| [2021] FWCFB 4575 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Maritime, Mining and Energy Union
v
Elgas Ltd t/a Elgas
(C2021/2633)
VICE PRESIDENT HATCHER |
SYDNEY, 29 JULY 2021 |
Appeal against decision [2021] FWC 2155 of Deputy President Dean at Sydney on 21 April 2021 in matter number B2020/339.
[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has filed an appeal pursuant to s 604 of the Fair Work Act 2009 (FW Act), for which permission to appeal is required, against a decision of Deputy President Dean issued on 21 April 2021 1 (decision) in which the Deputy President dismissed its application for a majority support determination pursuant to s 236 of the FW Act. The CFMMEU’s application was made with respect to employees of Elgas Limited (Elgas) at its Port Botany operations performing the role of “Operations Controller”. The Deputy President dismissed the application on the basis that, because none of the relevant employees was a “waterside worker” within the meaning of the CFMMEU’s eligibility rule (relevant rule), the CFMMEU was not a bargaining representative for any of them and was consequently not competent to make the application under s 236(1).
[2] The employees the subject of the CFMMEU’s application are Operations Controllers employed at the “Cavern” at Port Botany in Sydney, a facility operated by Elgas on leased premises. The Cavern is a large underground purpose-built storage facility in which liquefied petroleum gas (LPG) is stored. The storage is monitored on a 24-hour, 7-day basis in respect of temperature, quality, pressure and input/output flows, with all necessary safety and maintenance steps being undertaken by the Operations Controllers employed by Elgas. The site is adjacent (approximately 500 metres away) to a multi-user berth owned by NSW Ports. The LPG stored at the Cavern is received from very large gas carrier (VLGC) vessels mooring at the multi-user berth and then transmitted to the Cavern via a partially-underground pipe. The berth is used by a range of companies other than Elgas, including Vopak, which operates a petroleum import and distribution terminal nearby. There is one loading arm at the berth which is dedicated to the unloading of LPG intended for Elgas.
[3] The LPG stored at the Cavern is distributed in three main ways:
• primarily, the LPG is loaded onto trucks for distribution by road;
• a pipeline transfers LPG to a neighbouring facility owned by Qenos; and
• LPG is sometimes re-exported from the berth in small ships.
[4] The VLGC vessels dock at the berth for the importation of LPG only about 6-7 times per year. Small ships use the berth for the export of LPG stored by Elgas from 0 to 7 times per month. Elgas contracts an independent business, Zeus Oil and Gas Pty Limited, to undertake the work of unloading and loading LPG at the berth, and Zeus supplies its own personnel for this purpose. The flow of LPG from the berth to the Cavern (or vice versa) is controlled by Elgas’ Operations Controllers located in the control room in the Cavern, who communicate with Zeus employees by radio when doing so.
[5] There are 5 Operations Controllers in total, and they report to an Operations Coordinator. Two of the Operations Controllers are trained to operate as Loadmaster on the berth when there is shipping activity, but this has become infrequent and only one of the Operations Controllers, Mr James Webb, has performed this duty since January 2019. The Operations Coordinator usually performs the role of Loadmaster in conjunction with Zeus employees, with the two Operations Controllers effectively acting as a backup if the Operations Coordinator or Zeus employees are unavailable.
[6] Section 236 of the FW Act provides:
236 Majority support determinations
(1) A bargaining representative of an employee who will be covered by a proposed single-enterprise agreement may apply to the FWC for a determination (a majority support determination) that a majority of the employees who will be covered by the agreement want to bargain with the employer, or employers, that will be covered by the agreement.
(2) The application must specify:
(a) the employer, or employers, that will be covered by the agreement; and
(b) the employees who will be covered by the agreement.
[7] Section 176 defines who may be a “bargaining representative” in respect of a proposed non-greenfields enterprise agreement. Section 176(1)(b)(i) provides, relevant to a proposed single-enterprise agreement, that an employee organisation is a bargaining representative of an employee who will be covered by the agreement if the employee is a member of the organisation (subject to the employee not having appointed another person as their bargaining representative or having revoked the status of the employee organisation as their bargaining representative). However, an additional requirement is added by s 176(3), which relevantly provides that an employee organisation “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”.
[8] The CFMMEU’s application made under s 236 identified the group of persons to be covered by the enterprise agreement proposed as being “All operational employees with Elgas Cavern Port Botany facility as their primary place of work engaged by the respondent.” In the proceedings before the Deputy President, this group was equated with the five Operations Controllers. The CFMMEU contended that it was entitled to represent the industrial interests of the Operations Controllers in relation to the work they would perform under the proposed agreement because they fell within that part of its eligibility rule in Rule 2(S) 2 Part (W)(a), which provides that the CFMMEU shall consist of, inter alios, “[a]ny person who intends to follow the occupation of a waterside worker…”. Elgas contended before the Deputy President that the Operations Controllers did not fall within this part of the CFMMEU’s eligibility rule, with the result that the CFMMEU could not under the FW Act be the bargaining representative of the Operations Controllers. There appears to have been no dispute that at least some of the Operations Controllers, including Mr Webb, were de facto members of the CFMMEU.
