FEDERAL COURT OF AUSTRALIA
National Union of Workers v Coles CDC Eastern Creek Pty Ltd [2009] FCA 523
WORDS AND PHRASES - ‘single business’
Workplace Relations Amendment (Transition to Forward With Fairness) Act 2008 (Cth)
Corporations Act 2001 (Cth) ss 46 and 50
Acts Interpretation Act 1901 (Cth) s 15AB
Federal Court of Australia Act 1976 (Cth) s 50
Workplace Relations (Amendment) Work Choices Bill 2005
United Dominions Corporation Limited v Brian Proprietary Limited (1985) 157 CLR 1
Australian Softwood Forests Proprietary Limited v Attorney-General for the State of New South Wales; ex relatione Corporate Affairs Commission (1981) 148 CLR 121
Lilyvale Hotel Pty Ltd v Commissioner of Taxation [2009] FCAFC 21
Cooper Brookes (Wollongong) Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297
NSD 349 of 2009
GRAHAM J
20 MAY 2009
SYDNEY
|
IN THE FEDERAL COURT OF AUSTRALIA |
|
|
NEW SOUTH WALES DISTRICT REGISTRY |
NSD 349 of 2009 |
|
NATIONAL UNION OF WORKERS Applicant
|
|
|
AND: |
COLES CDC EASTERN CREEK PTY LTD (ACN 073 395 543) First Respondent
VERSACOLD LOGISTICS LIMITED (ACN 004 902 998) Second Respondent
COLD STORAGE AP1 PTY LTD (ACN 073 414 972) Third Respondent
COLD STORAGE AP2 PTY LTD (ACN 073 395 589) Fourth Respondent
COLD STORAGE CW MEAT PTY LTD (ACN 088 031 832) Fifth Respondent
COLD STORAGE GW1 PTY LTD (ACN 073 415 013) Sixth Respondent
COLD STORAGE GW2 PTY LTD (ACN 073 414 954) Seventh Respondent
COLD STORAGE GW3 PTY LTD (ACN 088 031 725) Eighth Respondent
COLD STORAGE GW4 PTY LTD (ACN 088 031 663) Ninth Respondent
COLD STORAGE MINTO PTY LTD (ACN 088 031 805) Tenth Respondent
COLD STORAGE WW ROSTER PTY LTD (ACN 088 032 017) Eleventh Respondent
COLD STORAGE WS PTY LTD (ACN 088 031 761) Twelfth Respondent
COLD STORAGE WW R1 PTY LTD (ACN 114 294 094) Thirteenth Respondent
COLD STORAGE WW R2 PTY LTD (ACN 114 294 110) Fourteenth Respondent
COLD STORAGE DF PTY LTD (ACN 120 287 907) Fifteenth Respondent
THE AUSTRALASIAN MEAT INDUSTRY EMPLOYEES' UNION, NEW SOUTH WALES BRANCH Sixteenth Respondent
|
|
JUDGE: |
|
|
DATE OF ORDER: |
20 MAY 2009 |
|
WHERE MADE: |
SYDNEY |
THE COURT ORDERS THAT:
1. The application filed 24 April 2008 be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
|
IN THE FEDERAL COURT OF AUSTRALIA |
|
|
NEW SOUTH WALES DISTRICT REGISTRY |
NSD 349 of 2009 |
|
BETWEEN: |
NATIONAL UNION OF WORKERS Applicant
|
|
AND: |
COLES CDC EASTERN CREEK PTY LTD (ACN 073 395 543) First Respondent
VERSACOLD LOGISTICS LIMITED (ACN 004 902 998) Second Respondent
COLD STORAGE AP1 PTY LTD (ACN 073 414 972) Third Respondent
COLD STORAGE AP2 PTY LTD (ACN 073 395 589) Fourth Respondent
COLD STORAGE CW MEAT PTY LTD (ACN 088 031 832) Fifth Respondent
COLD STORAGE GW1 PTY LTD (ACN 073 415 013) Sixth Respondent
COLD STORAGE GW2 PTY LTD (ACN 073 414 954) Seventh Respondent
COLD STORAGE GW3 PTY LTD (ACN 088 031 725) Eighth Respondent
COLD STORAGE GW4 PTY LTD (ACN 088 031 663) Ninth Respondent
COLD STORAGE MINTO PTY LTD (ACN 088 031 805) Tenth Respondent
COLD STORAGE WW ROSTER PTY LTD (ACN 088 032 017) Eleventh Respondent
COLD STORAGE WS PTY LTD (ACN 088 031 761) Twelfth Respondent
COLD STORAGE WW R1 PTY LTD (ACN 114 294 094) Thirteenth Respondent
COLD STORAGE WW R2 PTY LTD (ACN 114 294 110) Fourteenth Respondent
COLD STORAGE DF PTY LTD (ACN 120 287 907) Fifteenth Respondent
THE AUSTRALASIAN MEAT INDUSTRY EMPLOYEES' UNION, NEW SOUTH WALES BRANCH Sixteenth Respondent
|
|
JUDGE: |
GRAHAM J |
|
DATE: |
20 MAY 2009 |
|
PLACE: |
SYDNEY |
REASONS FOR JUDGMENT
The primary issues
1 The primary issues for determination in this case are:
(a) Can one employer carry on more than one single business within the meaning of Part 8 of the Workplace Relations Act 1996 (Cth) (‘the Act’), at the same time?
