100212981

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES BELL-A-BIKE ROTTNEST PTY LTD

APPELLANT

 - and -

 AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION OF WORKERS – WA BRANCH

RESPONDENT

CORAM FULL BENCH

  HIS HONOUR THE PRESIDENT P J SHARKEY

  CHIEF COMMISSIONER W S COLEMAN

  COMMISSIONER J H SMITH

DELIVERED FRIDAY, 27 SEPTEMBER 2002

FILE NO/S FBA 31 OF 2002

CITATION NO. 2002 WAIRC 06654

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Decision  Appeal upheld and decision at first instance quashed

Appearances

Appellant   Mr J H Brits (of Counsel), by leave

Respondent   Mr T R Kucera (of Counsel), by leave

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Reasons for Decision

THE PRESIDENT:

INTRODUCTION

1          These are the unanimous reasons for decision of the Full Bench.

2          This is an appeal by the abovenamed appellant company against the decision of the Industrial Magistrate made in the Industrial Court at Perth.  By the decision given on 21 June 2001 in matter No M 269 of 2001, His Worship found that the appellant had committed breaches of the Metal Trades (General) Award No 13 of 1965 (hereinafter referred to as “the award”).  He ordered the respondent to pay the sum of $8,176.89 being “underpayments” to the claimant, together with costs fixed at $40.00.

3          It is against that decision that the appeal is now brought under s.84 of the Industrial Relations Act 1979 (as amended) (hereinafter referred to as “the Act”).

GROUNDS OF APPEAL

4          There is an appeal against what purports to be a decision on the following grounds:-

“Grounds of appeal

1. The Magistrate erred in law in holding that the first question to be determined was the calling of the employee and the second question whether the Award applies to the employment relationship.

2. The Magistrate erred in law in holding that both the employer’s industry and the employee’s calling require consideration in determining the industry to which the Award applies.

3. The Magistrate erred in law in holding that the Respondent’s internal repair shop to maintain its own fleet, places them in the ‘Cycle Manufacturers and Repairers’ industry, when the vast majority of the Respondent’s business was ‘bike hire’.

A. The Magistrate should have first determined the industry by interpreting the scope clause in the Award according to the words used.  The words used are “… applies to all employees employed in each such industry ...”, the industry being “Cycle Manufacturers and Repairers”.  The Appellant’s main business was not in this industry.  The Appellant’s internal repairs of its own fleet of bicycles, does not determine its business for the purposes of Award coverage.

B. The Magistrate misinterpreted the decision in Eltin Open Pit Operations Pty Ltd v MEWU 73 WAIG 1466, and it can be distinguished.  Eltin was clearly found to have been in the earthmoving business and the category of Respondents was described as “Earthmoving Contractors”.  Earthmoving was Eltin’s main business, unlike the Appellant’s internal cycle repair shop.”

5          The appellant seeks the following order:-

“That the Magistrate’s decision be quashed and substituted with an order that the Appellant did not operate in the Cycle Manufacturers and Repairers Industry as defined in Clause 3 of the Metal Trades (General) Award No 13 of 1965.”

BACKGROUND

6          The respondent organisation of employees alleged that one Lenard (sic) Christie was an employee of the abovenamed appellant company “inclusive of the period week ending 2nd November to the week ending 13 September 2000”, and that he was employed as an engineering/production employee as defined in clause 5 and Appendix 1 of the award.

7          The agreement to which we refer was entered into on 12 April 1997.  In clause 88.5 of the agreement the word “business”, meaning the business to be carried on by the appellant, is designed to mean “the business of hiring bikes for use on the Island and ancillary retail sale and repair activities”.

8          The respondent organisation alleged that the appellant company was operating in the cycle manufacturing and repairers and retail and wholesale stores industries, which are industries described in clause 3. - Area and Scope and the Second Schedule of the award.  That the respondent was engaged in the retail and wholesale stores industry was not contended before the Full Bench.  It is not therefore necessary to deal with that point.

9          As a result, the respondent organisation alleged that by virtue of the matters alleged in the above paragraphs the appellant company was an employer bound by the award.

10       The background in fact and in other matters was little in issue upon this appeal.

11       The appellant company (hereinafter referred to as “Bell-A-Bike”), at all material times, carried on business on Rottnest Island in the State of Western Australia.  Bell-A-Bike was party to a management agreement with the Rottnest Island Authority, the statutory authority administering the Island, requiring Bell-A-Bike to manage the Authority’s bike hire business.

