstances as to the ones presently before the Commission.
[25] I commence with making certain findings of fact.
The facts
[26] The CFMMEU and Mr Smyth in both their written and oral submissions provide a succinct outline of the Applicant’s ownership structure, its operations (including its relationship to the mining functions of BHP Group Pty Ltd (BHP) and proprietors of the rail infrastructure), its relationship with Mr Callan, Mr Callan’s relationship to the CFMMEU, his alleged appointment of Mr Smyth to be his bargaining representative, and Mr Smyth’s dealings with the Applicant following his alleged appointment as a bargaining representative. 8
[27] These facts asserted by the CFMMEU and Mr Smyth are set out in the affidavits of Mr Smyth and Mr Callan of 8 March 2019. 9 The Applicant and the RTBU elected not to cross examine Mr Smyth or Mr Callan on the contents of their affidavits. Therefore, the factual assertions were unchallenged.
[28] I therefore, for the purposes of this application, make findings of fact that:
• The BHP Mitsubishi Alliance (BMA) is a joint venture owned 50% by BHP Group Ltd (BHP) and Mitsubishi Corporation of Japan.
• BMA operates seven Bowen Basin mines and owns the Hay Point Coal Terminal near Mackay.
• BMA is Australia’s largest producer and supplier of seaborne metallurgical coal.
• BHP Mitsui (BMC) is owned by BHP (80 per cent) and Mitsui and Co (20 per cent). It also owns and operates coal mines in the Bowen Basin.
• The Applicant (CQS) is a body corporate wholly owned by BHP Group Ltd.
• The Applicant engages in numerous activities in the coal industry including employing and supplying labour at the Daunia and Caval Ridge open cut coal mines.
• The Applicant also employs the labour which is to be covered by the proposed Agreement.
• BMA’s rail operations only involve the carriage of coal extracted from BMA and BMC mines to the Hay Point Coal Terminal, so as to enable that coal to be transported to the customers of BMA who have purchased it.
• In terms of rail infrastructure, the Central Queensland Coal Chain Network (CQCCN) rail corridors are owned by the Queensland Government and leased to Aurizon, who own the rail infrastructure.
• The rail network is regulated through the Queensland Rail Access Regime and declared under the Queensland Competition Authority Act. BMA then purchase access to the CQCCN from Aurizon.
• Mr John Callan was an employee of the Applicant employed in its rail business who will be covered by the proposed agreement during the time of bargaining.
• On 30 July 2017 Mr Callan appointed Mr Stephen Smyth in writing as his bargaining agent for the purposes of s. 176(1)(c) of the Act. On that date Mr Callan sent a copy of the instrument of appointment to the Applicant.
• On 21 August 2017 Mr Smyth emailed Ms Kristen Wall of the Applicant and asked whether it was their intention to have all bargaining representatives present at bargaining meetings. In that correspondence reference was made to Mr Smyth as a bargaining representative.
• On 22 August 2017 Ms Wall of the Applicant emailed Mr Smyth and advised that all bargaining representatives (which included Mr Smyth) were welcome to attend all bargaining meetings.
• On 14 August 2018 Mr Smyth sent correspondence to the Applicant making certain enquiries as to the progress of bargaining. In that correspondence, Mr Smyth expressly identified himself as a bargaining representative.
• On 27 August 2018, Ms Caitlin Ryan, on behalf of the Applicant, responded to Mr Smyth’s enquiries.
• At no time during any of the exchanges between Mr Smyth and the Applicant, did the Applicant assert that it did not accept the appointment of Mr Smyth as a bargaining representative.
• At no time did the Applicant contact Mr Callan and advise him that it did not accept the appointment of Mr Smyth as his bargaining representative.
• When this application was filed by the Applicant, the Form F16 identified Mr Smyth as a bargaining representative to the proceedings.
• Mr Callan assumed that the Applicant did not propose to take any objection to Mr Smyth’s appointment as his bargaining representative.
• Mr Callan did not take any steps to resolve Mr Smyth’s entitlement to be appointed as his bargaining representative, nor seek to appoint any other person as his bargaining representative.
[29] The Applicant, predominately through the witness statement of Ms Shirley Anne Bella (Ms Bella) of 15 March 2019 10 and also during the hearing and subsequent to the hearing clarified other key factual matters, including the function, structure and operations of the Applicant, and outlines further information regarding the work performed by the BMA Rail train drivers, their skills, qualifications and training and the recruitment of same.11
[30] The RTBU similarly provides a consistent account of the relevant facts in the matter; 12 again evinced in the affidavits of Ms Bella13 and Mr Dean Murray (Mr Murray) of 17 March 2019.14
[31] Both the Applicant’s account of the facts and the RTBU’s account again go unchallenged with the contents of both Ms Bella and Mr Murray’s evidence not cross examined by the CFMMEU and Mr Smyth at the hearing.
Statutory authority
Who can be a bargaining representative
[32] The Act provides a clear definition of who are bargaining representatives for proposed enterprise agreements that are not greenfields agreements.
[33] Relevantly, subsection 176(1) of the Act states that:
“176 Bargaining representatives for proposed enterprise agreements that are not greenfields agreements
Bargaining representatives
(1) The following paragraphs set out the persons who are bargaining representatives for a proposed enterprise agreement that is not a greenfields agreement:
(a) an employer that will be covered by the agreement is a bargaining representative for the agreement;
(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if:
(i) the employee is a member of the organisation; and
(ii) …
unless the employee has appointed another person under paragraph (c) as his or her bargaining representative for the agreement, or has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2); or
(c) a person is a bargaining representative of an employee who will be covered by the agreement if the employee appoints, in writing, the person as his or her bargaining representative for the agreement;
(d) …”
[34] On this basis, and as conceded by the Applicant at hearing the CFMMEU and Mr Smyth’s assertion that they are bargaining representatives appears to be made out.
[35] It was not disputed between the parties that Mr Callan was at all material times a member of the CFMMEU 15 and this would satisfy subsection 176(1)(b) of the Act.
[36] On or about 30 July 2017 Mr Callan appointed Mr Smyth to be his bargaining representative 16 pursuant to subsection 176(1)(c) of the Act. This appointment is similarly not disputed.
[37] It is common ground therefore that the CFMMEU and/or Mr Smyth was a bargaining representative as Mr Callan was a member of the CFMMEU per section 176(1)(b) of the Act or alternatively, appointed Mr Smyth to be his bargaining representative per section 176(1)(c) of the Act.
[38] However, subsection 176(3) of the Act qualifies this position where it states that:
“(3) Despite subsections (1) and (2):
(a) an employee organisation; or
(b) an official of an employee organisation (whether acting in that capacity or otherwise);
cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.”
(Emphasis added)
[39] The words recited in emphasis above must be satisfied.
Entitlement of an employee organisation to have an enterprise agreement cover it
[40] Section 183 of the Act provides:
“Entitlement of employee organisation that was a bargaining representative
(1) After an enterprise agreement that is not a greenfields agreement is made an employee organisation that was a bargaining representative for the proposed enterprise agreement concerned may give the FWC a written notice stating that the organisation wants the enterprise agreement to cover it.