[9] The Deputy President characterised the issue that arose for determination in the decision as “whether the employees in question are eligible to be members of the CFMMEU”. 2 The Deputy President then recounted the evidence and submissions of the parties and stated the following conclusions:
“[85] Having considered all the evidence and submissions made by the parties, I find that the relevant employees are not waterside workers.
[86] The evidence in my view supports a finding that the primary or predominant purpose of the role is not that of waterside work, rather it is that of a plant operator/controller. I agree with submissions made by Elgas that the function of loading and unloading vessels lies at the heart of the occupation of a waterside worker. The evidence here is that work involving the loading and unloading of vessels (ie the Loadmaster role) is primarily undertaken by Zeus or the Operations Coordinator. Only two of the relevant employees are trained to perform this role, and in the one year and nine months prior to the hearing only one of the employees had performed the role approximately 2% of his working time. On any objective view, this is an incidental component of the role.
[87] While the Cavern may be located within proximity of the waterfront, location is not, in and of itself, determinative of coverage. I agree with the submissions made by Elgas that a control room, with advances in technology that have occurred in recent years, may conceivably be operated significant distance away from the waterfront.
[88] In terms of the work performed by the relevant employees, I place more weight on the evidence provided by Elgas. I accept the evidence of Mr Chee [General Manager – Midstream] as to the nature of the busines and the work currently required to be performed by the relevant employees. Clearly, Mr Chee is in a position to provide a reliable account of the duties required to be performed by the relevant employees and how they fit within the business overall. In particular, I accept Mr Chee’s evidence that the only operations team member who is now required to be trained to work on the loading arm is the Operations Coordinator as he acts as Loadmaster when needed.
[89] Mr Reside [CFMMEU Organiser] is not an employee of Elgas and freely admitted that much of his knowledge came from communications with relevant employees. Of more relevance is the evidence of Mr Webb.
[90] There is no doubt that Mr Webb is capable of performing the Loadmaster role and does perform this role on occasion. It is clear from his evidence that he performed this role more regularly some years ago. However, the relevant consideration is the work currently required to be performed by the relevant employees, and not the work that employee may be capable of performing or work that was performed more regularly in the past.
[91] Because I have found the union is not entitled to represent the relevant employees it is unnecessary to consider the other aspects of section 237.
[92] As outlined earlier, only a bargaining representative of an employee who will be covered by a proposed enterprise agreement may make an application for a majority support determination. The Union cannot be a bargaining representative of an employee unless it is entitled to represent the industrial interests of the employees in relation to the work that will be performed under the proposed agreement. Given my finding that the relevant employees are not waterside workers within the meaning of the eligibility rule, the Union is unable to represent their industrial interests. Accordingly, the application is dismissed.”
CFMMEU
[10] In its notice of appeal, the CFMMEU advanced the following grounds of appeal:
1. The Deputy President erred by finding that the employees were not “waterside workers”, as provided for in Rule 2(S) 2 Part (W)(a) of the CFMMEU’s registered rules, who are eligible to be members of the CFMMEU.
2. The Deputy President erred by failing to correctly apply the meaning of “waterside worker” in accordance with decisions of the Federal Court.
3. The Deputy President erred by deciding the case on the basis that the primary or predominant purpose of the role of the employees is not that of waterside work but rather that of a plant operator/ controller.
4. The Deputy President erred by failing to consider whether the predominant purpose of the employment of the employees is to be engaged in the loading and unloading of cargo into or from ships and/or the prior or subsequent handling, treating or storing of that cargo at or in the vicinity of a wharf when that handling, treating or storage is to facilitate or is for the purpose of the ultimate shipping or discharging of that cargo.
5. The Deputy President erred by failing to properly consider the evidence before the Commission.
[11] The CFMMEU submitted that permission to appeal should be granted because the existence or otherwise of the representational entitlement in s 176(3) of the FW Act is a question of fact and law about which the Deputy President is either correct or incorrect and is not a discretionary decision. It submitted that if we disagree with the Deputy President about the nature, scope or construction of the relevant rule or her application of the facts to that rule, the public interest is enlivened and must result in a grant of permission because:
• the decision fails to apply the settled meaning at law of “waterside worker” in Federal Court decisions and it is in the public interest that mistakes of law and inconsistency of outcome with the settled law are corrected;
• by failing to correctly apply the law, the decision is likely to generate uncertainty and dispute amongst employers, registered organisations and employees about what employees are waterside workers eligible to be represented in bargaining and/or obtain a majority support determination under the FW Act by the CFMMEU;
• the appeal raises a broader question as to whether the CFMMEU is entitled to enrol and industrially represent the industrial interests of other employees in like circumstances in accordance with its registered Rules;
• the decision would prevent other employees in like circumstances who are eligible to be and desire to be represented by the CFMMEU from appointing the representative of choice as their bargaining representative; and
• the decision is demonstrably erroneous.