(b) For several single businesses to be ‘treated as one single business’ within the meaning of Part 8 of the Act, is it necessary for those single businesses to be of a similar kind?
(c) Can corporations, that are related to each other for the purposes of the Corporations Act 2001 (Cth), make a union collective agreement with an organisation of employees that has at least one member whose employment in one of the single businesses of the said corporations that are to be ‘treated as one single business’ for the purposes of Part 8 of the Act, will be subject to the agreement?
(d) If the answer to (b) is in the affirmative, were the single businesses of the first and third to fifteenth respondents of a similar kind such that they may be ‘treated as one single business’ for the purposes of Part 8 of the Act?
2 In my opinion these questions should be answered as follows:
(a) Yes.
(b) No.
(c) Yes.
(d) Does not arise, but as a matter of fact, they were.
3 The case concerns the Versacold Logistics Limited (NSW) Union Collective Agreement 2008 (‘the Agreement’), a print of which, bearing date 9 April 2009, is Annexure ‘NS3’ to the affidavit of Nicole Sullivan sworn 11 May 2009. The form of agreement includes a 55 page document which, amongst other things, incorporates an ‘Appendix 1’, a 5 page document which is an ‘Appendix 2’ and a 19 page document which is an ‘Appendix 3’ followed by a blank execution page. The execution page contemplates execution of the agreement by each of the first and third to fifteenth respondents and by the sixteenth respondent, the Australian Meat Industry Employees’ Union, New South Wales Branch, as the organisation of employees with whom it is proposed that the Agreement be made.
The relevant statutory provisions
4 For the purposes of this case, the version of the Act to be considered is the Act as it existed following its amendment by the Workplace Relations Amendment (Transition to Forward With Fairness) Act 2008 (Cth), Schedules 1 to 7 of which commenced on 28 March 2008.
5 Division 2 of Part 8 of the Act identified various types of workplace agreements. These included –
(a) ITEA or individual transitional employment agreements (see s 326);
(b) employee collective agreements (see s 327);
(c) union collective agreements (see s 328);
(d) union greenfields agreements (see s 329);
(e) employer greenfields agreements (see s 330); and
(f) multiple-business agreements (see s 331).
6 In relation to union collective agreements there are four relevant steps to be taken before an agreement can become operational, firstly, the making of the agreement (see s 333(c)), secondly the approval of the agreement (see s 340(2)), thirdly the lodgement of the agreement (see s 342(1) and ss 344 and 345) and, fourthly, the coming into operation of the agreement (see s 347(1)(b) and s 346M(1) or s 346Q(2) as the case may be).
7 According to Nicole Sullivan, the People Development Manager VersaCold Eastern Region, a ballot for approval of the Agreement:
‘commenced on 4 May 2009 with the attendance portions of the ballot having concluded on 8 May 2009. KMPG (sic) are now scheduled to forward postal ballots to each employee who had not participated in the attendance ballot with the ballot closing on 19 May 2009 at 5.00pm.’
(see affidavit sworn 11 May 2009, paragraph 16)
8 The significance of the closure of the ballot on 19 May 2009 lies in ss 341-2 of the Act. Section 342(1) of the Act requires the employer under a union collective agreement to lodge the agreement with the Workplace Authority Director within 14 days after its approval. And, s 341, which is a civil remedy provision, provides that an employer contravenes s 341(1) if:
‘(a) the employer lodges a workplace agreement …; and
(b) the agreement has not been approved in accordance with section 340.’
9 Should the Agreement be approved in accordance with s 340, its lodgement will be required on or before 2 June 2009. Hence, there is some element of urgency associated with the determination of the Application presently before the Court.
10 The applicant’s Application filed 24 April 2009 sought both permanent and interlocutory relief. The claims for interlocutory relief were not pressed, in circumstances where it became possible for the Court to give the Application an early final hearing, on 14 May 2009. There were nine substantive claims in the Application, but all save for the first claim for relief are clearly premature. They are concerned with possible future contraventions of the Act if, for example, s 341(1) is contravened by the lodgement of a workplace agreement which has not been approved in accordance with s 340. The only remaining prayer for relief which it is necessary for the Court to determine is a prayer seeking a declaration in respect of the Agreement in the following terms:
‘1. A declaration that the purported workplace agreement entitled Versacold Logistics Limited (NSW) – Union Collective Agreement 2008 … is not a union collective agreement for the purposes of section 328 of the WR Act.’
