United Workers’ Union
[2022] FWC 2044
•2 AUGUST 2022
| [2022] FWC 2044 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.236—Majority support determination
United Workers’ Union
(B2022/242)
| DEPUTY PRESIDENT EASTON | SYDNEY, 2 AUGUST 2022 |
Application for a majority support determination by employee organisation – Fair Work Act 2009 (Cth), s.236 – Elgas Limited at the Elgas Cavern Port Botany facility – whether employee organisation has standing to make application – whether organisation had capacity to enrol employees as member – application of organisation’s eligibility rule – whether operations controllers at Liquified Petroleum Gas storage and distribution facility are engaged in the reception, handling, storage, preparation, bottling, packing or delivery of goods and merchandise – primary or principal purpose for which the operators are employed in the context of the employer’s organisation of work – employee organisation does not have standing – application dismissed.
The United Workers’ Union has applied for a majority support determination in respect of a number of operational employees of Elgas Limited who are engaged to perform duties at Elgas' Cavern facility located at Port Botany, New South Wales. Elgas argues that the United Workers’ Union is not entitled to represent the industrial interests of the relevant employees and therefore does not have standing to make the application.
Section 176 of the Fair Work Act 2009 (“the FW Act”) identifies the persons who are eligible to be bargaining representatives for a proposed enterprise agreement. Section 176(3) provides that an employee organisation cannot be a bargaining representative unless the organisation is “entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.”
The workers in question are employed as Rostered Operations Controllers, or ROCs, by Elgas Limited (Elgas) at the Liquified Petroleum Gas Cavern (“the Cavern Facility”) in Port Botany. The site consists of an underground cavern which allows for the storage of up to 65,000 tonnes of Liquid Petroleum Gas (LPG) and four interlinked tunnels for the purpose of its subsequent distribution.
The Cavern Facility is staffed and operated on a 24/7 basis by four Operations Controllers, and by an Operations Coordinator to whom the controllers report and who predominantly performs a supervisory role.
The immediate question for determination is whether the United Workers’ Union (UWU) is entitled to represent the industrial interests of the Operations Controllers. The rules of the UWU[1] allow it to enroll into membership and represent the industrial interests of:
“…an unlimited number of employees engaged in, or assisting –
the reception, handling, storage, preparation, bottling, packing and delivery of goods and merchandise, and processes and activities incidental or ancillary to such reception, handling, storage, preparation, bottling, packing and delivery including the pulping, testing and/or processing of eggs.”
Elgas argues that neither the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) nor the UWU are entitled to represent the industrial interest of the Operations Controllers. Elgas argues that there is an existing avenue available for industrial representation of the Operations Controllers through the Transport Workers Union (TWU), who have negotiated agreements in comparable workplaces, and that if a majority support determination “was issued by the ROCs in their personal capacity or with the support of the TWU, then that would clearly be the appropriate form for the ROCs to pursue their industrial interests.”
The work of the Operations Controllers
Two Operations Controllers gave evidence – Mr James Webb and Mr Roberto Illiev.
Mr Webb explained the history of the present application:
“The ROCs at the Cavern Facility have been attempting to bargain for an enterprise agreement with Elgas since May 2020. At the time, we were members of the Maritime Union of Australia division (“the MUA”) of the Construction, Forestry, Maritime, Mining and Energy Union.
Elgas refused to bargain with us and instead engaged the MUA in protracted legal proceedings.
We then joined the United Workers’ Union (“the UWU”) in late 2021, as part of the Bulk Liquids Alliance between the MUA and the UWU.
Following a discussion with the ROCs about our desire to pursue an enterprise agreement with Elgas again, Mr Shane Reside of the UWU provided me, on 11 March 2022, with a copy of a petition outlining our support for bargaining for an enterprise agreement covering ROCs at the Cavern Facility.
I then circulated the petition amongst the ROCs on site to sign, if they wished to demonstrate their support for bargaining.”
Mr Illiev’s description of the work of Operations Controllers at the Cavern Facility includes the following:
“The main role of the ROC is to monitor and control the unloading of propane from ocean tankers for storage in the cavern, and its loading into either road tankers or export ships, as well as the filling of ISOtainers for distribution.
