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.