(2) The notice must be given to the FWC, and a copy given to each employer covered by the enterprise agreement, before the FWC approves the Agreement.
Note: The FWC must note in its decision to approve the enterprise agreement that the agreement covers the employee organisation (see subsection 201(2)).”
[41] As I have already observed, the CFMMEU has submitted that the union wants the enterprise agreement to cover it. 17
Approval decision to note that an enterprise agreement covers an employee organisation
[42] Section 201 of the Act (particularly at subsection 201(2)) provides that:
“201 Approval decision to note certain matters
…
Approval decision to note that an enterprise agreement covers an employee organisation
(2) If:
(a) an employee organisation has given a notice under subsection 183(1) that the organisation wants the enterprise agreement to cover it; and
(b) the FWC approves the agreement;
the FWC must note in its decision to approve the agreement that the agreement covers the organisation.
…”
[43] Therefore if I am minded to find that the CFMMEU and/or Mr Smyth is a bargaining representative, then it follows that the Agreement will cover them given they have provided notice that they want to be covered and this will be noted in the decision (pursuant to subsection 201(2) of the Act should the Agreement be approved.
[44] Conversely, if I find that the CFMMEU and/or Mr Smyth were not bargaining representatives, then the Agreement could not cover the union.
Discretionary matters
[45] Notwithstanding whether I find that the CFMMEU and/or Mr Smyth were bargaining representatives, the CFMMEU and/or Mr Smyth have asked to be heard in relation to the Agreement on a discretionary basis, said to be pursuant to s. 590 of the Act.
[46] Section 590 of the Act provides the Commission with the power to inform itself on a board range of matters on a discretionary basis.
[47] Whether or not I should exercise this discretion is a matter also disputed between the parties.
Consideration
Was the CFMMEU and/or Smyth a bargaining representative?
Work Performed
[48] The Applicant’s primary submission is that the CFMMEU is not eligible to represent employees covered by the Agreement in relation to the work performed under the Agreement. 18
[49] Mr Murdoch of Queen’s Counsel (and with him Mr Smith) for the Applicant, submitted that:
“… in order to determine the capacity of Mr Smyth to be a bargaining representative and ultimately to determine the capacity of the CFMMEU and Mr Smyth to have the standing to make submissions in this matter there needs to be a focus on the work to be performed under the agreement and a determination made as to whether the CFMMEU is entitled to represent the industrial interests of a person in relation to such work. 19
[50] The Applicant derives the characterisation of the work performed under the Agreement from two sources; the Agreement itself and the evidence of Ms Bella.
[51] In summary, the submission of the Applicant is, as I understood it, that the Agreement only covers three positions; Trainee Drivers, Level 1 Train Drivers and Level 2 Train Drivers. This is confirmed in the affidavit of Ms Bella. 20
[52] Mr Murdoch delved further into this point, outlining that the role of the employees covered by the Agreement is to “… solely drive trains between one of the various mines …” 21
[53] Mr Murdoch then submitted that the employees under the Agreement:
“… do not … load or unload the coal onto the trains or otherwise handle the coal and the drivers perform no services for any other business within BMA;
“… are not required to enter operational areas of the mines;”
“… would be treated as any other visitor would be [if they entered the operational area of a mine];” and
“… don’t hold any competencies or aren’t required, rather, to hold competencies or qualifications to perform any coal work … [h]owever are required to hold what is referred to as train qualifications …” 22
[54] Moreover, Mr Murdoch submitted that:
“… the actual loading of the coal onto the trains is performed by the operators at the relevant mine who report through the relevant mine structure …” 23
[55] In summary, Mr Murdoch submitted that the Applicant’s position is:
“... when one stands back and looks at the work that’s performed by these people, they are plainly employed to perform and do perform the work of train drivers and plainly do the same work as would otherwise be performed by train drivers employed by Aurizon or Pacific National, whether they’re transporting coal or not. Indeed when one stands back and looks at the facts, the only connection to coal in terms of the work performed by these people is that they drive trains which carry that coal away from the mine where the coal is produced, notably for the most part on land that does not form part of the mine lease and then once the coal is unloaded at the port, travel back to the mine to be reloaded.” 24
[56] Continuing, Mr Murdoch said:
“At its highest the work of the drivers is to provide a rail transport service to the coal industry.” 25
(Emphasis added)
[57] Specifically regarding the question of work performed under the Agreement, counsel for the CFMMEU and Mr Smyth (Mr Massey) submitted that:
“The applicant’s employees, insofar as they work in this part of the applicant’s business [BMA Rail], only transport coal from BMA mines to either the Hay Point coal terminal, which is owned by BMA, or to the Dalrymple coal terminal. The applicant employees working in this part of the applicant’s business do not transport any other types of goods and do not transport goods on behalf of any other corporations.
The costs associated with the applicant’s work are paid for by the operators of the coal mine. The rolling stock used by the applicant is owned by BMA and the operators of the coal mine pay for the applicant’s access to the rail network. The applicant’s business, insofar as it’s concerned with rail operations, is solely concerned with the transportation of coal extracted from mines operated by the same corporate group to a port, in most cases, which is operated by the same corporate group … The applicant has no other transport related business.” 26
[58] In understanding the work performed by the employees under the Agreement, consideration must then be given as to whether or not the work that would be performed under the Agreement is in, or in connection with, the coal and shale industries as prescribed by the eligibility rules of the CFMMEU.
[59] Mr Massey’s position (on behalf of the CFMMEU and Mr Smyth) was that if the Commission was minded to find that the work is in, or in connection with, the coal and shale industries, then it follows that the CFMMEU and/or Mr Smyth would be entitled to represent the industrial interests of Mr Callan in relation to work that will be performed under the Agreement.
[60] I now turn to this issue.
Rule 2D of the CFMMEU
[61] Rule 2D of the Rules of the Construction, Forestry, Maritime, Mining and Energy Union (the registered rules of the CFMMEU) provides as follows:
“Without limiting the generality of the foregoing and without being limited thereby an unlimited number of employees engaged in or in connection with the coal and shale industries together with such other persons whether employees in the industries or not as have been appointed officers and admitted as members are eligible to be members of the Union.
(Emphasis added)
Correct construction of eligibility rules
[62] The CFMMEU and Mr Smyth submitted that the general rule of construction is that eligibility rules should be constructed liberally and cited the decision of Re Union of Postal Clerks and Telegraphists; Ex parte Australian Telephone and Phonogram Officers’ Association 27as authority for this principle of construction. In that High Court decision, their Honours, Mason, Brennan and Dawson JJ said:
“The general rule of construction is that eligibility provisions should be construed liberally rather than narrowly or technically (R v Cullen; Ex parte: Motor Accidents Insurance Board (1979) 141 CLR 577 at 581, 587).” 28
[63] The CFMMEU and Mr Smyth suggested that the more recent case law favours a further liberalisation as to how eligibility rules should be constructed. To emphasise this point, the CFMMEU and Mr Smyth referred the Commission to the cases of R v Issacs; Ex Parte TWU 29 (Argyle Diamond) and NTEU v Technisearch.30
[64] Quoting from the Full Bench of the then Australian Industrial Relations Commission (AIRC) in NTEU v Technisearch, the CFMMEU and Mr Smyth submitted that it is:
“…essential to focus on the construction of the rule first and then apply it to the circumstances of the case...” 31
[65] In response, however, the Applicant submitted that while there is support for the principles of interpretation favouring a liberal construction of union rules, the correct construction is to be undertaken objectively per the decision of R v Williams; Ex parte Australian Building Construction Employees’ and Builders Labourers’ Federation. 32
[66] The correct construction, as proposed by the Applicant, would not see the Commission expansively interpret rule 2D to the extent favoured by the CFMMEU and Mr Smyth – such a construction not being reflected in the text of the clause, according to Mr Murdoch.
