R v Gough; Ex parte BP Refinery

It appears that the prosecutor proposes to operate an oil refinery which is at present in the course of construction and nearing completion at Westernport in that State and the evidence shows that for some time the Union and the Australian Workers' Union have been in competition with one another for the right, upon completion of the refinery, to recruit employees engaged in the refining process as union members. No such employees have as yet been engaged by the Company. Attempts have been made both by the Union and the Australian Workers' Union to secure an award binding upon the Company but up to the present time neither organization has been successful. It is unnecessary to recount the various manoeuvres which have taken place but it may be observed that an earlier log of claims served by the Union on the prosecutor and other oil refinery companies in other States was, for reasons which it is unnecessary to set out, withdrawn as against the Company and that the dispute, if any, which resulted from the rejection of the log by the prosecutor thereupon ceased to exist. What happened thereafter was that a log of claims was served by the Union upon the Company and upon five individuals and companies, referred to as "agents" in other States. Such individuals and companies are engaged in the distribution of petroleum products in the States in which they carry on business but they are not the agents of the prosecutor. Indeed, they have no business or industrial relations of any kind with the prosecutor whose business will consist exclusively of the business of operating an oil refinery for the refining of oil belonging to other companies and of transmitting the products of the refining process by pipe-line to various companies.

The log of claims purports to demand rates of wages and other conditions of employment in respect of a considerable number of categories of employees but, upon the evidence, it appears that only one category of such employees will be employed by the Company. These will be "operators" within the meaning of the log. On the other hand, the so-called agents - of whom there appear to a be very great number throughout the Commonwealth - carry on a form of business which does not call for the employment of this category of employee. But they do employ between them a handful - some seven in all - of another specified category - "storemen and packers". Again, such employees represent an infinitesimal proportion of storemen and packers employed throughout the Commonwealth.

The question is whether upon these briefly related facts the dispute which it is alleged arose upon the failure of the prosecutor to accede to the log of claims and upon the service of the log upon the five "agents" in other States constituted a dispute which extended beyond the limits of any one State. We have no doubt that it did not. It is, of course, no objection that the log was served upon employers in other States for the purpose of creating such a dispute. Indeed, as has been observed on occasions, it has become common practice to use the machinery of the Act, which was intended to provide a means of settling industrial disputes, as a means of creating them. But when the facts of this case are seen in perspective it is clear that the character of the Union's dispute with the "agents", if indeed one arose, was so far removed from the substance of its dispute with the prosecutor that it is impossible to say that there was one common dispute and, therefore, a dispute between the prosecutor and the Union extending beyond the limits of any one State. The fact that the demands upon the prosecutor and those made upon the "agents" were contained in a single log is by no means conclusive of the fact that there was a single dispute. Indeed, this much was conceded as also was the proposition that we are bound to have regard to the substance of the claims made upon both the Company and the "agents" in order to determine the matter. Upon this question we have had the advantage of Mr. McGarvie's argument but upon the whole of the evidence we are of the opinion that the point should be resolved against the respondents. It appears to us that the substance of the dispute with the Company was so far removed and so different from the substance of the alleged dispute with the agents that it is impossible to say that there was a single dispute. The prosecutor had no interest of any kind in resisting the demand made upon the agents and the agents had no interest in resisting the demands made upon the Company. Their respective interests, industrial or otherwise, were so disparate as to compel the conclusion that there was no common cause concerning which the Union and the parties upon whom the log was served could be said to be in dispute.

Moreover the conclusion that there was in reality no dispute with the prosecutor extending beyond the limits of Victoria is, we think, inescapable when regard is had to the fact that only five "agents" out of many hundreds of persons carrying on similar businesses in the Commonwealth were served with the log and that the employees sought to be affected numbered only seven. In these circumstances it seems to us that there was no desire on the part of the Union to initiate a dispute of any kind on this level and that it was a matter of indifference to it whether this claim was resisted or not or whether an award binding on the agents should be made. It is obvious that the only purpose of the Union was to secure an award binding on the Company and the service of the log on the "agents" was not intended to initiate, and did not operate to initiate, an actual dispute with them.

In my judgment the materials before the Court show that there is a real and genuine industrial dispute extending beyond the limits of a State to which the prosecutor is a party. It is a "paper dispute" but that is no reflection on the reality or genuineness of the dispute for the purposes of the Conciliation and Arbitration Act or the Constitution itself. The decisions of this Court make that point very clear. The Commissioner, therefore, has jurisdiction to make an award within the limits of the log of claims served on the prosecutor and each of the other employers binding on all of them.

It was not contended that the proceedings by the Australian Workers' Union to obtain an award or agreement against the prosecutor afford any legal objection going to jurisdiction to entertain the present claim for an award. However, in view of the other proceedings which appear to be current, the Commissioner might choose to refrain from including the prosecutor as a respondent to the award sought by the Federated Storemen and Packers' Union or make some other accommodation between the two organizations. But these are matters within the province of the Commissioner and are not of any concern in the present matter.

