Industrial Relations Commission of New South Wales CITATION: Transport Workers' Union of New South Wales v. National Union of Workers [2006] NSWIRComm 1087 APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT National Union of Workers INTERVENOR Australian Co-operative Foods Limited FILE NUMBER(S): IRC 1424 and 6454 of 2005 CORAM: Connor C CATCHWORDS: demarcation of work - milk treatment and distribution industry - orders for demarcation of work sought - eligibility rules of trade unions - history of trade union coverage - dissatisfaction with a trade union - principles for the demarcation of work between two trade unions Federal Workplace Relations Amendment (Work Choices) Act, 2005 LEGISLATION CITED: Industrial Arbitration Act 1940 Industrial Relations Act 1996 Australian Workers Union and Western District Branch of the Australian Coal and Shale Employees' Federation (1943) AR 76 BHP Refractories Pty Limited v. AWU-FIME Amalgamated Union (1996) 69 IR 41 Re Copper Refining and Smelting (Electrolytic Refining and Smelting Company of Australia Limited Award (No.3) (1942) AR 248 Federated Ironworkers' Association of Australia v. Transport Workers' Union of Australia (1995) 62 IR 90 Health and Research Employeess' Association of Australia v. University of New England (1984) AR 623 Jones v. Dunkel (1959) 101 CLR 298 McGrath and Davis v. Australian Jockey Club - unreported CASES CITED: National Union of Workers v. Transport Workers' Union of Australia (1998) 84 IR 360 Professional Officers' Association of New South Wales v. New South Wales Teachers' Federation (1994) 54 IR 85 R v. Holmes; ex parte Public Service Association of New South Wales (1978) 140 CLR 63 Re Public Hospital Employees (Skilled Trades) State Award (2001) 127 IR 361 Public Service Association of New South Wales v. Australian Workers Union (1990) 36 IR 221 R v. Hibble ex parte Broken Hill Proprietary Company Limited (1921) 29 CLR 290 Re Special Constables (Police Department) Award (1956) AR 880 Re Sykes Indoor Plant Services Pty Limited (1978) AR 46 Transport Workers' Union of New South Wales v. National Union of Workers [2005] NSWIRComm 1088 HEARING DATES: 05/04/2006, 07/04/2006, 13/04/2006, 16/05/2006 DATE OF JUDGMENT: 06/09/2006 APPLICANT Adam Hatcher LEGAL REPRESENTATIVES: RESPONDENT Andrew Joseph INTERVENOR Paul Ludeke Australian Co-operative Foods Limited DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Friday, 9 June, 2006 Matter No IRC 1424 and 6454 of 2005 Transport Workers' Union of New South Wales and National Union of Workers Application for demarcation orders under S.294 of the Industrial Relations Act, 1996 DECISION [2006] NSWIRComm 1087 Background 1 The Transport Workers' Union of New South Wales has lodged an application under Part 6, Demarcation Orders, of Chapter 5, Regulation of Industrial Organisations (Other than State Organisations) [Ss.294 and 295], of the 1996 Industrial Relations Act for demarcation orders to establish its sole industrial interest to represent employees engaged in milk treatment and distribution in this State. That application must be considered against the recent involvement of the National Union of Workers who have expressed an interest to cover employees in the milk treatment industry in this State and have obtained some membership of employees in the industry. 2 In that respect S.294 reads as follows: "(1) The Commission may, by its order, determine any question as to the demarcation of the industrial interests of industrial organisations of employees. (2) A demarcation order may be made on the Commission's own initiative or on application by an industrial organisation, an employer or a State peak council." 3 And S.295 is in the following terms: (1) The demarcation orders that the Commission may make include (but are not limited to) any one or more of the following orders: (a) an order that an industrial organisation of employees is to have the right, to the exclusion of another such organisation or other such organisations, to represent under this Act the industrial interests of a particular class or group of employees who are eligible for membership of the organisation, (b) an order that an industrial organisation of employees that does not have the right to represent under this Act the industrial interests of a particular class or group of employees is to have that right, (c) an order than an industrial organisation of employees is not to have the right to represent under this Act the industrial interests of a particular class or group of employees who are eligible for membership of the organisation. (2) When the Commission makes a demarcation order, the Commission may, after giving each industrial organisation and each State peak council concerned an opportunity to be heard, require the rules of the organisation to be altered in accordance with the demarcation order or a subsequent order of the Commission so as to give effect to the demarcation order. (3) Such a requirement has effect as follows: (a) In the case of a State organisation incorporated under this Act, the rules of the organisation are altered as specified in the order by force of this section. (b) In any other case, the Commission may cancel the registration of the organisation under Part 3 if the organisation does not alter its rules as specified in the order within the time allowed by the order." 4 Employees engaged in the milk treatment industry - receiving, producing, storing, processing, packaging, loading and distribution of milk, dairy and related products - in this State have traditionally been represented by the TWU under the terms of the Transport Industry - Milk Treatment &c and Distribution (State) Award. I will discuss the history of that State award later in this decision. 5 In particular, it is the work performed by employees of Australian Co-operative Foods Limited (Dairy Farmers) in Victoria Street, Wetherill Park and the work of employees of National Foods Limited at its plant in Castlereagh Street, Penrith which is in issue with the NUW which, in response to the TWU application, has now sought to exclusively represent those employees. Currently, the Dairy Farmers employees are covered by a State enterprise award - the Dairy Farmers TWU Enterprise Award - that has been made with the TWU. A State enterprise agreement - the National Foods Milk Limited Penrith Operations Agreement - made with the TWU which covered the National Foods employees at the Penrith site has now been replaced by a Federal instrument - the National Foods Penrith Operations Agreement - negotiated with the NUW. The Interlocutory Proceedings 6 The matter came before me for mention on Thursday, 14 April, 2005. It was adjourned for mention on Monday, 2 May, 2005 and Wednesday, 18 May, 2005. In the meantime, efforts had been made under the auspices of Unions New South Wales (the New South Wales Labor Council) to resolve the issue. Ultimately, I set the matter down for a conference on Tuesday, 7 June, 2005 at the request of the NUW. The proceedings commenced and I withdrew to permit the TWU, the NUW and Unions New South Wales, to confer. When the matter resumed before me the representative of Unions New South Wales, informed me that the matter remained in dispute between the parties. He sought and was granted leave to withdraw from the proceedings. 7 Mr Hatcher sought that I should then programme the matter for hearing, indicating that, in his view, conciliation before me would be a futility. The representative of the NUW in the proceedings at that time, acknowledged that conciliation would be unlikely to successfully resolve the matter but argued that I should nevertheless still conciliate on the matter. In the light of Mr Hatcher's comments, it seemed to me that to do so would simply be a waste of time for all concerned and that the matter should simply be programmed for hearing. The NUW argued that, as a matter of policy, there was an obligation on me to conciliate all matters that came before me, including applications concerning demarcation orders mounted under Part 6. I rejected that argument in my interlocutory decision of Tuesday, 7 June, 2005 in Transport Workers' Union of New South Wales v. National Union of Workers [Matter No.IRC 1424 of 2005]. 8 I concluded in my interlocutory decision that, whilst there was a clear direction on members of the Commission to conciliate with respect to some matters coming before them, eg. S.86 for unfair dismissal claims, S.135 for industrial disputes and S.315 for contract determinations in the transport industry, there was no compulsion on me to conciliate for demarcation orders under Chapter 5. I commented (at pp.4 and 5) that: "...in my opinion, the very fact that the obligation to confer is spelled out (in slightly different terms) in...separate sections of the 1996 Act suggests to me that there is not a general obligation on members of the Commission to conciliate in all issues which come before them by way of application, especially when it so obviously would be a futility - as in this case.... The TWU application seeks an order : it does not seek conciliation. It is its right not to compromise its claim in conciliation. And it would take both sides to constructively conciliate on the matter... I do not propose to embark on a fruitless exercise... Simply put, whilst the scheme of the 1996 Act directs conciliation as a prerequisite to some matters proceeding - in Ss.86, 135 and 315(1) - because such a direction is not contained in Chapter 5, it must follow that I am not under any obligation to conciliate - expressio unius est exclusio alteris - and I have not done so..." An appeal by the NUW against that interlocutory decision was dismissed and the matters came again before me for programming on Wednesday, 7 September, 2005, Friday, 4 November, 2005 and Thursday, 1 December, 2005. 9 On Thursday, 8 December, 2005 the NUW lodged a counter application for exclusive coverage of the milk treatment employees of Dairy Farmers at Wetherill Park and the National Foods employees at Penrith. The NUW either currently has no members or very limited membership at the Dairy Farmers site at Wetherill Park but has attempted to cover them, in any event. It now has substantial membership at the National Foods site at Penrith. Employees working at that site had expressed dissatisfaction with the TWU and resigned from it, taking up membership with the NUW. The Hearing 10 The NUW application was also allocated to me. I set both the TWU application and the NUW counter application down for mention and programming on Friday, 16 December, 2005 and Friday, 3 February, 2006 and scheduled the matters for hearing and inspections. On Tuesday, 5 April, 2006 I inspected the work at the Wetherill Park plant of Australian Co-operative Foods and the Penrith plant of National Foods and the matters were scheduled for a hearing on Friday, 7 April, 2006, Thursday, 13 April, 2006 and Tuesday, 16 May, 2006. 