Award coverage and area and scope issues

One particularly challenging legal issue in employment law is determining the area and scope of a modern award, or even sometimes, although in my experience less often, an enterprise agreement. The challenges are clearly on show in the extract from a decision of the Federal Court recently.

“THE ESTABLISHMENT ISSUE

75    The first issue is whether Regents Park was a “meat processing establishment” rather than a “meat retail establishment” within the meaning of those expressions in the Award.

The Meat Industry Award

76    The Meat Industry Award covers employers throughout Australia and their employees in certain classifications in the meat industry (cl 4.1). The “meat industry” is defined in cl 4.2 to include “meat manufacturing establishments”; “meat processing establishments”; “meat retail establishments”; and certain activities carried out “as an ancillary part of the business of that establishment” by an employer engaged in any of these establishments or by a related employer. Those activities are the handling and further processing of all by-products of the establishments referred to above and distribution, transport and storage operations for the purpose of transport or storage meat or meat products.

77    Each of the three types of establishment is defined in cl 3.1 of the Award.

78    “Meat manufacturing establishment” means:

an establishment wholly or predominately concerned with the manufacturing or processing of fresh meat into any form of edible manufactured or processed meat, meat products, smallgoods, ham, bacon, or similar products in which meat is a substantial ingredient, including any related activities such as retail and/or wholesale sales, and killing, dressing, boning, slicing, preparation and/or packing of fresh meat, where such activities are conducted at any place as an ancillary part of the manufacturing or processing business.

79    “Meat processing establishment” means:

an establishment wholly or predominately concerned with any one or more of the activities of killing, dressing, boning, slicing, preparation, and/or packing of fresh meat and will include any related activities conducted at any place as an ancillary part of such business, such as manufacturing or processing of meat, the treatment and processing of skins or hides, rendering, processing of by-products and/or retail and/or wholesale sales.

80    “Meat retail establishment” means:

an establishment wholly or predominately concerned with the retail and/or wholesale sale of fresh meat and/or meat products, including establishments where meat and/or meat products including ham and smallgoods and similar products are processed and/or manufactured as an ancillary part of the retail and/or wholesale business.

81    The terms “fresh meat” and “meat” are also defined in cl 3.1.

82    “Fresh meat” means:

meat that has not been cooked, pickled, cured or otherwise processed from the natural state, other than by chilling or freezing[.]

83    “Meat” means:

cattle, calves, buffalo, horses, mules, donkeys, sheep, lambs, goats, pigs, camels, deer, kangaroos, emus, ostriches or marine reptiles, and any flesh or other organic products derived from any of them (excluding milk)[.]

84    Although the Award was varied from time to time during the period of Mr Boateng’s employment, the variations are immaterial for present purposes.

The relevant principles

85    The parties agreed on the principles that apply to the interpretation of an award. They were discussed at length by Wheelahan J in King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [122]–[130] and, although the orders his Honour made were set aside on appeal, his Honour’s exposition of the principles was not challenged: King v Melbourne Vicentre Swimming Club Inc [2021] FCAFC 123; 308 IR 171 at [40]–[43] (Collier, Katzmann and Jackson JJ). In short, as with any industrial instrument, the resolution of any dispute about the meaning of a term or phrase in an award turns on the language used in it, understood in the light of its industrial context and purpose: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J). That context includes the history. Narrow or pedantic approaches to interpretation are misplaced: Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J). Too much should not be made of infelicitous expressions so that “fractured and illogical prose may be met by a generous and liberal approach to construction”: City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 at [57] (French J).

86    Reference to the history may reveal that certain expressions have been interpreted before, whether by industrial tribunals or courts, and when they appear in the same or a similar context in later instruments may then be taken to have an accepted meaning: Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 517–8 (Burchett J); King at [127] (Wheelahan J). But there are limits, as the Full Court observed in King at [43], referencing the primary judge at [128]–[129]:

[T]he texts of modern awards are widely available to members of the public and should be reasonably capable of being understood and implemented by participants in the relevant industry by reference to the language of the award itself, without having to delve into the pedigree of the instrument. That is especially so where, as here, non-compliance with an award can expose a person to pecuniary penalties: see Wanneroo at 380.

