Elgas Limited v SafeWork NSW

Relevant legislation

1. The object of the Act, set out in s 3, informs the exercise of the Commission's jurisdiction. That section relevantly provides: 3 Object (1) The main object of this Act is to provide for a balanced and nationally consistent framework to secure the health and safety of workers and workplaces by - (a) protecting workers and other persons against harm to their health, safety and welfare through the elimination or minimisation of risks arising from work or from specified types of substances or plant, and (b) providing for fair and effective workplace representation, consultation, co-operation and issue resolution in relation to work health and safety, and (c) encouraging unions and employer organisations to take a constructive role in promoting improvements in work health and safety practices, and assisting persons conducting businesses or undertakings and workers to achieve a healthier and safer working environment, and … (f) ensuring appropriate scrutiny and review of actions taken by persons exercising powers and performing functions under this Act, and …
2. Division 3 of Pt 5 of the Act is titled "Health and Safety Representatives" ("HSRs"). That Division relevantly provides: Division 3 Health and safety representatives Subdivision 1 Request for election of health and safety representatives 50 Request for election of health and safety representative A worker who carries out work for a business or undertaking may ask the person conducting the business or undertaking to facilitate the conduct of an election for one or more health and safety representatives to represent workers who carry out work for the business or undertaking. Subdivision 2 Determination of work groups 51 Determination of work groups (1) If a request is made under section 50, the person conducting the business or undertaking must facilitate the determination of one or more work groups of workers. (2) The purpose of determining a work group is to facilitate the representation of workers in the work group by one or more health and safety representatives. … 52 Negotiations for agreement for work group (1) A work group is to be determined by negotiation and agreement between - (a) the person conducting the business or undertaking, and (b) the workers who will form the work group or their representatives. … (3) The purpose of the negotiations is to determine - (a) the number and composition of work groups to be represented by health and safety representatives, and (b) the number of health and safety representatives and deputy health and safety representatives (if any) to be elected, and (c) the workplace or workplaces to which the work groups will apply, and (d) the businesses or undertakings to which the work groups will apply. … (6) The regulations may prescribe the matters that must be taken into account in negotiations for and determination of work groups and variations of agreements concerning work groups. … 54 Failure of negotiations (1) If there is a failure of negotiations (including negotiations concerning the variation of an agreement), any person who is or would be a party to the negotiations may ask the regulator to appoint an inspector for the purposes of this section. (2) An inspector appointed under subsection (1) may decide - (a) the matters referred to in section 52(3), or any of those matters which is the subject of the proposed variation (as the case requires), or (b) that work groups should not be determined or that the agreement should not be varied (as the case requires). …
3. Clauses 16 and 17 of the Work Health and Safety Regulation 2017 ("Regulation") "prescribe the matters that must be taken into account in negotiations for and determination of work groups" within the meaning of s 52(6). They provide: 16 Negotiations for and determination of work groups Negotiations for and determination of work groups and variations of work groups must be directed at ensuring that the workers are grouped in a way that - (a) most effectively and conveniently enables the interests of the workers, in relation to work health and safety, to be represented, and (b) has regard to the need for a health and safety representative for the work group to be readily accessible to each worker in the work group. … 17 Matters to be taken into account in negotiations For the purposes of sections 52(6) and 56(4) of the Act, negotiations for and determination of work groups and variation of agreements concerning work groups must take into account all relevant matters, including the following - (a) the number of workers, (b) the views of workers in relation to the determination and variation of work groups, (c) the nature of each type of work carried out by the workers, (d) the number and grouping of workers who carry out the same or similar types of work, (e) the areas or places where each type of work is carried out, (f) the extent to which any worker must move from place to place while at work, (g) the diversity of workers and their work, (h) the nature of any hazards at the workplace or workplaces, (i) the nature of any risks to health and safety at the workplace or workplaces, (j) the nature of the engagement of each worker, for example as an employee or as a contractor, (k) the pattern of work carried out by workers, for example whether the work is full-time, part-time, casual or short-term, (l) the times at which work is carried out, (m) any arrangements at the workplace or workplaces relating to overtime or shift work.
4. The language of cll 16 and 17 is mandatory. In conducting the external review, the Commission is required to give effect to cl 16, taking into account the matters set out in cl 17: see Transport Workers' Union of Australia, New South Wales v SafeWork NSW [2022] NSWIRComm 1050 ("Deliveroo Case") at [30], [63]-[69].
5. The Application is brought pursuant to s 229 of the Act. Section 229(1) empowers the Commission to review a "reviewable decision" made by SafeWork, or a decision made, or taken to be made, on an internal review. Pursuant to s 229(4) the Commission may, on an external review, confirm, vary or revoke the decision concerned.