[67] Mr Murdoch put this this delicately in its oral submission submissions when he referred to the proper construction of rule 2D, and how case law put before me had been used to interpret union eligibility rules over the years. He said:
“… in fact, all of the cases that your honour has been referred to – are idiosyncratic in the sense that they turned on their own facts and of course need to be considered in light of their own facts and ought to be applied to this case, therefore, with caution.” 33
[68] There have been a number of authorities provided by the parties to the Commission in support of their respective positions, all of which are helpful in some regard. It is likely that a debate about the proper construction of rule 2D will go on long after I give my view in this application. Notwithstanding, there is sufficient historical and more recent authority which I can have reference to in forming a concluded view as to how this rule should be properly constructed.
Older authorities presented to the Commission relevant to the present facts
[69] The parties first asked the Commission to consider the case of The King v Hibble; ex parte Broken Hill Proprietary Company Limited. 34
[70] In Hibble, the High Court was asked to determine whether ‘workmen’ who had been admitted as members of the Coal and Shale Employees’ Federation (the Federation) were persons engaged in or in connection with the coal and shale industry pursuant to the Federation’s rules. This is similar wording to that of rule 2D which is the subject of these proceedings.
[71] Relevantly, the five members of the High Court held in Hibble that:
“The words are no doubt wide but they do not cover every person who uses coal or who works in connection with it…”
“The discrimen adopted by the Coal and Shale Employees’ Federation, on a proper interpretation of their rules, is, we think, the trade or business of the employer. Thus, some employers extract coal from the earth, convert some of it into coke, and distribute both coal and coke to consumers. Such a business would in point of fact be part of the coal or shale industry, and all persons employed in that business are properly said to be employed in or in connection with that industry.” 35
(Emphasis added)
[72] The High Court further observed in Hibble that:
“The question of whether a particular trade or business is or is not part of the coal and shale industry must in all cases be a question of fact. We hold that a steel and iron manufacturer who for the purpose of his business uses coal in its natural state or after it has been transformed by him to coke is not engaged in the coal or shale industry and these employees are not employed in or in connection with that industry.” 36
[73] On this point the CFMMEU and Mr Smyth submitted that a conclusion can be drawn based on the reasoning in Hibble that there was and is a distinction made between the production process – getting the coal out of the ground, processing the coal and getting the coal to the customer – and what the customer does with the coal. A business engaged in the production process would be in or in connection with the coal and shale industry. A customer who then uses what is made from that production process is not part of the coal or shale industry.
[74] In response, the Applicant said that the decision in Hibble was not prescriptive because the business that is the subject of this application is a business that employees train drivers who transport coal. In all cases, the Applicant submitted, it is a question of fact as to whether a trade or business is part of the coal and shale industries.
[75] BMA Rail is a ‘business unit’ that employees train drivers who transport coal. However, the CFMMEU and Mr Smyth submitted that it is part of a wider corporate entity, CQS, which employs labour who operate in the coal industry.
[76] On the Applicant’s evidence, it employs some 512 employees who are covered under the Black Coal Mining Industry Award 2010 at the BMA Daunia Mine and BMA Caval Ridge Mine and some 66 employees at the BMC South Walker Creek Mine. 37 CQS is also the same employer of train driving employees who will be covered under the Agreement, if approved.
[77] The parties also asked the Commission to consider the well-known case of The King v Hickman & Ors; Ex parte Clinton & Ors 38 and its application to the facts. I will consider it in some depth due to its utility in this case.
[78] In Hickman, Chief Justice Latham said the following in determining whether employees employed as lorry drivers are persons engaged in the coal mining industry:
“The question which arises is whether the employing firm and their employees employed as lorry drivers are persons engaged in the coal mining industry.
The fact that a person is engaged in carrying coal does not show that he is engaged in the coal mining industry. A coal merchant or carrier may deal in or with coal without it being possible to suggest that he was engaged in the industry of mining coal. It may be added that a man employed by a colliery owner to drive a lorry for the purposes of the colliery could be engaged in the coal mining industry though he never carried any coal. These examples are sufficient to show that the mere fact of coal-carrying is not in itself decisive of the question whether the carrier is engaged in the coal mining industry.
The term “industry” is not a precise technical term. One industry sometimes overlaps into another industry. In my opinion, no absolute rule can be laid down for determining the limits of a particular industry. The question whether a particular industrial operation belongs to one industry rather than another cannot be decided merely by considering the nature of that operation itself. For example, a clerk may be employed in the boot-making industry, the coal industry, the transport industry, or almost any industry. The problems associated with the overlapping of craft and industrial unions are well known, and have to be carefully considered by industrial authorities when they are determining the terms of their awards. In my opinion, all the circumstances of each case must be taken into account. If coal is taken in skips by employees of colliery owners from the pit top to a place of storage on the colliery, such work would be work in the coal mining industry. Similarly, examples are given in affidavits filed on behalf of the respondents of railways, owned and controlled by proprietors of collieries and operated by employees of such proprietors, upon which coal is conveyed considerable distances to railway sidings or wharves.
Such transport of coal may be regarded as falling within the coal mining industry. In the present case, however, the lorry drivers who carry coal are employed as lorry drivers generally, and not as carriers of coal, and they are not employed by the colliery proprietors. They are employed by persons who carry on the business of carriers, and who do not in any real sense belong to the coal mining industry The fact that some lorry drivers belong to unions to which coal mining employees belong is a circumstance of little weight. Competition for members between unions is not unknown. The fact upon which the respondents rely is that the lorry drivers carry coal and carry it from a colliery. But lorry drivers employed by the prosecutors carry firewood, timber, blue metal and other materials. In my opinion, it would not be in accordance with the ordinary meaning of the term “ industry “ to say that the firm was therefore also engaged in the firewood industry, the timber industry, or the industry of producing blue metal, even if the carting were done from a forest, mill or a quarry. In my opinion, the whole of the evidence shows that the employers and employees concerned are not engaged in the coal mining industry, and that therefore the decision of the Local Reference Board was made without jurisdiction.” 39
(Emphases added)
[79] The recitation of this lengthy quotation from the Chief Justice is warranted given to the similarity between the relevant facts and issues in that case, and the facts and issues in this application. The Hickman case was referred to at length by Mr Murdoch and Mr Massey in their oral submissions.
