HOLCIM (Australia) Pty Ltd

[2020] FWCA 2942

[2020] FWCA 2942

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

HOLCIM (Australia) Pty Ltd
(AG2020/481)

HOLCIM (AUSTRALIA) PTY LTD - NSW/ACT STAFF ENTERPRISE AGREEMENT 2019

Cement and concrete products
DEPUTY PRESIDENT SAUNDERS	NEWCASTLE, 4 JUNE 2020

Application for approval of the Holcim (Australia) Pty Ltd - NSW/ACT Staff Enterprise Agreement 2019.

[1] An application has been made for approval of an enterprise agreement known as the Holcim (Australia) Pty LtdNSW/ACT Staff Enterprise Agreement 2019 (Agreement). The application was made pursuant to section 185 of the Fair Work Act 2009 (Act). The Agreement is a single enterprise agreement.

[2] Holcim (Australia) Pty Ltd (Holcim) has provided written undertakings (Undertakings). A copy of the Undertakings is attached in Annexure A to this decision. I am satisfied that the effect of accepting the Undertakings is not likely to:

(a) cause financial detriment to any employee covered by the Agreement; or

(b) result in substantial changes to the Agreement.

[3] The views of each person who the Fair Work Commission knows is a bargaining representative for the Agreement have been sought in relation to the Undertakings.

[4] Pursuant to subsection 190(3) of the Act, I accept the Undertakings. The Undertakings are taken to be a term of the Agreement.

[5] Subject to the Undertakings, I am satisfied that each of the requirements of sections 186, 187, 188 and 190 as are relevant to this application for approval have been met.

[6] Pursuant to subsection 202(4) of the Act, the model flexibility term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.

Union coverage of the Agreement

[7] The CSR, Holcim, Wilmar & Viridian Staff Association known as Salaried Staff United (SSU) being a bargaining representative for the Agreement, has given notice under section 183 of the Act that it wants the Agreement to cover it. In accordance with subsection 201(2) of the Act, I note that the Agreement covers the organisation.

[8] The Australian Workers’ Union (AWU) filed a form F18 giving notice that is wants the Agreement to cover it. The SSU objects to the AWU being covered by the Agreement. The SSU participated in a conference before the Commission on 26 May 2020 and maintained its position that the AWU is not entitled to be covered by the Agreement. Directions were then made requiring the SSU to file and serve submissions in support of its contention that the AWU is not entitled to be covered by the Agreement. The SSU failed to file or serve any such submissions and instead informed the Commission that it “does not accept that the AWU has eligibility under its rules to represent Holcim salaried employees however we do not intend to make any submissions”.

[9] On 3 June 2020, the AWU filed and served written submissions in support of its application to be covered by the Agreement.

[10] The AWU will be entitled to be covered by the Agreement if the following requirements are satisfied: 1

(a) First, during bargaining for the Agreement, the AWU had at least one member employed by Holcim who is covered by the Agreement.

(b) Secondly, the AWU is entitled under its rules to represent its members who are covered by the Agreement.

(c) Thirdly, not all of the AWU members identified in (a) above appointed a bargaining representative other than the AWU to represent them during bargaining negotiations.

[11] As to the first requirement, following the conference before the Commission on 26 May 2020 the AWU provided the Commission with a confidential list of its members who were employed by Holcim during bargaining for the Agreement and who it says are covered by the Agreement. Holcim separately provided to the Commission a list of its employees who are covered by the Agreement. I compared the two lists and satisfied myself that numerous members of the AWU were employed by Holcim during bargaining for the Agreement and are covered by it.

[12] As to the third requirement, the AWU and Holcim provided information to the Commission during the conference on 26 May 2020 to satisfy me that not all of the AWU members identified in [10(a)] above appointed a bargaining representative other than the AWU to represent them during bargaining negotiations. The information provided by Holcim in relation to this issue concerned the identity of the individual employee bargaining representatives for the Agreement. The AWU provided information concerning the fact that its members had not appointed an alternative bargaining representative.

[13] The real contest lies in relation to the second requirement. The resolution of that issue turns on the proper construction of the AWU’s rules.

[14] The proper approach to the interpretation of union rules was summarised by the Full Bench in AMWU v Resmed Limited 2 as follows (references omitted):

“ (1) Union eligibility rules will be construed objectively. 

(2) The nature of union eligibility rules means that they should be construed liberally rather than narrowly or technically.

(3) It is permissible to have regard to any common understanding among people concerned with relevant industries and particularly with industrial matters of the ordinary application of the words used, and to the previous use of the words in the relevant organisation’s rules and in statutory provisions, decisions, determinations, awards, reports and other papers concerned with the relevant industry or industries. Federal awards, including consent awards, made by Commonwealth industrial tribunals at a time when the legislative award-making power was founded upon the industrial disputes power in s.51(xxxv) of the Constitution, are important sources in this respect since a union may only be a party to an industrial dispute involving employees eligible to be its members.

