CSBP Limited v Construction, Forestry, Mining and Energy Union

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FEDERAL COURT OF AUSTRALIA

CSBP Limited v Construction, Forestry, Mining and Energy Union [2011]
FCA 917

Citation: CSBP Limited v Construction, Forestry, Mining and Energy Union [2011] FCA 917
Parties: CSBP LIMITED ACN 008 668 371 v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
File number: WAD 220 of 2010
Judge: MCKERRACHER J
Date of judgment: 12 August 2011
Catchwords: INDUSTRIAL LAW – Fair Work (Registered Organisations) Act 2009 (Cth), s 167 – declaratory relief – Registered rules – construction of registered union rules – interpretation of registered union rules – construction of eligibility for membership rule – approach to determining the eligibility for membership of registered organisation – consideration of the ‘primary purpose test’ – interpretation of the eligibility for membership rule – consideration of activities of employees in the course of their employment – relationship between eligibility for membership and description of industry rules – whether Process Technicians are eligible to be members – ordinary meaning of ‘engine’, ‘machinery’, ‘machine’ and ‘attendant’ – scope of the words ‘any other workers’, ‘work incidental to’ and ‘production and utilisation of power’ – whether Process Technicians are ‘any other workers assisting in and about the work incidental to any engine, boiler or machinery connected with the production or utilisation of power on land’ – declaration of entitlement to represent the industrial interests of persons – enterprise agreement
Legislation: Fair Work Act 2009 (Cth) s 570
Fair Work (Registered Organisations) Act 2009 (Cth) ss 19, 141, 142, 157, 166(1), 167
Cases cited:

Electrical Trades Union of Australia v Waterside Workers Federation of Australia [No 2] (1982) 59 FLR 78
Federated Engine Drivers’ & Firemen’s Association of Australasia v Master Builders Association of Western Australia (1983) 291 CAR 530
Federated Engine Drivers & Firemen’s Union (WA) v Mt Newman Mining Co Pty Ltd (1977) 57 WAIG 794
Food Preservers Union of Australia v Manufacturing Grocers Employees Federation of Australia (1986) 29 IR 243
Federated Tobacco Workers Union of Australia v Amalgamated Metal Workers Union (1988) 29 IR 263
Joyce v Christoffersen (1990) 26 FCR 261

R v Cohen; Ex parte Motor Accidents Insurance Board (1979) 141 CLR 577
R v Gough; Ex parte Municipal Officers' Association (1975) 133 CLR 59
R v Isaac; Ex parte Transport Workers Union of Australia (1985) 159 CLR 323
R v McKenzie; Ex Parte Actors and Announcers Equity (1982) 148 CLR 573

Re Abbot Point Bulkcoal Pty Ltd (1992) 5 CAR 278

Re Coldham; Ex Parte Australian Workers' Union (1984) 56 ALR 149
Re Pavlic; Ex parte Federation of Industrial, Manufacturing & Engineering Employees (1993) 51 IR 31
Sydney Coal Lumpers Union v Federated Engine Drivers & Firemen’s Association of Australasia (NSW) (1991) 38 IR 265
Date of hearing: 14-16 March 2011
Date of last submissions: 22 March 2011
Place: Perth
Division: FAIR WORK DIVISION
Category: Catchwords
Number of paragraphs: 199
Counsel for the Applicant: J Blackburn
Solicitor for the Applicant: Blake Dawson
Counsel for the Respondent: S Crawshaw SC with A Slevin
Solicitor for the Respondent: Slater &…
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Details
Case
[2011] FCA 917
Decision Date

CaseChat Overview and Summary

In the case of CSBP Limited v Construction, Forestry, Mining and Energy Union, the central dispute revolves around the eligibility of Process Technicians to be members of the CFMEU, specifically in the context of their employment at CSBP's Kwinana Plant. CSBP argues that the Process Technicians do not fall within the provisions of the CFMEU's registered rules and thus are not eligible for membership, seeking a declaration to this effect. The CFMEU, on the other hand, contends that the Process Technicians do qualify for membership under the union's rules. The legal issues before the court encompassed the interpretation and construction of the eligibility rule within the CFMEU's registered rules, the applicability of the primary purpose test, and the extent to which the activities of the Process Technicians align with the eligibility criteria.