We also carry out pipeline distribution of propane from the Cavern Facility to the neighbouring facility of our client, Qenos, and remotely monitor the levels and parameters of LNG stored in tanks around the country.
The loading and unloading processes are largely automated and mediated through a Distributed Control System (DCS), which the ROCs operate and monitor using the panel board in the Cavern Facility’s Control Room.
Using the panel board of the DCS, we control and operate valves and pumps, and make adjustments to maintain optimum flowrate, pressure and temperature level parameters during loading and unloading.
The unloading part of our duties involves receipt of LPG transported by sea on Very Large Gas Carrier (VLGC) class ships….
In order to minimise volume and pressure during transport, propane is stored cryogenically in liquid form in the VLGCs at temperatures at or below - 42⁰ C. The propane that is stored in the Cavern Facility, however, is in liquid form at an ambient temperature of around 16⁰ C to protect the structural integrity of the walls of the sandstone cavern and to prevent cracking. We therefore have to also operate a heater on the DCS during discharge, to warm up the cargo for storage…
In this way, the ROCs are directly responsible for carrying out and monitoring the unloading of LPG for storage by operating valves, pumps and the heater in sequence through the DCS. Unloading cannot safely occur without us regulating discharge temperature and pressure through the DCS.
Unloading a VLGC could take anywhere between 80-100 hours and we have to continuously operate and monitor the discharge to maintain optimum process conditions by adjusting flowrate, pressure and temperature level parameters as per the agreement with the VLGC ship.
The Cavern Facility is primarily an import storage facility and a key part of our duties as an ROC is the continuous monitoring on the DCS, of LPG and water levels in the cavern for safety, quality and inventory control purposes.
We also remotely monitor fifteen LNG storage tanks that are spread across the country, including in Queensland, Tasmania, NSW and South Australia. If any issues were to arise in relation to the safe storage of LNG across these fifteen tanks, we would be responsible for liaising with any on-site maintenance personnel or BOC Process Engineers to enact emergency and safety procedures.
… The propane that is received for storage and held at the Cavern Facility is then loaded either into small pressure ships or ISO-tainers for export, or into road tankers for distribution and delivery.
The process for loading export ships is substantively the same as the unloading and discharge process. We use the DCS to open up all the valves on the fill line, start-up the second propane pump, enable the Emergency Shutdown System (ESD) and maintain and monitor pressure and flowrate parameters as required by the export ship.
… Propane is loaded from the Cavern Facility into road tankers bound either for direct delivery to large industrial clients, or for bottling at, and distribution from Elgas supply depots around the state.”
Mr Creagh de Brabander is the Terminal Manager of the Cavern Facility and gave evidence on behalf of Elgas. He describes the principal work of the Operations Controllers as follows:
“The key role of the Operations Controllers is to control the flow of LPG throughout the Cavern Facility using the control panels that are located in the control room. To this end, the Operations Controllers work almost exclusively in the control room and it is standard practice for there to be at least one Operations Controller in the control room at any given time. Their work largely involves managing the operations of the Cavern Facility, monitoring the LPG storage level within the Cavern Facility and the managing the flow and distribution of LPG throughout the Cavern Facility. This is done from the Cavern Facility’s control room.
From the control room, Operations Controllers monitor and control the whole operation through the use of an automated control panel board. The panel board allows the Operations Controllers to open and close the valves, control the flow of LPG and monitor the pressure, temperature and weight of gas to ensure that trucks, Iso containers and the pipeline to Qenos are not overloaded with LPG. If no issues arise in the loading and unloading of LPG, Operations Controllers will only be sitting in the control room to monitor the flow of LPG. If an alarm is raised, their role is to investigate and make adjustments to the valves to control the flow of LPG. This is done from the Cavern Facility.
… Operations Controllers who are 'on shift' are required to be in the control room for the duration of their shift. There may be extra 'Day Operators' who are not on shift, who may leave the control room to attend to other duties as required, such as walking around the Facility to check on piping, equipment and general housekeeping.