How should the Award be interpreted?

87    Starting with the text, the Award identifies three types of meat establishments. It contemplates that manufacturing, processing and selling can occur in all three and that whether an establishment comes within a particular definition depends on which of the activities described in each definition is “wholly or predominately” its concern. The answer in any particular case, as Dick Stone submitted, requires a qualitative and/or quantitative assessment of the establishment’s concerns and that “concern” in this context directs attention to the nature of the business or commercial activities carried out in the establishment. Thus, the answer to the question of whether an establishment is a “meat processing” or “meat retail” establishment does not turn on the nature of the company’s business, but on the nature of the relevant establishment.

88    Like many words, the meaning of the word “establishment” will vary, depending on the context in which it is used. Regardless, “establishment” is not a synonym for “business” or “enterprise”. Relevantly, in its ordinary meaning it refers to “a place of business … and everything connected with it (as furniture, fixtures, grounds, employees)”: Macquarie Dictionary (8th ed, Macquarie, 2020).

89    In the context in which the word appears in the Meat Industry Award, it was common ground that it means “place of business”. It includes a shop, a factory, a plant or facility or a combination of them and other buildings. More than one business may be carried out in an establishment. Equally, two or more establishments may operate in adjacent premises or co-exist in the one premises: Meatpak Pty Ltd t/as Holco Fine Meat Supplies v Moran [2005] FCAFC 111; 145 IR 248 at [18].

90    None of these matters was controversial.

91    What was controversial was the extent to which any assistance can be obtained from the history of the Award.

92    In its opening submissions Dick Stone argued that it was clear that the Australian Industrial Relations Commission (AIRC) did not intend, as part of the award modernisation process, to disturb the existing coverage of meat manufacturing establishment, meat processing establishment and meat retail establishment in different awards before rationalising and consolidating the three pre-modern awards covering each type of establishment in making the Award. In its closing submissions, the argument was put a little differently. There, Dick Stone contended that it was “clear enough” that the AIRC sought to maintain the pre-existing award structure to reflect the market segmentation.

93    It is by no means clear that this was the AIRC’s intention. Indeed, Dick Stone’s submission cannot be accepted.

94    For a start, not all these terms appear in the three pre-modern federal awards. Furthermore, as the applicants pointed out, the definitions in the Meat Industry Award do not incorporate the definitions in the predecessor awards. Certainly, the coverage definitions in the three previous federal awards are different and distinct from the definitions in the Meat Industry Award.

95    The Meat Industry Award replaced three federal awards. Those three awards were the Federal Meat Industry (Processing) Award 2000 (FMP Award), the Federal Meat Industry (Retail and Wholesale) Award 2000 (R and W Award), and the Federal Meat Industry (Smallgoods) Award 2000 (Smallgoods Award). The Meat Industry Award also supplanted some 25 state awards.

96    The coverage clause in the FMP Award (cl 5.2) provided:

5.2.1    This award will apply in meat processing establishments, as defined, in respect to employees employed by the employers bound and respondent to this award for whom rates of pay and general conditions of employment are prescribed herein.

5.2.2    At the time of making this award, where an employer was bound by a State award, then this award will not apply, regardless of whether such employers were members of the National Meat Association of Australia or not.

97    “Meat processing establishment” in the FMP Award was defined in the following way (in cl 3.4):

Meat processing establishment shall include an abattoir, boning room or pre-packing operation but does not include a retail or country butcher shop, smallgoods factory or ham and bacon factory.

98    The coverage clause in the R and W Award (cl 5.2) provided:

This award will apply in respect of all employees employed in retail meat establishments, wholesalers, domestic and/or wholesale meat markets and abattoirs associated with a butcher shop and classifications contained in the award which are incidental to the principal business.

Clause 3.20 of that award read:

Wholesale or wholesaler are to be given their ordinary meaning and includes establishments that supply meat products for hospitality and catering outlets.