Principles to apply on review

1. The approach to be taken by the Commission when conducting an external review was described by Kite AJ (as he then was) in NSW Rural Fire Service v SafeWork NSW [2016] NSWIRComm 4 as follows: "67. The Commission is empowered to confirm, vary or revoke the decision concerned. I note the distinction between s 226(2) and s 229(4). The internal reviewer is empowered to set aside the decision (which equates to revocation) and substitute an appropriate decision. That last aspect is not expressly included in s 229(4). A question arises whether that is an important distinction. It may be that it is an indication that the Commission is not intended to substitute what it considers is the right, preferable or more appropriate decision. But that is inconsistent with the power to vary. It seems odd that the Commission could vary the decision and yet not substitute its conclusion as to what is preferable. What otherwise is the point of variation? 68. The Commission is, generally speaking, an arbitral tribunal. The general functions of the Commission specified in s 146 of the IR Act, for the most part, are undertaken by the Commission hearing the parties and, if conciliation is not successful, determining the issues which divide them. It is true that the Commission does have an inquisitorial role under s 146(d) but that is an exceptional role undertaken on reference from the Minister. The Commission of course has power to compel attendance and production of evidence but again that is usually exercised in an arbitral context with parties presenting their respective cases - as envisaged in s 162(2)(c) of the IR Act. Similarly the Commission's capacity to move on its own initiative to inquire into any industrial matter (s 162(2)(j)) is a facilitative power to resolve industrial issues. 69. The Commission's decision on the review would also be subject to appeal by leave of a Full Bench. An appeal is not available from a report on a Ministerial reference. That is another indication that the nature of the review is a merits review intended to be undertaken in an arbitral not an inquisitorial context. 70. Looked at in this context it seems to me that the legislature intends that the Commission will undertake a merits review. The fact that written reasons are required to be provided to the applicant following the internal review is not enough by itself to suggest that the review by the Commission is to be directed to simply the identification and correction of error. The legislation shows, through the multi-level process for the determination of work groups, an evident importance which suggests that the review by the Commission is intended to permit the arrival at a final and correct result. Either at first instance or on appeal in an appropriate case. 71. I am reinforced in this view by the conclusion of Staff J in the AFMEPKIU case. His Honour was considering a decision of a different kind however he concluded at [50]: 'The power granted to the Commission under s 229(4) of the WHS Act is to conduct a merit review. That is, to 'confirm, vary or revoke' the decision being reviewed so as to determine what is the correct or preferable decision. Accordingly, the Commission 'stands in the shoes' of the decision-maker and may only exercise those powers that were available to that decision-maker.'"
2. These passages, and in particular [68], make it clear that the normal arbitral processes of the Commission are to be followed, and that the Commission has available to it all the powers conferred on it under ss 162 and 163 of the Industrial Relations Act 1996. This was confirmed also by Commissioner Newall in Sydney Trains v Safework NSW [2017] NSWIRComm 1009 at [16] and [22].
3. I observe that the decisions of Kite AJ and Commissioner Newall referred to above were cited with approval by the Full Bench in the Deliveroo Case.