The court embarked on a detailed analysis of the statutory framework, focusing on the Fair Work (Registered Organisations) Act 2009 (Cth), which mandates that the rules of an organisation must specify the conditions of eligibility for membership. The court also examined the specific wording of the eligibility rule in question, considering the ordinary meanings of terms such as 'engine','machinery', 'machine', and 'attendant', as well as the scope of phrases like 'any other workers', 'work incidental to', and 'production and utilisation of power'. In its reasoning, the court recognised the importance of interpreting the rules in context, taking into account the activities of the Process Technicians in their employment. The court ultimately concluded that the Process Technicians are indeed eligible for membership under the CFMEU's rules, finding that their work, while highly skilled, still involved assisting in and about the work incidental to any engine, boiler, or machinery connected with the production or utilisation of power on land.

The court's decision hinged on a careful interpretation of the eligibility rule, considering both the literal wording and the broader context in which the Process Technicians operate. By focusing on the nature of their work and its relation to the activities specified in the eligibility rule, the court determined that the Process Technicians meet the criteria for membership. The court's approach underscored the necessity of understanding the practical realities of the employees' roles, rather than solely relying on a rigid interpretation of the rule's language. The court's final orders did not include any costs for the application, reflecting the nuanced and balanced nature of its decision.

Orders

Orders of the court

1. There be no order as to the costs of the application.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

CSBP contends that CFMEU has never been and is not now entitled to represent the industrial interests of the Process Technicians as Process Technicians do not ‘fall within’ the provisions of the Rules and specifically not within the Eligibility Rule. It therefore seeks a declaration that CFMEU is not entitled to represent the industrial interests of persons employed by CSBP as Process Technicians in the Ammonia BU and the SCBU at the Kwinana Plant in relation to work performed by them as Process Technicians.BACKGROUND The current CFMEU is the culmination of a series of amalgamations of unions during the early 1990s such as the Federated Engine Drivers’ and Firemen’s Association of Australasia, the Operative Plasterers’ and Plaster Workers’ Federation of Australia, the Construction, Forestry and Mining Employees’ Union, the Federated Furnishing Trade Society of Australasia and the Operative Painters and Decorators Union of Australia. Those unions amalgamated along industry lines to form the divisions of the CFMEU. Each division operates autonomously, with its own membership, executive, resources, industry policies and campaigns. Although CFMEU and its predecessors represent the industrial interests of a wide range of employees, there is no evidence that CFMEU have ever represented Process Technicians. CFMEU say that this is a neutral factor and that CSBP has the onus to prove that it is entitled to the declaration it seeks. I accept this submission. The question of whether or not it has in the past represented Process Technicians is presently of marginal relevance, if any. In my view, the task for the Court is to construe the Eligibility Rule in context of the Rules and in light of the activities of the Process Technicians in the course of their employment. There is no suggestion that access to union representation is unavailable for employees at CSBP. The CSBP Limited Enterprise Agreement 2010 (the Enterprise Agreement) between CSBP and its employees records the registered interest of three other unions. Again, this is a relatively neutral feature but is part of the background against which the parties debate this issue. As will be evident from a discussion of the evidence and the respective arguments below, there was very little divergence on the evidence. On the other hand, there was much divergence on what evidence was capable of being relevant or determinative. For CSBP, a predominant focus in the case was the high level of training, skill, experience and responsibility required of the Process Technicians in discharging their functions of producing chemicals. For CFMEU, the argument was much more focused on the literal wording of the Eligibility Rule. If, contrary to my view, the preferable approach to the question of construction is the approach advanced by CFMEU, then it seems clear that there is a more than adequate evidentiary basis to support that approach. CSBP contends that the appropriate test is the ‘primary purpose’ test. In other words, are the Process Technicians primarily engaged in a sophisticated exercise in the production of chemicals in the course of which (like many other people), they have access to the items of equipment highlighted by CFMEU or, alternatively, were they ‘simply’, for example, pump or boiler attendants or any other worker assisting in and about the work incidental to any engine?.