[80] A couple of observations ought to be made. First, the case of Hickman and the one before me now both deal with the carrying of coal, and Chief Justice Latham observed:
“… [t]he fact that a person is engaged in carrying coal does not show that he is engaged in the coal mining industry.” 40
[81] The Chief Justice’s point demonstrates a nuance which accords with the broader interpretation in Hibble regarding the distribution of coal or the transport of coal necessarily being in or in connection with the coal and shale industry.
[82] Second, his Honour observes (in Hickman) an important point regarding the term “industry”: “… the term “industry” is not a precise technical term. One industry sometimes overlaps into another industry.” 41 His Honour continued:
“…The question whether a particular industrial operation belongs to one industry rather than another cannot be decided merely by considering the nature of that operation itself. For example, a clerk may be employed in the boot-making industry, the coal industry, the transport industry, or almost any industry. The problems associated with the overlapping of craft and industrial unions are well known, and have to be carefully considered by industrial authorities when they are determining the terms of their awards. In my opinion, all the circumstances of each case must be taken into account.” 42
[83] His Honour also observed that:
“Similarly, examples are given in affidavits filed on behalf of the respondents of railways, owned and controlled by proprietors of collieries and operated by employees of such proprietors, upon which coal is conveyed considerable distances to railway sidings or wharves ...”
Such transport of coal may be regarded as falling within the coal mining industry.” 43
[84] This reasoning tends to suggests that the CFMMEU and Mr Smyth have the better argument as the facts in the present application are analogous to these observations in Hickman – that is, the transporting of coal may both be in the transport and coal industries.
[85] However, the Applicant submitted that on this point the reasoning in Hickman is to be distinguished insofar as the railways in Hickman were owned and controlled by the proprietors of collieries and operated by employees of such proprietors.
[86] Unlike in Hickman, the Applicant submitted that the railways in this application are not owned and controlled by the proprietors of the collieries – nor can it be said that the railways are operated by the employees of such proprietors. 44
[87] This, in the Applicant’s submission, demonstrates a sufficient distinction between the present application and that of Hickman, so as to permit the distinguishing of Hickman.
[88] In response, however, the CFMMEU and Mr Smyth submitted that this was not a material distinction. Mr Massey said:
“The only difference here is that the colliery proprietors buy access to the rail network rather than owning it …” 45
[89] The more material consideration according to the CFMMEU and Mr Smyth was the fact that in Hickman there was:
“… no evidence that any lorry drivers were limited by the terms of their engagement to carrying coal.”
[90] Furthermore, as the Chief Justice observed in Hickman:
“… the lorry drivers who carry coal are employed as lorry drivers generally, and not as carriers of coal, and they are not employed by the colliery proprietors.” 46
[91] The key distinction therefore according to the CFMMEU and Mr Smyth is that in Hickman the cartage companies were general cartage companies. They were, as the CFMMEU and Mr Smyth submitted, responsible for:
“…specifically hauling coal from designated mines to designated ports.” 47
[92] The critical differential is put as such by Mr Massey:
“That is the fundamental difference in [the CFMMEU and Mr Smyth’s] submission. The applicant’s business here is exclusively concerned with the haulage of coal from its parent company’s joint venture to a port owned by its parent company’s joint venture so that it could be collected by the customers.” 48
(Emphasis added)
[93] However, in the Applicant’s favour are its submissions which indicate that the employees covered under the Agreement are in a ‘discrete business unit’ of the broader CQS mining operation, inconsistent with the above submission from the CFMMEU and Mr Smyth. For instance, the Applicant pointed out that:
“the rail lines used by the train drivers are owned by Aurizon and are also used by Aurizon and Pacific National;
“approximately 93% of the rail track falls outside BMA mining leases;
…
the trains operated by BMA Rail also service mines which do not have CQS employees working at them;
the mines serviced by BMA Rail are charged the rail costs (e.g. overheads, operations and maintenance costs) associated with transporting the coal;
the train drivers are not managed by the general managers at the mines, they are managed through the Hay Point Coal Terminal’s management structure.” 49
[94] The RTBU in its submissions also provided relevant context with respect to the employees covered under the Agreement:
“The workers in question drive trains on a rail corridor substantively on State-owned land, access to which is not controlled by the mining operators. The relevant business of the Applicant is comprised of two teams: rail maintenance and rail production. The management structure is internal: the workers do not report to the mine operators.
The Applicant is but one of a number of entities that haul coal from a number of mines to a port in Queensland…
…
The train drivers employed by the Applicant are based at a terminal, not a mine. They are employed exclusively to drive trains and for no other purpose. Train drivers employed by the Applicant do not load or unload coal, and only enter the mining lease while driving a train. Their work is exclusively that of a train driver. They do not enter operational areas of the mine, and only depart from the train in the event that the train becomes overloaded. If required to depart from the train, the employees must be escorted by an employee of the mine because the train drivers have not been inducted onto the mine, and are not required to be inducted on the mine.” 50
(Citations omitted)
[95] Had it been the case that the Applicant or its parent company owned the railways and the railway leases, it would have been simpler for the CFMMEU and Mr Smyth to make their case on the basis of what was held in Hickman by analogy. As this is not the case, I am therefore left in a position where I must consider the situation before us as a question of fact. I do place some weight, however, in the distinction between Hickman and the present case as advanced by the CFMMEU and Mr Smyth, on the basis that the BMA Rail business unit is not a general rail business as was the case in Hickman. 51Whilst it may service other mines, on the evidence before the Commission, it is presently only capable of transporting coal.
[96] The High Court’s decision in R v Central Reference Board; Ex parte Theiss (Repairs) Pty Ltd 52 is also one which the parties invited the Commission to consider. This case is relevant insofar as it relates to a reasonably similar corporate structure to the present circumstances – but also noticeably distinct, as I will come to later.
[97] Thiess Brothers Pty Ltd operated a coal mine where it used earthmoving machinery. This machinery was repaired by employees of Thiess Brothers Pty Ltd if the repair work was minor. If major work was required to be done on the machinery it was conducted by a related company, Theiss Repairs Pty Ltd. The question asked was whether Theiss Repairs Pty Ltd was in connection with the coal mining industry so as to enliven the jurisdiction of the (coal) Central Reference Board to make an order for reinstatement in an unfair dismissal matter.
[98] In the judgment, Latham CJ said the following:
“The fact that the operations of one enterprise are carried on in proximity to another enterprise cannot in itself show that the enterprises are part of the same industry. The two companies, Thiess Bros. and Thiess Repairs. are separate juristic persons. But it needs no argument to show that nevertheless they may both be engaged in the same industry. On the other hand, a single employer may conduct two or more separate enterprises in two or more distinct industries,” per R. v. Drake-Brockman; Ex parte National Oil Pty Ltd. 53
[99] This reasoning is advanced in similar terms in this application by the Applicant with respect to the business unit BMA Rail and its relationship to CQS. 54
[100] Latham CJ continued:
“The two Thiess companies have four directors and a manager in common, but this fact has no relevance to the question here to be determined, the answer to which depends upon the character of the industry carried on by the Repairs company and its place in the general industrial set-up. Is it in substance an engineering enterprise or a coal-mining enterprise? The answer to this question does not depend upon whether the two companies are regarded as separate persons or as only one person. The two companies are, it is true, “closely associated” in general control, management, and a common dependence upon the continuance of work at the open cut. But the fact that enterprise A is “closely associated” with enterprise B does not in itself establish either that enterprise A is engaged in the same industry as B or that enterprise B is engaged in the same industry as A.