Consideration

1. The question for determination in these proceedings is what work group structure ought to be adopted, that will best meet the requirements of cl 16 of the Regulation taking into account the matters identified in cl 17. It is Elgas' position that a single work group be established for the Site, with three of four HSRs, in keeping with Option 2. The UWU contends that there is no reason to depart from the Inspector's Decision, confirmed in the Internal Review Decision, that Option 4 should be implemented.
2. I have already referred to Mr de Brabander's evidence as to the size and composition of the workforce on the Site. Mr de Brabander further deposed in his affidavit of 19 November 2021: "25. I am concerned that the introduction of multiple workgroups on-site will have an adverse impact on the management of health and safety matters at the Worksite. This is a small worksite of 20 people, all of whom move around the site regularly and are affected by potential safety issues as well as having the capacity to impact on and help manage potential safety issues. 26. Any step which moves away from a whole-of-site approach to health and safety and focusses in on health and safety by reference to one part of the Worksite will undermine the whole-of-site approach to safety which is currently in place and allows us to achieve high levels of health and safety performance."
3. In his affidavit of 25 February 2022, Mr de Brabander deposed as to his concerns that the implementation of Option 4 would hinder Site safety for the following reasons: 1. It might lead to health and safety issues being seen from the narrower perspective of the work group rather than from the whole-of-site approach which is currently adopted or encouraged. This might result from the development of "siloed thinking" and a lack of sharing of information on safety risks. 2. Option 4 would heavily reduce access to HSRs when compared with Option 2, due to the 24/7 nature of the Cavern Operations on the Site. 3. There is no logical reason to distinguish between employees and contractors.
4. In that affidavit, Mr de Brabander further stated: "19. Access to the Health and Safety Representatives would be heavily reduced within Options with more than 1 work group, due to the nature of the 24/7 Cavern Operations at the Worksite. This is caused by the shift cycle of the FTE Rostered Operation Controller Position. With this cycle, one worker may not interact with another worker for potentially 2 weeks. If one of the workers was a Health and Safety Representative, then the worker may not have access to them for potentially 2 weeks. When interaction finally occurred, this meeting would be on a shift change, so limited time would be available. The period without access to a Health and Safety Representative would be extended further if a casual operator was to fulfil the opposing shifts. Being mindful of the day/night roster and 24/7 operation of the facility, the potential to disrupt a Health and Safety Representative during their time off (during breaks between shifts, sleeping and managing their fatigue) is greatly increased. This would also be the case during the leave period between shift cycles. With a single workgroup such as Option 2, access to a HSR would be greatly improved. … 21. The only distinction Inspector Leo identified between the options was to find that Option 2 (being a single workgroup on-site covering all workers) was found not to have regard to the need for a health and safety representative for the workgroup to be readily accessible to [each] worker in the workgroup. I do not agree with this conclusion because: a. The worksite is a small area in which anyone on site at a particular time is able to travel between the various work areas (eg control room, berth, office) within a minute or so. b. The work of all of the groups of workers on-site is integrated with the work of others. … c. No single person will be at the worksite 24 hours a day and 7 days a week, so there is no solution which would ensure that a single Health and Safety Representative would be accessible on-site at all times. d. A Health and Safety Representative who is on-site at a particular point in time would be readily accessible to any other worker who was on-site at that time."
5. It is relevant to observe that the evidence of Mr de Brabander is not controverted in these proceedings. While some of the documents in the exhibit to Mr Leo's affidavit of 19 November 2021 might call into question Mr de Brabander's description of the Site's operations, particularly the extent to which there is movement of different work classifications around the Site, the authors of those documents were not called to give evidence in these proceedings.
6. I will turn now to consider the particular matters that the Commission is required by cl 17 of the Regulation to take into account. I have been informed in particular in this regard by Mr de Brabander's affidavit of 25 February 2022 at par 25, and an email from Aldo Costabile of Elgas to Mr Leo sent on 30 June 2021, which is at Tab 12 of Exhibit DL-1 to Mr Leo's affidavit: 1. The number of workers - There are 20 workers on the Site. Of these, five are "management staff" and not included in the work group proposal. The small number of workers in the context of the operations of the Site as a whole argues against a multiplicity of work groups. 2. The views of workers - In a workplace survey conducted by Elgas in June 2021, 10 out of 14 workers supported the formation of a single work group for the Site. A survey conducted by Mr Leo suggested that 50% of Elgas' employees and 61% of its total workforce (including management) supported a single workgroup with two or three HSRs. The Internal Review Decision acknowledged that there was a preference in the workforce for a single workgroup. 3. The nature of each type of work carried out by the workers - This is described in par 22 of Mr de Brabander's affidavit of 19 November 2021 reproduced at [7] above. 4. The number and grouping of workers who carry out the same or similar types of work - This is described in par 22 of Mr de Brabander's affidavit of 19 November 2021 reproduced at [7] above. 5. The areas or places where each type of work is carried out - This is described in pars 23 and 24 of Mr de Brabander's affidavit of 19 November 2021 reproduced at [7] above. 6. The extent to which any worker must move from place to place while at work - This is described in par 24 of Mr de Brabander's affidavit of 19 November 2021 reproduced at [7] above. 