[12] In respect of the merits of the appeal, the CFMMEU submitted:
(1) Union eligibility rules are to be construed liberally, not narrowly and technically, and can and should be interpreted to take account of changing technologies so as to facilitate representation rather than to deny it. This is particularly the case when the context is the instigation of the processes the FW Act prescribes for initiating enterprise bargaining because it promotes achievement of the FW Act’s bargaining objects and the emphasis those objects give to collective bargaining undertaken for employees by representatives.
(2) The phrase “occupation of a waterside worker” has been considered in a number of Full Court decisions of the Federal Court, and it is apparent from these cases that the relevant rule is a term of art with a settled meaning. Despite the reference in the relevant rule to intention, it is to be construed objectively. The settled meaning of “occupation of a waterside worker” has a direct and indirect connotation. The Deputy President treated the direct connotation, that is, the loading and unloading of vessels, as the only operative form. Rather, the concept is activity-based and focuses on the connection between a worker’s activities and the relationship of those activities to the overall function and purpose of loading ships and unloading them. It extends further and includes:
(a) the prior handling, treating and storing of cargo at or in the vicinity of a wharf to facilitate or for the purpose of the ultimate shipping of that cargo: Cooperative Bulk Handling Ltd v Waterside Workers’ Federation of Australia; 3
(b) predominant work activities based on or in the vicinity of wharves that constitute part of the overall stevedoring operations of loading and unloading of ships, including the physical transportation and storing of goods: Electrical Trades Union of Australia v Waterside Workers’ Federation of Australia; 4
(c) predominant work activities, whenever it is necessary in or in the vicinity of the site of loading and unloading of ships, to prepare and service the mechanical equipment for loading or unloading of ships or the maintenance of that equipment: Electrical Trades Union of Australia v Waterside Workers’ Federation of Australia; 5 and
(d) predominant work activities based on a ship or a wharf or in the vicinity of a wharf that constitute part of the overall stevedoring operations of loading and unloading ships, including the physical transportation and storing of goods and the checking of work being done by workers doing that work: Federated Clerks Union of Australia v Waterside Workers Union of Australia. 6
(3) The Deputy President erred in applying the wrong test to determine the application of the relevant rule. The Deputy President accepted Mr Charng Jing Chee’s evidence of the duties required to be performed by the relevant employees and how they fitted within the business overall, which is not the test because the relevant rule is not an industry eligibility rule. The business activities of the employer are not to be assimilated with the work activities that bear on whether a worker follows the occupation of a waterside worker.
(4) Further, the Deputy President erred in finding that the relevant consideration was the work “currently required” to be performed for Elgas by an affected worker, Mr Webb. Rather, it is the range of duties the employee is engaged to perform and the relationship of this work to the functions that comprise the settled meaning of the occupation. Construed otherwise, an employer’s periodic choices about what it wishes a particular employee to do within the scope of their employment could intrude upon the representational rights of the CFMMEU and employees’ bargaining rights.
(5) The Deputy President erred in that she focused too narrowly on current work duties including loadmaster duties and failed to have proper regard to the totality of the evidence about the Operations Controllers’ work and how that work relates to the operation of the Cavern, as distinct from Elgas’ business. The evidence demonstrated that the purpose and activity of the work is to control a facility that receives gas unloaded from ships and sometimes loads gas for export, stores that gas and periodically disgorges the stored gas into trucks for transportation, activities which engaged the settled meaning of “occupation of a waterside worker”.
(6) The Deputy President erred in finding that the location of the Cavern in proximity to the waterfront alone was not determinative of coverage in circumstances where the CFMMEU never suggested it was. The Deputy President failed to deal with the CFMMEU’s actual submission based on the authorities, namely that where work with the requisite connection to the overall function of loading and unloading ships is performed is relevant to eligibility. This constituted a failure to afford the CFMMEU natural justice.
[13] The CFMMEU submitted that we should grant permission to appeal, quash the decision and redetermine the matter ourselves on the basis of the evidence and submissions before the Commission.
Elgas
[14] Elgas submitted that the CFMMEU had not raised any ground giving reason to doubt the correctness of the decision or attracting the public interest so as to justify a grant of permission to appeal. It submitted that the Deputy President’s finding that the primary or predominant purpose of the Operations Controller role is not that of waterside work is a finding of fact that should not be interfered with on appeal unless it is demonstrated to be wrong by “incontrovertible facts or uncontested testimony” or to be “glaringly improbable” or “contrary to compelling inferences”.