99    The coverage clause in the Smallgoods Award (also cl 5.2) provided:

5.2.1    This award applies in respect of all employees in establishments whose principal business is the smallgoods manufacturing.

5.2.2    At the date of making this award, where an employer was bound by a state award then this award will not apply, regardless of whether such employers are members of the National Meat Association of Australia, or not.

100    Dick Stone submitted that the Commission implicitly accepted submissions made by the Australian Meat Industry Council (AMIC), the peak employer body in the industry, and implicitly rejected the Union’s alternative formulation based on physical activities. That submission cannot be accepted either.

101    It is true that in its first exposure draft the Commission adopted definitions for each establishment type based on the AIMC’s submission. Those definitions differed from the three federal awards by referring to activities but their focus was on the business of the employer. The AIMC’s proposal, largely incorporated in the first exposure draft, included the following definitions of “meat processing establishment” and “meat retail establishment”:

Meat processing establishment means an establishment in which the sole or predominant business is any one or more of the activities of killing, dressing, boning, slicing, preparation and/or packing of fresh meat and shall include any related activities conducted at any place as an ancillary part of such business, such as manufacturing or processing of meat, the treatment and processing of skins or hides, rendering, processing of by-products and/or retail and/or wholesale sales.

Meat retail establishment means an establishment in which the sole or predominant business is the retail and/or wholesale of fresh meat and/or meat products, including establishments where meat and/or meat products including ham and smallgoods and similar products are processed and/or manufactured as an ancillary part of the retail and/or wholesale business.

(Emphasis added.)

102    In its submissions to the Commission in response to the first exposure draft, the Union raised concerns that the proposed definitions were potentially ambiguous:

The AMIEU appreciates that the definition is referring to the “predominant business” of the “establishment” rather than that of the overall “business,” but submits that there is clearly scope for ambiguity. The AMIEU submits that it would be preferable to replace the word “business” with a more neutral term, such as “activity”…

103    In response the AMIC adhered to its original proposal, contending that it was based on the reasoning in Holco. It submitted:

For this reason, the proposed alteration of the expression “sole or predominant business” to “sole or predominant activity” in the definition of meat manufacturing establishment is neither useful nor sensible. In many cases, the sole or predominant activity will also be characteristic of the business, however in other circumstances, such as the Holco case itself, the predominant business of the enterprise (wholesaling of meat) was arguably not reflected in the degree of physical activity on the site due to some labour-intensive processing activities being undertaken as an ancillary part of the larger business.

Use of the word business will allow a global and sensible view to be taken of the nature of the operation, and is more likely to be consistent with existing demarcations under the pre-reform awards.

104    In the Award Modernisation decision [2019] AIRCFB 826 at [164] the Full Bench of the AIRC referred to this controversy:

The most significant area of controversy between AMIC and the AMIEU relates to the definitions of the various sectors of the industry. The issues arise from the decision of the Full Court of the Federal Court of Australia in Meatpak Pty Ltd t/a Holco Rine Meat Supplies v Moran. That decision dealt with issues of possible overlap between awards covering different sections of the industry. The Full Court resolved the matter by adopting a “dominant nature of the establishment” test. The exposure draft adopted the wording proposed by AMIC which used the phrase “the sole or predominant business”. It was submitted by AMIC that this best reflected the decision of the Court.

105    At [165] it referred to the Union’s submission and proposal. At [166] it resolved the controversy:

We have decided to adopt a formulation which refers to an establishment wholly or predominantly concerned with a particular sector of the industry.

106    How this conclusion can sensibly be read as an implicit adoption of the AMIC’s submission and a rejection of the Union’s frankly escapes me.

107    Contrary to Dick Stone’s submission, the Commission did not eschew an activities-based approach. The text upon which the Commission settled indicates that meat processing establishment, meat retail establishment and meat manufacturing establishment are each defined, not by the nature of the employer’s business but by the activities performed within them. The history also indicates that, rather than accepting the submissions of the AMIC and rejecting the submissions of the Union, the Commission took on board the Union’s concerns.