7. The diversity of workers and their work - The evidence suggests that there is little diversity in the workforce, being all-male. There is no evidence of ethnic, cultural or similar diversity. The nature of the work undertaken has already been addressed. 8. The nature of any hazards/risks to health and safety at the workplaces - I note the extract of the decision of the Fair Work Commission reproduced at [6] above. The Site is a Major Hazard Facility. A Safety Case prepared by Elgas has identified 28 Major Incident scenarios, of which 25 affect the entire Site and impact on all of the workers who would fall within the work group or groups. 9. The nature of the engagement of each worker - Of the 15 relevant workers, 10 are employees and 5 are contractors. There is no evidence that there is any differentiation in the way that workers are treated due to their status as either employee or contractor. 10. The pattern of work carried out by workers - 10 workers are engaged full-time and the balance work part-time or casually. 11. The times at which work is carried out - Operations workers (employees and contractors) work a mix of 24/7 shift work and day work. Other workers generally work day shifts, Monday to Friday. 12. Any arrangements at the workplace(s) relating to overtime or shift work - Shift work is carried out by all 10 operations workers.
7. Taking these matters into account, I accept Elgas' submissions that the proposed implementation of Option 4 gives rise to a number of concerns.
8. First, there does not appear to be any reason to create separate work groups for employees and contractors. There is no evidence that employees and contractors are treated differently on the Site, particularly when it comes to safety.
9. More particularly, however, there does not appear to be anything in the evidence that warrants such a distinction being made. The only rationale that seems to have been offered is contained in an email from Jim Webb, Walter de Vecchis, Steve McFadden and Roberto Iliev, four of the workers on Site, to Mr Leo and others sent on 13 August 2021. That is the email that Mr Leo identified as proposing "Option 4". In that email, the workers proposed the creation of a "contract operating group" as the people in that group "represent the 3rd party contractors which the company can heavily influence when it comes to Safety outcomes": see Tab 23 to Exhibit DL-1 to Mr Leo's affidavit.
10. There is no evidence to support a finding that Elgas has sought to so influence third party contractors, or that it would do so, in a manner inimical to Site safety. To the contrary, the evidence strongly suggests a firm commitment by Elgas to workplace health and safety.
11. I note finally that the distinction between employees and contractors does not sit comfortably with the definition of "worker" in s 7 of the Act.
12. Second, Option 4 would exclude two Engineering and Maintenance workers from representation. Again, there is no explanation as to why those workers should be excluded. In the email of 13 August 2021 referred to above, Neil Tarin, one of the workers excluded, is described as "obviously management", but no evidence has been led to enable a determination that he should be excluded on that basis. The evidence is completely silent as to the identity of the second Engineering and Maintenance worker and why he should not have the benefit of representation.
13. It is relevant that on 1 October 2021 CJ Chee, the General Manager Midstream for Elgas, sent an email to Mr Leo challenging aspects of the Inspector's Decision, including the exclusion of the Engineering and Maintenance workers: see Tab 40 to Exhibit DL-1 to Mr Leo's affidavit. In a reply sent on 6 October 2021, Mr Leo stated that "these workers are entitled to ask the PCBU for a workgroup and HSR's should they feel the need": see Tab 40 to Exhibit DL-1 to Mr Leo's affidavit. This suggests that the exclusion of the Engineering and Maintenance workers was intentional. If left to stand, the Inspector's Decision might result in there being four work groups for a workforce of 15.
14. In the Internal Review Decision, Mr Kammel acknowledged the exclusion of the two Engineering and Maintenance workers and stated that these two workers "will need to be integrated into one of the workgroups". This is inconsistent with the Inspector's Decision and Mr Leo's subsequent email to Elgas of 6 October 2021. It is clear that Mr Leo did not regard those two employees as being contemplated by his decision to adopt Option 4. It follows that the Internal Review Decision was not so much a confirmation of the Inspector's Decision as a variation to it.
15. Further in this regard, Mr Kammel offered no guidance as to how and into which work group those two workers were to be "integrated". It is not a "decision" to that extent.
16. Third, on the evidence of Mr de Brabander the creation of multiple workgroups would in fact limit rather than enhance a worker's access to a HSR. I note in this regard the evidence reproduced at [31] above.
17. Having regard to all of the evidence and submissions before me, and taking into account the matters to which I have referred, I consider that the requirements of cl 16 of the Regulation are best met by the single work group proposed by Elgas, as opposed to Option 4 or any variation requiring the formation of multiple work groups. Given the nature of the operations on the Site, the size and composition of the workforce and the manner in which work is performed across the Site by that workforce, a single work group with preferably four but no less than two HSRs will most effectively and conveniently enable the interests of the workers to be represented and will best ensure that a HSR is readily accessible to each worker in the work group.
18. A single work group is also better aligned to the whole-of-site approach to safety espoused by Elgas. I am satisfied that such an approach is warranted having regard to the nature of the operations on the Site, and the work performed by all relevant workers on the Site. The evidence shows an inter-relationship in the work performed by workers in the different classifications, calling for an integrated approach to safety. Having regard to Site-wide safety issues in the determination of the Application is consistent with the object of the Act to "secure the health and safety of workers".

Orders

1. I make the following orders: 1. The Internal Review Decision is revoked. 2. The Inspector's Decision is varied so as to require the adoption of Option 2, as opposed to Option 4, with the work group having preferably four but no less than two HSRs. Damian Sloan Commissioner

Amendments 24 August 2022 - Minor typographical amendment made in Paragraph [4]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 August 2022