REVIEW OF DECISION OF THE CONSTRUCTION INDUSTRY LSL PAYMENTS BOARD GIVEN ON 7 NOVEMBER 2016

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2017 WAIRC 00164

DELIVERED : TUESday, 21 March 2017

FILE NO. : APPL 67 OF 2016

Applicant

AND

Construction Industry Long Service Leave Payments Board

Respondent

Catchwords : Review of a decision of the Construction Industry Long Service Leave Payments Board – Requirement to register as an employer under the Construction Industry Portable Paid Long Service Leave Act 1985 - Definition of construction industry – What constitutes work on site – Decision of the Construction Industry Long Service Leave Payments Board affirmed - Scope of Act extends beyond work on construction sites

Legislation : Construction Industry Portable Paid Long Service Leave Act 1985  s 3, s 30(1), s 50(2)
Construction Industry Portable Paid Long Service Leave Regulations 1986  reg 2, reg 3, sch 1 div 2

Result : Decision of Board affirmed

Representation:

Applicant : Mr I Curlewis of counsel

Respondent : Ms R Harding of counsel and with her Ms B Ridout of counsel

Solicitors:

Applicant : Lavan

Respondent : Jackson McDonald

Reasons for Decision

1         The applicant seeks a review of the respondent’s decision requiring it to register as an employer under s 30(1) of the Construction Industry Portable Paid Long Service Leave Act 1985 (the Act).  The applicant says it is not an employer which engages persons as employees in the construction industry, nor is it required to otherwise register under the Act.

2         The applicant says:

(1) It is a partnership of two companies, namely Sparks “N” Security Pty Ltd and Ritzline Pty Ltd.  The primary business is the installation of reverse cycle ducted or split systems and evaporative cooling units in established residences and apartments.  It also undertakes other work.

(2) It operates primarily in or in relation to the retail industry;

(3) It is not an employer as defined in the Act because:

(a) It does not engage persons as employees in the construction industry;

(b) None of its work is carried out on a construction site or on a site on which construction work is normally carried out;

(c) Its employees are not itinerant in that they are not employed on a project to project basis.

3         Therefore, the applicant says, the Act does not apply to it, and it is thus not required to be registered under s 30(1) of the Act.

4         The applicant called evidence from Darren Callaway, a director of Ritzline Pty Ltd.  Mr Callaway says that:

…

(5) The primary and predominant business of the applicant is the installation of domestic reverse cycle ducted, split systems and evaporative cooling units at established residential homes and apartments.

(6) The other business conducted by the applicant is the sale and servicing of domestic cooling units for residential houses and apartments and work on alarm systems, lighting, CCTV, theatre rooms, oven change overs, residual current devices and smoke alarms. All that work is carried out in residential homes and apartments.

(7) The applicant only carries out work in the retail trade for individual home and apartment owners.

(8) The applicant never works as a subcontractor for any new home builder. None of the applicant's work requires the issue of a building permit.

(9) At least 80% of the applicant’s work is the installation of domestic reverse cycle ducted, split systems for home or apartment owners referred by Harvey Norman's Midland and Malaga shops to the applicant.

…

5         Mr Callaway gave evidence of the numbers of air conditioning units installed by the applicant by reference to referrals received from the two shops.

6         Mr Callaway also says:

(11) The air conditioning units installed by the applicant are not industrial or commercial in nature. Each unit is received from Harvey Norman or other unit vendor, in a discrete large cardboard covered packaged container.

(12) None of the work that the applicant carries out is on or at a construction site. It is only carried out at existing residential homes and units.

7         As at the date of hearing, the applicant employs:

● One certified electrician.  Until very recently, it also employed two other electricians.

● One restricted fridge engineer, who is not a fitter or mechanic, having a qualification to allow him to do work installing and decommissioning air conditioners;

● Two electrical apprentices;

● Two office administrative staff, one of whom is also a proprietor and director.

8         The applicant also employs trades assistants from time to time to assist with installation and generally assisting tradespersons.

9         Mr Callaway holds a Refrigerator Handling Licence No L0199112 issued by the Federal Government, and he is not an employee, rather he is a director.

10      Mr Claude Camporale, also a director, has a restricted licence, but he also has other certifications that allow him to do installations of security cameras and other equipment.

11      The employees of the applicant are not itinerant and are generally employed full time.

12      None of the applicant's employees is covered by any prescribed Award and in particular, the applicant and its employees are not subject to the Air Conditioning and Refrigeration Industry (Construction and Servicing) Award No 10 of 1979.