11 In the hearing Mr Hatcher represented the TWU and Mr Joseph represented the NUW. Mr Ludeke intervened in the proceedings on behalf of Australian Co-operative Foods. There was no intervention in the proceedings by any representative of National Foods. Annexed to this decision is a list of the witnesses called to give evidence in the hearing by either Mr Hatcher or Mr Joseph. As an intervenor, Mr Ludeke had no right to call evidence or to cross-examine witnesses [Re Special Constables (Police Department) Award (1956) AR 880]. He led no evidence but I granted him leave to cross-examine a witness in the hearing. 12 All evidence had been led in the proceedings on Friday, 7 April, 2006 and Thursday, 13 April, 2006, although Mr Joseph foreshadowed that he may seek to adduce further evidence. I reserved his position, and the position of Mr Hatcher, concerning any further evidence being admitted. Subject to those reservations, the hearing on Tuesday, 16 May, 2006 was to be confined to submissions by the parties. On Thursday, 27 April, 2006 the NUW wrote to my assistant indicating that they: "...write to advise the Commissioner that we wish to lead further evidence as foreshadowed at the last hearing. We therefore seek that these matters be re-listed for directions and programming at the Commissioner's earlier convenience. We will be seeking that the listing for submissions on Tuesday, 16 May, 2006 be moved to a later date..." 13 I set down the matter for a mention on Thursday, 4 May, 2006 for further programming of the matter. I directed the parties into further discussions concerning this matter, indicating that I would entertain arguments in the proceedings on Tuesday, 16 May, 2006 on whether to admit any further evidence. I also indicating that if oral evidence was to be led by a witness, it should be supported by a written statement provided within seven days. However, particularly in the light of the current restrictions on my diary flowing from the strict centralised listing and case management of files, I declined to grant a further adjournment of the proceedings. The Applications 14 The TWU application is to the following effect: "1. The Transport Workers Union of New South Wales is to have the right, to the exclusion of the National Union of Workers, New South Wales Branch, to represent under the Industrial Relations Act, 1996 NSW the industrial interests of all employees employed in the receival, production, storage, processing, packaging, loading and distribution of milk, dairy and related products by: (i) National Foods Limited at its site at Castlereagh Road, Penrith ('Penrith site'); and (ii) Australian Co-operative Foods Limited at its site at 433 Victoria Street, Wetherill Park ('Wetherill Park site') who are eligible for membership of the Transport Workers' Union of New South Wales. 2. The Transport Workers' Union of New South Wales, to the extent that it does not have the right to represent under the Industrial Relations Act, 1996 NSW the industrial interests of any or all employees employed in the receival, production, storage, processing, packaging, loading and distribution of milk, dairy and related products by: (i) National Foods Limited at its site at Castlereagh Road, Penrith ('Penrith site'); and (ii) Australian Co-operative Foods Limited at its site at 433 Victoria Street, Wetherill Park ('Wetherill Park site') is to have that right. 3. The National Union of Workers, New South Wales Branch, is not to have the right to represent under the Industrial Relations Act, 1996 NSW, the interests of employees employed by: (i) National Foods Limited at its site at Castlereagh Road, Penrith ('Penrith site'); and (ii) Australian Co-operative Foods Limited at its site at 433 Victoria Street, Wetherill Park ('Wetherill Park site') to the extent that any such employees are eligible for membership of those organisations." 15 The counter application by the NUW is, naturally enough, the direct reverse - as Mr Hatcher indicated in his submissions, a mirror image, viz: "1. The National Union of Workers, New South Wales Branch, is to have the right, to the exclusion of the Transport Workers' Union of New South Wales, to represent under the Industrial Relations Act, 1996 NSW the industrial interests of all employees employed in the receival, production, storage, processing, packaging, loading and distribution of milk, dairy and related products by: (i) National Foods Limited at its site at Castlereagh Road, Penrith ('Penrith site'); and (ii) Australian Co-operative Foods Limited at its site at 433 Victoria Street, Wetherill Park ('Wetherill Park site') who are eligible for membership of the National Union of Workers, New South Wales Branch. 2. The National Union of Workers, New South Wales Branch, to the extent that it does not have the right to represent under the Industrial Relations Act, 1996 NSW the industrial interests of any or all employees employed in the receival, production, storage, processing, packaging, loading and distribution of milk, dairy and related products by: (i) National Foods Limited at its site at Castlereagh Road, Penrith ('Penrith site'); and (ii) Australian Co-operative Foods Limited at its site at 433 Victoria Street, Wetherill Park ('Wetherill Park site') is to have that right. 3. The Transport Workers' Union of New South Wales, is not to have the right to represent under the Industrial Relations Act, 1996 NSW, the interests of employees employed by: (i) National Foods Limited at its site at Castlereagh Road, Penrith ('Penrith site'); and (ii) Australian Co-operative Foods Limited at its site at 433 Victoria Street, Wetherill Park ('Wetherill Park site') to the extent that any such employees are eligible for membership of those organisations." Existing Trade Union Coverage of the Milk Treatment Industry 16 At the Wetherill Park site of Australian Co-operative Foods both long-life (long-life milk, flavoured milks and custards) and short life (yogurts, custards and desserts) dairy products are processed, flavouring is added, the product is placed in plastic bottles or cardboard containers, packaged, palletized, wrapped in plastic and, depending on the shelf life of the product, held in either an ordinary warehouse or (briefly) in a refrigerated warehouse, prior to distribution. There are 160 employees involved in the process. 17 At the Penrith site of National Foods only short-life dairy products (ordinary milks, skim milks, flavoured milks) are pasteurised and processed, ie placed in containers, packaged, palletized, wrapped and either stored briefly in a refrigerated warehouse or dispatched immediately. All products have a short shelf life. There are 13 different products in all and other products not made at the site - yogurt, fruit juices, cheese, custard and long-life milk - not processed on the plant are also received and distributed. There are approximately 165 employees involved in the process. 18 Mr Derrick Belan, the State NUW secretary, was called to give evidence in the hearing by Mr Joseph. He asserts that the NUW now currently covers 90 employees at the Penrith site of National Foods. Former members of the TWU employed at that site had expressed dissatisfaction with the role of the TWU on their behalf and had resigned from the TWU. Mr Holden Smith, a storeman employed by National Foods at its Penrith site (and formerly a TWU delegate but now NUW delegate at the site) was called to give evidence in the proceedings by Mr Joseph. He has claimed that, to the best of his knowledge, there are presently no members of the TWU involved in the Penrith plant of National Foods (although the TWU claims that it still retains membership of an unspecified number of employees there). 19 Mr Mick Pieri, a TWU organiser called to give evidence in the hearing by Mr Hatcher, recorded in the written statement which formed the basis of his evidence in this hearing: "...Mr Belan would not know who is a member of the TWU. The TWU still has members working at National Foods. Since employees of National Foods have joined the NUW...I have been contacted by a worker from National Foods expressing concern about the move to the NUW. That person did not want to identify themselves ( sic ) to me..." 20 In the written statement which formed the basis of his evidence in this hearing, Mr Belan asserted that the NUW has no membership at the Wetherill Park site of Dairy Farmers, although its application does extend to bring those employees into NUW coverage. Mr David Clarke, a forklift driver at the Dairy Farmers Wetherill Park site, whom Mr Hatcher called to give evidence in the hearing indicated in his written statement that: "...there are approximately 140 members at Dairy Farmers, Wetherill Park and around 15 NUW members, although I don't believe that they are financial members..." 21 In his evidence, Mr Belan refuted any suggestion that the NUW would accept members on its records of employees who were not financial and he maintains his stand that there are no NUW members currently at the Wetherill Park site of Dairy Farmers. However, there is some evidence before me in this hearing to suggest that the NUW does have at least one member at the Wetherill Park site - Mr Mick Maloney - who is described in documents provided to me as an NUW delegate at the site. 22 Mr Belan has claimed in his evidence that the NUW is the predominant trade union in the milk and diary products industries in Australia (if not in New South Wales) with a national membership of approximately 4,500 persons. But nationally, as Mr Belan has indicated in the written statement which formed the basis of his evidence in this hearing, there is some confusion over the appropriate trade union to represent the interests of employees in the milk treatment industry. 23 For instance, in South Australia, the Miscellaneous Workers Union is the predominant trade union with the TWU confined to distribution, ie driving deliveries. In Queensland, the predominant trade union in the milk treatment industry is the Australian Workers' Union. In Victoria, Mr Belan claims that the NUW is the predominant trade union and he points out in his written statement that: "...based on information published by Dairy Australia, Victoria has 64% of Australian dairy cows, more than 65% of milk production and 70% of Australian cheese production..." 24 In Tasmania, the AWU and the NUW share membership in the milk treatment industry and the role of the TWU is confined to cover milk carters and drivers. In Western Australia, the NUW was until recently the predominant trade union to represent the interests of employee involved in the milk treatment industry. Those NUW members have now decided to join the TWU and have done so. The NUW has not apparently contested their rights in that respect. 25 The position in New South Wales has been stable for some time, however, and the TWU has always retained coverage of work in the milk treatment industry in this State. At present, the TWU has approximately 400 members in the milk treatment industry. They are engaged by Perfection Dairies Pty Limited (at sites in Baulkham Hills and Hornsby), Dairy Farmers (at sites in Homebush Bay, Wetherill Park, Lidcombe, Bomaderry and Hexham) and National Foods (at Penrith). 