Many industries supply goods to or provide services for other industries. A motor garage may be almost exclusively engaged in repairing trucks for a transport company, and it may do such work under a contract under which it is entitled to obtain and bound to do all the transport company’s work. But it would not follow that the motor garage was in the transport industry. Similarly, an engineering workshop which does all the repairs for a coal mine and a gold mine and a shipping company would not, according to the ordinary use of language, be said to be engaged in the coal-mining industry, the gold-mining industry and the shipping industry. There would be as much reason for saying that it was engaged in any one of them as for saying that it was engaged in any other of them. There are obvious difficulties in saying that it is at one and the same time in each of these industries and in the engineering industry as well. Thus the fact that an enterprise provides a service for a particular industry cannot be held to identify that enterprise with that industry so as to make it a part of the industry.
In my opinion the question to be asked is—What is the substantial character of the industrial enterprise in which the employer and employee are concerned? In the present case the employer is Thiess (Repairs) Pty. Ltd. That employer is not engaged in coal-mining, but is an engineering company carrying on general work. It is not under the control of the mine owner, or even of the contracting party (Thiess Bros. Pty. Ltd.), which actually conducts the mining operations. But the more important fact is that its operations are separate from and different in kind from the operations carried on at the open cut. It supplies certain needs of the coal-mining industry in the same way as do many other industrial enterprises. But these facts do not show that all such suppliers of goods or services to that industry are themselves engaged in that industry. In my opinion the evidence in this case shows that Thiess (Repairs) Pty. Ltd. did not employ Belmar in the coal-mining industry. As already stated, the Central Reference Board can make an order only in relation to certain matters in or in connection with that industry, and therefore the Board had no jurisdiction to make the order for the reinstatement of Belmar. 55
(Emphasis added)
[101] His Honour established in this judgment what in later cases became known in Australian industrial jurisprudence as the ‘substantial character test’. This test will be canvassed in more depth later where I consider the modern construction of the eligibility rules.
[102] At this point, however, it is appropriate to outline my concerns with the submissions of the Applicant and the RTBU with reference to Theiss Repairs.
[103] The issue for the Applicant is, in my view, how it has structured itself as a corporate entity. Had the ‘business unit’ BMA Rail been the Applicant in its own right – that is had its own corporate entity as opposed to being a part of CQS – it would have been much easier for the Applicant to rely on Theiss as supporting its submission. The substantial character of the BMA Rail ‘discrete business unit’ could have been considered transport work, as the substantial character of Theiss (Repairs) Pty Ltd was considered to be engineering work. However, the Applicant and the employer in this proceeding is CQS. There is no distinction as there was in Theiss. If the application of the ‘substantial character test’ must be on the Applicant as a whole entity, then this is a difficulty for the Applicant to overcome.
[104] The conclusion reached by His Honour in Theiss (in applying the substantial character test) was arrived at because the employer (Theiss (Repairs) Pty Ltd) was not engaged in the coal mining industry. It cannot be said in this case that CQS as an industrial enterprise is not engaged in the coal mining industry, or at least the coal industry. In fact, the major business activity of the Applicant is in the coal industry. It employs hundreds of employees in this business activity. The BMA Rail ‘discrete business unit’ employs just over 50 employees. It is difficult therefore to say that the substantial character of CQS is not in connection with the coal industry, even though the ‘discrete business unit’, known as BMA Rail, may be. In applying the substantial character test I have also been guided by its modern construction.
Modern authorities
[105] The decision of the Full Bench of the AIRC in CFMEU v Dyno Nobel Asia Pacific Limited 56 provides a useful summary of the High Court authorities to date in respect of the application of the substantial character test.
[106] Relevantly, two members of the Full Bench of the former Commission observed in Dyno Nobel that has been:
“… a certain tension between the way in which the question of characterisation in relation to an industry rule was addressed in some judgments in the later cases.” 57
[107] Notwithstanding, this observation, Lawler VP and Hamberger SDP summarised the prevailing industrial jurisprudence in this way (at [51]):
“An eligibility rule, or part of an eligibility rule, that simply refers to persons employed or engaged “in or in connection with” a specified industry or industries is properly characterised a conventional industry rule and the discremen of eligibility under such a rule is the industry of the employer, that is, whether the trade or business of the employer is in or in connection with the specified industry or industries.
Whether or not the trade or business of an employer is in or in connection with a particular industry is a question of fact.
The answer to that question of fact is determined by the “substantial character” of the trade or business of the employer and all of its employees and requires a consideration of the business of the employer as a whole.
The business of an employer can be “in or in connection with” more than one industry. This outcome can arise in different ways:
(i) The business of the single employer is a single integrated enterprise but nevertheless operates substantially in or in connection with two or more industries simultaneously. This may be because:
• There is an overlap between industries and the business operates in the area of overlap (in such a case the same business can be described in different ways placing the business in either industry so that it has a “substantial character” that places it in each industry); and/or
• The nature of the single integrated business is such that the business itself overlaps two or more distinct industries in such a way that it has a “substantial character” within each of those industries.
(ii) The overall business of the single employer is properly seen as being constituted by two or more distinct businesses or enterprises each of which has a different “substantial character”.
The mere supply of goods or services to a business in a particular industry is not, of itself, sufficient to render the business of the supplier one that is “in connection with” the industry of the business supplied, even if those goods are essential to the operation of that business.
Where a conventional industry rule applies in relation to a distinct business or enterprise of an employer, all of the employees in that business or enterprise are eligible for membership of the union.” 58
(Emphasis added; italicisation in the original)
[108] Both Mr Murdoch and Mr Massey made reference to these quoted words, each highlighting aspects of the decision that supported their respective points of view. There is, like Hibble and Hickman, merit to both parties’ submissions with respect to Dymo Nobel.
[109] The Full Bench in Dymo Nobel makes it clear that:
“the business of an employer can be “in or in connection” with more than one industry …” 59
[110] As the Full Bench makes clear supra, this can arise where “the business of the single employer is a single integrated enterprise but nevertheless operates substantially in or in connection with two or more industries simultaneously”, because there “is an overlap between industries and the business operates in the area of overlap”, and, or, because the” the nature of the single integrated business is such that the business itself overlaps two or more distinct industries”.
[111] Obviously such a proposition supports the CFMMEU and Mr Smyth’s position. That is because, if viewed broadly, the overall business of the Applicant is substantially in connection to both the coal and transport industries.