Whenever a ship arrives at the berth and LPG is imported from or exported onto the ship, this task is handled by a contractor (Programmed) on the berth side while the Operation Controllers sit in the control room and monitor and control the flow of the LPG to or from the ship as the case may be. After the contractor has connected the loading arm to the ship on the berth, the Operations Controllers operate the control panel board to open up the valve pipeline. The Operations Controllers also monitor and respond to any alarms such as pressure alarms in relation to the flow of LPG.
During the process of loading and unloading of LPG onto trucks, Iso containers or onto ships, the Operations Controllers' main role is to operate the control panel, allowing the automated process of pumping the LPG to take place and to simply monitor the flow, pressure and temperature of LPG.
The Operations Coordinator's work hours are largely taken up by duties related to the loading of trucks and the running of the terminal, as this is the main purpose of the Cavern Facility.
… there is no manual handling of LPG, or physical loading, unloading or packing of LPG, either into containers or otherwise, that is required of the Operations Controllers…”
UWU rules
According to the UWU’s rules, an “industrial member” of the union is a person who is entitled to apply for membership, and who is “working or usually working in an occupation” and “able to be industrially represented”.[2]
“Occupation” is defined in the rules as “eligibility comprised in Schedule 1 in the industries comprised in Schedule 2”.[3]
Schedule 1 contains a large number of “industrial pursuits”, including the following pursuits relied upon by the UWU:
“…employees engaged in, or assisting –
the reception, handling, storage, preparation, bottling, packing and delivery of goods and merchandise, and processes and activities incidental or ancillary to such reception, handling, storage, preparation, bottling, packing and delivery including the pulping, testing and/or processing of eggs.”
In Schedule 2, Part B, sub-rule B(i) the following “industries” are included:
“Storing and packing goods and merchandise (but not so as to limit the generality of the expression 'Storing and Packing'), the reception, handling, storing, preparing, bottling, packing and delivery of goods and merchandise so far as such reception and/or handling and/or preparing and/or delivery of such goods and merchandise is in any way incidental or ancillary to their storing and packing as above described including the pulping, testing and/or processing of eggs;”
Consideration
The argument advanced by the UWU in this matter is not dissimilar to the unsuccessful argument put in Re Chubb Security Services Limited Armoured Vehicle Operators (Lane Cove, Newcastle, Smithfield, Heathcote Branches) Enterprise Agreement 2011 - 2014[4]. In that matter the same eligibility rules were relied upon to argue that armoured vehicle operators were eligible to be members of the National Union of Workers because they “handle and deliver goods and merchandise all day every day or do work which is incidental or ancillary to that” (at [13]).[5]
SDP Hamberger considered the relevant authorities and ultimately found that the work performed by the armoured vehicle operators was primarily concerned with the secure transportation of cash and “cannot reasonably be described as storing and packing work”.[6] His Honour reasoned:
“[22] The need to have regard to ‘the assistance legitimately and necessarily to be gained from reading the Eligibility Rule as a whole’ was emphasised in a recent decision of the Full Federal Court in CFMEU v CSBP Ltd. On finding that the focus of the eligibility rule that they were considering was upon the occupations of employees covered (as is the case here) the Court stated that this ‘means that the primary purpose test of employment is appropriate.’ The Court continued [at 44]:
‘In applying this test one does not focus on one aspect of an employee’s work in isolation from the totality of his or her duties. Thus in Federated Engine Drivers & Firemen’s Union (WA) v Mt Newman Co Pty (1977) 57 WAIG 794, Burt CJ observed in this regard at 794 that not every worker, who in doing the work which is employed to do drives an engine, is an engine driver within the meaning of the rule. Rather:
... The question in any particular case is, I think, whether the worker is employed to drive an engine so that he earns his wages by doing that, or whether he is employed to do something else. And if the answer is that he is employed to do something else then he is not an engine driver merely because he operates a machine and drives the engine of that machine so as to do what is employed to do.
45. Similarly, in Joyce v Christoffersen (1990) 26 FCR 261 at 279, Gray J observed that “the primary function of an employee must be determined by looking at what he or she does in the context of the employer’s organisation of work.”
[23] To find that aspects of the work of the Chubb employees involves handling and delivering goods and that therefore the employees come within the NUW’s eligibility rules would be to do what the Federal Court in CFMEU v CSBP Limited warned against when it said [at 49]:
‘... one should not accede to attempts to promote exorbitant claims which, if allowed, would render otiose the efforts of those who laboured long and hard to produce explicit statements intended to mark out the scope of the union’s coverage of occupations in the workplace.’