26 Mr Wayne Forno, the assistant secretary of the TWU, was called to give evidence in the hearing by Mr Hatcher. He had undertaken some research into the background of the milk treatment and distribution industry in this State and in a witness statement which formed the basis of his evidence he outlined in detail the results of that research. Originally - in or around 1908 - the Milk and Ice Carters and Dairymens Employees' Union had been formed to represent the interests of employees engaged in the milk treatment and distribution industry and in the middle of 1970 a new Milk Treatment &c and Distribution (State) Award was made by the Milk Treatment &c and Distribution (State) Conciliation Committee. In the middle of 1971 the Dairymens' Union was amalgamated with the TWU. 27 Since 1998, usually at three monthly intervals, the TWU holds meetings of TWU delegates in the milk treatment industry to discuss various issues. From time to time the State milk treatment and distribution award had been varied to reflect general wage movements on economic grounds and on specific applications by the TWU. Mr Forno's evidence in this hearing outlined in considerable detail the activities in which the TWU had been involved on behalf of the employees in the milk treatment and distribution industry. The current State milk treatment and distribution award was made by Marks J on Wednesday, 15 August, 2001 and has subsequently been varied on several occasions since that time. 28 But, in any event, as far as the Wetherill Park operations of Dairy Farmers and the Penrith operations of National Foods, the State milk treatment and distribution award has been replaced by enterprise specific arrangements and a somewhat confusing position has been developed. The State milk treatment and distribution award appears to retain the role of a parent award in some respects, however. I will deal with the position in Dairy Farmers and the position in National Foods separately. The Position in Dairy Farmers 29 Australian Co-operative Foods was formed in late 1989 as a result of a merger between Dairy Farmers Co-operative Foods Limited, Hunter Valley Co-operative Dairy Limited and Shoalhaven Dairy Co-operative Limited. After some initial industrial disruption following the breakdown of negotiations for a wage increase, and following the closure of depots, Dairy Farmers and the TWU reached an agreed position. That agreement was formalised initially into two enterprise agreements, viz: (i) an agreement between the TWU and Dairy Farmers - the Australian Co-operative Foods Limited Sydney Metropolitan Depots (TWU) Enterprise Agreement (which applied to employees at Ultimo, Croydon Park, Lidcombe, French's Forest, Sutherland and Campbelltown); and (ii) an agreement between the TWU, the NUW, the New South Wales Nurses Association and Dairy Farmers - the Australian Co-operative Foods Limited Wetherill Park Site (TWU, NUW and NSWNA) Enterprise Agreement. 30 The interest of the Nurses Association in the enterprise agreement concerned only the position of occupational nurse at the Wetherill Park site. The NUW's apparent interest at that time appears to me to have been confined to storeman and packer positions. The enterprise agreement [Clause 1, Rates of Pay and Relationship to Awards] made reference in an appendix to both the Storemen and Packers General (State) Award and the State milk treatment and distribution award for the purposes of comparison and to provide a basis for a minimum standard for wages and conditions, viz: "...The awards listed at Appendix A will regulate the rates of pay and conditions of employment covered by this agreement except to the extent that such rates and/or conditions of employment have been varied by this agreement, in which case the provisions of this agreement shall apply..." 31 In late 1995 an application for a new State award to cover the Lidcombe operations of Dairy Farmers - the Milk Treatment &c and Distribution - Australian Co-operative Foods Limited Lidcombe Factory Employees - Wages (State) Award came before me and I made that State award with the consent of the parties. In early 1997 Peterson J made a new State award - the Australian Co-operative Foods Limited TWU Enterprise Award - which provided for substantial increases to rates of pay [15%] and in early 2000 his Honour, with the consent of the parties, made a new State award - the Dairy Farmers TWU Enterprise Award - which replaced it as far as is relevant in this hearing. Subsequently, a new Dairy Farmers Award was made by me in the middle of 2003, also by consent of the parties. 32 Both the 1997 award and the 2000 award made by Peterson J and the 2003 award made by me purportedly extended to cover all employees of Dairy Farmers engaged in work covered by the terms of the State milk treatment and distribution award. Clause 1, Parties, Area and Incidence, of the current Dairy Farmers TWU Enterprise Award is in the following terms: "...This award is made between Australian Co-operative Foods Limited (trading in New South Wales as and herein called Dairy Farmers) and the Transport Workers' Union of New South Wales and shall apply to employees engaged under the Milk Treatment &c and Distribution (State) Award...in New South Wales (excluding rural trading employees and employees engaged in country stores) in the classifications set out in Appendix A to this award..." In late 2005 Dairy Farmers and the TWU entered into a new Dairy Farmers TWU Enterprise Agreement and that is currently the industrial instrument on which the activities of Dairy Farmers at it Wetherill Park site are regulated. The Position in National Foods 33 National Foods acquired United Dairies Limited in 1992 and with it the Penrith operations. In the middle of 1996 Buckley C made a new State award with the consent of the parties - the National Dairies (New South Wales) Limited North Rocks Operations Award - and in the middle of 1998 a new enterprise agreement - the National Foods Milk Limited North Rocks Operations Agreement - was approved by Marks J to operate until the North Rocks operations closed down (or for a period of twelve months, if the plant were not to close down in that time). In 1999 the milk treatment operations were transferred from North Rocks to the Penrith site, although some transport functions are still performed at North Rocks. The North Rocks Operations Award was subsequently rescinded. Adjacent to the Penrith site of National Foods is a plant operated by Brickwood Holdings Pty Limited - the Blowflex site - where employees are engaged in the production and distribution of containers which are primarily sent through pipes by an automated blower process to the National Foods operations. Employees involved in that process are also members of the NUW. 34 In 1999 an agreement was struck between National Foods and the TWU and signed by representatives in late 1999. While it was not registered as an enterprise agreement, it became known as the Penrith Operations Agreement. In early 2000 an application for approval of an enterprise agreement - the National Foods Milk Limited/Blowflex Moulding Pty Limited Penrith Operations Agreement - was made by the TWU to reflect an agreement it had reached with National Foods; there is no evidence that that enterprise agreement was ever approved by the Commission under S.35. However, in late 2000 the National Foods Milk Limited Penrith Agreement was approved by Peterson J and in the middle of 2003 I approved a replacement enterprise agreement for it. 35 Clause 3, Incidence and Parties Bound, of the National Foods Penrith Enterprise Agreement reads as follows: "This agreement is made between National Foods Milk Limited and the Transport Workers' Union of Australia on behalf of all employees who are eligible to be members of the union employed at the company's Penrith facility engaged in the receival, processing, packaging and distribution of milk and related products at the Penrith site." 36 However, the employees at the Penrith site of National Foods are currently employed under the National Foods Milk Limited Penrith Operations Agreement which was certified by the Australian Industrial Relations Commission on Tuesday, 18 October, 2005. Clause 3, Incidence and Parties Bound, of the Federal National Foods Milk Limited Penrith Operations Agreement provides that: "This agreement is made between National Foods Milk Limited and the National Union of Workers on behalf of all employees who are eligible to be members of the union employed by the company's Penrith facility engaged in the receival, processing, packaging and distribution of milk and related products at the Penrith site." 37 The qualifying words which I have highlighted - "...who are eligible to be members of the union..." - leaves unanswered the question of whether they are entitled to become members of the NUW, of course. For reasons I will outline later in this decision, the Federal NUW appears to have an entitlement to represent employees involved in the milk treatment and distribution industry but I am considering this matter in the State context where up to now the New South Wales dairy industry has historically been based. Issues Concerning the TWU at the Dairy Farmers Wetherill Park Site 38 Mr Clarke who was elected as a co-delegate of the TWU and TWU representative on the occupational health and safety committee at the Wetherill Park site of Dairy Farmers, recalled being approached by Mr Maloney (who is now described in documents provided to me in evidence as NUW delegate) with words to the following effect: "I'm unhappy with the TWU and the way I've been harassed by management. I don't think I'm getting the response I need. I'm being left out on my own and it might be time to get a union in that takes Dairy Farmers workers seriously." Mr Maloney suggested the NUW to cover the employees and Mr Clarke replied: "Maybe you're right. We should speak to the NUW." 39 Mr Clarke telephoned the NUW office and spoke to an official, saying: "I'm a member of the TWU but would like to talk to someone about the NUW and if they could do a better job for us than the TWU." The NUW official responded: "Not a problem. We can't come on site but give us a time and place." 