The evidence before the Court shows that the Federated Storemen and Packers' Union is seeking in the Conciliation and Arbitration Commission, an award covering members of the Union employed in the prosecutor's oil refinery at Westernport in Victoria, and by five distributors of oil and petrol products, who carry on business in three States, Queensland, Tasmania and South Australia. These employers do not conduct refineries, but are known in the oil trade as agents. They operate as vendors of oil and petroleum products supplied by major oil companies and their businesses are apparently substantial. Generally they sell by wholesale. The Union is an organization registered under the Conciliation and Arbitration Act and is, therefore, entitled to make demands on behalf of its members upon their employers. Rejection of such demands, or failure by the employers to assent to them, is evidence of an industrial dispute, the settlement of which may be effected by an award made under the Act or by an industrial agreement certified thereunder: Reg. v. Dunlop Rubber Australia Ltd.; Ex parte Federated Miscellaneous Workers' Union of Australia [1] . The Union made a common demand upon the prosecutor and each of the abovementioned agents to grant to members of the Union employed by them rates of pay and conditions of employment set out in a log accompanying the letter of demand sent to the prosecutor and each agent. All of them refused the demand. The Union notified a Commissioner appointed under the Act - the respondent Mr. Gough - of the service of the demand and log of claims on each of the employers and of the refusal by them to accede thereto. The Commissioner thereupon acted in the matter as required by s. 28 of the Act. He found that an industrial dispute - extending beyond the limits of one State - to which the Union, the prosecutor and each of the five agents were parties, had arisen, and that the ambit of the dispute was governed by the log of claims. The prosecutor's application in the present matter is that a writ of prohibition issue to restrain the Commissioner from going on to make an award on the basis that the prosecutor is a party to the alleged industrial dispute. The grounds of the application are that there is no industrial dispute extending beyond the limits of one State between the Union and the prosecutor and, alternatively, that there is no such dispute of a real and genuine character between them. The grounds raise questions going to the jurisdiction of the Commissioner to proceed further as regards the prosecutor. The onus is on the prosecutor to establish want of jurisdiction in the Commissioner.

The evidentiary materials before the Court are presented by affidavits and annexures thereto. It is a somewhat arduous task to piece together these materials to obtain an uncomplicated account of the facts.

The letter of demand sent by the Union to the prosecutor in common with the agents individually is upon its face a real and genuine demand: there is no evidence that the letter is other than what it purports to be. The Commissioner found in effect that the demand and log of claims were rejected by the prosecutor and the agents or, at any rate, they all failed positively to assent to those documents. A dispute which arises in this fashion is described in this field of law as a "paper dispute" but, as I have said, this description is no reflection on its reality or genuineness. Nor is it a reflection on the genuineness of a paper dispute that it was created for the purpose of obtaining an award: this is true both of paper disputes created by employees' or employers' organizations. However, it is said that the real purpose of the Union in seeking to involve the agents was to provide constitutional grounds for an award against the prosecutor. This contention has no other basis than that the agents served are relatively few in relation to the total number of such enterprises in Australia and that the total number of employees in their service eligible for or members of the Union did not exceed six or seven. In my view, a statement in the reasons of Latham C.J. in R. v. Portus; Ex parte Federated Clerks Union of Australia [1] provides an answer to the contention. The statement is as follows: "This Court would soon find itself in grave difficulties if it were to hold that the jurisdiction of the Arbitration Court depended, not merely upon the extension of an industrial dispute from one State to another State, but also upon the size of the dispute in each or some particular State. I venture to repeat what I said in the case of Metal Trades Employers Association v. Amalgamated Engineering Union [2] : - "The fact that the Arbitration Court or this Court may consider an industrial claim to be unimportant or trifling or unwise has no bearing upon the actual content of the dispute or upon the jurisdiction of the Arbitration Court to deal with that claim in an award. The Arbitration Court may, because it considers that a claim, though actually made, is not important or really significant, decline to include in an award any provision with respect to it. But if, for reasons satisfactory to the Arbitration Court, such a claim is granted in the award, there can, in my opinion, be no valid objection, upon the ground of jurisdiction, to the Arbitration Court making such an award. The award in such a case would deal directly with an actual part of the dispute"." However, the main contention for the prosecutor is that there was not a single industrial dispute because, as I understand the contention, there was no interest common to the prosecutor on the one hand and to the agents, treating them as a group, on the other hand. It is necessary, of course, that a paper demand in respect of industrial matters should be served on an employer or a group of employers in industry to create an industrial dispute with the claimant organization. The decision of the Commissioner which is attacked bears on this point and should be quoted in full:

In the first place, there is no doubt that certain parties were served a letter of demand accompanying a log of claims and that the log was either rejected in one case at least or else the other employers served did not express their intention of accepting it. There can be no doubt in my mind that Scott Agencies, H. L. Goodfellow and A. A. Watts, Petroleum Distributors, Downs Oil Sales Pty. Limited and V. Joyce Distributors in three different States are joined in an industrial dispute within the meaning of the Act with the Storemen and Packers' Union.

The point that gives rise to mature reflection is whether BP (Westernport) Pty. Limited is joined in the same dispute or whether attempt has been made which has resulted in one actual dispute of an inter-State character and one temporary dispute which is not a dispute within the meaning of the Act.