[112] Conversely, it is also the case that:
“The mere supply of goods or services to a business in a particular industry is not, of itself, sufficient to render the business of the supplier one that is “in connection with” the industry of the business supplied, even if those goods are essential to the operation of that business.” 60
[113] The issue here, however, is the legal personality of CQS. Whilst the ‘discrete business unit’ of BMA Rail may be merely supplying the service of transport to the coal mining function of the broader CQS business, it cannot be said to be a transport service to the CQS coal mining operations, in a way an unrelated entity such as Aurizon may be able to. The BMA Rail ‘business unit’ is still part of CQS. CQS is the employer of the employees who are to be covered by the Agreement. This, in my view, is a difficult proposition for the Applicant to divorce itself from, especially when it is observed that the work of BMA Rail employees is predominately to service mines which the parent of CQS owns and operates. And, unlike a general transport operation, the work of the train drivers under this agreement is exclusively to transport coal.
[114] In Dymo Nobel, that case concerned whether the predominate purpose of the single integrated business which manufactured and supplied explosives was in or in connection with the coal industry due to a small number of employees in that business engaging in coal mining operations; in the present circumstances, the scenario is reversed.
[115] In the present circumstances, the ‘business unit’ of BMA Rail within CQS now has 52 employees 61 who are engaged as train drivers. These train drivers predominately transport coal from mines owned by the parent company of CQS. At a broader level, a significantly higher number of employees in CQS are engaged in the coal industry than there are train drivers in the BMA ‘discrete business unit’. The predominate purpose of CQS’s operations is coal mining. The substantial character of the CQS enterprise is in the coal industry.
[116] I turn now to the later decision of the Full Bench of the former Commission in Harnischfeger of Australia v CFMEU 62 which specifically considers the proper construction of rule 2D, in that the Full Bench observed that (commencing at [85]):
“Rule 2D is an industry rule and the discrimen of eligibility under such a rule is the industry of the employer. Hence the question here is whether the trade or business of Harnischfeger is “in or in connection with the coal and shale industries”. This is a question of fact and the answer is determined by the substantial character of the activities in which the employer is engaged.
The substantial character of a business may be in or in connection with more than one industry. In such circumstances it is not necessary to decide which is predominant. Nor is it necessary for each group of activities that have a “substantial character” to operate as distinct businesses or enterprises within the employer’s overall operation. To the extent that Dyno Nobel may be said to stand for such a proposition, and we do not think it does, we respectfully disagree. In our view a proper reading of the authorities does not support such a proposition.
The final general observation we wish to make relates to the words “or in connection with” in Rule 2D. As we have already noted, these are words of expansion and allow a finding of eligibility even if the employees in question are not “in” the relevant industry. As Wilson J (with whom Deane and Dawson JJ agreed) said in the Argyle Diamond case:
The cases establish that one may be employed in connexion with the mining industry notwithstanding that one is merely developing the infrastructure which will be necessary to support the actual mining when it commences and notwithstanding that one is engaged, not in the process of extracting the ore from the mine, but in its subsequent treatment. A sufficient connexion may therefore be found in an occupation which takes place either before or after the actual work which itself identifies the industry in question.” 63
(Emphasis added, italicisation in the original)
[117] In summary, therefore, one must look at the substantial character of the activities of which the employer in is engaged in.
Transport as a service
[118] The Applicant and the RTBU referred the Commission to the authority, R v Moore; Ex Parte Federated Miscellaneous Worker’s Union of Australia 64 (otherwise known as the Poon brothers case) that observed that provision of services, such as cleaning or laundry should not be characterised as part of the coal industry. With reference to this authority Mr Howell for the RTBU submitted that:
“…the circumstances of this case (being the present case) are [in the RTBU’s submission] much more akin to, although certainly not identical to, the facts presented and considered by the court in R v Hickman and R v Moore and Ors; Ex parte AWU [1976] 11 ALR 449, otherwise known as the Poon brothers’ case.
That was the decision, your Honour, which examined whether persons employed by a business contracted to a mine operator that had provided laundering and catering services to the mine and to the local business community which the mine had built – this is one of the places over in WA where the mine built the town – the question there was whether or [not] the AWU, who had notified a dispute, had coverage to enrol and represent workers in the catering business, laundry and cleaning services. The court ultimately concluded that by reference to the array of tests discussed in the earlier High Court decision in Thiess that the nature of the businesses was such that they had a substantial character that did not enable it to be said they fit within the characterisation of a business in or in connection with (indistinct) mining industry which was at issue there.
Here as there BMA Rail has its own substantial identity as the provider of a rail service. Just because the provider of a rail service happens to carry a particular product does not bear upon either the nature of the business – the provision of a rail service – or the nature of the work performed by those employees who are employed by that business; i.e. the driving of a train. I made the point earlier so I won’t’ labour it now but I don’t suddenly become engaged in the pink elephant business or industry just because I am driving a train that happens to be carrying pink elephants. I am not in any way, shape or form engaged with that product. I am employed in a business that operates a rail service and I perform work as a train driver. I’m not operating in connection with the business of coal - the industry of coal and shale.” 65
[119] In response to this point, the CFMMEU and Mr Smyth sought to distinguish this matter on the following basis:
“Each of those [seemingly referring to the Poon brothers’ case] had similar facts where there was an attempt to suggest that the contractors working at the camp or in the township providing services such as cleaning and laundry were in or in connection with metalliferous mining. On each occasion the court found that there was no connection and an important factor in that was that the services provided was they related to the mining activity, they in no way touched upon the activity. Here, the very activity involves hauling of the coal which has been extracted to a place where the consumer can collect it. It is, to use the language from the Full Bench in Harnischfeger, essential to the activities being undertaken at the mine because if it is not hauled to the port the consumers can’t get it and the exercise is for nought …” 66
[120] There is no doubt that transport is a service, akin to laundry or cleaning. However, unlike laundry or cleaning, as the CFMMEU and Mr Smyth assert, transport does touch upon the coal mining operation in a way that these other services do not. The transport of coal to customers, consistent with how I have understood Hibble, is not incidental to the operation; but is part of the coal mining process.
[121] The question therefore about the work performed is one of degree.
[122] I have already observed that in the case of Hickman that coal was carried by lorry. The Applicant in this application also provided evidence that its coal would be required to be carried by lorry if there was no rail infrastructure. 67 If coal is to be exported overseas, then it will need to be transported by a vessel of some kind. This would encompass the maritime industry. Transport is therefore probably a part of any coal mining operation, or indeed any mining operation. The question, however, is whether its activities are substantially connected to the operation (Harnischfeger) consistent with the examination of the industrial enterprise of the employer and the employee (Dyno Nobel).
[123] The concern expressed in the RTBU’s submission is that should the Commission find that the transport of coal is in connection with the coal industry, then it is almost concluded that the transport industry cannot be its own unique industry, but part of each industry that it is engaged in. This submission has some merit in my view. However, this is not something that I need to decide in this application.
[124] The more relevant consideration, in my view, is the substantial character of CQS, the Applicant.
Application to the facts
[125] The Applicant and the RTBU in both their written and oral submissions attempt to portray the discrete business unit, BMA Rail, of CQS, as an entity which engages train drivers in the transport industry, which incidentally hauls coal. This, it was submitted, is broadly a service to the coal industry.