40 Arrangements were made to meet in a local tavern. Mr Clarke informed other employees on his shift about the meeting and Mr Maloney informed him that he had passed the message on to employees engaged on his shift. Mr Clarke believes that a majority of the employees were aware of the meeting in the tavern and 15 employees attended the meeting with Mr Belan and other representatives of the NUW to be told that the NUW "...will be there whenever you call..." and that it was a "...strong union..." that would fight for them. A bundle of NUW membership forms were provided to Mr Clarke and he later gave those forms to Mr Maloney. However, Mr Clarke had decided that he did not wish to join the NUW. 41 In the middle of 2005 Mr Maloney again approached Mr Clarke and invited him to attend a meeting with a firm of solicitors to discuss trade union coverage rights for the NUW. Mr Clarke did not respond to Mr Maloney but he did not attend the meeting with the solicitors. His concern appears to have been chiefly directed to the need he saw to provide a united front against the encroachments on employee's rights from the new industrial regime dictated by the 2005 Federal Workplace Relations Amendment (Work Choices) Act. He informed Mr Maloney that: "I can't fight these Federal IR changes with the NUW because they're not strong on site. I like the way the TWU are handling the fight against the Federal changes and I feel I have to be a part of it." Mr Maloney replied: "Fine. I can understand it." The Advice from the Solicitors Over Trade Union Coverage 42 In fact, the firm of solicitors provided a formal advise concerning trade union membership in the milk treatment industry which in the middle of 2005 was pinned up on the staff notice at the Penrith plant of National Foods. The formal advice points out that: "...there have been a number of trade unions that have coverage of membership at the Wetherill Park plant. However, in more recent years membership of all workers at the plant have been covered by the Transport Workers' Unions. Many workers are desirous of transferring their union membership from the Transport Workers' Union to the National Union of Workers. It is unlikely that the Transport Workers Union will be most aggrieved by the proposed transfer of membership as it will involve a significant reduction in the collection of union dues and at a time when the union movement is under a significant amount of pressure as a result of the draconian legislative changes to be introduced by the Federal Government..." 43 The advice by the firm of solicitors concentrates on the constitutional rule of the Federal NUW and not its State branch - there are fundamental differences which I will discuss in more detail later in this decision. That would appear to me to be a case of moving the employees closer to an area of apparent concern to them (and, presumably, one of the reasons that Mr Clarke and other employees were cold on the prospect of moving over from TWU coverage of their work to the NUW). 44 In particular the advice from the firm of solicitors is to the following effect: "...Rule 4(F) provides that industries in or in connection with which the union is registered include '...ice and ice cream making, butter making, cheese making... milk (fresh, dried and/or condensed)...' Rule 5(F) provides that the union shall consist of an unlimited number '...of persons employed in or connexion with...ice cream, butter, cheese, milk (fresh, dried and/or condensed)...' There are food items in the short life processing section, such as custards and yogurts, which are not specifically referred to in Rule 5(F) but it would seem to us that the processing of those food products are so closely related to '...ice cream, butter, cheese, milk...' that such workers who are involved in this form of processing should be covered. It might well be, however, in due course that the union should make an application to amend their rules to specifically cover these food items. All in all, it is our view that employees in the processing section of the plant can be covered by membership of the (Federal) National Union of Workers. The issue of those employees in the warehouse and distribution section is not clear cut. However, Rule 5(F) does use the words '...in connexion with...' and we would have thought that would be sufficiently wide to allow such employees to be covered by the NUW. Further, as we understand it, those employees in the warehouse and distribution section are not actually involved in carting (which would lead to direct identification with the Transport Workers Union) but are involved in working leading up to the transport of milk products from the premises. Accordingly, we are of the view that those employees can also have union membership with the National Union of Workers..." The advice concluded: "...The Transport Workers Union is, of course, entitled to challenge the decision by the employees at Dairy Farmers Co-operative to transfer their membership to the NUW. However, if there is a unanimous and voluntary decision by employees to transfer their union membership in an industry where the NUW can quite reasonably argue that they would ordinarily have coverage (but for the fact that historically membership has been covered by another union) then we would have thought there would be good prospects of the NUW maintaining that union coverage..." 45 Mr Belan indicated in his evidence that the NUW had not sought that advice from the firm of solicitors. It appears that it was Mr Maloney who sought that advice but the solicitor's invoice for the advice was, in fact, forwarded to the NUW and paid by it. Issues Concerning the TWU at the Dairy Farmers Lidcombe Site 46 Mr Steve Price is employed by Dairy Farmers at its Lidcombe plant. He is involved in unloading tanks, receiving bulk milk and dispatching bulk products by means of bulk tankers. He had provided a written statement as evidence in this hearing for the TWU but Mr Joseph did not require him to be called for cross-examination in the hearing and his written statement was admitted into evidence unchallenged. He has been a member of the TWU for 16 years and he describes himself in the written statement as a "...union activist..." who has promoted the TWU to his workmates. 47 The negotiations with Dairy Farmers for improvements to wages or working conditions start with committee meetings comprising representatives, usually TWU delegates. Mr Price claims in his written statement that: "...a TWU official is very closely involved in the committee's activities. No decision is made without the official's input. I have found the input given by the various officials we have had over the years to have been very helpful and sensible advice. The TWU has assisted us in getting a number of pay increases over the years. I estimate that over the past 15 years, the TWU has assisted us in negotiating an overall increase of over 45%. The TWU has also been very active in ensuring safety at our site. Our officials have conducted safety investigations and safety walks on numerous occasions. I have observed that whenever an organiser has attended our site, he has kept an eye out for any safety issues, raising any concerns he has with myself or the delegates. Any concerns are put to the safety committee or, if needing immediate attention, put straight to management. The union then makes sure that these issues are followed up and fixed. Whenever a member has had a safety concern, investigations have been conducted immediately and followed up until resolved... The TWU's broader industry campaign relating to safety has also had a very positive impact on our depot's practices. Through the TWU's efforts to educate its members, I and my colleagues are more aware of our obligations with regards safety in the industry. I have referred a lot of issues raised with me by colleagues and other work associates, including tanker drivers who come into the production depot, to the TWU. These issues have concerned pay, superannuation, excessive driving hours and other points of safety. When the issue is brought to me, I pass it onto the relevant TWU organiser who deals with the problem and then reports back to me on the outcome. In each of these cases the relevant TWU organiser has dealt with the problem quickly and effectively..." All in all, a fairly well organised site, it would seem to me - and apparently little reason for the employees to change trade union membership away from the TWU. And they have not done so. 48 Nevertheless, Mr Price recalled in his written statement that in late 2004 two employees had approached him to say: "An NUW official approached us and said that they could get us pay rises above and beyond what we get with the TWU." And Mr Price responded: "I do not believe that we could get any better." And he records no further involvement with the NUW. Issues Concerning the TWU at the National Foods Penrith Site 49 Mr Smith expressed considerable dissatisfaction with the TWU and apparently speaks on behalf of other employees at the Penrith plant of National Foods who had resigned from the TWU and joined the NUW in early 2005. Mr Smith did not deny the suggestion made to him in cross-examination by Mr Hatcher that he had informed TWU officials that, if joining the NUW meant moving into the Federal industrial jurisdiction, speaking on behalf of the employees he represented, he would not be prepared to do so. But obviously events overtook any such concerns and he and other employees whom he represented subsequently resigned from the TWU to join the NUW. 50 Mr Smith had expressed concern over the lack of continuity of TWU representation at the Penrith site of National Foods, with different TWU organisers appointed to that work. In a written statement which formed the basis of his evidence in this hearing Mr Smith indicated that: "...the discontent of the employees with the TWU began some years ago. When the employees decided to resign from the TWU and join the NUW...there was not one reason for this change but a series of reasons that had built up over a period of time. These included: (a) Over the period of time we had a lot of changes in the organiser that came to the site so that we lacked continuity. This annoyed many employees as well as the fact that we did not see the organiser enough. (b) There were numerous issues that were raised by the delegates and members of the union that were not promptly followed up. Often we would raise issues with the organiser and never hear any more about it. (c) The approach of the TWU regarding our last enterprise agreement (2002) upset many if not all of the members. Firstly we were unhappy with the union's proposition of a 5% wage increase per annum broken up into 4% for the members and 1% being paid into the TWU's training fund. (d) Also during the negotiations the organiser at the time (Mr Pieri) was not involved for the majority of the enterprise bargaining agreement meetings with the company. In fact, I recall that at the second last enterprise bargaining agreement meeting for the 2002 agreement, Mr Pieri turned up and tried to remove or cancel all the improvements that the delegates had negotiated with the company and instead replaced our proposal with a TWU proposal: that was the first enterprise bargaining agreement I recall Mr Pieri attending: ultimately, Mr Pieri went along with our opinions on the things we wanted in the agreement. (e) There were occasions when members were sacked and the remaining members did not believe that the union provided adequate representation to our dismissed colleagues: for example, one employee (Mr Michael Stuart) was terminated for excessive absenteeism - it is true that Mr Stuart had a lot of time off. However Mr Pieri undertook to file an application for relief from unfair dismissal. After approximately six weeks Mr Smith rang me and asked me what was going on. I told him that I had assumed his case was going to court. Subsequently, I rang Mr Pieri who advised me that he had not managed to get the documents lodged in time and there was nothing he could do. My fellow workers and I felt that this was unsatisfactory. (f) Our last organiser (Mr Mark Bell) was regarded by the members as not being very effective and it increased the member's disillusionment with the TWU. In fact, I rang (various TWU officials, including Mr Pieri) and raised the issue of Mr Bell's competence with them and sought their assistance.... Unfortunately no assistance was forthcoming..." 