In order to determine this latter point I must look very closely at all the circumstances of the case. The question I pose myself is whether this group of six enterprises, including BP (Westernport), can reasonably be regarded as forming a part or parts or the whole of an industry.

It is the factual situation in that regard which I look upon as vital in the determination of this preliminary point. In coming to my conclusions I am relying upon, first of all, what was an intimate and continuing knowledge of the "wholesale oil industry" until 1959, and an occasional association with it since that time, chiefly in connexion with two of my assignments as a Commissioner, namely road transport, other than Governmental and oil and petroleum. Secondly, I rely upon the submissions of the parties in these proceedings, which, I think, have been exhaustive. On the basis of this source of information I can say that the "wholesale oil industry" as seen from the inside has not been a tidy, constant and unfluctuating entity any more than a large number of other groups of industrial enterprises. For instance, that same "wholesale oil industry" went to some pains to exclude from itself in respect of industrial relations the operation of service stations which are, in many respects, the vital point in the distribution chain. But this itself was not a complete exclusion because from time to time various companies allotted certain members, usually of staff, to work in service stations. There was that anomaly, although in general it might be said that the "wholesale oil industry" excludes that side of distribution.

There was for many years, and still is from my own knowledge, a tendency to farm out the final stage of distribution to the operators of small depots similar in operation to the depots run from time to time by the major oil companies themselves with their own staff. But that tendency has been a fluctuating one. It may be that the pendulum is swinging at the moment in the direction of making this final link in the chain of wholesale distribution independent of the major oil companies. There may at some future date be a swing back of that pendulum.

As far as oil refineries are concerned, in the early stages it was clearly integrated with marketing; marketing facilities were on the premises of the oil refineries which, in those days, were quite small enterprises. Since that time there has been a tendency for oil refining to become more and more independent, as it were, of marketing, certainly a discernible part of industry. It may be that at some future time the oil companies themselves (oil companies in the broader sense as controlling all aspects of oil refining and marketing) may carry the separation to the extent of having separate awards for all oil refineries, whereas at present the operation of certain oil refineries comes within the aegis of an award that also covers oil distribution. From my own knowledge there have been suggestions to this effect up to ten years ago and there may have been such suggestions since. The point of this small dissertation is, I repeat, that the "wholesale oil industry" has been a fluctuating entity.

For this reason it would be an unreal and artificial distinction at this stage of growth of this sector of industry - industry used in its most general and widest sense - to look upon oil refining and the distribution of oil products at the level of agencies as belonging to different industries.

My decision on this preliminary point is therefore that although the apparent gap between the two parts of the "wholesale oil industry" is large, because none of the major distributing companies is employed, they do in fact belong to the one industry at this point of time. This is not to say that at some future date they will not become distinct industries. But at this point of time oil refining and oil distribution as wholesale do appear to the Commission to belong to the one industry as part of that one industry.

For this reason I regard the service of the six enterprises, although differing quite obviously in size, as giving rise to an industrial dispute between all six enterprises and the Federated Storemen and Packers' Union of Australia, that dispute being a dispute within the meaning of the Act. The substance of that dispute is constituted by the letter of demand and the log of claims which accompany the Section 28 notification which gave rise to these proceedings.

1. (1949) 79 C.L.R. 428, at p. 432. 2. (1935) 54 C.L.R. 387, at p. 410.

In my view there is no evidence before us which makes it wrong to say that the refining of crude oil to extract oil and petroleum products for marketing and the wholesale distribution of the products of the refinery are branches of the oil industry. It would follow that so far as the evidence goes it is right to say that the prosecutor and the agents were an industrial group associated together as branches of the oil industry and the prosecutor and each agent could be validly served with a common paper demand as to industrial matters with the consequence that disagreement with the demand or failure to assent to it might result in a paper dispute of an industrial character fit to be settled by arbitration or conciliation in accordance with the Act.

The evidence shows that the prosecutor's refinery, which as yet is not completely constructed, will be wholly mechanized thus leaving little room for the employment of manual labour in connexion with the delivery of crude oil to it, the processes of refining and extraction of marketable products from it, or the delivery of the output of the refinery at the first stage of distribution. It further appears that the prosecutor intends to employ about sixty workers, called operators, to tend the machinery and plant in the refinery. Workers who follow the craft of operator in an oil refinery are, by the rules of the Union, eligible for membership. It does not appear that operators are employed in the business of any of the "agents" joined as parties to the dispute. Whereas the agents respectively employ workers who manually handle drums &c. the prosecutor does not intend to employ any such worker. The categories of workers mentioned in the log in respect of which certain rates of pay are claimed include operators of the class to be employed by the prosecutor and storemen and packers of the class employed by the agents. It seems to me that the demand and log of claims served on the prosecutor and the agents respectively were relevant to their common industrial interest as employers in the oil industry and that an industrial dispute to which all of them were parties arose by reason of the rejection of the demand and log of claims and the failure of all the employers to assent to them. I think that the argument that there is not a single industrial dispute to which the prosecutor and the agents are all parties fails and that the dispute found by the Commissioner affords a valid basis on which to make an award within the ambit of the log if he should think fit to do so.