12       The manager, namely the appellant company, is prohibited by the agreement from competing with the business by clauses 47 and 48, which read as follows:-

“47. The Manager may not be involved or concerned in any business that competes with the Business.  If any person associated with the Manager (including Glen Parker and Sandra Parker) is involved or concerned in a business that competes with the Business, the Manager shall be deemed to be involved or concerned in a business that competes with the Business.

48. Without limiting the general meaning of the word “compete”, a business competes with the Business if:
    1.   it hires bikes from a ferry terminal from which ferries take people to Rottnest Island; or
    2.   it hires bikes when the person in control of the business knows or ought to have known that the bike was to be used on Rottnest Island.”

13       It was accepted that Bell-A-Bike was the employer for the purposes of the award.  It seems to have been accepted, too, that the business conducted was the business of Bell-A-Bike for the purposes of the award, even though the extracts from their management agreement prescribe that Bell-A-Bike is the Authority’s manager.  As we say, that point was not argued either on appeal or at first instance, and is not an issue to be considered now.

14       Mr Christie gave evidence that he commenced working with the respondent, Bell-A-Bike, during the week ending 5 November 1999 continuing until 14 January 2002 when his employment was terminated.

15       Whilst there has been some attempt by the appellant to classify Mr Christie in some other role, His Worship accepted the evidence of Mr Christie which was supported by the respondent’s other witnesses and documentary evidence, that Mr Christie’s primary duties were those of a bicycle mechanic, and His Worship so found.  That finding is not challenged.

16       It is quite clear, from the management agreement, that the business required to be conducted was the business of hiring bikes for use on the Island and ancillary retail and repair activities as the agreement prescribes.

17       His Worship found, and that finding is not challenged, that, although Bell-A-Bike sold water and soft drinks and other limited retail items, as well as spare parts and accessories for privately owned cycles, the “primary and substantial” business activity was the hire of bicycles.  Bicycles generically included pedal cars, wheelchairs and tricycles.  Bell-A-Bike also managed the hire of almost two thousand bicycles per annum and derived income from such hire in the amount of $1,667,603.00.  Repairing bicycles was, on the evidence, a crucial part of the business.  Further, the business provided a repair service for the public as was required as part of the business, but, as His Worship found, and this finding was not challenged, this was a minor part of the business.  It is perhaps, as we will observe later, better described as a miniscule part of the business.

18       There were usually three of four bicycle mechanics employed by Bell-A-Bike, and they sometimes helped out “on the floor” assisting customers during busy periods.  There is no doubt, on the evidence, that the workshop was an important, and, indeed, essential part of the business, as we think would be obvious.

19       The particulars of breach appear as alleged in paragraph 5 of the particulars of claim (see pages 4-5 of the appeal book) and allege breaches of clauses 31(1), 14(1)(b), (d) and (c)(i) and (ii) of the award.

20       There was, too, a claim for an order for alleged award underpayments totalling $10,554.34.

21       It was denied on behalf of Bell-A-Bike (the respondent at first instance) that the employee was employed as anything but a casual bicycle mechanic and floor person.

22       It was also alleged that there was an officially induced error of law in that Bell-A-Bike was bound by the award, but that was not an issue before the Full Bench on appeal.

23       An agreement referred to above was tendered and therein “business” is defined as meaning “the business of hiring bikes for use on the Island and ancillary retail sale and repair activities”.

24       Clause 5. - Definitions and Classification Structure of the award prescribes the classifications of employees.  It was not in issue on appeal that Mr Christie was employed in the classifications referred to in clause 5 and clause 31 of the award, indeed as His Worship found.

25       The only named parties to the award are the respondent organisation and another organisation of employees, the “Australian Electrical, Electronics, Foundry and Engineering Union (Western Australian Branch)”.

26       In Appendix 2 of the award “Cycle mechanic” is defined to mean “an employee engaged in assembling (except for the first time in Australia), building, brazing, repairing, altering or testing the metal parts of a pedal cycle”.  A “Cycle assembler” is defined as “an employee engaged in assembling, putting together and adjusting the parts of a pedal cycle received from the maker”.

27       In the Second Schedule to the award, which is a list of respondents, one respondent is listed under the heading “Cycle Manufacturers and Repairers”.

28       His Worship then went on to find that Mr Christie’s primary duties being those of a bicycle repairer, there was no doubt that he would have been classified in the calling of a cycle mechanic based on the old definition in Appendix 2.

29       He also found that the calling of cycle mechanic now lines up with the wage group C12 as set out in Appendix 1, and classified as engineering/production employee level III in clause 5(3) of the award.