51 Mr Pieri indicated in the written statement which accompanied his evidence that: "...I was aware that some years ago there was some discontent with membership of the TWU. When I became aware that the members at National Foods were seeking more from the TWU, I took steps to meet these needs. This included running new delegate elections, including new co-delegates for each shift, ensuring that all shifts at the site had elected representatives, arranged training for delegates and occupational health and safety training and took other steps as required. After those initiatives had been introduced I believed that the members at National Foods were very satisfied with their membership of the union..." Not so, apparently and Mr Smith's concerns centred chiefly on the dismissal of three employees from National Foods operations at Penrith - Mr Matthew Taylor, Mr Stuart and Mr Doug Reburger - to which I will refer in more detail shortly. 52 Mr Pieri claimed in his evidence that he attended the National Foods Penrith site at least once in every fortnight, often more regularly, and when issues were raised by TWU members which required attention, he was often there on a daily basis. He maintained telephone contact with the TWU delegates at the site every few days. He is not aware of any issues raised by employees at the site which were not followed up by the TWU. Mr Pieri claimed in his written statement that: "...throughout the 2002 wage claim the TWU pursued a number of common claims through the union's membership. One of those claims was an increase of 5% + 5% + 5% over three years. At National Foods the TWU achieved a greater amount than that claim for the 2002 enterprise agreement...." Mr Pieri disputes that 1% of that wage increase was dedicated as a levy for the TWU training programmes and it appears that, in fact, the 1% levy was in addition to the wage increase granted. Mr Pieri denied that he sought to cancel any improvements which the employees had achieved. The Dismissal of Mr Taylor 53 A settlement was negotiated between the TWU and National Foods over the dismissal of Mr Taylor which was apparently to Mr Taylor's satisfaction. However, Mr Smith claimed in his cross-examination that Mr Taylor's dismissal was not taken up promptly by Mr Pieri, acting on behalf of the TWU. He described Mr Pieri's conduct with the matter as a "...sort of shambles..." and said that Mr Taylor "...had problems with it...". But there is really very little in evidence before me concerning the dismissal of Mr Taylor. In fact, Mr Taylor was not really identified by name in the proceedings at all. I do not propose to rely in any respect on the incident involving Mr Taylor's dismissal in this hearing. The Dismissal of Mr Stuart 54 Mr Pieri never took any action on behalf of Mr Stuart. He did recalled being contacted by Mr Smith over the telephone. Mr Smith said: "A friend of mine has been dismissed for excessive absenteeism." Presumably Mr Stuart. Mr Pieri replied: "I can lodge an unfair dismissal application but he will need to give me a call so I can get the details and prepare the forms." 55 According to Mr Smith, Mr Stuart was present with him when he spoke to Mr Pieri on the telephone and Mr Stuart also spoke on the telephone to Mr Pieri, exchanging telephone numbers. Mr Smith appeared to me to be unclear whether or not it was left to Mr Stuart or Mr Pieri to make any further contact over the issue. If Mr Pieri was left with the task of pursuing the matter further with Mr Stuart, he did not do so. However, Mr Pieri's evidence is that the matter was left with Mr Stuart to further contact him and he did not do so. According to Mr Pieri, it was necessary for Mr Stuart to give him more details so that he could take the matter further. 56 Mr Pieri received no response until six weeks later when he received a telephone call. Mr Pieri believes that it was the employee himself who contacted him but Mr Smith claimed that he had actually made the telephone call. Mr Pieri said: "There's a 21 day time limit to file an unfair dismissal application from the day you are dismissed." Mr Pieri claimed that Mr Stuart (or Mr Smith) accepted that any claim over his dismissal was now stale and the matter was not pursued any further. 57 Moreover, according to Mr Pieri, the TWU records do not establish that, in fact, Mr Stuart was a TWU member at all. Mr Pieri records in his written statement that: "...The TWU's membership database shows that there is a member by the name of 'Michael Stewart' who works at Australian Air Express: this person has not resigned from the union and is presumably a different person than the one referred to by Mr Smith..." The Dismissal of Mr Reburger 58 Mr Smith claimed that the dissatisfaction of the employees at the Penrith plant of National Foods to the TWU's representation of them was over a range of issues but the actual catalyst for their resignations from the TWU - what Mr Smith described as the "...icing on the cake..." or "...the last straw..." - appears to me to have been the dismissal of Mr Doug Reburger, a general hand employed for 28 years by National Foods at its Penrith site prior to his dismissal. Mr Reburger's dismissal arose following an allegation, which Mr Reburger denied, that he provided products to a customer which were not ordered and with respect to which no invoice was issued. Initially, the employees took industrial action which came before Haylen J in conference proceedings convened pursuant to S.130. 59 Ultimately, it was agreed at a stop work meeting that the employees would refrain from further industrial action and the TWU would lodged an application under Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] and it did so. In its Part 6 application lodged on behalf of Mr Reburger, the TWU sought either Mr Reburger's reinstatement or, alternatively, monetary compensation in lieu thereof. The matter was allocated to me and set down for a conciliation and directions hearing on Wednesday, 8 September, 2004 and mentions on Monday, 20 September, 2004 and Wednesday, 1 December, 2004. The matter had been programmed for arbitration but it was considered by the parties that a further attempt at conciliation may assist in resolving the matter and it was resolved in that manner. 60 Mr Smith regarded this matter as very important. Mr Mark Bell, an organiser for the TWU whom Mr Hatcher called to give evidence in the hearing, recalled Mr Smith saying to him: "The members won't be happy if the union loses this one." Mr Smith concedes that he made that comment. He recorded in his written statement: "...The reason for advising him of this was that the members felt very strongly that Mr Reburger had been wrongly and unfairly accused of criminal activity which he simply did not do..." 61 However, I understand that a number of employees at the Penrith site had actually provided statements against Mr Reburger's interests (making his reinstatement to the Penrith plant more difficult, if not impossible, in my opinion) and Mr Reburger did not press for his reinstatement. Mr Bell claimed that Mr Reburger was satisfied with the TWU and its role on his behalf, although he was apparently offended that some employees would attack him with statements against his interests. Mr Reburger wrote a letter on Wednesday, 23 February, 2005 in the following terms: "...I worked for National Foods for about 28 years. I am also a member of the TWU. I know there has been rumours about what has happened since I left and the case that the TWU lodged for me. I would now like to tell you that those rumours are not correct. I have always been happy with the way that the TWU represented me. They have always worked in a professional manner and worked for my best interests. I am also happy with the confidential settlement that was achieved. I have no regrets about the way the case was handled and would recommend the TWU at any time..." But Mr Smith saw things differently. 62 According to Mr Smith, notwithstanding what Mr Reburger had written in the letter, he had spoken privately to him and has continued to keep in contact with him. He claimed that Mr Reburger had told him that he was not satisfied with the outcome of his unfair dismissal claim, the slur on his character by the allegation made against him or the TWU's conduct of the proceedings on his behalf. The conflicting evidence of Mr Smith and Mr Bell over whether or not Mr Reburger was satisfied with the conduct of the TWU in representing him and settling his claim for unfair dismissal may cancel one another out, but the letter signed by Mr Reburger is concrete evidence that supports Mr Bell's assertions. 63 If Mr Reburger's attitude is different from what he had written in his letter, he could have been called by Mr Joseph to give evidence to clarify his position and he did not do so. That must raise an inference that favours the position advanced in this hearing by Mr Hatcher [Jones v. Dunkel (1959) 101 CLR 298]. Mr Smith stated that Mr Reburger "...had been through enough..." already and he did not want him to come forward and give evidence in these proceedings. But in the absence of Mr Reburger to give any evidence to refute what he had actually written, I accept that his letter means precisely what it so clearly says. 64 I believe that it is important to stress that in pursuing any claim on behalf of a dismissed employee, the TWU should really only be concerned with the interests of the dismissed employee himself. Whether or not Mr Reburger's fellow employees "...would not be happy if the TWU loses..." any case made on Mr Reburger's behalf is really not a relevant consideration for the TWU in acting for Mr Reburger. As Mr Hatcher indicated in his submissions, Mr Smith "...did not have ownership of Mr Reburger's case...". No colleague of Mr Reburger is entitled to press him into an arbitration of his claim of unfair dismissal for his reinstatement in employment against his wishes or the advice of the TWU officials who had represented his interests. This matter should have ended there with a settlement which was confidential to Mr Reburger, the TWU and National Foods. The Resignations from the TWU 65 Mr Bell recalled a telephone conversation with Mr Smith in early 2005. There is some conflict in the evidence over what was said in that telephone conversation but I believe that the gist of the telephone conversation is as I have recorded it in this decision. According to Mr Smith, Mr Bell asked: "I understand that you guys are leaving the union and are going to the NUW. Why?" And Mr Smith replied: "Because the blokes are fed up and sick of the lack of service." Mr Bell recollection was that Mr Smith had said: "I told you this would happen. Everyone has resigned from the TWU." 66 According to Mr Bell, Mr Smith sounded angry. Mr Bell inquired: "Why didn't you talk to me before you decided to pull out of the TWU? You've given me no indication you're going to go to the NUW." And Mr Smith responded: "It's too late." 67 When Mr Bell asked why they