11 In the light of the issues for determination, which emerged during the course of the hearing on 14 May 2009, an invitation was extended to the applicant to consider a reformulation of the declaration as sought in paragraph 1 of the Application if final relief were to be granted in the applicant’s favour. However, in light of the answers which I have indicated above as appropriate for resolution of the issues requiring determination, no reformulation of prayer for relief 1 will be necessary.
12 In considering the questions raised at [1] above it has been necessary to have regard to a number of provisions in Part 8 of the Act including the following, which are not necessarily recorded in strict numerical order:
‘331(1) A multiple-business agreementis an agreement that:
(a) relates to any combination or combinations of the following:
(i) one or more single businesses;
(ii) one or more parts of single businesses;
carried on by one or more employers; and
(b) would be a collective agreement of a type mentioned in section … 328 … but for the matter in paragraph (a).
…
(3) So far as the context permits, this Part (apart from this Division) has effect in relation to a multiple-business agreement with more than one employer as if a reference to the employer in relation to an agreement were a reference to an employer in relation to the agreement.
332(1) An employer may apply to the Workplace Authority Director for an authorisation to make or vary a multiple‑business agreement.
…
327 An employer may make an agreement (an employee collective agreement) in writing with persons employed at the time in a single business (or part of a single business) of the employer whose employment will … be subject to the agreement.
328 An employer may make an agreement (a union collective agreement) in writing with one or more organisations of employees if, when the agreement is made, each organisation:
(a) has at least one member whose employment in a single business (or part of a single business) of the employer will be subject to the agreement; and
(b) is entitled to represent the industrial interests of the member in relation to work that will be subject to the agreement.
…
323 For the purposes of sections 329 and 330, an agreement relates to a new business if:
…
(b) the [new] business, project or undertaking is, or the [new] activities are, a single business (or a part of a single business).
…
322(3) For the purposes of this Part, a part of a single business includes, for example:
(a) a geographically distinct part of the single business; or
(b) a distinct operational or organisational unit within the single business.
…
322(1) For the purposes of this Part, a single business is:
(a) a business, project or undertaking that is carried on by an employer; or
(b) the activities carried on by:
(i) the Commonwealth, a State or a Territory; or
(ii) a body, association, office or other entity established for a public purpose by or under a law of the Commonwealth, a State or a Territory; or
(iii) any other body in which the Commonwealth, a State or a Territory has a controlling interest.
(2) For the purposes of this Part:
(a) if 2 or more employers carry on a business, project or undertaking as a joint venture or common enterprise, the employers are taken to be one employer; and
(b) if 2 or more corporations that are related to each other for the purposes of the Corporations Act 2001 each carry on a single business:
(i) the corporations may be treated as one employer; and
(ii) the single businesses may be treated as one single business.’
Construction considerations
13 It is clear that the first and third to fifteenth respondents inclusive are all related to each other for the purposes of the Corporations Act 2001 (Cth) (see ss 46 and 50).
14 In United Dominions Corporation Limited v Brian Proprietary Limited (1985) 157 CLR 1 (‘Brian’) Mason, Brennan and Deane JJ said at 10:
‘The term “joint venture” is not a technical one with a settled common law meaning. As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill. Such a joint venture (or, under Scots’ law, “adventure”) will often be a partnership. The term is, however, apposite to refer to a joint undertaking or activity carried out through a medium other than a partnership: such as … joint ownership. …’
15 In Australian Softwood Forests Proprietary Limited v Attorney-General for the State of New South Wales; ex relatione Corporate Affairs Commission (1981) 148 CLR 121 at 133 Mason J, as his Honour then was, said:
‘An enterprise may be described as common if it consists of two or more closely connected operations on the footing that one part is to be carried out by A and the other by B, each deriving a separate profit from what he does, even though there is no pooling or sharing of receipts of profits (sic). It will be enough that the two operations constituting the enterprise contribute to the overall purpose that unites them. There is then an enterprise common to both participants and, accordingly, a common enterprise.’
16 Were it necessary to address whether the single businesses of the first and third to fifteenth respondents were of a similar kind, some assistance may be had from considering the ‘same business test’ referred to in s 165-210 of the Income Tax Assessment Act 1997 (Cth).
In the recent case of Lilyvale Hotel Pty Ltd v Commissioner of Taxation [2009] FCAFC 21 (‘Lilyvale Hotel’) a Full Court was required to consider the application of the same business test under s 165-210 in relation to a hotel situated at 176 Cumberland Street, The Rocks, Sydney which was originally known as the ANA Hotel Sydney, later as the ANA Harbour Grand Hotel and later still as the Shangri-La Hotel.