[126] The employees of BMA Rail are engaged exclusively in the transporting of coal, unlike the lorry drivers in Hickman who were engaged in predominately the transporting of coal. Notwithstanding, this was a distinction that the Applicant and the RTBU submitted could be made – that is, the work performed under the agreement is discrete and the employees who are to be covered under the Agreement only drive the trains which transport the coal.
[127] On this point, consistent with Harnischfeger, just because there is a ‘discrete business established, it does not or did not necessarily preclude these same activities from being part of the ‘substantial character’ of the Applicant. 68
[128] Further, having regard to the reasoning of Lawler VP and Hamberger SDP (in joint reasons) and Lewin C (in separate reasons) in Dymo Nobel, that submission should be met with caution.
[129] Lawler VP and Hamberger SDP said (at [62]):
“It is clear from this, and from paragraphs [366] to [370] of her decision, that her Honour was concerned to characterise the ‘industry’ of Dyno Nobel. However, it is equally clear from those paragraphs that her Honour approached the task of characterisation on the basis that if work performed by a group of employees of Dyno Nobel was work that could be characterised as being in or in connection with the coal industry then the coal industry is an industry that Dyno Nobel operates in or in connection with within the meaning of Rule 2D. So much is apparent from the use of the word “therefore” in paragraph [359]. Moreover, it is apparent from the last sentence of paragraph [359] that her Honour did not regard herself as required to characterise the industry or industries in which Dyno Nobel operated by reference, amongst other things, to a consideration of the overall business of Dyno Nobel. For the reasons we have given, focussing only on the work performed a small number of Dyno Nobel’s employees and failing to have regard to the totality of the business of Dyno Nobel led her Honour to ask herself the wrong question in determining the “substantial character” of the business of Dyno Nobel. This amounts to a jurisdictional error.
The approach adopted by her Honour substantially undermines the distinction between conventional industry rules and vocational rules. This distinction has a long history and has, for many years, informed the drawing of union rules and the resolution of demarcation disputes. If, as her Honour appears to have accepted, the fact that work performed by a small number of employees is work in a particular industry necessarily brings the business or enterprise of the employer within that industry, no matter how small the number and no matter what the character of the overall business of the employer, then the discrimen referred to in Hibble and Poon Bros is substantially shorn of its content as a means of distinguishing conventional industry rules from vocational rules. 69
(Emphasis added; italicisation in original)
[130] Further, Lewin C said (at [83]):
“In my view, the earlier discussion by my colleagues of the various decisions of the High Court makes it clear that the industry of the employer cannot be established simply by considering and determining the nature of the tasks, duties and responsibilities, the work, of the employer’s employees. To approach the matter in this manner would, I think, be a jurisdictional error. The nature of that error would be for the decision maker to ask the wrong question. That is to say “what is the work of the employees”?” 70
[131] Lewin C, consistent with the Lawler VP and Hamberger SDP joint decision (at [84] and [85]), continued:
“What is required by the relevant authorities is for the decision maker to consider the nature of the employer’s business, including, importantly, the work performed by the employees in the enterprise(s) undertaken by the employer. In my view, my colleagues correctly emphasise the following passage from the decision of Chief Justice Latham in R v Central Reference Board; Ex parte Thiess (Repairs) Pty Ltd
“In my opinion the question to be asked is - What is the substantial character of the industrial enterprise in which the employer and employee are concerned? In the present case the employer is Thiess (Repairs) Pty. Ltd. That employer is not engaged in coalmining, but is an engineering company carrying on general work. It is not under the control of the mine owner, or even of the contracting party (Thiess Bros. Pty. Ltd.), which actually conducts the mining operations. But the more important fact is that its operations are separate from and different in kind from the operations carried on at the open cut. It supplies certain needs of the coal-mining industry in the same way as do many other industrial enterprises. But these facts do not show that all such suppliers of goods or services to that industry are themselves engaged in that industry. In my opinion the evidence in this case shows that Thiess (Repairs) Pty. Ltd. did not employ Belmar in the coal-mining industry. As already stated, the Central Reference Board can make an order only in relation to certain matters in or in connection with that industry, and therefore the Board had no jurisdiction to make the order for the reinstatement of Belmar.” (my emphasis added)
(Emphases retained from original)
In my respectful view, the Chief Justice there makes clear that it is the combination of the work of the employees and the entrepreneurial activity of the employer that is to be considered for the purpose of characterising the industry or industries of the employer. Moreover, to determine the nature of the enterprise(s) and the business of the employer exclusively by reference to the work performed by some of the employees of the employer and to determine the industry of the employer without wider consideration is to apply an inappropriate test, in my view. I consider that while in a difficult case like this the concept of a “holistic” test might lack precision of meaning it does capture the necessity for a field of view in the determination of the industry of the employer which is wider than simply the work of the employees the subject of the alleged dispute. On the other hand, I am likewise inclined to the view that measuring the volition of the employer in relation to the structure of its corporate legal personality for the conduct of its business is not determinative of the industry or industries in which it is engaged.” 71
(Emphasis added)
[132] In applying these principles, this passage from Lewin C above is helping in the characterisation of where a single business entity owns two or more business operations which are distinct from one another. That is, for instance, where a company may own a coal mine and engages in coal mining operations and with the same entity also owns an unrelated business. The mere fact of the corporate legal personality owning a coal mining operation and something unrelated, such as a transport company, does not determinately make that unrelated business part of the coal mining industry. However, in my view, it may nevertheless be instructive in determining the substantial character of the industry with which a company is in.
[133] Conversely, should a company which may be in connection with the coal mining industry call itself something else, such as for example, BMA Rail Ltd (a transport company), its legal personality cannot exclude itself from being a part of the coal mining industry by nature of its legal personality. It is instructive that BMA Rail Ltd, which is a transport company, may not be part of the coal industry, even though it only delivers coal. However, this was not a hypothetical I needed to consider in this case, given the Applicant was CQS, and not some other entity.
Other considerations
Modern Awards
[134] The introduction of Modern Awards on 1 January 2010 replaced some 1,500 decades old Federal and State awards with 122 industry and/or occupational based awards. The result of this process was a significant departure from previous practice where unions and indeed, employer associations, were named as “a party” to a particular industry and/or occupational awards. Resulting from this is that the Modern Awards no longer prescribe which unions cover or ought to cover certain industries or occupations. With the lesser role given to Modern Awards in the construction of union eligibility rules I am of the view that greater attention is now required on the principles I have set out in these reasons. Therefore, whilst I have note submission of the Applicant with respect to how the relevant Modern Awards may provide “guidance” with regard to union eligibility specifically the Black Coal Mining Industry Award 2010 and the Rail Industry Award 2010, this submission has not been determinative. 72
LCR Mining
[135] With respect to the Applicant’s submission that this case is analogous to the decision in LCR Mining Group Pty Ltd v CFMEU, 73 I accept the CFMMEU and Mr Smyth’s submissions on how to apply this authority. Whilst both cases are about transport servicing the mining industry, I am of the view that the circumstances are sufficiently distinguishable. I do not accept the submission that Spencer C made any error in her decision in LCR Mining. I agree with the CFMMEU and Mr Smyth that in this case I did not have to determine whether the Applicant is in the “black coal mining industry”. Further, I accept the proposition that the facts are sufficiently different to the present circumstances, rendering that decision of no great utility to me in the present application.74
Conclusion
[136] Through examining the reasoning in Dyno Nobel, I have found the reasoning of Lawler VP and Hamberger SDP in that decision, as well as Lewin C’s interpretation of Theiss, highly instructive. I have been assisted following the Full Bench’s reasoning in Harnischfeger. Ultimately, I have arrived at a conclusion – consistent with Mr Massey submissions – that the Applicant’s (that is CQS’s) substantial character is that of an industrial enterprise in, or in connection with, the coal industry, and therefore the CFMMEU and Mr Smyth may be bargaining representatives, pursuant to the combined operation of subsection 176(1) of the Act, and rule 2D of the registered rules of the CFMMEU.