had done so, according to Mr Bell, Mr Smith told him that it was over the manner in which the TWU had dealt with Mr Reburger's dismissal. Mr Smith asserted that he had said Mr Bell: "That is the icing on the cake, the last straw." Mr Bell claimed that he commented to Mr Smith: "What could I do? I heard that Doug wanted to take the settlement and was happy with it." And, according to Mr Bell, Mr Smith replied: "I don't care. I felt like punching you in the head." Or, according to Mr Smith: "I felt like punching holes in you myself." Mr Smith described that comment as just a "...figure of speech..." - and I accept it as such. I do not believe that Mr Smith was intending to assault Mr Bell by "...punching holes..." in him. 68 Mr Bell's response was: "I think you need to get a few facts together before you keep going. You're blaming me because Doug was happy with the deal and you guys aren't. You don't always get the outcome you think you're going to get in the Commission. Doug wanted to take the settlement. He said he didn't want to work there with a bunch of people that might turn on him again." That was the first occasion that Mr Bell became aware that employees at the Penrith site of National Foods were contemplating resigning from the TWU. He is convinced, notwithstanding Mr Smith's evidence to the contrary, that the employees resigned from the TWU and joined the NUW in protest at the TWU's handling of the dismissal of Mr Reburger. In any event, the resignations soon after the settlement of Mr Reburger's unfair dismissal claim (although the TWU claims it has some members at the site). The TWU's Response 69 On Tuesday, 16 May, 2006, the last day of the hearing and after all other evidence had been admitted, Mr Joseph pressed that I admit a further written statement from Mr Belan. Mr Hatcher did not oppose that additional written statement by Mr Belan being admitted. Mr Belan's written statement refers to material circulated by the TWU to a large number of work sites where the NUW has membership. That material highlights different, and better, working conditions under which TWU members at a specific sites enjoy over NUW members employed there. The circular raises a number of criticisms made of the NUW officers by members of the Commission in the past. It asks: "Feel ripped off by the National Union of Workers?" And invites NUW members to contact the TWU officers. This conduct is clearly as Mr Hatcher and Mr Joseph described it in the hearing - "tit-for-tat" - with both the NUW and TWU taking pot shots at one another. The Principles for Demarcation Orders 70 In the State industrial jurisdiction, a trade union has historically had no capacity to put forward claims of any nature on behalf of a member of whom it had no constitutional right of coverage - de facto as distinct from de jure membership [R v. Hibble ex parte Broken Hill Proprietary Company Limited (1921) 29 CLR 290 and Re Sykes Indoor Plant Services Pty Limited (1978) AR 46]. That certainly was the case under the 1940 Industrial Arbitration Act but, as I understand the position, that strict test has been relaxed somewhat under the 1991 Industrial Relations Act and the 1996 Act which replaced it. For instance, as I indicated in my unreported preliminary decision of Monday, 2 December, 1991 in McGrath and Davis v. Australian Jockey Club [Matter Nos.255 and 256 of 1991 at pp.5 and 6): "…it is a fundamental feature of (the equivalent to S.84(2) in the 1940 Act) that individual employees have access to State industrial tribunals over their unfair dismissal… In such proceedings there is no barrier to dismissed employees being represented by either paid or unpaid agents… I note that the words '…an industrial union of employees…' are used in (the relevant provision) not '…the industrial union of employees of which a dismissed employee is a member…'. Whether or not (the dismissed employees) are de jure members of (a relevant trade union) therefore becomes an irrelevancy in this case…" 71 But whilst an employee's freedom of choice to select the trade union which he believes best represents his interests - or no trade union at all for that matter - is to some extent preserved, the role of a trade union representing other than members who legitimately may be covered by it is certainly curtailed and such a trade union has no actual rights in negotiations with employers on behalf of those members. Moreover, in demarking the work in question in this hearing, I should avoid a multiplicity of trade unions which would not be in the industrial interests of anybody - employee or employer alike. 72 Trade union inactivity or neglect on behalf of its members in a particular industry may be one factor for me to consider in demarking that particular work against its interests [Professional Officers' Association of New South Wales v. New South Wales Teachers' Federation (1994) 54 IR 85 at p.109]. It appears to me that the NUW claim has as its main foundation the alleged neglect of the TWU in servicing the milk treatment and distribution industry in general, and the National Foods employees at Penrith in particular. A trade union which is inactive on behalf of a section of its membership cannot expect its members to remain loyal to it. Nor can it expect the Commission to preserve its entitlements in that respect against encroachment by another trade union. 73 But notwithstanding Mr Smith's views to the contrary, there is no evidence before me to support any conclusion that the TWU has been anything other than very active in the interests of its members in the milk treatment industry. Indeed, Mr Forno's evidence went into that activity by the TWU in some detail and confirms to my satisfaction, if not that of Mr Smith and the employees of National Foods, that the TWU has not neglected its members in the milk treatment and distribution industry. Quite the reverse seems to me to be the case. 74 Simply because a particular group of members of a trade union are dissatisfied with it, rightly or wrongly, and join another trade union in protest does not necessarily lead to a conclusion that their particular work should be demarked in favour of the trade union they join. As Sweeney J of the former State Industrial Commission commented in Health and Research Employees' Association of Australia v. University of New England (1984) AR 623 at pp.625 and 626: "...It seems to me that from time to time every trade union will have members or groups of members who disagree with some decision or policy of the union. Normally such matters can be and are satisfactorily resolved within the union in accordance with the majority vote of the members concerned. Occasionally, however, a group of members may seek to resign from the union that has traditionally covered and represented their field of employment and seek to join and be represented by some different trade union. It is often submitted in such circumstances, and is submitted in this case, that such members have exercised '...a free choice...' and have '...voted with their feet...'. In my opinion, however, it remains in the long term interests of good industrial relations to avoid competition for membership where practicable and to have these disagreements and disaffections resolved according to democratic processes within the union that has traditionally covered and represented the field of employment..." In BHP Refractories Pty Limited v. AWU-FIME Amalagamated Union (1996) 69 IR 41 Hungerford J indicated (at p.98) that he agreed with those comments: and so do I in this hearing. 75 Mr Hatcher also referred me to the decision of Bauer J in Public Service Association of New South Wales v. Australian Workers Union (1990) 36 IR 221 where a small group of employees - toll collectors on the Sydney Harbour Bridge - dissatisfied with their trade union representation attempted to join a rival trade union. His Honour demarked the work in favour of the original trade union, commenting (at p.224) as follows: "...The cohort of toll collectors was always less than 100 members, including part-time workers. That the numbers are small does not mean that industrial interest should not be appropriately pursued, but a reasonable appreciation of the amount of effort that any union could expend on a small group would be less than that expended on a larger group. Toll collectors were, on their own evidence, a militant and persistent industrial group for whom every issue was urgent. In my view, the evidence reveals that there would have been few groups within the public service which called upon the service of their union representatives more often and on more peremptory and urgent terms than this group of officers. The period during which the dissatisfaction of the toll collectors became crystallised was a time of difficult industrial relations, particularly in the implementation of the wage fixation principles and a change in the amount of the tolls..." All in all, the attitude to a particular trade union by a group of its members is a poor guide to demark the work. 76 What then are the principle considerations which should be borne in mind when demarking the work of the employees in the milk treatment and distribution industry in this hearing? The traditional view of industrial tribunals as to the principles to be adopted in deciding the respective interests of rival trade unions in demarcation disputes is that there should be one organisation alone to which persons engaged in any particular industry should conveniently belong and, generally speaking, exclusive membership should be allocated to it [Australian Workers Union and Western District Branch of the Australian Coal and Shale Employees' Federation (1943) AR 76 at p.79 and Re Copper Refining and Smelting (Electrolytic Refining and Smelting Company of Australia Limited Award (No.3) (1942) AR 248 at p.253]. 77 The appropriate demarcation order is a matter for my discretion [Federated Ironworkers' Association of Australia v. Transport Workers' Union of Australia (1995) 62 IR 90 at p.101]. In Re Public Hospital Employees (Skilled Trades) State Award (2001) 127 IR 361 Boland J summarised the issues for a member of the Commission to take into account when demarking work (at p.366), viz: "...I consider that the relevant factors in the present case are: (i) the constitutions of the competing unions; (ii) the history of industrial coverage and representation; (iii) the history of award coverage; (iv) the wishes of employees affected; (v) the attitude of the employer; (vi) the state of industrial relations; and (vii) the issue of multiple union coverage..." 78 The conduct (or misconduct) of a trade union in pursuing its industrial interest may also be a factor in determining an application for a demarcation order. Hungerford J in National Union of Workers v. Transport Workers' Union of Australia (1998) 84 IR 360 demarked work against a particular trade union on the basis of its behaviour in pursuing membership when it had no constitutional right to do so, commenting (at p.415) that: "...on all the facts, my conclusion is that the industrial conduct of the NUW is such as to disqualify it from the benefit of an order to represent the industrial interests of the employees concerned...in the absence of any counterbalancing by the other relevant elements: all of those elements clearly favour the TWU and not the NUW. The NUW's application must be refused. In any event, I am comfortably satisfied that a compelling case otherwise has been established to allow the TWU's application..." 