17 In their joint judgment Edmonds and Graham JJ addressed the application of the same business test to the facts of that case. At [45]-[46] their Honours said:
‘45 The critical issue for determination in this case was whether throughout the same business test period (i.e. 1 January 2002 to 31 March 2003) the appellant carried on the same business as it carried on immediately before the test time (on the appellant’s case, 8 August 2002 and on the respondent’s case, 30 August 2002).
46 In our opinion, the lea[r]ned primary judge fell into error in concluding that in answering the ‘same business test’ one had to have regard to the management of the business. In our opinion, the fact that at one stage the appellant conducted its hotel business without the intervention of a hotel management group and at another did so with the assistance of such a hotel management group is a distinction without a difference. In our opinion, the appellant correctly described the business which it carried on as that of ‘owning and operating …[a] hotel to derive revenue from its guests and profits from its operation’. The execution of the management of the hotel at different times in different ways had no bearing upon the identification of the business which the appellant carried on.’
18 For the purposes of construing the relevant sections in Part 8 of the Act regard should be had to s 15AB of the Acts Interpretation Act 1901 (Cth) which included:
‘15AB(1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
(b) to determine the meaning of the provision when:
(i) the provision is ambiguous or obscure; or
(ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.
…
(3) In determining whether consideration should be given to any material in accordance with subsection (1), or in considering the weight to be given to any such material, regard shall be had, in addition to any other relevant matters, to:
(a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; and
(b) the need to avoid prolonging legal or other proceedings without compensating advantage.
19 In Cooper Brookes (Wollongong) Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297 the High Court held that the draftsman had made a mistake in formulating amendments to s 80C(3) of the Income Tax Assessment Act 1936 (Cth) and that the intention of the legislature was sufficiently clear for it to be permissible to depart from the literal meaning of the words of the Act.
20 At 304-305 Gibbs CJ said:
‘It is an elementary and fundamental principle that the object of the court, in interpreting a statute “is to see what is the intention expressed by the words used”: River Wear Commissioners v. Adamson ((1877) 2 App. Cas. 743, at p. 763). It is only by considering the meaning of the words used by the legislature that the court can ascertain its intention. And it is not unduly pedantic to begin with the assumption that words mean what they say … Of course, no part of a statute can be considered in isolation from its context–the whole must be considered. If, when the section in question is read as part of the whole instrument, its meaning is clear and unambiguous, generally speaking “nothing remains but to give effect to the unqualified, words”: Metropolitan Gas Co. v. Federated Gas Employees’ Industrial Union ((1925) 35 C.L.R. 449, at p. 455). There are cases where the result of giving words their ordinary meaning may be so irrational that the court is forced to the conclusion that the draftsman has made a mistake, and the canons of construction are not so rigid as to prevent a realistic solution in such a case … However, if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust. To say this is not to insist on too literal an interpretation, or to deny that the court should seek the real intention of the legislature. The danger that lies in departing from the ordinary meaning of unambiguous provisions is that “it may degrade into mere judicial criticism of the propriety of the acts of the Legislature”, as Lord Moulton said in Vacher & Sons Ltd. v. London Society of Compositors ([1913] A.C. 107, at p. 130); it may lead judges to put their own ideas of justice or social policy in place of the words of the statute. On the other hand, if two constructions are open, the court will obviously prefer that which will avoid what it considers to be inconvenience or injustice. Since language, read in its context, very often proves to be ambiguous, this last mentioned rule is one that not infrequently falls to be applied.’
At 321 Mason and Wilson JJ were disposed to depart from the ordinary and grammatical meaning of the relevant words in the Income Tax Assessment Act because ‘the literal interpretation of s. 80C (3) results in an operation for s. 80B (5) (c) which in our opinion is capricious and irrational’.
21 As I see it, the ordinary meaning conveyed by the text of the provisions of the Act as quoted above, taking into account the relevant context and the purpose or object underlying the Act, does not lead to a result that is manifestly absurd or unreasonable. Furthermore, there is no relevant ambiguity or obscurity which needs be taken into account.
22 In relation to the proposed new s 95A of the Act, which has now become s 322, the Explanatory Memorandum circulated by authority of the Minister for Employment and Workplace Relations in the House of Representatives in relation to the Workplace Relations (Amendment) Work Choices Bill 2005 included the following:
‘New section 95A – Single business and single employer
790. Proposed section 95A would define single business and part of a single business for the purposes of Part VB [now Part 8]. It is intended that collective agreements would cover a single business or part of a single business unless the exceptions in subsection 95A(2) apply or the agreement is a multiple-business agreement made under proposed section 96E.
791. Subsection 95A(1) would define single business as a business, project or undertaking that is carried on by an employer, or activities carried on by the Commonwealth, a State or Territory, or a Commonwealth, State or Territory authority.