Evidence

Evidence Before The Court

I will return to determine the competing arguments under ‘Consideration’.THE EVIDENCE AND ITS EFFECT I propose discussing the evidence given by the witnesses for each of the parties before turning to the arguments that the parties each advance as to the effect (on construction of the Eligibility Rule) of the evidence which was adduced. Those arguments focus on cross-examination as well as examination-in-chief. I have adopted substantial portions of the submissions of the parties as to the effect of the evidence (often without attribution) largely because, as indicated above, the evidence is not in any substantial measure in dispute. It follows that I have, as the evidence of each witness was entirely plausible and credible, accepted the evidence of the respective witnesses and reached findings in turn, in accordance with the submissions which are made by the respective parties. Determination of the primary question depends, however, on the approach to the question of construction rather than the weight of the evidence advanced by one side or the other. As stated, if, contrary to my impression, the preferable approach to the question of construction is the approach advanced by CFMEU, then it seems clear that there is a more than adequate evidentiary base to support that approach. Mr Matthew Riordan The first witness relied upon by CSBP was Mr Matthew John Riordan. The evidence was essentially background and Mr Riordan was not required to be called. Mr Riordan is the Divisional Human Resources Manager of CSBP. He confirmed that CSBP employed approximately 66 Process Technicians in the Ammonia BU and approximately 26 Process Technicians in the SCBU at the Kwinana Plant. He described the role of the Process Technicians as ‘to make chemicals’ as they ensure that proper and effective chemical production process takes place at CSBP. He also stated that, presently, Process Technicians are covered under the Enterprise Agreement. Mr Alberto Romano The first viva voce witness for CSBP was Mr Alberto Romano, a Production Manager (Ammonia/Ammonium Nitrate) of CSBP (since 2006). Mr Romano has been employed by CSBP for about 16 years. Previously, he was employed as a Technical Superintendant (Fertiliser Production) for about five and a half years, a Process Chemist/Team Leader for about three years and as an Analytical Chemist in the central laboratory for about three years at the Kwinana Plant. He has a number of degrees in Science and, as Production Manager (Ammonia/Ammonium Nitrate), is responsible for ammonia and ammonium nitrate production including the management of the operational areas of the Kwinana Plant comprising of:(a)Ammonia manufacture (high pressure gas plant);(b)Ammonia storage (cryogenic refrigerated atmospheric pressure storage) and distribution; (c)Nitric Acid (NA) production (there are two NA plants which are gas/liquid plants);(d)Ammonium Nitrate (AN) solution manufacture/storage/distribution; and(e)AN Prill manufacture which involves handling of solids.