79 I believe that in this hearing the fundamental issues centre on a number of factors: the nature of the work itself; what the employees themselves, or a majority of them, would wish as trade union coverage; the actual constitutional coverage of the respective trade unions and their entitlement to membership of a particular class of employees; the historical trade union coverage for a particular industry; and the need to ensure a rational approach to trade union coverage and limit the number of trade unions at a particular place of work in the interests of industrial harmony. Constitution Rules of the TWU and the NUW 80 The Federal NUW constitutional rule, no doubt influenced chiefly by the position in Victoria to which Mr Belan referred in his evidence, does extend to cover work in milk treatment and distribution. It firstly refers generally to coverage of : "...employees engaged in, or in connection with , the storage and packing of goods..." Dairy products are clearly "goods" for the purpose of that constitutional rule - a fairly wide scope for any employee involved in warehouses where dairy products are stored, particularly when, as Mr Joseph submitted, they are considered in the context of the words I have emphasised above - "...in connection with...". 81 Moreover, the constitutional rule goes on to provide coverage of: "...persons employed in or in connection with freezing, refrigerating, ice cream, butter, cheese, milk (fresh, dried and/or condensed), bacon oleomargarine, and meat preserving factories, employees in retail dairymen's establishments (other than employees in those establishments whose work in the main comprises the work of carters and drivers or their assistants, stablemen loaders or collectors of money or watchmen) or in connexion with the fish, game and poultry industry, but excepting engine drivers, firemen and greasers, engineering mechanics, electrical trades employees and persons employed in any clerical capacity or solely as salesmen or saleswomen in dairies..." 82 Whilst the Federal NUW constitutional rule would obviously have relevance in the Federal industrial jurisdiction (and no doubt was the reason that the NUW proceeded before the Australian Commission to certify the agreement to cover the employees of National Foods at the Penrith site), of course, it is only the State NUW constitutional rule that is relevant in this hearing and that fact favours Mr Hatcher's submissions and the preservation of the TWU to cover employees involved in milk treatment and distribution in this State. 83 Historically, the TWU (and the Dairymens' Union which preceded it) have represented employees in milk treatment and distribution in this State since 1908. I am less interested in what is occurring outside New South Wales - and in view of the diverse trade union involvements in other States I find any comparison with the milk treatment activities in other States unhelpful to me. The employees clearly fall under the TWU's constitution in this State. As far as the milk treatment and distribution industry is concerned, the TWU's constitutional rule is very extensive, viz: "...persons (males and females) employed or engaged as milk carters, relief carters, ice carters, ice cream van salesmen, general relieving hands, drivers of horses and motor wagons, special delivery carters, bulk carters, brakemen, fork lift drivers, calandria evaporator and by-product plant operators, automatic plant operators, extra hands, milk weighers, receivers, measurers, pasteurisers, tasters, testers, graders, washers of cans and tanks, vat or railway vat washers, can and tankroom employees, grooms, stablemen, yardmen, useful hands, bottle washers, bottle and carton fillers, butter room employees (other than those employed in the butter factories) employees in the collection of bulk milk and/or cream at farms who are required to grade the same before collection (except such employees within the jurisdiction of the Butter and Cheese Factories Employees (Newcastle and Northern) Conciliation Committee as at the 10th day of August, 1971) and all assistants in such work employed by dairymen and/or milk vendors and/or others engaged in the distribution of milk and/or ice and/or ice cream..." 84 Mr Joseph pointed out in his submissions that the extensive range of work covered by the TWU's constitutional rule did not actually specify stores or warehouse work - which had traditionally been covered by the NUW or its predecessors, ie storemen and packers. But, in my opinion the words I have emphasised above - "...distribution of milk..." provide the widest possible coverage for all work engaged in milk distribution, including work in stores or warehouses where the product may be stacked for some little time. 85 By comparison, whilst the constitutional rule of the State NUW is equally extensive, it appears to extend to work with a range of products, to the exclusion of milk and dairy products, viz: "...all employees in flour mills, grain and/or cereal food mills, and in starch mills, condiment makers, employees in coffee mills, chicory roasters, malt roasters, peanut roasters, and all male and female employees engaged in the manufacture, handling and/or packing of stove, boot and floor polishes, macaroni. vermicelli, spaghetti, custard mixers, jelly blenders and self-raising flour; employees engaged in, and in connection with the grinding of drugs, spices and the manufacture of vegemite, noodles, soup powder or tablets, junket powder or tablets and caramel powder, females engaged in wholesale grocery stores and/or factories, or any other place where such articles are manufactured and/or put up, females engaged in the handling and putting up of honey, butter and cheese; employees engaged in the manufacture of linseed cake, linseed meal, or other substance of food and/or lick for cattle, sheep, horses, dogs, poultry or other animals, and employees engaged in the crushing, grinding, preparation or handling of such foods; and employees engaged in the manufacture and/or treatment of cream of tartar, tartaric acid, and citric acid and/or handling of same...an unlimited number of persons not of general bad character who are employed or are competent to be employed in any capacity in the pastry cooking or biscuit making industry or the manufacture of any goods in which flour or sugar forms a part..." Mr Belan, in his evidence, attempted to equate "packing" in the NUW rule with the packaging of the milk products but Mr Hatcher challenged that approach, describing it in his written submissions as a "...sleight of hand..." 86 Mr Joseph submitted that lactose in dairy products is natural sugar and, of course, sugar in the form of flavouring is added to some diary products (yogurts, flavoured milk, etc). But I believe that when the constitutional rule of the NUW speaks of "...the manufacture of any goods in which...sugar forms a part..." Mr Joseph is drawing a very long bow in expanding those words to cover lactose or flavouring in dairy products. By the same reasoning work in cake and pastry preparation - clearly work covered by the NUW - in which diary products form some part, would be part of the dairy industry. That clearly is not the case. The fact remains that in none of the extensive ranges of work for which the State NUW can properly claim constitutional coverage through its constitutional rule, there is mention of dairy products per se, whilst the constitutional rule of the TWU makes specific reference to a range of diary products. This is a case where questions of the general coverage of the trade union should give way to specific coverage of the work in question - generalia specialibus non derogant. 87 However, I do note that in terms of S.295(1)(b) my demarcation order may extend to provide that: "...an industrial organisation of employees that does not have the right to represent under this Act the industrial interests of a particular class or group of employees is to have that right..." So that, notwithstanding what is contained in the constitutional rule of the State NUW, it is still open to me to give it the right to cover the work in milk treatment and distribution throughout New South Wales against the interests of the TWU which, as matters stand, I am satisfied clearly has that right of constitutional coverage. Submissions 88 Mr Hatcher described the NUW in his submissions as an "interloper" in the milk processing industry and he pointed out in written submissions which he supplied that: "...The current applications have come about because the NUW in early 2005 'poached' the large majority of the TWU members at the National Foods site at Penrith and for some time has been engaged in covert recruitment activity at the Australian Co-operative Foods site at Wetherill Park. The TWU application seeks to restore the status quo as it existed prior to the NUW intrusion into the industry..." In Mr Hatcher 's written submissions he asserts that: "...The TWU has constitutional coverage for the whole industry. By contrast, the NUW does not have eligibility for most functions in the industry. It (unlike the Federally registered NUW) does not have any rule relating to the production of milk and milk-related products. Nor does it have any rule covering the packaging of milk products. The sleight of hand whereby packaging is sought to be equated with 'packing' in the NUW's rules ought to be rejected. So too should the NUW's desperate resort to the pastry cooking and biscuit making component of its rule (which would have it covering the production of any product containing sugar, even where naturally occurring). Mr Belan conceded that he could not identify any case where the former Pastrycooks' Union (whence that part of the rule came) had anything to do with the milk industry. In fact, it is clear that the NUW has a much wider view of its coverage than can possibly be justified by its constitutional rule. Thus, Mr Belan referred to the NUW as covering 'consumables' and 'the food industry', when neither of those contentions find any support in the text of the NUW eligibility rule..." 89 According to Mr Hatcher, the evidence before me overwhelmingly demonstrated that the industrial relationship between the TWU and the NUW was poor and the NUW saw no impediment to it poaching TWU members (as, no doubt the TWU saw no impediment in poaching NUW members within the range of work it purportedly covered), ie there was basically a "...free for all..." on members between the TWU and the NUW - not a particularly healthy industrial environment, I would say. But with that "tit-for-tat", the only alternative would be to demark the work entirely in favour of either the TWU or the NUW: any compromise would not work in the industrial interests of anybody - employee and employer alike. 