[15] In respect of the merits of the appeal, Elgas submitted that:
• the CFMMEU has not provided any detail regarding the nature of the errors alleged but rather simply expresses discontent with the outcome and alludes to the presence of underlying errors;
• one cannot disregard the general context of the relevant rule in favour of a literal reading of the specific words used, particularly in this case where the relevant rule on a literal reading is contingent upon the intention of the prospective member rather than on the work actually being performed;
• it is clear that the test must be objective to make sense, as eligibility depends on whether employees are working as waterside workers rather than whether they intend to do so;
• the Deputy President correctly approached the task of determining whether the relevant employees’ work was in the occupation of a waterside worker and made findings that the loading and unloading of vessels is primarily undertaken by Zeus or the Operations Coordinator and is an incidental component of the role of the relevant employees;
• the CFMMEU’s contention that the Deputy President’s approach was in error by looking at the “work currently required to be performed” and its suggestion that Mr Webb was “capable of performing the loadmaster role and performed that role on occasion” is wrong, as the question under s 176(3) of the FW Act is whether the CFMMEU is entitled to represent the industrial interests of the employee “in relation to work that will be performed under the agreement”;
• there was no evidence suggesting the work of the relevant employees was set to change in the future to bring them within the scope of the relevant rule, and the Deputy President was correct in approaching the task by assessing the current requirements of the role as it was the best evidence of the requirements of the position;
• the authorities referred to by the CFMMEU still require an employee’s predominant work activities to involve part of the overall stevedoring operations of the loading and unloading of ships, even if the work function (such as in grain handling or as an electrician or clerk) does not directly involve the loading and unloading of a ship;
• in this case, Elgas is not a stevedoring company but rather a gas distribution business, and the employees were not predominantly involved in stevedoring operations at Port Botany;
• Elgas’ situation is analogous to that considered in MUA v Toll Mermaid Logistics Broome Pty Ltd, 7 in which it was determined that employees who worked at a “supply base” where goods received and transferred from ships were stored and distributed were considered not to be waterside workers, and that occasional work at the waterside was not sufficient and that the character of waterside work was not transmitted with the goods along the supply chain;
• the “predominant purpose” approach completely answers the CFMMEU’s contentions, and on a proper construction the duties which could be said to have a waterside connection are only incidental to the other functions of the role;
• the work of the Operations Controllers is the operation of the Cavern facility, and just because the provenance of the product being monitored and distributed involved transportation by ship does not mean they are engaged in waterside work; and
• the proximity issue goes nowhere because, regardless of the location of the work, the Operations Controllers do not work within the overall stevedoring operations of the loading and unloading of ships.
[16] Although the CFMMEU’s appeal grounds and submissions challenge the reasoning of the Deputy President in various respects, we consider that the appeal ultimately only raises one issue: was the Deputy President’s conclusion that the Operations Controllers employed by Elgas were not eligible to be members of the CFMMEU correct? The Deputy President’s determination in this respect was not discretionary in nature, and accordingly the correctness standard applies in respect of the CFMMEU’s appeal. Accordingly, our reasons will focus on this question.
[17] It is convenient in our consideration of this question to begin with the three Federal Court Full Court authorities referred to by the CFMMEU. The first is Cooperative Bulk Handling Ltd v Waterside Workers’ Federation of Australia. 8 The decision concerned an employer (CBH) which operated a grain storage and shipping facility in Kwinana in Western Australia. The facility was described in the first instance decision of the Court (Toohey J)9 as follows:
“At Kwinana grain is discharged from rail trucks by bottom dumping wagons. The grain falls into hoppers and is then transferred along conveyor belts where it is weighted, metal objects removed and pesticide applied before it is taken to its planned storage location, either in the horizontal silos or in the vertical cells. There it may remain for some months, during which time it is subject to regular checks to ensure that there has been no infestation of insects. When the grain is to be shipped, it is removed from storage and carried to the top of the terminal complex where it passes through weighers and cleaning machines before being taken by conveyor belts along a jetty for shipment at the wharf. There the grain is tripped on to another short conveyor on loading gantries which direct the grain into the hold of a waiting ship.”
[18] Justice Toohey went on to refer to the description of the Kwinana facility in CBH’s own literature as “the largest and most modern grain receival storage and shipping complex in the world… [enabling it] to meet all the demands of complex export requirements”.
[19] Two important observations may be made about the facts as described above. The first is that the CBH facility was an integrated storage and export shipping facility and CBH was directly engaged in the loading of ships at the site as a fundamental aspect of its business operations, albeit that it engaged a contractor to undertake the ship loading function. The second is that the receipt and storage of grain at the facility was for the sole purpose of it ultimately being shipped for export by CBH (subject to some de minimis exceptions). In short, CBH was conducting a stevedoring operation at the Kwinana facility.