792. Subsection 95A(2) would allow two or more employers to be treated as one employer in certain circumstances. Paragraph 95A(2)(a) would provide that where two or more employers carry on a business, project or undertaking as a joint venture or common enterprise, they would be deemed to be one employer for the purposes of the definition of single business in subsection 95A(1).
793. Subparagraph 95A(2)(b)(i) would provide that where two or more related corporations under the Corporations Act 2001 carry on a single business, those corporations may be treated as one employer and the single businesses may be treated as one single business.
794. By deeming multiple businesses and employers to be single businesses and single employers in certain circumstances, subsection 95A(2) would have the effect of allowing these employers to make one collective agreement covering certain joint business activities. This would eliminate the need for these businesses to make separate collective agreements or a multiple-business agreement, but would only apply in the limited circumstances set out in paragraphs 95A(2)(a) and (b). These would be exceptions to the requirement that a collective agreement must apply to a single business or part of a single business.
795. Subsection 95A(3) defines a part of a single business to include a geographically distinct part or a distinct operational or organisational unit within the single business. The definition is inclusive and does not limit the scope for collective agreements to apply to a part of a single business that may be constituted in any relevant way (eg all of the boilermakers employed in the business).’
23 There was nothing in the Supplementary Explanatory Memorandum circulated by authority of the Minister for Employment and Workplace Relations in the Senate in relation to the Workplace Relations Amendment (Work Choices) Bill 2005 which bore upon the proposed new s 95A which has now become s 322 of the Act.
24 The Minister’s Second Reading speech in the House of Representatives in relation to the Workplace Relations Amendment (Work Choices) Bill 2005 included the following under the heading ‘Workplace agreements’ (see Hansard 2 November 2005 at pages 19-20).
‘This government believes in encouraging the further spread of workplace agreements.
With Work Choices, there will be provision for collective agreements negotiated directly between employers and their employees and between employers and unions that represent employees in a workplace. There will also be provision for collective agreements in which persons other than unions can be employee representatives.
Work Choices will provide agreement-making options where an employer is establishing or proposing to establish a new business in areas such as the economically important resources and construction sectors.
…’
25 There was nothing that was material to the construction of the relevant sections in Part 8 of the Act included in the Minister’s Second Reading speech in the Senate.
The VersaCold Group
26 The responsibilities of Kenneth Brundell, the General Manager Finance and Commercial of the second respondent included the financial management of the VersaCold group of companies and all corporate governance issues associated with that group.
27 Annexure ‘KB1’ to the affidavit of Mr Brundell sworn 28 April 2009 was a list of the 29 companies constituting the VersaCold group. The 29 companies included the second respondent which was described as ‘Parent Operating Company, Property, Assets and Investments. Labour Hire Company (Vic, Qld, WA).’ Each of the first and third to fifteenth respondents was listed amongst the 29 companies operating in Australia in the VersaCold group, although the fifteenth respondent was, at the time of the preparation of the list, known as Versacold DF Pty Ltd. Each of the first and third to fifteenth respondents was described as a ‘Labour Hire Company’.
28 According to Ms Sullivan (see affidavit sworn 11 May 2009 paragraph 4) the first and third to fifteenth respondents together employed approximately 444 ‘permanent warehouse employees in distribution centres employed (sic) by VersaCold across in (sic) New South Wales’. The distribution centres in New South Wales were collectively known as the ‘Eastern Region’. They comprised an Arndell Park Distribution Centre, a Girraween Facility Regional Office & Distribution Centre, a Minto Facility and a CDC Chilled Distribution Centre. Mr Brundell described the corporate structure of the VersaCold group in Australia as follows (see affidavit 28 April 2009 paragraph 4):
‘(a) VersaCold Australian Holdings Pty Ltd (ACN 117 491 291), is wholly owned by the Canadian parent company VersaCold Holdings Corp.
(b) VersaCold Australian Holdings Pty Ltd (ACN 117 491 291) wholly owns VersaCold Australia Pty Ltd (ACN 116 962 219).
(c) VersaCold Australia Pty Ltd (ACN 116 962 219) wholly owns VersaCold Investments Pty Ltd (ACN 115 750 377) and the Second Respondent [VersaCold Logistics Limited (ACN 004 902 998)].
(d) The Second Respondent is the sole shareholder in First, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteen (sic), Fourteenth and Fifteen (sic) Respondents (“Employer Respondents”).’
29 It will be apparent that each of the first and third to fifteenth respondents is a wholly owned subsidiary of the second respondent.
30 Mr Brundell’s unchallenged evidence continued (see affidavit 28 April 2009 at paragraphs 5-8):
‘5. VersaCold’s Australian companies operate as an integrated unit performing different functions in pursuit of the overall VersaCold business in Australia. That business consists of the management of temperature controlled warehouse and storage facilities, together with associated transport and stock management, for or on behalf of clients.