[137] On the basis that the transport of coal may be capable of being part of the coal industry (consistent with Hibble); that the train drivers that are to be covered under this agreement do not haul anything else other than coal (in contrast to Hickman); that there is no distinct corporate identity of BMA Rail (c.f. Theiss Repairs); I have arrived at the conclusion that the substantial character of the single integrated business of the Applicant in this proceeding places its rail business unit in connection with the coal industry.
[138] Had CQS re-designed its corporate structure (as in Theiss), had the train drivers carried other commodities other than coal (as in Hickman); andhad the substantial character of CQS been something other than in the coal industry, I could have been persuaded to arrive at the contrary conclusion.
[139] If I am wrong that the CFMMEU and/or Mr Smyth did have standing to be bargaining representatives under subsection 176(1) of the Act (because of the satisfaction of the substantial character test), I am minded to nonetheless exercise my discretion under s. 590 of the Act to hear from them anyway because of the issues raised in their two page submission that I requested of them prior to the hearing.
[140] Subject to the availability of the parties, I intend to list a directions conference in the next ten days regarding issues relevant to the approval or otherwise of the Agreement.
DEPUTY PRESIDENT
Appearances
Mr C Murdoch QC (with Mr A Smith), of counsel for Central Queensland Services Pty Ltd, instructed by Ashurst.
Mr C Massey of counsel for the CFMMEU and Mr Smyth, instructed by Hall Payne Lawyers.
Mr A Howell of counsel for the RTBU, instructed by Optimum Legal.
Hearing Date
9 April 2019 in Brisbane.
Printed by authority of the Commonwealth Government Printer
<PR710449>
1 CFMMEU Form F18 filed 26 March 2019 at [8].
2 BMA Rail Greenfields Agreement 2013 [2013] FWCA 3869.
3 Ibid.
4 Applicant Form F17 filed 4 January 2019 at [2.10].
5 RTBU Form F18 filed 4 January 2019.
6 AFULE Form F18 filed 4 January 2019.
7 CFMMEU Form F18 filed 26 March 2019 at [5].
8 Stephen Smyth and CFMEU’s Outline of Submissions.
9 Affidavit of Stephen Smyth dated 8 March 2019 (Smyth Affidavit); Affidavit of John Callan dated 8 March 2019 (Callan Affidavit).
10 Witness Statement of Shirley Anne Bella dated 15 March 2019 (Bella Witness Statement) at [12] – [56].
11 Transcript at PN [83] – [93].
12 RTBU Outline of Submissions at [14] – [17].
13 Bella Witness Statement.
14 Witness Statement of Dean Murray dated 17 March 2019.
15 Callan Affidavit at [3].
16 Callan Affidavit at [6].
17 CFMMEU Form F18 filed 26 March 2019 at [8].
18 Outline of Submissions of the Applicant at [10].
19 Transcript at PN [83].
20 Bella Witness Statement at [17].
21 Transcript at PN [90].
22 Ibid at [90] – [91].
23 Ibid at [90].
24 Ibid at [92].
25 Ibid at [93].
26 Transcript at PN [36].
27 Re Union of Postal Clerks and Telegraphists; Ex parte Australian Telephone and Phonogram Officers’ Association. (1986) 66 ALR 227, 235.
28 Ibid.
29 R v Issacs; Ex Parte TWU (1985) 159 CLR 323, 335; 344.
30 NTEU v Technisearch (1996) 66 IR 38 at [42].
31 Ibid at [42].
32 R v Williams; Ex parte Australian Building Construction Employees’ and Builders Labourers’ Federation (1982) 153 CLR 402, 408.
33 Transcript at PN [93].
34 R v Hibble (1921) 29 CLR 290.
35 Ibid at [297].
36 Ibid.
37 Per the Applicant’s email to Chambers dated 17 June 2019 in response to a request for a further submission from the parties regarding the composition of the Applicant’s workforce following the hearing.
38 R v Hickman (1945) 70 CLR 598.
39 Ibid at [608] – [609].
40 Ibid at [608].
41 Ibid.
42 Ibid.
43 Ibid at [608] – [609].
44 Transcript at PN [124].
45 Transcript at PN [226] – [229]; referencingR v Hickman (1945) 70 CLR 598, 607.
46 R v Hickman (1945) 70 CLR 598, 609.
47 Transcript at PN at [228].
48 Ibid.
49 Outline of Submissions of the Applicant at [17(d)-(e), (i)-(k)].
50 RTBU Outline of Submissions at [15] – [16].
51 Transcript at PN [229].
52 R v Central Reference Board; Ex Parte Theiss (Repairs) Pty Ltd (1948) 77 CLR 123.
53 Ibid at [134].
54 Outline of Submissions of the Applicant at [17(b) and (k)] in particular.
55 R v Central Reference Board; Ex Parte Theiss (Repairs) Pty Ltd (1948) 77 CLR 123, 135.
56 CFMEU v Dyno Nobel Asia Pacific Limited [2005] AIRC 622.
57 Ibid at [52].
58 Ibid at [51].
59 Ibid.
60 Ibid.
61 Per the Applicant’s email to Chambers dated 17 June 2019.
62 Harnischfeger of Australia v CFMEU (2005) 152 IR 243.
63 Ibid at [85] – [87] quoting R v Issacs; Ex Parte TWU (1985) 159 CLR 323, 346 in [87].
64 R v Moore; Ex Parte Federated Miscellaneous Worker’s Union of Australia (1978) 140 CLR 470.
65 Transcript at PN [182] – [184].
66 Transcript at PN [232].
67 Bella Witness Statement at [11].
68 Harnischfeger of Australia v CFMEU (2005) 152 IR 243 at [92].
69 CFMEU v Dyno Nobel Asia Pacific Limited[2005] AIRC 622 at [62] – [63].
70 Ibid at [83].
71 Ibid at [84] – [85].
72 AMWU v ResMed Ltd [2016] FWCFB 22 at [81].
73 LCR Mining Group Pty Ltd v CFMEU[2017] FWC 1581
74 Ibid at [3] for instance whereby the sole focus of the Applicant’s work was on transport operations at the mine sites.
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