[20] The then Waterside Workers’ Federation of Australia (Federation), from which the current stevedoring coverage of the CFMMEU in Rule 2(S) 2 Part (W)(a) ultimately derives, claimed that it was entitled to enrol as members employees of CBH at the Kwinana facility who for the most part appear to have performed duties on the land side of the “waterline” from which the jetty projected into the sea and were not directly involved in the loading of ships. The Full Court described these duties as follows:
“Apart from the control room operators and the two gardeners, all the employees are required to do one or more of some twenty seven different classes of duties. The duties are interchangeable and from time to time the employees, including the control room operators, are engaged to perform the whole range of those duties. All those duties relate to the receival, distribution, storage, checking, conditioning, treating and discharging of the grain, together with general cleaning duties and general supervision and oversight of the grain as it is transported on the conveyor belts.” 10
[21] The Full Court, after analysing the Federation’s eligibility rule in its historical and statutory context, construed “waterside worker” in that rule as being a composite expression used to define a class or classes of workers, and assigned it the following definition:
“Without attempting to give an exhaustive definition, in our opinion the term "waterside worker" in Rule 6(a) of the Rules of the Federation includes persons who are engaged in the loading of cargo, including loose bulk cargo, into ships and the prior handling, treating and storing of that cargo at or in the vicinity of a wharf when that handling, treating and storing is to facilitate or is for the purpose of the ultimate shipping of that cargo.” 11
[22] Applying that definition to the facts of the case, the Full Court first found that the location of the employees’ employment was in the vicinity of a wharf:
“There can be no doubt that the Kwinana terminal is in the vicinity of the wharf from which the loose bulk grain is loaded directly into ships. On the evidence, we are satisfied that the terminal is in the vicinity of that wharf and that the grain is handled, treated and stored in the terminal prior to its being ultimately loaded into ships and is so handled, treated and stored to facilitate and for the purpose of its ultimate loading into ships.” 12 (underlining added)
[23] The Full Court then linked the purpose of the activities at the terminal and the work of the employees to the shipping of cargo in the following way:
“The activities performed at the terminal are, necessarily, preliminary to the loading and shipping of the grain for export. The harvest months are three only and during that time the grain must be received, but since shipping goes on through the whole of the year, obviously to suit customer requirements and having regard to shipping availability, there must be grain stored for shipping during various parts of the year and some of this stored at the Kwinana terminal.
So far as the duties of the employees are concerned, an attempt was made to analyse those activities and show the percentage of them which were performed before and after the waterline. This, in our opinion, is not the test and is contrary to the examples set out in the references given earlier. Considering the nature of the work performed, it is all done for the purpose of export and for that purpose only. The reception of the grain, the examination, taking of samples, testing and treating are all done to enable wheat to be shipped and to arrive in a suitable condition at the port to which it is exported. The conditioning and treating serves the same purpose as the removal of foreign matter from the ore bodies at Port Pirie or from the belts of coal at Newcastle and the checking of refrigerated containers while being held at container terminals. The movement of the grain within the terminal again bears a close resemblance to the stacking and restacking of cargo for shipping and loading and transport of containers and movement about a container terminal. Truly, they all form part of the loading operations involved in the shipping of grain in bulk.” 13 (underlining added)
[24] The underlined sentence in the above passage seems to us to be the central proposition which caused the Full Court to determine that the employees in question were entitled to be admitted as members of the Federation. The Full Court identified the employees as waterside workers by reference to the characterisation of the business operation in which they performed their duties and the ultimate purpose of those duties considered in that context.