6. Several different business models are utilised for this business, depending on the wishes of the client. In some circumstances VersaCold will own (or lease) and operate its own storage facilities and service a single or multiple clients. In other situations VersaCold will tender for the management of facilities which are owned by clients themselves, but which the clients do not wish to operate. The majority of clients are engaged in the retail or manufacturing industries.
7. The services provided by VersaCold are on either an “open book” or “closed book” basis depending upon the client’s requirements. “Open book” contracts involve the charging to the client of all actual costs associated with the provision of the service together [with] a management fee and margin. “Closed book” contracts involve the charging of a fixed fee or rate to the client out of which VersaCold must pay all expenses incurred and attempt to derive a profit.
8. For example, the Coles CDC Eastern Creek Warehouse is wholly owned by Coles as the client and VersaCold has successfully tendered to manage that centre on behalf of the client on an open book basis. In other facilities such as Arndell Park or Girraween Distribution Centre the facilities are owned or leased by VersaCold and each facility services multiple customers, the number and identity of which may change from time to time depending upon contracts won or lost.’
31 On 29 May 2006 a Heads of Agreement (Exhibit 2) was entered into between the company then known as Coles Myer Limited and the second respondent the publication of which has been forbidden pursuant to s 50 of the Federal Court of Australia Act 1976 (Cth). The Heads of Agreement contemplated the execution of further agreements which would, amongst other things, provide for Distribution Centre services to be provided to Coles Myer Limited for an extended period of time from Coles Myer Limited’s new Distribution Centre.
32 The evidence included a copy spreadsheet of employees whose employment would be subject to the Agreement together with an identification, in the case of each employee, of his or her employer and an indication as to the location at which they were employed (see Exhibit 1). Exhibit 1 consisted of a number of pages. It listed numerous employees of the third respondent who worked at ‘Arndell Park South’, numerous employees who worked for the fourth respondent at ‘Girraween South’, numerous employees who worked for the fifth respondent at ‘Arndell Park North’, numerous employees who worked for the fifteenth respondent at ‘Arndell Park South’, numerous employees who worked for the sixth respondent at ‘Arndell Park North’, numerous employees who worked for the seventh respondent at ‘Girraween North’, numerous employees who worked for the eighth respondent at ‘Girraween North’, numerous employees who worked for the twelfth respondent at ‘Arndell Park South’, numerous employees who worked for the thirteenth respondent at ‘Arndell Park South’, numerous employees who worked for the fourteenth respondent at ‘Arndell Park South’, numerous employees who worked for the eleventh respondent at ‘Arndell Park South’, numerous employees who worked for the first respondent at the Coles Eastern Creek Distribution Centre and numerous employees who worked for, presumably, the tenth respondent at ‘Minto’.
33 Of the total of 444 employees, 162 were shown as working for the first respondent at the Coles Eastern Creek Distribution Centre.
34 It would appear that the proceedings were instituted by the applicant at the request of Mekdad Mohammad who was employed by the first respondent at, so it would seem, the Coles Eastern Creek Distribution Centre (see Exhibit A).
35 It was common ground that a number of members of the applicant were employed by the first respondent at the Coles Eastern Creek Distribution Centre.
36 According to Ms Sullivan ‘VersaCold’ commenced operations at the Eastern Creek CDC on 4 February 2008 on an ‘open book’ contract basis (see affidavit sworn 11 May 2009 paragraph 8). She said:
‘8. … The Eastern Creek CDC site was purpose built by Coles for the Coles business. VersaCold successfully tendered for the contract to manage the temperature controlled warehouse and storage facility together with the associated transport and stock management on behalf of Coles. The Coles business was then transferred to Eastern Creek from the VersaCold-owned facility at Arndell Park North. Prior to that time, the management of the storage and distribution of the chilled products required by the Coles business had previously been performed by VersaCold at our Arndell Park North Distribution Centre on a “closed book contract” for approximately ten (10) years.’
37 In determining whether or not the several businesses of the first and third to fifteenth respondents were of a similar kind it is appropriate to have regard to what was said by Edmonds and Graham JJ in Lilyvale Hotel at [46] where, of course, the relevant test was a much stricter one than a ‘businesses of a similar kind’ test. It will be recalled that in addressing the application of a ‘same business test’ to the facts of that case their Honours said at [46]:
‘The execution of the management of the hotel at different times in different ways had no bearing upon the identification of the business which the appellant carried on.’
38 One might paraphrase those words in respect of the businesses carried on by the first and third to fifteenth respondents saying that the identity of the particular customers and the execution and management of the businesses in different ways under ‘open book’ contracts in some instances and ‘closed book’ contracts in others and from different premises with different ownership regimes, had no bearing upon the identification of the businesses which were being carried on. The relevant businesses all involved the distribution of refrigerated goods from temperature controlled warehouse and storage facilities or the provision of labour for that purpose.