[24] While the eligibility clause of a union may validly travel beyond the bounds of the industry in respect of which it is registered, an ambiguity in an eligibility clause may be resolved by reference to the industry clause. While the NUW’s eligibility clause refers to ‘reception, handling, storage, preparation, bottling, packing and delivery of goods and merchandise...’ it would be absurd if an employee who engaged in any of these activities was automatically brought within the rule. However, it is equally clear that one need not engage in all of the listed activities to be eligible to join the NUW. Given this lack of clarity, regard may properly be had to the industry rule. That rule makes clear that the relevant activities must be considered in the context of the ‘storing and packing’ of goods and merchandise. That does not mean that to be eligible under the relevant part of the rule one must be in the storing and packing industry - but one must be performing storing and packing work.”
(footnotes omitted)
Elgas argues that the Commission is being asked by the union to stretch the words of the union eligibility rule in order to cover employees who already have a clear right of industrial representation through another union. Elgas relies on the fact that comparable employees in Victoria are covered by the Elgas Limited Plant Operators Dandenong Bulk Terminal - TWU Workplace Agreement 2021, and that the TWU was a bargaining agent for at least some of those comparable workers.
If the Cavern Facility is seen as a 65,000 tonne LPG warehouse then the Operations Controllers could be seen as storepersons. At its crudest, it could be said that the purpose of the facility is to receive LPG in large quantities from large ships, and distribute it in significantly smaller quantities, predominantly in road tankers. If the LPG is a “good” or is “merchandise” then the literal terms of the eligibility rule are said to be met.
In earlier proceedings a Full Bench found the that Operations Controllers were not eligible to be members of the CFMMEU[7] and described the operation of the Cavern Facility in the following way:
“[35] This is very dissimilar to the factual position in the Cooperative Bulk Handling case. The LPG is not stored for the sole or predominant purpose of being exported by ship. The CFMMEU urged us to view this case, in effect, as analogous to the Cooperative Bulk Handling case in the sense that all the LPG stored at the facility has been unloaded from ships and transported directly there. However, we do not consider that this analogy works. In Cooperative Bulk Handling, the storage of grain facilitated and was for the purpose of its ultimate loading onto ships, and thus could be said to form part of the loading operations involved in the shipping of grain. By contrast, it cannot be said here that the storage of LPG at the Cavern has a functional connection with or forms part of the prior unloading of LPG at the multi-user berth. As earlier stated, the LPG has already been unloaded from the VLGC vessel by the time it is received at the Cavern, and we consider that the proper function of the Cavern is to store gas for the purpose of its subsequent distribution, primarily by road. That is, in our view, the proper way to characterise the business operation being conducted at the Cavern.
[36] Insofar as the evidence demonstrates that Elgas arranges for the unloading of LPG from VLGC vessels that is intended to be stored at the Cavern and the loading of LPG from the Cavern onto small ships, it might be said it engages in stevedoring operations to some degree. However, this conclusion comes with a number of caveats: the berth is owned by NSW Ports and is not part of the Cavern facility, Elgas is only one of a number of users of the berth, Elgas does not undertake stevedoring work as a separate business undertaking but only in a subordinate way to its main functions, and for the most part it engages a contractor to undertake the actual unloading work. This limited amount of stevedoring activity does not permit Elgas to be described as a stevedoring business, but rather is best characterised as an operational function undertaken by Elgas in a manner ancillary to its business of storing and distributing LPG.”
[emphasis added]
Although Elgas’ primary business at the Cavern Facility is the storing and distributing of LPG, the primary or principal purpose for which the Operations Controllers are employed must be determined by looking at what they do in the context of Elgas’ organisation of work, and the purpose for which the Elgas has employed the Operations Controllers.[8]
In my view the primary purpose of the work of the Operations Controllers is to apply their specialist technical and chemical knowledge to the storage and manipulation of LPG. The intrinsic character of the work is marked by the materials involved and the specialist knowledge required to perform the role.