13      All work is performed away from the applicant’s premises, and is performed at the client’s residence.

14      In particular, the applicant says that the term “employee” in the construction industry in s 3 of the Act is ambiguous.  This is because reference in the definition of “employee” to “a classification of work referred to in a prescribed industrial instrument relating to the construction industry that is a prescribed classification” must be read in context with the area and scope of the prescribed industrial instrument.

15      The respondent says that:

(1) It is not a requirement of the Act that an employee of the applicant is covered by an award, but rather that the employee undertakes work in a classification that is a prescribed classification in a prescribed award.  The prescribed awards include the Air Conditioning and Refrigeration Industry (Construction and Servicing) Award 1979.  The applicant employs persons in two prescribed classifications, electricians and apprentices, which are referred to in prescribed awards.

(2) It is not necessary that the work be carried out on a “construction site” as such but is “on site” or “on a site”, which means a place other than the business address of the employer.  The applicant’s employees carry out work at locations other than its business address.

(3) The type of work performed by the applicant’s employees falls within the definition of “construction industry” as defined, in s 3(1)(a) of the Act of installation, maintenance of or repairs to:

“(xiii) work for the generation, supply or transmission of electric power; and

…

(xvi) fixtures … for the use of any buildings or works.”

(s 3(1)(a) of the Act).

16      The respondent says the work described by Mr Callaway is work of the nature which meets these meanings.  Therefore, the applicant’s employees are engaged to perform work in the construction industry.

(4) It is not a requirement of the Act that the employees be itinerant.

17      Therefore, the respondent says the applicant is an employer as defined by s 3 of the Act in that:

(a) it employs persons as employees who meet the definition of employee under the Act;

(b) the employees are engaged in the construction industry.

The Act

18      Section 50(1)(b) of the Act provides that the decision by the Board to require an employer to register under the Act is a reviewable decision.  A person aggrieved by a reviewable decision may refer the decision for review to the WAIRC (s 50(2)).  The WAIRC is to inquire into the circumstances relevant to the decision and may affirm, vary or set aside the decision, and either substitute another decision or send the matter back to the Board for reconsideration in accordance with any directions or recommendations the WAIRC considers appropriate.

19      The Long Title of the Act provides that it is “An Act to make provision for paid long service leave to employees engaged in the construction industry and for incidental and other purposes”.

20      It is useful, for the purpose of context, to set out the whole of the definition of ‘construction industry’ set out in s 3 of the Act even though a great deal of it is not relevant.

construction industry means the industry —

(a) of carrying out on a site the construction, erection, installation, reconstruction, re‑erection, renovation, alteration, demolition or maintenance of or repairs to any of the following —

(i) buildings; and

(iia) swimming pools and spa pools; and

(ii) roads, railways, airfields or other works for the passage of persons, animals or vehicles; and

(iii) breakwaters, docks, jetties, piers, wharves or works for the improvement or alteration of any harbour, river or watercourse for the purposes of navigation; and

(iv) works for the storage or supply of water or for the irrigation of land; and

(v) works for the conveyance, treatment or disposal of sewage or of the effluent from any premises; and

(vi) works for the extraction, refining, processing or treatment of materials or for the production or extraction of products and by‑products from materials; and

(vii) bridges, viaducts, aqueducts or tunnels; and

(viii) chimney stacks, cooling towers, drilling rigs, gas‑holders or silos; and

(ix) pipelines; and

(x) navigational lights, beacons or markers; and

(xi) works for the drainage of land; and

(xii) works for the storage of liquids (other than water) or gases; and

(xiii) works for the generation, supply or transmission of electric power; and

(xiv) works for the transmission of wireless or telegraphic communications; and

(xv) pile driving works; and

(xvi) structures, fixtures or works for use on or for the use of any buildings or works of a kind referred to in subparagraphs (i) to (xv); and

(xvii) works for the preparation of sites for any buildings or works of a kind referred to in subparagraphs (i) to (xvi); and

(xviii) fences, other than fences on farms;

(b) of carrying out of works on a site of the construction, erection, installation, reconstruction, re‑erection, renovation, alteration or demolition of any buildings or works of a kind referred to in paragraph (a) for the fabrication, erection or installation of plant, plant facilities or equipment for those buildings or works;

(c) of carrying out of work performed by employees engaged in the work referred to in paragraph (a) or (b) and that is normally carried out on site but which is not necessarily carried out on site,

but does not include —

(d) the carrying out of any work on ships; or

(e) the maintenance of or repairs or minor alterations to lifts or escalators; or