39 Mr Mohammad, referred to in an affidavit affirmed 6 May 2009 as ‘Mekdad Mohamad’ said:
‘1. I am employed as a Store Person by the First Respondent. I work on day shift at the Eastern Creek Chilled Distribution Centre located at 3 Roberts Road, Eastern Creek, New South Wales (“CDC”).
2. I have been employed by the First Respondent at the CDC since February 2008. Annexed hereto and marked “MM1” a copy of my pay slip for the week ending 26 April 2009.
3. Prior to working at the CDC, I believed I was employed by the Second Respondent at its Arndell Park distribution centre (“Arndell Park”). However, I now believe I was employed by a different company, although I am unsure of the exact name of the company.
…
6. I put in an application to work at the CDC and attended an interview and was accepted.
7. I received a letter offering me a position at the CDC. I no longer have a copy of this letter. To the best of my recollection the letter was from the Second Respondent and was similar to the letter I have annexed hereto and marked “MM2”.
…
10. The work that is undertaken at the CDC solely relates to storing and supplying Coles supermarkets in New South Wales with frozen and chilled products including dairy products. In addition at Christmas and Easter the CDC has started storing and distributing general merchandise for Coles supermarkets in the form of Christmas trees and wrapping paper as well as some other general supermarket products such as chocolates.
11. To the best of my knowledge Arndell Park and the other distribution centres of the Second Respondent at Girraween (“Girraween”) and Minto (“Minto”) do not store or supply products for Coles.
12. To the best of my knowledge no one employed at the CDC works at Arndell Park, Girraween or Minto. Further to the best of my knowledge no one employed at Arndell Park, Girraween or Minto works at the CDC.
…
14. There are about 110 members of the Applicant at the CDC yet neither myself or, to the best of my knowledge, any of the other delegates of the Applicant at the CDC have been involved in any of the negotiations for the Agreement or had any input into the Agreement.
…’
40 Annexure ‘MM2’ to the affidavit of Mr Mohammad was a letter to an unidentified person on a letterhead of ‘Australian Support Office VersaCold Logistics Ltd A.B.N. 58 004 902 998 [plainly a reference to the second respondent]’. The form of letter signed by Ms Sullivan as ‘People Development Manager – Coles Retail’ included:
‘I am pleased to offer you a position of Team Member, reporting to a Team Manager at the Eastern Creek CDC. The terms and conditions of your employment with VersaCold Logistics will be communicated to you shortly including a date of commencement.
Your employment at Arndell Park will continue until you have been transferred over to the Eastern Creek site.’
The letter was dated 16 January 2008.
Application of the law to the facts
41 Whilst the legislature’s intention was to have collective agreements, whether employee collective agreements or union collective agreements, cover ‘a single business or part of a single business’, that was clearly to be the case ‘unless’ one of the ‘exceptions’ covered by s 322(2) applied (see Explanatory Memorandum paragraphs 790, 793 and 794).
When one of the ‘exceptions’ applied it was plainly the intention of the legislature that, amongst other possibilities, collective agreements could be made by several related corporations treated as one employer and such agreements could cover employees in several single businesses treated as one single business. The last two sentences of paragraph 794 of the Explanatory Memorandum make this abundantly clear.
42 Counsel for the applicant points out that in paragraph 793 of the Explanatory Memorandum there is no mention of ‘95A(2)(b)(ii)’ [now s 322(2)(b)(ii)] and the word ‘each’ is not included between the reference to the Corporations Act and ‘carry on a single business’. These observations are correct, but without any substance. The Explanatory Memorandum cannot be relied upon to change the text of the Act in the absence of manifest absurdity or unreasonableness. More importantly, it is clear from paragraph 793 that ‘95A(2)(b)(ii)’ was in contemplation when the paragraph was drafted (see ‘and the single businesses may be treated as one single business’) and that the omission of ‘each’ was inadvertent, otherwise the reference to ‘single businesses’ (emphasis added) being treated as ‘one single business’ would be otiose.
43 In relation to paragraphs 794 of the Explanatory Memorandum counsel for the applicant drew attention to the words ‘subsection 95A(2) would have the effect of allowing these employers [several employers treated as a single employer] to make one collective agreement covering certain joint business activities’ (emphasis added). The applicant’s submission was that the word ‘joint’ confined the operation of s 322(2)(b) to cases where members of a corporate group carried on business activities jointly i.e. where several companies were engaged in the same business activity together. With respect, this submission does not bear analysis. Whilst it may be correct to say that s 322(2)(a) focuses upon a number of employers carrying on a joint business activity, the same cannot be said of s 322(2)(b). The words chosen in the Act ‘the single businesses may be treated as one single business’ (emphasis added) are entirely inconsistent with the concept of the single businesses being a joint business activity. This view is reinforced by what appears in the last two sentences of paragraph 794 of the Explanatory Memorandum.