108    Dick Stone also submitted that the AIRC intended to incorporate the dominant purpose test developed in Holco. Relying on Holco, Dick Stone submitted that the nature of the establishment depends on the source of the profits of the business.

109    Up to a point the first part of this submission should be accepted but not the second.

110    Holco was concerned with the meaning of “establishment” in the context of the FMP Award and the R and W Award. Seven boners and slicers, who were employed in the “boning area” of a plant adjacent to a wholesale market operated by their employer, claimed to have been underpaid annual leave on the basis that their employment was governed by the FMP Award, cl 5.2.1 of which relevantly provided that it would apply in “meat processing establishment[s]”, as defined. The employer claimed that the FMP Award did not apply because a “meat processing establishment” for the purposes of the FMP Award referred to a “stand-alone” establishment and, in the case of a boning room, there had to be an establishment constituted only by a boning room. It argued that the R and W Award applied because the employees were employed in a wholesaler or wholesale meat establishment (see cl 5.2).

111    At first instance an industrial magistrate held that the FMP Award applied to the relevant employees because they were working in a boning room, albeit that this was a discrete area of a larger room, known as the production area, which also included “the food service area”. Her Honour observed that there was nothing unusual about different awards applying in the one establishment.

112    The Full Court (Wilcox, Spender and Madgwick JJ) accepted that there was a possibility that a single establishment might come within the ordinary meaning of the coverage clauses of both awards (at [15]), such as a stand-alone boning room where the employer owned and sold by wholesale 90% of the output and contract boning for other meat traders the remaining 10%. In ordinary language, the Court held, such an establishment might well be both a meat processing establishment and a wholesaler. But the Court inferred that the two awards were not intended to overlap in a single establishment (at [13]) and that it was evident from the terms of the R and W Award and “industry parlance” that “boning areas may be part of wholesale establishments” and not establishments in themselves (at [14]). The Full Court went on to hold (at [17]) that a “dominant nature of the establishment test” should be applied, if possible, to give effect to the “inferred purposes” of the parties and the Commission. In determining the dominant nature of the establishment, the Full Court held (at [18]) that it was necessary for the Industrial Magistrate to take into account “all surrounding circumstances”. In particular, the Court explained, the Industrial Magistrate needed to consider first, the exact nature of the establishment in question, noting the possibility that in that case there might have been two or more establishments in adjacent premises or parts of the premises; and second, the relevant attributes of the establishment, which it characterised as “the mainspring or dominant means whereby the employer derived (or intended to derive) a profit from the operations”. With respect to the second matter, the Full Court explained:

For example, were boning and slicing and the other meat processes the essential value-adding mechanisms or were they mere enhancements of a concern fundamentally focussed on buying and selling meat? It is the objective attributes of the establishment, rather than self-serving ex post facto assertions about them, which must be examined.

113    The Court also observed (at [19]) that an understanding of the general context of the Australian meat industry might indicate that the phrase “meat processing” within the term “meat processing establishments” in the FMP Award should be given a different meaning from “its apparently plain one”. That meaning, I gather from what the Court said at [16], was “preparing meat into a marketable form by a systematic series of actions performed by persons and/or equipment”.

114    Since the Industrial Magistrate did not address “the fundamental question” of the dominant nature of the establishment, the Full Court allowed the employer’s appeal and remitted the matter for further hearing and determination to the Industrial Relations Court of South Australia.

115    The definitions in the Meat Industry Award, however, are not the same as those in the FMP Award. And they do not use the same formulation as the Full Court did in Holco. The relevant definitions in the Award turn on the whole or predominant concern of the particular establishment. In its ordinary meaning, “predominant” means having “ascendancy, power, authority, or influence over others”. It also means “prevailing”. “Dominant” can mean “ruling; governing; controlling; [or] most influential”. But it can also mean “main; major; [or] chief”. See Macquarie Dictionary. Whatever differences in meaning or nuance the two adjectives may have, however, the extrinsic material makes it clear that the language used in the Meat Industry Award was intended to introduce a similar test to that which was developed in Holco.