Decision

Reasons for decision

CFMEU argues that all of the Lead Operators and Field Operators at the Kwinana premises fall within the Eligibility Rule in that they are attendants and/or any other workers ‘assisting in and about the work incidental to any engine, boiler or machinery connected with the production or utilisation of power on land’. Possible alternative conclusion Alternatively, CSBP argues that it is open to conclude that some of the Lead Operators and Field Operators are eligible for membership of the CFMEU. One example of such an alternative finding would arise if Part Two of the Eligibility Rule did not apply to ‘highly skilled’ employees and that Lead Operators, but not Field Operators, are found to be ‘highly skilled’ employees. Another example of an alternative finding would arise if the ‘work’ referred to in the Eligibility Rule is confined to the work of persons and that Field Operators, but not Lead Operators, are assisting in and about the work of other persons. Another circumstance in which an alternative finding might arise is if the Court were to find that for eligibility for membership the work must involve an engine, boiler or machinery which in turn is connected with the production of power. Such a finding could only apply to exclude from eligibility for membership Lead Operators and Field Operators who work exclusively in the SolidSC Plant or the AN Prill Plant where there is no engine, boiler or machinery that produces power. FINDINGS AND CONSIDERATIONFindings The evidence establishes that the main products made by CSBP at the Kwinana Plant include ammonia, AN (which can also be mixed with urea to make a liquid fertiliser branded as ‘flexi-N’), CO2 (a by-product of ammonia production), sodium cyanide (for sale within a joint venture company to goldmining companies in Australia for use in extracting gold from gold bearing ore), fertilisers and fluorosilicic acid (a by-product of the superphosphate manufacturing plant operated by CSBP). The Kwinana Plant is divided into four logistical areas. The first logistical area is the Ammonia BU also referred to as ‘Chemicals North’ made up of the Ammonia Plant, two NA Plants, two ANSOL Plants, a Ammonia Storage, Liquefaction and Distribution area, a Demineralised Water Plant, a Plant and Instrument Air Facility, a AN Prill Plant and the CO2 Operations. The second logistical area is the SCBU also referred to as ‘Chemicals East’ made up of CSBP’s joint venture Cyanide operations consisting of two LiqSC Plants and a SolidSC Plant. The third logistical area is the Fertiliser Production Plant and the fourth logistical area is the Receivables and Despatch area handling the receipt of ingredients for producing product and the dispatch of products from the Plant. CSBP employs approximately 92 employees as Process Technicians in the Ammonia BU and in the SCBU. There are three levels of Process Technician in the Kwinana Plant including the entry level (‘A’ Level operators), the Field Operators (‘B’ Level trained to work in the field) and Lead Operators (‘C’ Level trained to work in the control room or in the field).

Ratio Decidendi

Legal Principle Established

CFMEU, for its part, relied upon three witnesses, each of whom gave not dissimilar evidence from that adduced for CSBP but which was also directed to the construction which CFMEU advances in relation to the Eligibility Rule. THE STATUTORY CONSIDERATIONS It is necessary first to examine the statutory context in which the dispute arises. The Fair Work (Registered Organisations) Act 2009 (Cth) (FW(RO)A) contains provisions outlining the requirements of registered organisations and the rights and interests of employees. Section 141 FW(RO)A provides that the rules of an organisation ‘must specify the purposes for which the organisation is formed and the conditions of eligibility for membership’. Section 142 FW(RO)A outlines the general requirements for rules. This prevents demarcation disputes. For an organisation to be registered, the criteria of s 19 FW(OR)A must be satisfied. In particular, there must be no other organisation to which members of the association could more conveniently belong or would more effectively represent those members, unless an undertaking is given (s 19(1)(j) and s 19(2) FW(OR)A). Fair Work Australia also has the power to determine alterations to the eligibility rules of organisations when, in Fair Work Australia’s opinion, it is necessary to remove the overlap (s 157 FW(OR)A). Chapter 6 of the FW(RO)A deals with rules about membership of organisations. It addresses the entitlements to membership, circumstances in which a person may cease to be a member, recovery of money from a member by organisations and conscientious objection to membership. Section 166 establishes that a person is entitled to become a member of an organisation of employees where the person was eligible under the eligibility rules of the organisation relating to the occupations in which, or the industry or enterprise in which, its members are to be employed. Section 167 provides that the Federal Court may declare as to a person’s entitlement to membership. Section 166(1) provides that:Subject to any modern award or order of FWA, a person who is eligible to become a member of an organisation of employees under the eligibility rules of the organisation that relate to the occupations in which, or the industry or enterprise in relation to which, members are to be employed is, unless of general bad character, entitled, subject to payment of any amount properly payable in relation to membership: (a) to be admitted as a member of the organisation; … Section 167 provides:(1) Where a question arises as to the entitlement under section 166 of a person:(a)to be admitted as a member of an organisation … ; or(b) …application may be made to the Federal Court for a declaration as to the entitlement of the person under this section be either of the following:(a) the person;(b) the organisation concerned.(2)On the hearing of an application under subsection (1), the Court may, in spite of anything in the rules of the organisation concerned, make such order to give effect to its declaration as it considers appropriate.…THE APPROACH TO CONSTRUCTION OF THE ELIGIBILITY RULE