WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES Konecranes Pty Ltd

APPLICANT

-v-

Construction Industry Long Service Leave Payments Board

RESPONDENT

CORAM  J Rossi (Chair)

   M O’Connor (Member)

   K Peckham (Member)

HEARD Monday, 27 March 2006

FILE NO. BOR 2 OF 2005

CITATION NO. 2006 WAIRC 04331

Decision

1         This is an appeal by Konecranes Pty Ltd (the Applicant) against a decision of the Construction Industry Portable Paid Long Service Leave Payments Board (the Respondent) to require the Applicant to register as an employer under the Construction Industry Portable Paid Long Service Leave Act 1985 (the Act).

2         The appeal is made pursuant to section 50(b) of the Act.

3         The Act provides for the registration of employers in the construction industry.  Registered employers are required to make financial contributions to the Board on behalf of eligible employees for their long service leave entitlements.  Eligible employees can obtain an entitlement to long service leave based on employment in the construction industry rather than employment with a single employer. Construction Industry Portable Paid Long Service Leave Payments Board v Precision Corporation Pty Ltd, unreported, Supreme Court of WA, Library No 920130, 4 March 1992.

4         If an employer operates in the construction industry section 30 of the Act makes it mandatory that they be registered even if they operate in other industries.

5         Section 3 of the Act defines the terms ‘construction industry’, ‘employer’ and ‘employee’: 

“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;

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

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

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

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

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

 (vii) bridges, viaducts, aqueducts or tunnels;

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

 (ix) pipelines;

 (x) navigational lights, beacons or markers;

 (xi) works for the drainage of land;

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

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

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

 (xv) pile driving works;

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

 (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;

 (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 who is not substantially engaged in the industry described in this interpretation;

“employee” means a person who is employed under contract of service or apprenticeship in a classification of work referred to in a prescribed award relating to the construction industry that is a prescribed classification;

““employer” means a natural person or firm or body corporate, as the case may be, who or which engages persons as employees in the construction industry but does not include a Minister, authority or local government prescribed under subsection (4)(c);

6         In the often referred to Aust-Amec Pty Ltd t/a Metlab Mapel & SRC Laboratories and others v Construction Industry Portable Paid Long Service Leave Payments Board, (1995) 62 IR 412 -418 Justice Ipp states the two key principles of interpretation that apply for an employer to be registered for the purposes of the Act.  Firstly an employer must operate within the construction industry and secondly must employ employees within the construction industry.

7         In consideration of the first key principle the evidence before this Board is that the Applicant’s commercial operations are captured by and fall within the activities set out in section 3 of the Act.

8         The Applicant supplies, maintains, services and repairs cranes, hoists and lifting gear.  This was competently demonstrated by the Applicant’s own promotional brochures and the oral evidence of the State Manager. 

9         The Applicant contended that it did not operate within the construction industry but rather in the manufacturing and mining industries.  The State Manager stated that although the majority of its customers were in the manufacturing industry, the biggest ones were in the mining industry. 

10      The evidence before this Board is that the main part of the Applicant’s business is carrying out site-based maintenance contracts for various clients throughout the state.  The work involves servicing and repairing fixed overhead lifting equipment such as overhead travelling cranes or wire rope hoists capable of lifting weights from 125kg to 80 tonne.  This was highlighted by reference to the following larger site-based contracts involving customers such as BHP in Port Hedland and Newman; Alcoa at Pinjarra and Wagerup and Worsley at Collie. 

11      The Applicant submitted that because the larger customers in the mining industry provided on-site facilities for its employees to carry out their maintenance contracts that it was therefore operating from its own premises albeit on the customer’s site.  This Board is not persuaded by this view and held that the maintenance and servicing of equipment by the Applicant could only be construed as being on a site and not on the Applicant’s premises.  This accords well with the Act’s definition of construction industry which mentions work that is carried out on a site.  The fact that from time to time some equipment is returned and repaired at the Applicant’s premises is not sufficient to preclude it from this definition as the evidence submitted showed that only a small proportion of work is carried out at the Applicant’s premises and the majority of its activities are site based.  