116    Contrary to the approach taken by Dick Stone, however, the Full Court did not say that the dominant nature of the establishment is exclusively determined by reference to the dominant means by which the employer derives a profit from the business conducted in the establishment. While that was unquestionably a significant factor, said that all the surrounding circumstances need to be considered. In any case, the context in Holco was very different. The question of profit was the method used by the Full Court in Holco to work out the dominant attributes of the establishment in the absence of a clause which defined the nature of the establishment by reference to the activities performed in it.

117    In the context of the Meat Industry Award, the characterisation of the establishment is to be determined first, by identifying the nature of the establishment by reference to the activities undertaken there and second, by assessing which of those activities is the establishment’s whole or predominant concern. The latter requires consideration of all surrounding circumstances, including physical nature of the premises, the roles activities carried out by the employees who work in it and the dominant means by which the employer derives (or seeks to derive) a profit from the enterprise conducted there.

Were the Regents Park premises a “meat processing” or “meat retail” establishment?

118    It is not in dispute that boning, slicing, preparation and packing of fresh meat took place in Dick Stone’s Regent Park premises. Nor is it in dispute that meat and meat products are sold by Dick Stone from those premises. It is therefore readily apparent that the answer to the question turns on which was the predominant concern. Naturally enough Mr Boateng’s evidence was focused on the activities in which he participated and on what he saw others do. For obvious reasons that evidence has its limitations.

119    Ms Fernandez also gave expert evidence on this question. Her expertise was not challenged. As I mentioned earlier, Ms Fernandez is the NSW Branch Secretary of the Union. She is also its former National President. She has been employed by the Union since 1994 and previously worked in the meat industry for 10 years.

120    Ms Fernandez deposed that, historically, there was a clear demarcation between meat processing, manufacturing and wholesaling. Abattoirs slaughtered animals, processed their carcases and divided them into quarters or “primal cuts”. That meat was then sold by wholesalers to retail butchers, restaurants and meat manufacturers. The wholesalers, she said, did “very little, if any, processing [work]”. But Ms Fernandez also said that the role of wholesalers fundamentally changed following the introduction of the Goods and Services Tax, which she attributed to the fact that restaurants no longer received a tax advantage from purchasing meat from wholesalers. Further changes included greater efficiency in selling meat; increased automation in meat processing and manufacturing; increased amounts and types of premade meals sold by supermarkets and food delivery companies; deskilling of the work performed by chefs and others in restaurants and meat retailers; and decreased numbers of specialist butchers.

121    Ms Fernandez deposed that these changes affected businesses like Dick Stone which responded by undertaking more meat processing and purchasing premises with meat storage facilities. She noted that Teys Australia was an example of a meat processing company that had adapted as a result of these changes. While initially operating as an abattoir, the company now also processes and manufactures various meat products, prepares “ready-to-eat meals”, and processes and manufactures meat for use by food services companies such as restaurants and hotels. Although unlike Teys Dick Stone did not slaughter, skin and quarter animals, Ms Fernandez said that the Teys enterprise was similar to Dick Stone, amongst other things in having factory areas where primal cuts of beef were processed into steaks and mince and packaged for dispatch.

122    Based on her research of Dick Stone and her review of its website, she expressed the opinion that the Regents Park establishment would be classified as a meat processing establishment for the purposes of the Award.

123    On the other hand, Dick Stone argued that the Regents Park establishment was not a meat processing establishment because, in effect, meat processing establishments were abattoirs and it was common ground that the Regents Park establishment was not an abattoir. Dick Stone submitted that the definition of “meat processing establishment” in the Meat Industry Award “describes one or more of the activities comprising the discrete successive processes involved from the slaughter of animals to the preparation and packing of fresh meat”. As it later put it:

[The Award] uses a bespoke definition. Relevantly, properly understood, the references to ‘boning’, ‘slicing’, ‘preparation’ and ‘packing’ are references to activities conducted during the primary production process in an abattoir and boning room. It does not refer to the subsequent process of cutting and portioning meat received from meat processing establishments. The work conducted by the Respondent is akin to that undertaken in a retail butcher shop to service the needs of particular customers. Here the Regents Park ‘establishment’ does not perform the activities undertaken in an abattoir.