(f) the carrying out of maintenance or repairs of a routine or minor nature by employees for an employer, or another person under an arrangement with a labour hire agency, who is not substantially engaged in the industry described in this interpretation;

21      Section 3 also defines employee, employer and apprentice as:

employee means —

(a) a person who is employed under a contract of service in a classification of work referred to in a prescribed industrial instrument relating to the construction industry that is a prescribed classification; or

(b) an apprentice;

employer means —

(a) a natural person, firm or body corporate who or which engages persons as employees in the construction industry; or

(b) a labour hire agency which arranges for a person who is a party to a contract of service with the agency (person A) to do work in the construction industry for another person (person B), even though person A is working for person B under an arrangement between the agency and person B,

but does not include a Minister, authority or local government prescribed under subsection (4)(c);

apprentice means —

a person who is an apprentice under a training contract that —

(a) provides for training in a classification of work referred to in a prescribed industrial instrument relating to the construction industry that is a prescribed classification; and

(b) is registered under the Vocational Education and Training Act 1996 Part 7 Division 2 or an Act of another State or a Territory that corresponds to that Act;

22      Section 3 defines industrial instrument as:

(a) an award, industrial agreement or order made under the Industrial Relations Act 1979; or

(b) an award, determination, enterprise agreement or order made under the Fair Work Act 2009 (Commonwealth); or

(c) an award, determination or agreement given continuing effect under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Commonwealth),

irrespective of whether or not the instrument has, since it was made or given continuing effect, ceased to be in force;

23      Section 3 defines prescribed as:

prescribed means prescribed by regulations made under this Act;

24      Section 30 – Registration of Employers provides in subsection (1):

30. Registration of employers

(1) Every employer must register as an employer under this Act.

25      Section 3(4) of the Act provides for regulations to be made.  It provides:

(4) The regulations may prescribe —

(a) any classification of work referred to in a prescribed industrial instrument to be a prescribed classification of work for the purposes of the definitions of apprentice and employee;

(b) any industrial instrument made with respect to employment in the construction industry to be a prescribed industrial instrument for the purposes of this Act;

(c) a Minister in the Government, an authority, whether a body corporate or not, constituted by a written law or a local government, not to be an employer, or not to be an employer in respect of prescribed employees of that Minister, authority or local government, for the purposes of the definition of employer in subsection (1).

26      The Construction Industry Portable Paid Long Service Leave Regulations 1986 (the Regulations) provide the following relevant provisions:

2. Prescribed awards

The awards mentioned in Schedule 1 are prescribed under section 3(4)(b) of the Act.

3. Prescribed classifications of work

(1) Subject to subregulation (2), all classifications of work referred to in an award mentioned in Schedule 1 are prescribed under section 3(4)(a) of the Act.

Subregulation (2) relates to exceptions, conditions or limitations, and is not relevant to this matter.

27      Schedule 1 – Prescribed awards and classifications of work, Division 2 lists the following awards arising under the Industrial Relations Act 1979:

(1) Air Conditioning and Refrigeration Industry (Construction and Servicing) Award No. 10 of 1979, which includes the classifications of:

● Refrigeration Fitter; (clause 29(2)(a))

● Tradesperson; (clause 29(2)(a))

● Tradesperson’s Assistant; (clause 29(2)(a))

● Apprentice (clause 29(3)).

(2) Electrical Contracting Industry Award R 22 of 1978, which includes the classifications of:

● Electrical Fitter; (clause 5 – Definitions)

● Electrical Installer/Mechanic; (clause 5 – Definitions)

● Electrician – Special Class.  (clause 5 – Definitions)

…

(4) Metal Trades (General) Award, which includes the classifications of:

● Tradesperson; (clause 13.2(1)(m))

● Tradesperson’s Assistant; (clause 13.2(1)(v))

● Apprentice; (clause 13.3))

● Electrician – Special Class; (clause 13.2(1)(g))

● Electrical Fitter; (clause 13.2(1)(h))

● Electrical Installer; (clause 13.2(1)(i))

● Fitter – Refrigeration (clause 13.2(1)(o)).

Consideration and Conclusions

28      The process for the consideration of this matter must start with s 30 of the Act.  It requires every employer to register under the Act.

29      According to s 3, an employer, for the purposes of this matter, is a natural person, firm or body corporate who or which engages persons as employees in the construction industry.

Does the applicant engage persons as employees in the construction industry?

30      Section 3 defines employee as:

“(a) a person who is employed under … a classification of work referred to in a prescribed industrial instrument relating to the construction industry that is a prescribed classification; or

(b) an apprentice.”