Mr Illiev has a bachelor’s degree in Petrochemical Engineering and a Certificate IV in Process Plant Technology. Mr Illiev worked as a Refinery Technician at the Caltex refinery in Kurnell from early 2000 until 2014, then as a casual Terminal Operator at Quantem Site A in Port Botany from 2016 until 2018, before commencing work at the Cavern Facility in 2018. Even with this background, when Mr Illiev started working for Elgas he underwent nine months of training in over twenty modules before he was eligible to operate the control panel. Mr Illiev indicated in cross-examination that he did not think nine months training for someone “off the street” would be enough. Mr Webb did not state his qualifications or experience in his written statement and was not required for cross-examination.
The LPG itself is processed in the Cavern Facility leaves in a different state from when it arrived. In the large gas carrier class ships the propane is stored cryogenically in liquid form at or below -42⁰ C. The propane is “heated” through a Distributed Control System to warm it for storage in the Cavern Facility. In the Cavern Facility an ethyl mercaptan odorant is added for safety reasons, and the propane is dried out, meaning moisture is removed.
The reality is that the work of the Operations Controllers in heating the propane, adding odorant, and drying it out is a long way from an orthodox storeperson. More so, the work is almost exclusively performed at a control panel where workers are required to operate valves, pumps and heaters in sequence, control and monitor temperatures and flow rates, maintain emergency shutdown systems, pressure and flow rate parameters and so on.
The work requires more than knowledge of how to open and close valves, and turn heaters on and off. The work involves applying a specialist understanding of the properties of LPG, how it can and must be handled, and the consequences of changes in variables that arise from time to time. For example, Mr Illiev was asked in cross examination whether he agreed that the heating process requires a scientific precision and continual checking, to which he indicated:
“That’s correct, heating of the product is a very complex operation [that includes] … technicians, sometimes they're outside adjusting things, I'm watching the heater inside, I'm watching the inlet outset temperature and how the heating process goes on and we all make adjustments, so make sure everything is at optimum and runs well and safely.”
Mr Illiev also agreed in cross-examination that “you always use your experience to make a judgment. What's priority, what's emergency and what’s not. And then you take further actions.”
The Operations Controllers working at Port Botany also monitor flow rates and safety-related measurements in other LPG facilities in other parts of Australia, which to me confirms that the Operations Controllers’ primary role is the application of specialist chemical knowledge.
The mere fact that LPG is “stored” and “handled”, and even “prepared for delivery” does not of itself engage the eligibility provisions in the rules. As SDP Hamberger found in the Chubb case, such a reading would accede to a claim that would render otiose the efforts of those who laboured long and hard to produce explicit statements intended to mark out the scope of the union’s coverage of occupations in the workplace.[9]
For these reasons I must dismiss the UWU’s application for a majority support determination in respect of Operations Controllers of Elgas Limited at the Cavern Facility. The UWU does not have standing to make the application because it is not “entitled to represent the industrial interests of the employee in relation to work that will be performed under the agreement.”
DEPUTY PRESIDENT
Appearances:
Ms S Ananth for the United Workers’ Union
Mr R Millar of Counsel instructed by Mr J Nguyen of HWL Ebsworth Lawyers
Hearing details:
2022.
Sydney (By Video using Microsoft Teams)
June 7.
[1] Sub-rule B(a), Schedule 1, Pt B.
[2] UWU Rules clause 11(a).
[3] UWU Rules clause 3(a).
[4] [2012] FWAA 3896, AE893764.
[5] Ibid, at [8]-[9] and [13].
[6] Ibid at [25].
[7] Construction, Forestry, Maritime, Mining and Energy Union v Elgas Ltd t/a Elgas[2021] FWCFB 4575.
[8] Re Construction, Forestry, Maritime, Mining and Energy Union[2021] FWC 3786 at [184], affirmed on appeal in Construction, Forestry, Maritime, Mining and Energy Union v DuluxGroup (Australia) Pty Ltd t/a DuluxGroup (2021) 312 IR 217 at 231-2 and 238, [2021] FWCFB 6020 at [40], [52] and [55].
[9] Re Chubb Security Services Limited Armoured Vehicle Operators (Lane Cove, Newcastle, Smithfield, Heathcote Branches) Enterprise Agreement 2011 - 2014[2012] FWAA 3896 at [23].
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