124    Dick Stone contended that:

It is clear that each type of meat establishment contemplates a different segment of the continuum of activities comprising the meat industry – from the killing of animals to the sale of meat to the consumer. The segmentation of the types of meat establishment into three categories and the reference to ancillary businesses strongly indicates that the commercial structure of the meat industry is generally organised along these lines to reflect the grouping of activities as part of the system of producing meat for sale and consumption. This is also reflected in the award history in the meat industry which generally has been delineated according to three separate phases of (a) the killing and breaking down of animals into primal and sub-primal cuts in an abattoir and boning room: (b) the manufacturing and processing of meat to create meat product[s] such as smallgoods, ham, bacon etc; and (c) the wholesale retail sale of meat to businesses (e.g. hotels, restaurants, caterers, schools etc) and consumers (usually in supermarkets or butcher’s shops).

125    Further, relying on its interpretation of Holco, Dick Stone argued that its profits are derived from the mark-up on the meat it on-sells from meat processing and meat manufacturing companies and, for this reason, it comes “squarely within the boundaries of the definition of ‘meat retail establishment’” in the Award. Dick Stone claimed it was beside the point that it carries out on the site some tasks “akin to processing”, from which it derives no additional profit because those tasks are an “ancillary part of the … wholesale business”.

126    So what is the Regents Park establishment, what are its concerns, and which is predominant?

127    It is convenient to start with a description of the premises.

128    At all relevant times the premises consisted of a production room or area; large freezer and chiller warehouses for storing meat when it was delivered to the premises and after it had been processed in the production room pending sale and distribution to customers; offices; a reception area; and staff amenities. There was also a boning room, which was decommissioned in late 2017. The largest area of the premises is the distribution area, which includes about 1,500 square metres of loading docks where supplies were received and deliveries loaded.

129    The Dick Stone website emphasises the importance of meat processing to the Regents Park establishment. On the website the premises are described as a “new state of the art processing and cold storage facility”, “hous[ing] a boning room, food service operation with portion control area as well as 300 pallet chiller, 900 pallet freezer and blast freeze area of around 25 pallets”. The company boasts that it “has always remained at the forefront of innovation and technology with processing and packaging”. Nevertheless, it markets itself both on the website and elsewhere as a meat wholesaler, specifically as a “wholesaler of fine quality… meat, game, poultry & smallgoods”. And it is classified for workers’ compensation purposes as a wholesaler.

130    Parts of the premises were also used by Melrina. During the period in which Mr Boateng was employed, Melrina shared the use of the administration area, pallet spaces, the loading docks, car park, and the former boning room.

131    Melrina receives and stores meat at the Regents Park premises. It sells meat from the Regents Park establishment to retail butcher shops, food service wholesalers and small goods manufacturers. It does not engage in any processing of meat. It employs sales people, forklift drivers, cold store management staff, finance staff, and administrative employees. The evidence does not indicate how many sales staff it employed but Mr Marler testified that it employed about seven salespeople, six forklift drivers, two finance staff, four administration employees and one manager. Dick Stone contracts certain finance and administrative functions from Melrina. And Dick Stone delivers meat under contract for Melrina.

132    The activities carried out at the establishment included boning, slicing, preparation and packing of fresh meat; manufacturing of meat products; loading and unloading of meat from vehicles; storage of meat; and the administration of sales.

133    While killing, dressing, boning, slicing, preparation and packing of fresh meat describes the processes performed in an abattoir, I am unable to accept Dick Stone’s submission that the references to “boning”, “slicing”, “preparation” and “packing” in the definition of “meat processing establishment” are merely or exclusively references to activities conducted during the primary production process in an abattoir and boning room as that it is at odds with the plain words of the definition. Nor am I able to accept Dick Stone’s alternative submission that a “meat processing establishment” must at least be a boning room or a location where the activities listed in the definition are carried out in the particular sequence as part of that sequence of activities. Dick Stone submitted, in effect, that the definition of “meat processing establishment” in the Meat Industry Award was intended to replicate the definition in the FMP Award, which, it will be recalled, provided that “meat processing establishment” shall include “an abattoir boning room or pre-packing operation but does not include a retail or country butcher shop, smallgoods factory or ham and bacon factory”. But if only abattoirs and boning rooms were meat processing establishments, I ask rhetorically, why would the Award not define a meat processing establishment as an abattoir or boning room?