30       His Worship went on to refer to s.37(1) of the Act and considered the question whether Bell-A-Bike was in the cycle repair industry or the bike hire industry.  It was the case for Bell-A-Bike that it was in the cycle hire industry and not in the cycle repair industry.

31       His Worship went on to consider Eltin Open Pit Operations Pty Ltd v MEWU 73 WAIG 1466 and The King v Drake-Brockman and Others; ex parte National Oil Pty Ltd 68 CLR 51, and found that the employees, including Mr Christie, who were engaged in the repair of bicycles were employed in the cycle repair industry, notwithstanding the evidence that they may have assisted in other areas during busy times.  He therefore held that the award applied to Bell-A-Bike.

CONCLUSIONS

32       The Industrial Magistrate found that Bell-A-Bike was bound by the award and that the primary duties of Mr Christie were those of a bicycle repairer.  He also found that the employer was engaged in two industries, the cycle hire industry and the cycle repair industry, and that Mr Christie was employed in the latter industry.  It is that finding which is the real issue in this appeal along with the finding which it underpins, namely that the award applied at the material times and bound Bell-A-Bike, by common rule.

33       What was clearly the evidence and the correct finding open on appeal was that Mr Christie himself was engaged in and as a repairer of cycles.

34       What was also clear and what was also not challenged upon appeal was that the evidence was that the only activity carried on by Bell-A-Bike was the hiring of its cycles and their repair by it as an essential part of that activity.  As a minor part of that activity cycles owned by members of the public were also repaired.  Those findings were correctly made.

35       That the activities which we have described were also required to be conducted by the prescription of the management agreement, to which we have referred above, was also the case.

36       “Industry”, for the purposes of s.37 of the Act, and, indeed, for the purposes of the whole of the Act, is defined in s.7 of the Act as follows:-

““industry” includes each of the following — 

(a) any business, trade, manufacture, undertaking, or calling of employers;

(b) …

(c) any calling, service, employment, handicraft, or occupation or vocation of employees,

whether or not, apart from this Act, it is, or is considered to be, industry or of an industrial nature, and also includes — 

(d) a branch of an industry or a group of industries;”

37       Bell-A-Bike is not and was not a named respondent to the award, as we have already observed.

38       Clause 3 of the award (the Area and Scope clause) prescribes that the award relates to each industry mentioned in the award and the schedule to the award and applies to all employees employed in each such industry in any calling mentioned in clause 31.

39       It is quite clear, on the evidence, and it seems to have been accepted, that Mr Christie was employed as a cycle repairer, and it seems also to have been accepted that he was employed in a calling mentioned in clause 31.

40       It is trite to observe that, having regard to the prescription of clause 3, the scope and area clause, that does not determine the industry carried on or engaged in by Bell-A-Bike.

41       The question was whether Mr Christie was employed in an industry mentioned in the Second Schedule to the award.  The appellant had to so establish that at first instance.

42       As was properly recognised in submissions upon this appeal, there were two tests which apply to determine the industry to which an award applies, to enable a finding as to the manner in which s.37 of the Act operates.

43       The first requires a finding of fact as to the industries or the industry carried on by the named appellant as at the date of the award, which finding is to be made in accordance with the common object test laid down in Parker’s Case (1926) 29 WALR 90 per Burt J (as he then was) and in the well known case of WA Carpenters and Joiners, Bricklayers and Stoneworkers’ Industrial Union of Workers v Glover (1970) 50 WAIG 704 (“Glover’s Case”)).  The common object test is that “the common object which it is sought to attain by the combined efforts of the employer and the worker indicates the industry in which they are engaged”.

44       The other test is to ascertain the industry by the words used to describe it (see R J Donovan and Associates Pty Ltd v Federated Clerks Union of Australia, Industrial Union of Workers, WA 57 WAIG 1317 (“Donovan’s Case”)).  In this case, the industry concerned was identified in the award by the words used to describe it.

45       The test applied in Donovan’s Case (op cit) was plainly applicable, and, indeed, it seems to have been accepted by the parties that this was the case.  That meant, therefore, as Burt J (as he then was) said in Donovan’s Case at page 1318:-

“… in my opinion, the industry to which the award relates is to be ascertained by the words used to describe it and not by entering upon an inquiry as to the common object in the sense of Parker’s Case …”

46       The words used in the award, Schedule 2, to describe the industry are unambiguous.  The words used are “Cycle Manufacturers and Repairers” industry.  That is the industry described by the award.