[25] The second Full Court decision, Electrical Trades Union of Australia v Waterside Workers’ Federation of Australia, 14 concerned whether the Federation was entitled to enrol as members electricians and mechanics employed to maintain and repair equipment including cranes, forklifts, straddle trucks, transtainers, portainer cranes, grabs, winches and hydraulic equipment located in or around conventional or container wharves. The question again was whether any of the employees in question could properly be described as following or intending to follow “the occupation of a waterside worker”. The Full Court, as in the Cooperative Bulk Handling decision, treated the expression as a composite one and construed it in its historical and statutory context. The Full Court said:
“From the time of the original registration of the Federation, the essential attributes of a waterside worker have consistently been seen in terms of his relationship to particular functions or activities. Those functions or activities are the loading and unloading of cargo, stores, supplies or fuel into or from ships….” 15
[26] The Full Court then placed emphasis on the fact that the essential functions of a waterside worker had changed with the mechanisation of the stevedoring industry, and said:
“With the introduction of mechanization, the mechanical skills essential in the performance of stevedoring operations have taken a number of forms. There is the skill necessary to drive or operate the machinery used in loading and unloading operations. There is the associated mechanical skill necessary to keep machinery in operating condition. Some running repairs and servicing of equipment can plainly be seen as part of the task of operating it. Other servicing and repairing of equipment involve more specialized skill. The role of the worker with special skills for repairing or servicing complicated machinery has steadily become more important on the waterfront. To some extent that role has been performed by men who acquired skill and training after they had commenced to follow the occupation of a waterside worker. To a significant extent, however, specialized servicing and mechanical work has been performed by qualified or semi-qualified tradesmen who have never been engaged in the immediate physical loading or unloading of ships. It is these men who constitute the relevant mechanics and the relevant electricians in the present case. It is plain that they cannot properly be seen as persons who actually load and unload ships. Can they properly be seen, for relevant purposes, as following the occupation of a waterside worker in that they are engaged in the overall stevedoring operation which takes place at the wharf and which encompasses what is involved in the activity of loading and unloading ships? … The question is whether… the relevant electricians and the relevant mechanics are also properly to be seen as engaged in the overall operation of loading and unloading ships and as being qualified for membership of the Federation by reason of the fact that, for the purposes of the Federation's eligibility provisions, they can be said to follow the occupation of a waterside worker.” 16
[27] The Full Court then answered the question it posed in the above passage in the following way:
“It is plain that a tradesman who carries out repair or maintenance work on stevedoring machinery in a general mechanical business conducted away from the waterfront cannot properly be seen as engaged in stevedoring operations. Nor can a tradesman who merely comes to the waterfront to carry out particular repairs or servicing of a machine in the course of a general independent occupation of carrying out mechanical or electrical work on machines. On the other hand, the fact that a man is a skilled tradesman or that his work consists of mechanical or electrical work on machines used in stevedoring operations will not, in the view we take, necessarily preclude him from properly being seen as being engaged in the loading and unloading of ships in the relevant sense. In our view, the words "occupation of a waterside worker", as used in r.6 of the Federation's rules, should be construed as encompassing the occupation of any worker whose predominant working activities are based on or in the vicinity of wharves and constitute part of the overall stevedoring operations of loading and unloading ships. Those activities include not only the physical transportation and storing of goods. They include, in the view we take, whatever is necessary, on or in the vicinity of the site of the actual loading and unloading, to prepare and service the mechanical equipment by which loading and unloading operations are effected and to maintain it in the condition necessary for the performance of its stevedoring functions. They include on site electrical and mechanical repair and maintenance work on the machines. They include the activities which predominantly constitute the occupation of the relevant electricians and mechanics.” 17 (underlining added)
[28] The underlined sentence in the above passage, consistent with the Cooperative Bulk Handling decision, identifies the need for the work of the employees in question, in addition to being in physical proximity to wharves, to functionally form part of stevedoring operations. That is, the operational context of the work performed is a critical element of the analysis. The Full Court went on to consider whether the employer of the employees needed itself to be a stevedoring business, and said:
“At one stage during the course of argument, we inclined to the view that a distinction should be drawn between those of the relevant mechanics and electricians who were employed by the stevedoring companies and those who were employed by independent contractors. The fact that a man is employed by a stevedoring company is a factor which supports his being seen as engaged in the overall stevedoring operation of that company. Further consideration has however led us to the view that the electrician or mechanic who is engaged substantially full time, on the site of the loading and unloading of ships, in the on site servicing, maintenance and repairing of the machines which perform the essential stevedoring function should be properly seen as engaged in the stevedoring operation regardless of whether his employer is the stevedoring company or an independent contractor.” 18 (underlining added)
[29] In the above passage, the Full Court introduced additional criteria for employees not employed by stevedoring companies which may be described as, first, substantially full-time employment on the site of the loading and unloading of ships and, second, the performance of duties which directly relate to the function of stevedoring.