134    The terms of the definition make it abundantly clear that if any one or more of the activities mentioned in the definition is the whole or predominant concern of the establishment, then the establishment is a meat processing establishment. If Dick Stone’s submission were right, then there would have been no need for the phrase “any one or more of” and the conjunction “or” before “packing” would also be redundant. The submission leaves these words with no work to do. Yet, in construing the definition, the Court should strive to give effect to all its words: King at [124]–[125] (Wheelahan J). After all, whatever history and context may tell us, “what is to be determined is the proper construction of the [award] based on the objective meaning of the text”: King at [128] (Wheelahan J). Dick Stone submitted that it was important, indeed critical, in understanding the meaning of “meat processing establishment” that in Holco at [19] the Full Court said that an understanding of the general context of the Australian meat industry might indicate that the phrase “meat processing” within the term “meat processing establishment” in FMP Award should be given a meaning other than its apparently plain one. Here, however, I do not consider that the extrinsic material upon which Dick Stone relied justifies such a conclusion.

135    Moreover, as Wheelahan J went on to say in King at [128]:

The Fair Work Act contains provisions that require the Commission to publish its written decisions, reasons, approved enterprise agreements, and variations to modern awards, with the consequence that they are widely available to members of the public: s 168, s 601. There is much to be said for the notion that instruments such as awards should be reasonably capable of being understood and implemented by the participants in the industries to which they apply by reference to the language employed in the instrument itself, without having to investigate and ascertain the pedigree of the instrument in order to identify some latent meaning to be discerned by an analysis of the mental states or purposes of others: see, The Nine Brisbane Sites Appeal at [8] (Allsop CJ). In City of Wanneroo v Holmes at 380, French J stated –

Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.

136    Dick Stone also submitted that the provision in cl 32.2 of the Award for a 10 minute rest break for certain production workers in meat processing establishments only supported its argument that meat processing establishments within the meaning of the Award is concerned with “work as part of the primary meat production process where the work is generally more intense and a break by one person has the capacity to halt work for others working on the line”. But cl 32.2 does not define a meat processing establishment. The particular production workers to which that clause is directed are “employees whose duties are integral to the operation of a mechanised chain, conveyor, or other similar constantly moving system of production, or a non-mechanised rail system of conveyance”. The existence of such an operation is not a component of the definition of “meat processing establishment”.

137    Dick Stone submitted that the main source of the establishment’s profits is from the sale of meat and meat products. But the evidence did not go this far. Mr Marler merely described the profit margins on two cuts of meat. No profit and loss statements were tendered.

138    Still, the purpose of the processing activities carried out at the Regents Park establishment was to prepare products for sale to customers outside the meat industry including by filling customers’ orders by slicing, dicing, mincing or otherwise preparing fresh meat into portions for sale. In this sense the processing activities support the sales functions, not vice versa, and can be seen as an ancillary, albeit important, part of the wholesale business.

139    Dick Stone submitted that it is “artificial and misguided” to exclude the business of Melrina when deciding the nature of the establishment. It pointed to the evidence that the two businesses had a close commercial relationship and operated in an integrated manner as well. Dick Stone also pointed to the fact that it earned income from the distribution and transport of meat for Melrina, charging commercial rates for that freight. Dick Stone submitted that, to the extent that it was involved in distributing and transporting “products of its meat establishment”, it forms part of the meat industry by virtue of cl 4.2(d)(ii).

140    I accept that the activities Dick Stone carried out in connection with its arrangement with Melrina mean that those activities were part of the meat industry but that is beside the point.