12      The Applicant sought to rely on section 3(e) which excludes from the definition of construction industry “the maintenance of or repairs or minor alterations to lifts or escalators”.  It submitted that the definition of lifts was not isolated to passenger lifts but necessarily included all manner of lifts including overhead lifting equipment.  The Applicant submitted that the definition could have specifically indicated passenger lifts if that was the intention of the Act and because it fails to do this the interpretation should be more expansive to include all manner of lifting equipment.  This Board takes the view that the definition of lift intended by the Act was one that described passenger lifts particularly given that the exclusion refers to “lifts or escalators” the ordinary meaning of which is mechanical devices for vertically transporting people. 

13      Consequently on the first point of whether the Applicant operates within the construction industry this Board concludes that the work of the Applicant is easily captured by the definition of “construction industry” in section 3(a) (xvi) of the Act and therefore the Board finds that the Applicant does work in the construction industry as defined in the Act.

14      On the second key principle that an employer that operates within the construction industry must also employ employees in the construction industry to be registered, the Applicant provided evidence that it employed both electricians and mechanical fitters to carry out its maintenance and repair services.  The Applicant indicated that these trade qualified employees are provided with additional training by the Applicant to familiarise them on the range of equipment it services.  Some are employed as full time employees and some as contractors.  Some have common law contracts of employment and some are subject to unregistered Australian Workplace Agreements (AWAs).  This Board notes that the AWAs had been lodged but not yet approved.

15      This Board heard evidence that the Applicant was a registered employer for the purposes of the Act for the period 1989 and 1997 and made payments for eligible employees to the Respondent during this period.  Its registration lapsed when the Applicant’s returns failed to record eligible employees for two reporting periods in a row.  The Respondent indicated that it relied on employer self-assessment and had not pursued the matter with the Applicant until recently following an enquiry by an employee of the Applicant in 2004 regarding contributions on his behalf to the Respondent. 

16      The Respondent’s senior inspector then contacted the Applicant and after correspondence and an inspection at their O’Connor premises formed an opinion that the Applicant should be registered as an employer under the Act.

17      The senior inspector gave evidence that he found the Applicant employed employees under awards prescribed by the Construction Industry Portable Paid Long Service Leave Regulations 1986.  The Applicant employs electricians under the Electrical Contracting Industry Award 1979 and mechanical fitters under the Metal Trades (General) Award 1966.  Both state awards are prescribed awards for the purposes of the Act and employees employed under classifications in prescribed awards by an employer in the construction industry are eligible employees for the purposes of the Act.

18      Consequently on the second key principle as espoused by Justice Ipp in Aust-Amec Pty Ltd t/a Metlab Mapel & SRC Laboratories and others v Construction Industry Portable Paid Long Service Leave Payments Board, (1995) 62 IR 412 -418 this Board finds that the Applicant does employ employees as defined in the Act. 

19      The two key principles for determining whether an employer is to be registered for the purposes of the Act being that firstly the employer operates within the construction industry as defined and secondly that it employs employees in the construction industry as defined are correctly met.  In conclusion, this Board is of the view and finds that the evidence presented cogently demonstrates that the Applicant falls within the provisions of the Construction Industry Portable Paid Long Service Leave Act 1985 and is required to be registered for the purposes of that Act.

20      During proceedings the Applicant raised the point that its employees were entitled to long service leave under their contracts of employment, or in some cases, Australian Workplace Agreements the approval of which, at the date of hearing, was pending.

21      The role of this Board does not extend to assessing the potential impact of Federal Agreements on the Act, however, it is our view that the requirement to register for the purposes of the Act is not impeded by contractual entitlements under an Australian Workplace Agreement.  The Respondent pointed out that the Act contains provision to reimburse an employer who has provided a long service leave entitlement to an eligible employee. 

John Rossi

Chairperson