31      The applicant employs a number of employees under contracts of service and as apprentices.  It employs Electricians, Trades Assistants, and a Refrigeration Engineer.

32      Schedule 1 – Prescribed awards and classifications of the Regulations sets out, amongst others, three particular awards which are prescribed for the purposes of the Act.  I note that the definition of employee requires that the classification be referred to in a prescribed industrial instrument relating to the construction industry.

33      “Construction industry” used in that context must be that construction industry defined by the Act.  I think it is also reasonable to conclude that because the Schedule lists awards, that they are awards “relating to the construction industry”.

34      The awards listed in Division 2 – Awards under the Industrial Relations Act 1979 include the Air Conditioning and Refrigeration (Construction and Servicing) Award No 10 of 1979, the Electrical Contracting Industry Award R22 of 1978 and the Metal Trades (General) Award.

35      I note that the definition of employee in s 3 of the Act does not require that the industrial instrument cover the employment, or that the employer be bound by the award (Construction Industry Long Service Leave Payments Board v Positron Pty Ltd (1990) 70 WAIG 3062 at 3064).  It requires only that the employee is employed in a classification of work referred to in the prescribed industrial instrument.

36      So what are the classifications referred to in the awards?  In the Air Conditioning and Refrigeration Award they include Tradesperson, Refrigeration Fitter and Tradesperson’s Assistant.

37      The Metal Trades (General) Award is broken up into two parts, Part 1 dealing with ‘General’ industry and Part 2 dealing with Construction Work.

38      Part 1 – General sets out in clause 1.6 – Definitions and Classification Structure, classification structure and definitions which is used to determine clusters of Wage Groups.  The classification titles include, for example, Advanced Engineering Tradesperson – Levels I and II, Engineering Tradesperson Special Class – Levels I and II, Engineering Tradesperson – Level II, Engineering Tradesperson, Engineering/Production Employee – Level I, Engineering/Production Employee – Levels I - IV.

39      Each of those Wage Groups is then defined by reference to duties, training and exercise of different levels of judgment and levels of supervision.  For example, the Engineering Tradesperson Level 1 includes a person who holds a Trade Certificate or a Tradesperson’s Rights Certificate as an Engineering Tradesperson (Electrical/Electronic) – Level 1, (see 1.6.7 – Wage Group C10).  An Engineering Tradesperson Special Class – Level 1 includes an Engineering Tradesperson Special Class (Electrical/Electronic) – Level 1 (1.6.10 – Wage Group C8).

40      Clause 13 – Wages contains 13.2(1) Classification.  This sets out classifications including Electrician – Special Class, Electrical Fitter, Electrical Installer, Tradesperson, Fitter - Refrigeration and Tradesperson’s Assistant.

41      The general Wage Groups and classifications replace the “Old definitions” set out in Appendix 2.  This Appendix defines Tradesperson and sets out groups of classifications under the headings of ‘General Engineering’, ‘Electrical’, ‘Electroplating’, ‘Steel Construction’, ‘Welding’, ‘Foundry’ and ‘Industrial Instrumentation’.  Under the group covered by ‘Electrical’ are Electrical Fitter, Electrical Installer, Electrician – Special Class, amongst others.

42      In Part 2 – Construction Work, clause 13 – Wages sets out classifications including Electrical Fitter, Electrical Installer, Tradesperson, Fitter – Refrigeration and Tradesperson’s Assistant.

43      The Electrical Contracting Industry Award R22 of 1978 has classifications of Electrical Fitter, Electrical Installer/Mechanic, Electrician - Special Class and Electrical Assistant.  The Electrical Assistant is defined in Clause 5 – Definitions as “an employee directly assisting any other employee covered by this award.”

44      Therefore, the prescribed industrial instruments refer to classifications of Electrical Fitter, Electrical Installer, Electrician Special Class, Tradesperson, Tradesperson’s Assistant and Electrical Assistant (which definition is the equivalent of a Trades Assistant).

45      The applicant employs such classifications, as well as apprentices.

The area and scope of awards

46      I conclude that nothing in the definition of ‘employee’ in the Act requires consideration of the area and scope of the prescribed industrial instruments.  It is merely that the employee is employed in the classification of work referred to in the award.  In any event, where the award contains the definitions of the classifications in the awards, they do not refer to the industry covered by the award.  They set out only the skills or qualifications required of the classification.  The awards contain identical definitions of ‘construction work’, however, it is the construction industry as defined by the Act which is significant.

What is the construction industry for the purposes of the Act?