141    Clause 4.2 provides:

The meat industry includes:

(a)    meat manufacturing establishments;

(b)    meat processing establishments;

(c)    meat retail establishments; and

(d)    the following:

(i)    handling and further processing of all by-products of the establishments referred to in clause 4.2(a),(b) or (c), including skins, hides and rendering; and

(ii)    distribution, transport and storage (including freezing and cold storage) operations for the purpose of transport or storage of the meat or meat products of an establishment referred to in clause 4.2(a),(b) or (c),

where such activities are carried out by an employer engaged in any of clauses 4.2(a), (b) or (c) as an ancillary part of the business of that establishment, or by an employer that is a related company of such employer.

142    That means that Dick Stone and its employees in the establishment and those engaged in distribution, transport and storage (whether for Dick Stone, for Melrina, or for Dick Stone under its contract with Melrina) are covered by the Award, but it does not mean that the activities of distributing, transport and storage are relevant to the determination of the nature of the establishment. Dick Stone did not act as a wholesaler when delivering meat for Melrina. The contract it had with Melrina was to deliver the goods, not to sell them. If anything, this aspect of Dick Stone’s business is properly regarded as a freight business.

143    The evidence indicates that the majority of Dick Stone’s employees in the establishment were involved in meat processing activities. It also indicates that meat processing was an important part of the work carried out at the establishment. These circumstances are relevant to whether meat processing is the predominant concern of the establishment but they are by no means decisive. Despite these matters, the evidence indicates that the establishment was predominantly concerned with the sale of meat, particularly when Melrina’s activities are taken into account. Between 1 July 2016 and 30 June 2019, around 69% of the meat delivered by Dick Stone, including the meat delivered on behalf of Melrina, was neither cut, diced, minced or portioned by Dick Stone. When Melrina’s deliveries were excluded from the equation, that number dropped to 45%. The latter figure suggests that the majority (55%) of Dick Stone’s sales were derived from meat products that it had processed. No doubt this explains why the applicants were at pains to quarantine from consideration Melrina’s activities and sales.

144    But Melrina’s operations cannot be quarantined from consideration as the applicants would have it. Dick Stone and Melrina are related companies who shared premises, are involved in the same industry, and had common staff and quality management systems. As Dick Stone submitted, they effectively operated the Regents Park premises as a single establishment. The Award does not expressly preclude such an arrangement. And there is no reason in principle why an establishment could not be operated by two or more employers in the industry. In any event, Dick Stone and Melrina both operated out of the Regents Park establishment. The activities they both carried out therefore affect the determination of the question whether the establishment was predominantly concerned with killing, dressing, boning, slicing, preparing and/or packing of fresh meat on the one hand or predominantly concerned with the retail and/or wholesale sale of fresh meat and/or meat products on the other.

145    Even if the deliveries on behalf of Melrina are not taken into account, that would not be enough to make the Regents Park premises a meat processing establishment. That 55% of the meat delivered to Dick Stone customers may have been cut, diced, minced, portioned or otherwise processed by Dick Stone does not alter the fact that the meat is being on-sold on a wholesale or retail basis. Here, as the applicants accepted (at T318), the work undertaken by Dick Stone is akin to that performed in a retail butcher shop, albeit on a much larger scale. It would be surprising if the intention of the Award were to treat a retail butcher shop as a meat processing establishment merely because tasks that might be described as “meat processing” were carried out there. The meat processing tasks are properly to be regarded as ancillary to the principal function of a butcher shop, which is to sell meat.

146    I am not persuaded that at the relevant time the Regents Park facility was a meat processing establishment. I am not satisfied that it was predominantly concerned with killing, dressing, boning, slicing, preparing and/or packing of fresh meat. Rather, the evidence indicates that it was predominantly concerned with the sale of fresh meat and/or meat products. While it was also concerned with the former activities, those activities were an ancillary part of Dick Stone’s wholesale business.”

 

Australasian Meat Industry Employees Union v Dick Stone Pty Ltd [2022] FCA 512 delivered 6 May 2022 per Katzmann J