90 Certainly, that would be the case at the Dairy Farmers Wetherill Park site where, with the exception of one person, all employees are presently members of the TWU and wish to remain so. As far as the employees at the Penrith site of National Foods are concerned, Mr Hatcher's written submissions are as follows: "...The factors of historical representation and constitutional award coverage favour the TWU. Again, the NUW is an interloper to the site, where it historically has had no established role, no award coverage, and insufficient constitutional coverage. Further two matters must importantly weigh against the NUW with respect to this site: 1. It has recruited as 'members' persons in relation to whom it has no constitutional coverage, ie it has breached its own rules. This was inappropriate and improper conduct on the part of the NUW and ought not be condoned by the Commission. 2. It has abandoned the State jurisdiction, with the Federal NUW having negotiated a Federal agreement for the site. In that circumstance, it cannot with clean hands claim an order for coverage in the State jurisdiction in which it has declined to participate..." 91 Whilst not conceding that the NUW lacked the constitutional right to cover all employees involved in the milk processing industry, Mr Joseph indicated in his submissions that, in the light of Ss.295(1)(b) and 295(2), that would not be fatal to the NUW application. As I indicated earlier in this decision, S.295(1)(b) permits work to be demarked to an industrial organisation whose eligibility rule actually does not extend to cover the employees performing that work. And S.295(2) may permit the constitutional rule of a trade union to be altered to reflect such a decision to demark work. Mr Joseph has argued in written submissions that the eligibility rules of trade unions should not be subjected to the same meticulous scrutiny as a deed carefully prepared by lawyers. They should be liberally and not restrictively construed [R v. Holmes; ex parte Public Service Association of New South Wales (1978) 140 CLR 63 at p.73]. 92 Mr Joseph indicated further in written submissions that: "...the conduct of trade unions may influence the exercise of discretion in the making of a demarcation order. The relevant conduct will relate to such matters as structural efficiency and industrial harmony and thus engage consideration of the interests of the employer and the needs of the enterprise. The preference of an employer will be a relevant factor, particularly where it involves a position being taken where an employer is trying to improve or change workplace practices as distinct from having a mere preference for a particular union based on its antecedents..." As I will outline shortly in this decision, based on the submissions of Mr Ludeke , Dairy Farmers supports the preservation of the status quo , ie in favour of the TWU, for its operations. The position of National Foods, which did not intervene in the proceedings, is unknown, except to say that it is open to me to conclude that it remains content with NUW coverage of employees in its Penrith operations. 93 Mr Joseph argued in his written submissions that: "...it can be observed that the vast majority of employees at both of the sites are employed in or in connection with the storing and packing of goods. Even if those employees engaged in packaging might be said not to be packing goods directly there can be no doubt from observation of the processes engaged in both sites those employees are engaged in close connection with (and for the purpose of) the storing and packing of goods. It also needs to be remembered that (the relevant part of the eligibility rule), coming as it does from the old Storemen and Packers Union, is an occupation based rule, not an industry based rule. In other words, the coverage of the union in this respect goes with the type of work being performed not the industry that it is in..." 94 Mr Joseph concluded his written submissions that: "...in the milk and dairy products industries in Australia, the NUW nationally has by far the largest membership of any union by virtue of its predominance in coverage in Victoria. It should also be noted, as referred to by Mr Belan, that in Western Australia some years ago the TWU managed to convince some several hundred NUW members in that State to change unions in the milk industry. The NUW in New South Wales has previously had members employed in production and distribution in the dairy industry at a number of sites..." 95 In his submissions Mr Ludeke expressed concern over the poor relationship between the NUW and the TWU and the effect that relationship may have on the work performed by Dairy Farmers at the Wetherill Park site. Dairy Farmers has a legitimate interest in these proceedings as an intervenor - and, as Boland J indicated in Re Public Hospital Employees (Skilled Trades) State Award, the attitude of the employer is one relevant factor for the Commission to take into account in demarking work. 96 Mr Ludeke sought to preserve the status quo and he pointed out that, as far as the Dairy Farmers operations at Wetherill Park was concerned that meant that the work should be demarked in favour of the TWU. All but one of the employees at that site who were represented by a trade union were members of the TWU and were content to remain covered by the TWU. Mr Ludeke stated that there were no problems at the site over trade union coverage and he was not anxious to import one onto the site. If I demarked the work in the milk treatment industry in favour of the NUW, that would be the case as far as the Wetherill Park operations of Dairy Farmers were concerned. Conclusion 97 Mr Belan has claimed NUW coverage of the workers of Bonlac Foods at Granville involved in storing, processing, production and distribution of butter and cheese. At Streets Ice Cream at Turrella, the NUW has members involved in receiving and despatch of product and the making of ice cream cones. At Kraft Foods in Deniliquin the NUW covered approximately 20 members involved in the processing, production and distribution of foodstuffs, in particular macaroni cheese, until the plant closed over ten years ago. According to Mr Belan, the employees of Kraft Foods received milk, process it and distribute it to dairy bottling plants. 98 Mr Belan makes reference to the coverage of the NUW of employees of the Kitchens of Sara Lee at Lisarow. There can be no doubt about its right in that respect. Mr Belan records in his written statement that: "...our members there were previously members of the Pastrycooks Employees, Biscuit Makers Employees and Flour and Sugar Goods Workers Union of New South Wales and the Federated Storemen and Packers Union of Australia... They are employed in all aspects of the production and distribution of cakes, desserts and other dairy based products..." 99 As I have intimated earlier in this decision, I do not believe that it is appropriate to categorise the products that are made by the Kitchens of Sara Lee as properly making them a part of the dairy industry. Of course, dairy products are involved in cake and pastry making, but that does not bring them into the dairy industry. Equally, in the manufacture of macaroni cheese, the emphasis would be on macaroni, which I accept does fall under the State NUW's constitutional rule, and not the cheese which flavours it. The only link ice cream cones would have with the dairy products is that ice cream is placed in them - and a distinction may be drawn between the manufacture of ice cream and other dairy products. 100 The TWU presently holds 400 members in the milk treatment and distribution industry - and, in that sense, those employees of National Foods at the Penrith site who have resigned from it and joined the NUW are in the minority. I do not believe that on this occasion the views of the minority should dictate the question of trade union coverage to the majority. Of course, the NUW application is confined to only two sites - the Wetherill Park site of Dairy Farmers and the Penrith site of National Foods. It has expressed no interests in other areas of the milk treatment industry. But, following the policy that I outlined earlier in this decision concerning the emphasis on establishing only one trade union to represent the industrial interests of a particular industry, the work of employees in the milk treatment and distribution industry should be demarked to either the TWU or the NUW: it is not appropriate in my view for the two trade unions to share coverage of the work. 101 That inevitably means that the TWU should retain exclusive coverage of the work of the milk treatment and distribution industry, consistent with its constitutional rule and the wishes of the bulk of its membership. I am influenced in my decision by the following factors: (i) the fact that the work in milk treatment and distribution in this State clearly falls under the constitutional rule of the TWU and, in my opinion, not under the State NUW; (ii) the historical coverage of the work has rested in this State with the TWU; (iii) notwithstanding arguments to the contrary, I am not satisfied that the TWU has been inactive or neglectful of the interests of any of the employees in the industry: quite the reverse seems to be the case in my opinion; (iv) the desirability to demark work in a particular industry exclusively in favour of one trade union alone and avoid workplaces where there may be dual trade union membership; (v) the wish of Dairy Farmers to preserve the status quo as far as its operations at Wetherill Park were concerned (the attitude of National Foods is not known); (vi) that, notwithstanding that neither the TWU application nor the NUW counter application seek to demark work beyond the Dairy Farmers operations at Wetherill Park and the National Foods operations at Penrith, this matter should be considered in a wider context, ie trade union representation in the milk treatment and distribution industry in general - which supports the contention that the matter should be resolved in favour of the TWU which would otherwise retains coverage of the industry in this State; and (vii) the fact that vast majority of the workers in the industry in this State presently hold TWU membership and remain content to do so. 102 None of those factors on their own may constitute grounds to deny the NUW coverage of the work in milk treatment and distribution but, in combination, they point inevitably to the need to preserve the existing position, in my opinion. Consequently, I make a demarcation order in favour of the TWU's application for coverage of the industry and dismiss the NUW application for a demarcation order in its favour. P J CONNOR Commissioner LIST OF WITNESSES Belan, Derrick State secretary of the NUW Bell, Mark TWU organiser Clarke. David employee of Dairy Farmers (forklift driver) at Wetherill Park Forno, Wayne assistant secretary of the TWU Pieri, Mick TWU organiser *Price, Steve employee of Dairy Farmers (at TWU member) at Lidcombe Smith, Holden employee of the National Foods (storeman) at Penrith (and NUW delegate) * Witness statement admitted without the need for cross-examination 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.