(4) If there is ambiguity as to the meaning of words in the eligibility rules, assistance may be sought in the terms of the industry rule (subject to it being understood that the scope of the eligibility rule is not restricted by the scope of the industry rule). 

(5) Words in an eligibility rule should not be read in isolation such as to give the rule a wide and indefinite scope of operation that is unlikely to have been intended.

(6) Terms used in union eligibility rules should not be interpreted statically in accordance with the meaning they bore at the time that they were first introduced into the rules. Although such terms will have a fixed connotation, they bear a changing denotation - that is, they may be interpreted in accordance with their appropriate current meaning, taking into account changing technologies and methods of work. This may mean that eligibility rules may cover industries or callings not known when the rules were originally drafted.

(7) The words “in or in connection with” are words of expansion. However, for the requisite connection to be established, the work of the employees in question must be referable or significant to the work of the second group of employees with whom there is said to be a connection. It is not sufficient that the work of the relevant employees makes it possible for an employer to conduct a business involving the performance of work by the second group of employees.” 

[15] Further to principles (1) and (2) in the previous paragraph, while union rules are to be construed objectively, a liberal and purposive approach should be taken to the construction of the rules. 3

[16] The AWU is a federal organisation registered under the Fair Work (Registered Organisations) Act 2009. The AWU’s eligibility rule is contained in Part 2, Rule 5 of the organisation’s registered rules. Rule 5(1) relevantly provides that “Every bona fide worker, male or female, engaged in manual or mental labour in or in connection with any of the following industries or callings, namely: […] stone quarrying, […] the manufacture of cement and cement articles and/or the operation of concrete batching plants” shall be eligible for membership in the organisation.

[17] Rule 5(1) clearly refers to the industries of ‘stone quarrying’ and ‘the manufacture of cement and cement articles’; they are plainly industries, not callings. As explained in the principles above, the words ‘in or in connection with’ are words of expansion.

[18] The discrimenof eligibility under an industry rule is the industry of the employer. Accordingly, the relevant question in the present case is whether the trade or business of Holcim is in the stone quarrying or cement manufacturing industries. This is a question of fact answerable by reference to the substantial character of the activities in which the employer is engaged. However, the substantial character of a business may be in or in connection with more than one industry. 4

[19] It is clear that the production of concrete falls within the scope of “the manufacture of cement or cement articles”.

[20] It is uncontroversial that Holcim operates quarries (e.g., Albion Park Quarry) and concrete manufacturing plants (e.g., Humes Tamworth) throughout New South Wales and members of the AWU are engaged at Holcim’s quarries and/or concrete manufacturing factories.

[21] Further, it is clear that the substantial character of the activities engaged in by Holcim at its quarries or concrete manufacturing plants fall within the quarrying and cement manufacturing industries, respectively. Alternatively, even if certain senior salaried employees of Holcim engaged at its quarries or concrete manufacturing plants were not engaged in the quarrying or cement manufacturing industry per se, it is clear that their work would fall within the broader ambit of work “in connection with” the respective industries.

[22] The Agreement covers “Salaried and Casual Employees of Holcim who are employed in New South Wales and Australian Capital Territory”. 5 This clearly includes work by Holcim employees within the quarrying and cement manufacturing industries in New South Wales and the Australian Capital Territory. Consistent with this coverage are a number of the “typical jobs” which fit within the various employee classification levels in the Agreement, such as Labourer, Weighbridge Operator, Quarry Operator, Concrete Production Officer, Humes Production Officer, Concrete Production Supervisor, Humes Dispatch Officer, Tradesperson, Humes Yard Supervisor, and Humes Production Officer.

[23] At the conference before the Commission on 26 May 2020, the SSU relied on Section 3, Part J, sub-rule (2l) of Rule 5 in support of its contention that the AWU is not entitled to represent employees covered by the Agreement. That part of the rule provides:

“SECTION 3

PART J

(21) Notwithstanding anything else in this rule and without being limited by any other provision of this rule and without limiting any other provision of this rule the union shall consist of an unlimited number of persons, namely:

(a) all salaried members of the Staffs of gas companies throughout the Commonwealth of Australia excepting:

(i) general managers (other than in the case of the South Australian Gas Company and its subsidiaries);

(ii) chief executive officers (being officers who are in effect General Managers but not so designated) [other than in the case of the South Australian Gas Company and its subsidiaries]; and

(iii) tradesmen (not being foreman) who from day to day use tools of trade other than for the purpose of demonstrating their use or in cases of emergency;

(b) in addition to, and without detracting from the generality of the coverage conferred by paragraph (a) of this subrule, all persons who are employed by gas companies throughout the Commonwealth of Australia, either wholly or substantially in professional, technical, clerical, marketing or supervisory capacities;

(c) any other persons who may be elected officers of the Union or a branch thereof;