47       The appellant’s business in the management agreement was clearly described as “hiring bikes for use on the Island and ancillary retail sale and repair activities”.  That description coincided with the evidence of what the activities of the business carried on by the respondent were (see page 24 of the appeal book).  It is quite clear that that part of the activities of the appellant directed to repairing bicycles for the public was less than minor.  A miniscule $7092.00 income was derived in the financial year 2000, compared to the income derived from hire, which we have already mentioned as being $1,667,603.00.  There is no mention at all of income derived from any retail activities.

48       In our opinion, the words “Cycle Manufacturers and Repairers” ought properly to be read as “Cycle Manufacturers and/or Repairers”, since, on a fair reading, either activity might be properly carried on as a separate industry.  We think that that is quite clear.

49       In our opinion, whilst the test in Donovan’s Case (op cit) prescribes an approach to determining the industry in which an employer is engaged by reference to the words of the award, it does not prescribe any test relating to fact finding which must inevitably take place to determine whether any given enterprise, industry or activity is an industry as described by the words of the award, in this case that of cycle repairer.  We exclude any question of the appellant being a cycle manufacturer because there is simply no evidence that there was any cycle manufacturing carried on by it, and it was not so contended on appeal.  We would also add that the finding was not attacked as being inapplicable to the date of the award.

50       As Eltin Open Pit Operations Pty Ltd v MEWU (op cit) recognised, and what we think is a trite proposition, is that, once the industry described by the award is ascertained, a finding of fact must be made as to whether the activity carried on by an employer is covered by the description of that industry and/or whether that has been so established as a matter of fact.

51       It was contended on behalf of the appellant that the fact finding should be conducted in accordance with the test in Parker’s Case (op cit), “the common object test”.  We do not think that that is a tenable proposition because such an approach is entirely excluded by the ratio in Donovan’s case (op cit).

52       In our opinion, it was not established, on the balance of probabilities, that, as a matter of fact, the industry carried on was that of cycle repairer.  It was, as a matter of fact, not.  The facts were that the appellant hired bicycles to the public, kept them in repair for that purpose, and to an absolutely negligible extent, provided some cycle repairs for the public and some liquid refreshment by way of water or soft drink.

53       It was therefore more probable than not that the respondent was not engaged in the industry as described in the award, on the evidence only.  We would also add that it was erroneous, given the applicable test, to determine the industry being carried on by Bell-A-Bike at all, by reference to Mr Christie’s occupation.

54       If, however, it is or was necessary to establish that the fact finding should be carried out by the application of a test, then one could say that the major and substantial activity of the business which characterised it unequivocally on the preponderance of the evidence was that the business was a cycle hire business not a cycle repair business, the cycle repairs being merely ancillary to or incidental to the carrying on of the business of cycle hire.  That finding results from the application of the test used to establish whether an employee is engaged in a classification under an award, and, as we think, handy and simple (see Litis v Pantelis [1958] 60 WALR 17 and Diggle v Brine and Others [1939] 41 WALR 76).  Further, and alternatively, it was not established to be otherwise.  The industry could not be established by reference to the activities of the employees, it is trite to observe, nor by any reference for those reasons, to the minute amount of repair work done for members of the public.  Further, it could not be properly found that Bell-A-Bike was engaged in two industries.  The evidence was, for the reasons which we have advanced, that it was not so engaged.  Of course, if the test in Parker’s Case (op cit) were applicable and applied, which it is not and was not and could not be, it would achieve the exact same result because the common object to be carried out by employers and employees was to carry on the business of hiring bicycles.  It was essential, as part of the achievement of that object, to have bicycles available for hire.  Incidental to that object the respondent repaired and maintained its own bicycles and repaired an insubstantial number of bicycles owned by members of the public.

55       In any event, the circumstances of this case are not met by the application of Eltin Open Pit Operations Pty Ltd v MEWU (op cit) which dealt with the industry carried on by a contractor, saving and except to establish, if it were necessary to establish, that after one identifies the industry one has to embark on a fact finding exercise to establish that the industry alleged to be carried on by the respondent was the industry prescribed by the award.

56       It was not open to the Magistrate to find that the appellant was carrying on any industry as prescribed by and within the meaning of clause 3 of the award.  The award did not apply to the industry carried on by the appellant.  It was, in any event, not established that it was.

57       For those reasons, the Industrial Magistrate erred in finding otherwise.  For those reasons, too, we would find the appeal made out.  We would uphold the appeal.  We would quash the order made at first instance.

       Order accordingly