[30] The third decision, Federated Clerks Union of Australia v Waterside Workers Union of Australia, 19 concerned “whether persons who are employed in a clerical capacity in connection with the loading or unloading of cargo into or from ships are persons who 'follow the occupation of a waterside worker'”. Such employees are referred to in the decision as “tally clerks”. Their work functions at conventional and container wharf operations were described in the decision as follows:
“…Tally clerks are engaged in connection with the movement of cargo either by conventional ships or by container ships. With respect to conventional ships, tally clerks perform their duties in the ships, on the wharf, and in stores adjacent to a wharf. They are employed in a clerical capacity. Their duties are to check the work of persons engaged in the physical activity of loading and unloading ships. Their duties are to account, check, record and, where necessary, weigh cargo and to account, check and record the movement of cargo into and from ships. With respect to container ships, tally clerks are also employed in a clerical capacity. Their duties vary depending on whether they are performing them in a container terminal or in a container depot. The terminals are situated on or adjacent to a wharf. The duties of tally clerks working in terminals are to check, account, record and, where necessary, weigh the containers being loaded into and from ships and into and from the terminals. Container depots need not be situated on or adjacent to a wharf. In fact, many are long distances from a wharf. Some containers are packed and unpacked at depots. Other containers are packed and unpacked at the premises of the consignor or the consignee respectively. The duties of tally clerks working in depots are to check, account, record and, where necessary, weigh containers into and out of depots, and to check, account, record and, where necessary, weigh goods being packed into and being unpacked from containers in the depots and being carted into and from the depots.” 20
[31] The Full Court adopted the same construction of the Federation’s eligibility rule as stated in the Cooperative Bulk Handling decision, which it articulated as follows:
“Without doubt, the essential feature of the occupation of a waterside worker is the loading or unloading of cargo, stores, supplies or fuel into or from ships. The work may be done on a ship, on a wharf or in the vicinity of a wharf. In any one case it is a question of fact to be determined upon the evidence whether the work is being done in the vicinity of a wharf and for the purpose of the loading or unloading of cargo into or from a ship. To adopt the conclusion already quoted, the term 'waterside worker' in r.6 of the rules of the Federation connotes persons who are engaged in the loading or unloading of cargo into or from ships and the prior or subsequent handling, treating or storing of that cargo at or in the vicinity of a wharf when that handling, treating or storage is to facilitate or is for the purpose of the ultimate shipping or discharging of that cargo.” 21
[32] The Court concluded that tally clerks that worked at container terminals at or in the vicinity of a wharf fell within the Federation’s eligibility rule. It stated:
“Tally clerks do not engage in manual labour. They are not engaged in the physical activity of loading or unloading ships. Nevertheless, they perform an essential function in the loading or unloading of ships. The loading and unloading of ships cannot, in any industrial or practical sense, be completed without the checking, accounting, and recording of cargo and of cargo movements. The tally clerks are engaged within the overall stevedoring operation which takes place at or in the vicinity of a wharf and which encompasses what is involved in the activity of loading and unloading ships.
. . .
In our view, the words 'occupation of a waterside worker' as used in rule 6 of the Federation's rules, should be construed as encompassing the occupation of a tally clerk whose predominant working activities are based on a ship, on a wharf or in the vicinity of a wharf and which constitute part of the overall stevedoring operations of loading and unloading ships. Those activities include not only the physical transportation or storing of goods, but include the checking of the work being done by the persons who are engaged in the physical transportation and storing of goods, accounting, recording and, where necessary, weighing of goods and cargo. It follows that in our view tally clerks who perform their duties in a ship or on a wharf or in the vicinity of a wharf are eligible to become and remain members of the Federation. Thus, tally clerks engaged in connection with the loading and unloading of conventional ships come within the class of persons eligible to become members of the Federation. Thus, tally clerks engaged in connection with the loading or unloading of container ships, whether in the ship, on the wharf or in the container terminal come within that class also.” 22
[33] We consider that the following propositions emerge from the above trilogy of cases:
(1) A person following the occupation of a waterside worker must work on a ship at or in the vicinity of a wharf.
(2) A waterside worker need not be physically engaged in the task of actually loading or unloading a ship, but their predominant duties must facilitate or serve the purpose of the loading or unloading of cargo or constitute part of the overall stevedoring operations of loading and unloading ships. It is necessary in this connection to give contextual consideration to the nature of the business operations conducted by the employer at the relevant site.
(3) Where the employer is not a stevedoring business, its employees may nonetheless be waterside workers if they are substantially employed full-time on the site of the loading and unloading of ships and perform duties which directly relate to the function of stevedoring.
[34] In applying the above proposition to the facts of this case, the starting point, we consider, is to properly characterise the nature and purpose of Elgas’ business activities at the Cavern. It is not itself concerned with the undertaking of stevedoring operations, since it is functionally separate from the nearby multi-user berth owned by NSW Ports. When LPG is received into the facility, it has already been unloaded from VLGC vessels. The LPG is then stored in the Cavern, and subsequently distributed by loading on to road tankers, by pipeline to Qenos, or by re-shipping from the multi-user berth. The predominant aspect of the distribution function is truck loading: the evidence given by Mr Chee in his primary witness statement was that, of the approximately 300,000 tonnes of LPG per annum sold from the Cavern, about 200,000-250,000 leave by truck, about 10,000-70,000 tonnes is re-exported by small ships, and about 5,000-30,000 is piped to Qenos.
[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.
[37] The duties of the Operations Controllers must be considered in the context described. The position description for the Operations Controller position identified its purpose as follows:
“The main function of the Cavern Operations Controller position is the 24/7 monitoring and control of all plant and equipment for the safe, uninterrupted and efficient receipt, storage and distribution of LPG in accordance with the facility’s 20 Operating Standards (Operating Procedures). In addition to the control room-based duties, hands-on site duties include connection and disconnection of the Marine Loading Arm during shipping operations, daily inspection and testing of process equipment and monitoring groundwater levels.”