(d) notwithstanding anything contained in paragraph (a) hereof, executive officers who are departmental heads and the officers designated Staff Officer or Industrial Officer and any officer carrying out the duties of any of these positions by whatever designation shall not be eligible for membership of the Federation (other than in the case of the South Australian Gas Company and its subsidiaries);

(e) Provided that nothing in this subrule shall confer eligibility for membership on salaried employees of CSR Limited employed at a yearly rate of pay in the company, including such employees who are either on loan to or on secondment to any subsidiary or any associated company of CSR Limited…”

[24] There is no distinction made in the AWU eligibility rules between ‘salaried’ and ‘waged’ employees except in Section 3, Part J, sub-rule (21) of Rule 5 (the GISOF eligibility rule) and the similar provision in Rule 6, Part J, sub-rule (13) which deals with ‘description of the industry’. There is, as such, no basis in the rules to say that the AWU’s industry coverage generally is limited to ‘waged’ employees.

[25] I accept the AWU’s submission that the GISOF eligibility rule appears to have been inserted into the AWU’s rules as a consequence of the amalgamation of the AWU-FIME Amalgamated Union, the Gas Industry Salaried Officers Federation and the Federated Tobacco Workers’ Union of Australia on 30 June 1995. 6

[26] I am satisfied that the GISOF eligibility rule has no application to the present case for the following reasons.

[27] First, the chapeau to sub-rule (21) states that it applies “without limiting any other provision of this rule”. This is a clear statement that nothing in sub-rule (21) can restrict the scope of the AWU’s coverage as determined by the balance of Rule 5. That is unsurprising, as it would be curious if the amalgamation process resulted in a narrowing of the ultimate coverage of the amalgamated organisation (in the absence of undertakings given in response to objections).

[28] Secondly, paragraph (21)(e) states that “nothing in this subrule shall confer eligibility for membership on salaried employees of CSR Limited employed at a yearly rate of pay in the company, including such employees who are either on loan to or on secondment to any subsidiary or associated company of CSR Limited.” The fact that “nothing in this subrule” confers eligibility for membership on CSR salaried employees does not prevent eligibility for membership arising under other provisions of Rule 5 for such employees.

[29] Thirdly, there is nothing in the rules which suggests that the reference to ‘CSR Limited’ in sub-rule (2l)(e) includes businesses sold or otherwise disposed of by CSR Limited. There is no rule of construction which requires an eligibility rule to be read as if a reference to a named company includes any successor, transmittee, or assignee of any business formerly conducted by the named company. Holcim is not CSR Limited. The employees covered by the Agreement are employed by Holcim. The fact that some of the employees covered by the Agreement were employed by CSR Limited many years ago before Holcim was formed as a new legal entity and the construction material assets of CSR Limited were separated out from other parts of its business is irrelevant.

[30] Fourthly, there is no evidence before the Commission or any other basis to find that Holcim salaried employees covered by the Agreement are “on loan to or on secondment to” any subsidiary or associated company of CSR Limited; Holcim is not such a company.

[31] It follows that:

(a) the AWU is eligible to enrol as members employees of Holcim engaged in the quarrying or cement manufacturing industry New South Wales and the Australian Capital Territory;

(b) the Agreement covers work performed by Holcim’s employees in the quarrying and cement manufacturing industry in New South Wales and the Australian Capital Territory;

(c) during bargaining for the Agreement the AWU had numerous members employed by Holcim who are covered by the Agreement;

(d) not all of the AWU members identified in (c) above appointed a bargaining representative other than the AWU to represent them during bargaining negotiations; and

(e) the AWU is entitled to be covered by the Agreement pursuant to s 183 of the Act.

[32] The AWU being a bargaining representative for the Agreement, has given notice under section 183 of the Act that it wants the Agreement to cover it. In accordance with subsection 201(2) of the Act, I note that the Agreement covers the organisation.

Conclusion

[33] The Agreement is approved and, in accordance with section 54 of the Act, will operate from 11 June 2020. The nominal expiry date of the Agreement is 10 June 2024.

DEPUTY PRESIDENT

Annexure A

 1   Sections 176 and 183 of the Act

 2   [2014] FWCFB 3501 at [34]

 3   R v Cohen; Ex parte Motor Accidents Insurance Board (1979) 141 CLR 577 at 587; Co-operative Bulk Handling Ltd v Waterside Workers’ Federation of Australia (1980) 49 FLR 355 at 361-2; Electrical Trades Union of Australia v Waterside Workers’ Federation of Australia (No. 2) (1982) 59 FLR 78 at 87

 4   Harnischfeger of Australia Pty Ltd v CFMEU (2005) 152 IR 243 at [85]

 5   Clause 2.1.2 of the Agreement

 6   Re AWU-FIME Amalgamated Union (AIRC, 29 June 1995, Print M3271, Williams DP)

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