44 Returning to question (a) at [1], one might contemplate an employer which, within one company, carried on a media business, a pastoral business and a gambling business. Would those together constitute a single business, each being ‘part of a single business’ or, would they be three separate single businesses? Whilst it may be arguable that the three businesses were, for the purposes of the Act, a single business, with the answer to the question depending upon the unique facts of the given case, I am inclined to the view that there would be three separate ‘single businesses’ for the purposes of the Act. Section 331(1)(a) certainly contemplates that ‘one’ employer may carry on more than one single business and s 323(b) contemplates that an employer with an existing ‘single business’ may carry on a new business, project or undertaking which will itself be ‘a single business’. Against this, one has the seemingly odd situation where all the activities carried on by (say) the Australian Capital Territory will, for the purposes of Part 8 of the Act constitute ‘a single business’ (see s 322(1)(b), no matter how diverse those activities may be e.g. electricity supply, road maintenance, release of land for subdivision or other development, waste disposal etc.
45 In relation to question (b) at [1], there is nothing in the Act or the Explanatory Memorandum, as properly understood, to compel a construction of s 322(2)(b) that would require the insertion of words such as ‘of a similar kind’ after ‘each carry on a single business’. The fact that s 322(2)(b) might produce an unusual result was clearly recognised by the words of paragraph (b) and by the several references to the exceptions in the Explanatory Memorandum to which reference has been made. As was said in paragraph 794 of the Explanatory Memorandum, the exceptions would ‘eliminate the need for these businesses [relevantly, separate single businesses of different companies within the same group] to make separate collective agreements or a multiple-business agreement’ (emphasis added).
46 In any event, were it necessary for the single businesses of the first and third to fifteenth respondents in this case to be of a similar kind, it seems clear to me that they were. Paraphrasing, once again, the words of Edmonds and Graham JJ from Lilyvale, where the relevant test was ‘the same business’ test and not simply a ‘business of a similar kind’ test, the execution of the management of the several temperature controlled warehouse and storage facilities at different times, in different locations and in different ways, had no bearing upon the kinds of business which the first and third to fifteenth respondents respectively carried on.
The employer companies within the VersaCold group were not obliged by s 328(a) or any of the other provisions of the Act to have separate union collective agreements for parts of the single businesses which, by virtue of s 322(2)(b)(ii) were to be treated as ‘one single business’, such as geographically distinct parts like Minto, Girraween, Arndell Park or, as the applicant would seek, Eastern Creek.
47 In relation to (c) at [1], the applicant submitted that the fact that two or more related corporations ‘may be treated as one employer’ and that the single businesses of those corporations ‘may be treated as one single business’, did not mean that the corporations could as ‘an employer’ make a union collective agreement with the sixteenth respondent as an organisation of employees within the meaning of s 328 of the Act in circumstances where one of its members was employed in ‘a single business … of the employer’.
This submission effectively asked the Court to ignore s 322(2)(b) of the Act which was directed at allowing related corporations to make one collective agreement and eliminate the need for separate collective agreements or a multi-business agreement.
48 In my view, the Act makes it abundantly clear that a collection of related corporations which ‘may be treated as one employer’ are together ‘an employer’ for the purposes of s 328 of the Act and the single businesses of such related corporations, which ‘may be treated as one single business’ are together ‘a single business’ of that employer within the meaning of the section.
49 In my opinion, none of the issues raised by the applicant requires a finding that the Agreement is not a union collective agreement for the purposes of the Act.
50 It was faintly asserted by the applicant that s 340(2)(a) of the Act required the first and third to fifteenth respondents to give persons employed at the separate temperature controlled warehouse and storage facility sites a separate right to decide whether they wanted to approve the Agreement. It was submitted that the conferral of a ‘reasonable opportunity to decide’ so required. In my opinion this submission is without substance. Section 340(2)(a) is concerned with the process whereby ‘all of the persons’ whose employment would be subject to the Agreement are given a reasonable opportunity to decide whether they want to approve the agreement in one or other of the ways contemplated by s 340(2)(b).
51 No declaration should be made as sought by the applicant. The Application should be dismissed.
|
I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. |
Associate:
Dated: 20 May 2009
|
Counsel for the Applicant: |
R Reitano |
|
|
|
|
Solicitor for the Applicant: |
Slater & Gordon |
|
|
|
|
Counsel for the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Fourteenth and Fifteenth Respondents: |
A K Herbert and J W Nolan |
|
|
|
|
Counsel for the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Fourteenth and Fifteenth Respondents: |
Agnew D'Arcy Legal |
|
|
|
|
Counsel for the Sixteenth Respondent: |
C H Buckley |
|
Date of Hearing: |
14 May 2009 |
|
|
|
|
Date of Judgment: |
20 May 2009 |