[38] The position description goes on to the key responsibilities of the position. It firstly sets out the control room duties of the Operations Controller, and specifies 21 responsibilities in this respect. It next specifies seven “Day worker duties” which are required to be conducted within the Cavern facility but outside of the control room. It then specifies the following “Standard shipping operator duties and loadmaster duties”:
“• Assist with preparation of essential equipment and spares (such as reducers and gaskets) and transport to the Bulk Liquids Berth (BLB) using the forklift vehicle. (Must have a current forklift licence and a current Marine Security ID card.)
• Assist with ship berthing. Connect Marine Loading Arm (MLA) reducer to ship’s manifold and drive the MLA. Connect/disconnect the MLA. Carry out leak testing and emergency checks.
• Carry out ship-to-shore paperwork exchange between Elgas, the ship’s crew and NSW Ports. Maintain communication exchange with all parties during marine operations.
• Liaise with NSW Ports, Customs, Biosecurity and other third-parties.
• Coordinate and instruct the control room regarding separate export and import parameters, such as pressure and temperature.
• Carry out two-hourly pipeline inspections. Monitor cargo heater during import operations.”
[39] The position description also contains additional responsibilities in respect of safety, compliance and security, training and other duties.
[40] Notwithstanding the inclusion of the “Standard shipping operator duties and loadmaster duties” in the position description, the evidence (as earlier stated) showed that three of the five Operations Controllers had not been trained to perform these duties and thus had never performed them. Of the two who had been trained in these duties, one had not performed the duties at all since January 2019. The evidence was that the remaining employee, Mr Webb, had spent less than 2 percent of his working time undertaking the Loadmaster role in the same period, with this role ordinarily being performed by the Operations Coordinator 23 or a Zeus contractor. On any view, therefore, the stevedoring duties performed by the Operations Controllers are, in the case of Mr Webb, a very small minority of his duties and, in the case of the other employees, currently non-existent. Even if the currently-applying situation is disregarded and the primary emphasis is placed on the responsibilities outlined in the position description, it is clear that the main function of the position consists of duties in the control room at the Cavern, and that stevedoring-related duties are merely one of a number of ancillary functions of the position.
[41] It may be accepted that the Operations Controllers perform their work in physical proximity to a wharf, although they do not work on a wharf. However, their predominant duties do not facilitate or serve the purpose of the loading or unloading of LPG, nor do they constitute part of the overall stevedoring operations of loading and unloading ships. Further, insofar as Elgas cannot be in our view properly characterised as operating a stevedoring business, the Operations Controllers are not substantially employed full-time on the site of the loading and unloading of ships or perform duties which directly relate to the function of stevedoring. We therefore consider that the Deputy President was correct in concluding that the Operations Controllers were not eligible to be members of the CFMMEU, that the CFMMEU could consequently not act as their bargaining representative under the FW Act and, accordingly, that the CFMMEU’s application was incompetent.
[42] That conclusion does not of course mean that the Operations Controllers cannot access the facility for obtaining a majority support determination under s 237. They are entitled to make an application for a majority support determination acting on their own behalves as bargaining representatives. Alternatively, they may nominate some other person independent of the CFMMEU to act as their bargaining representative to make the application. Further, we note that Elgas does not deny that there may be one or more other registered organisations of employees which are entitled to represent the industrial interests of the Operations Controllers.
[43] Because the appeal raises issues of substance and potentially wider application, we consider that permission to appeal should be granted. For the reasons stated above, the appeal must be dismissed.
Orders
[44] We order that:
(1) Permission to appeal is granted.
(2) The appeal is dismissed.
VICE PRESIDENT
Appearances:
Mr M Harding SC of counsel for the Appellant.
Mr C O’Grady QC with Mr R Millar of counsel for the Respondent.
Hearing details:
2021.
Sydney (via video-link):
22 June.
Printed by authority of the Commonwealth Government Printer
<PR732249>
2 [2021] FWC 2155 at [3]
3 [1980] FCA 141, 49 FLR 355 at 372
4 [1982] FCA 36, 1 IR 349 at 353
5 Ibid
6 [1983] FCA 79, 4 IR 25 at 31
8 [1980] FCA 141, 49 FLR 355
9 [1980] FCA 53
10 [1980] FCA 141, 49 FLR 355 at 373
11 Ibid at 372
12 Ibid at 373-374
13 Ibid at 374
14 [1982] FCA 36, 1 IR 349
15 Ibid at 351
16 Ibid at 353
17 Ibid at 353-354
18 Ibid at 354
19 [1983] FCA 79, 4 IR 25 at 26
20 Ibid at 28
21 Ibid at 26-27
22 Ibid at 28-29, 31
23 There is no suggestion that the CFMMEU is the bargaining representative of the Operations Coordinator.