47      The definition of construction industry in s 3 includes the industry of carrying out, on a site, the installation, maintenance of or repairs to works for the generation, supply or transmission of electric power and to fixtures for the use of any building or works of a kind referred to in this section.

48      Therefore, it requires consideration of whether the work:

1. is carried out on a site;

2. is the installation, maintenance of or repairs to:

(a) works for the generation, supply or transmission of electric power; and

(b) fixtures or works for use on or for the use of any buildings.

Work ‘on a site’

49      I note that the legislature could easily have included in the definition of construction industry the word ‘construction’ in reference to the site at which the work occurs if it had intended the work concerned to be only that on a construction site.  Rather, it said ‘on a site’.

50      The Macquarie Concise Dictionary, 6th edition, defines ‘site’ as ‘1.  the position of a town, building, etc., especially as to its environment.  2.  the area on which anything, as a building, is, has been, or is to be situated.’  This definition is not helpful in this matter.

51      In examining the meaning of construction industry by reference to work ‘on a site’, firstly, as a matter of common sense, I think it could not be argued that all of the industry defined as the ‘construction industry’ in the Act is conducted on a site of the construction of a building or other works set out in the definition.  That is because it includes maintenance, repairs and alterations.  Maintenance and repairs in particular are usually carried out after the completion of the construction of the buildings or works.

52      Secondly, as Smith C observed in Brown & Root Energy Services Pty Ltd v Construction Industry Long Service Leave Payments Board (2001) 81 WAIG 665 at 670:

… The opening words [of s 3(1)(a)] are plainly expressed as disjunctive, so that a ‘site’ is to be construed as a place where any activities are carried out, that can be characterised as, construction, erection, installation, reconstruction, re‑erection, renovation, alteration, demolition or maintenance of or repairs to any of the categories in subparagraphs (i) to (xviii) of s.3(1)(a) of the Act.

53      This means that a place where maintenance or installation, but not construction or erection, occurs can be a ‘site’ for the purposes of the Act.

54      In Aust‑Amec Pty Ltd t/a Metlab Mapel & SRC Laboratories and Others v Construction Industry Long Service Leave Payments Board (1995) 62 IR 412 at 423, Ipp J found that the duties of employees of Metlab Mapel were ‘carried out at Metlab Mapel’s premises (and not ‘on a site’).’  While his Honour did not discuss the basis for this conclusion, it is clear that he determined that work at the employer’s own premises is not work ‘on a site’.

55      Therefore, where the applicant’s employees perform work at the residences of clients in the installation of air conditioning, not at their employer’s premises, they are performing work ‘on a site’.

‘Installation’

56      Install means ‘1.  to place in position for service or use, as a system of electric lighting, etc’ (Macquarie Concise Dictionary, 6th ed, 609).  Installation is ‘the act of installing’.

57      It is clear that the work done by the applicant’s employees is installation.  They place in position systems of ducting, electrical wiring and split air conditioning systems to established or newly completed houses, and to a limited extent, apartments and some small commercial premises.

‘Works for the generation, supply or transmission of electrical power’

58      The applicant’s Electricians and Apprentices undertake work to supply power to the air conditioning systems installed by their employer.  They do so by connecting cables between the systems and the power supply to the house or a particular circuit.

‘fixture or works for the use of any building’

59      The applicant’s employees, the Electricians, Apprentices and Trades Assistants, fix to the buildings the air conditioning systems and the electrical systems to support them, for the use of the building in the form of cooling or heating the building.

Conclusion

60      Therefore, the applicant engages persons in the construction industry because:

(i) the work is carried out on a site;

(ii) it includes installation of works for the supply or transmission of electric power and fixtures for the use of buildings.

61      They are employees for the purposes of the Act because they are employed under a contract of service in classifications of work referred to in prescribed industrial instruments related to the construction industry, that are prescribed classifications.

62      I conclude that the applicant engages persons as employees in the construction industry.

63      Therefore, the applicant is an employer which is required to register under the Act.  The respondent’s decision to register the applicant is not in error and is to be affirmed.

Final comment

64      There is a misconception created by the title of the Act and some of its history.  It is not limited to the construction industry or construction work as is generally understood in the community.  Its scope extends significantly beyond employees who work on what people generally understand to be construction sites, who work on a series of construction projects and may, in that sense, be itinerant.  It also applies to some maintenance and installation work, to the building of roads, bridges, swimming pools and other structures not normally contemplated when people think about the construction industry.  It does not cover simply the building construction industry.  Its coverage includes employees who work continuously for the same employer for many years.