Australasian Meat Industry Employees Union v State of South Australia
[1999] FCA 597
•10 MAY 1999
FEDERAL COURT OF AUSTRALIA
Australasian Meat Industry Employees Union v State of South Australia [1999] FCA 597
INDUSTRIAL LAW – claim for penalty and for moneys unpaid in breach of an industrial agreement – termination of employment on sale of business – whether former employees entitled to enhanced severance payments because they were not “offered employment with the purchaser” – meaning of “offered employment” in the industrial agreement – whether applicants offered employment
Workplace Relations Act 1996 (Cth), s 178
Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 cited
Printing and Kindred Industries Union v Vista Paper Products Pty Ltd (1994) 57 IR 414 applied
Byrne v Australian Airlines Limited (1995) 185 CLR 410 citedMATTER NO. SG 92 OF 1997
AUSTRALASIAN MEAT INDUSTRY EMPLOYEES UNION & ORS v STATE OF SOUTH AUSTRALIA
VON DOUSSA J
10 MAY 1999
ADELAIDE
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
SG 92 OF 1997
BETWEEN:
AUSTRALASIAN MEAT INDUSTRY EMPLOYEES UNION, PHILLIP BRUCE BAIN, ROGER WINSTON BEHENNA, RICHARD BOND, DANNY SCOTT BOWMAN, ANTHONY SHANE BUGG, RAYMOND LINDSAY BURGESS, NORMAN RODNEY BURTON, MARK WAYNE BYRNE, WAYNE MORRIS BYRNE, ROBERT VINCENT CLARKE, MICHAEL BRUCE COOMBE, DOREEN COPUS, IAN KEITH COX, RICHARD CRADDOCK, GERALDINE ANNE CROSBY, GEORGE DOUGLAS DAVIES, MALCOLM COLIN DEAN, VITTIORIO DIMASI, NICOLA D’ONOFRIO, CRAIG STUART ELMES, JOHN ROBIN EMERY, JAMES FEENEY, RAYMOND GUY FOLEY, MICHAEL JOHN FORD, WAYNE RODNEY FOSTER, SHANE DONALD FRAZER, JAMES GEORGIADIS, JOHN GEORGIADIS, PANTELIS GEORGIADIS, SIMEON GEORGIADIS, DAVID JOHN HICKMAN, ROBERT MATHEW HAINES, WAYNE DOUGLAS HAWKINS, BRONTE ELWIN HAYDON, PHILLIP ALLEN HERRAMAN, RODNEY FRANCIS JEFFRIES, MARK JOVANCEVIC, JAMES ROBERT KING, ROBERT KIRKPATRICK, CHRISTOPHER JAMES LAMBERT, GERARD MAJELLA LAVERY, SIMON DAVID LINK, DENNIS ADRIAN LITCHFIELD, DAMIANO LUPPINO, CON MANOLAKIS, ARTHUR MANOU, GREGORY McPHAIL, LE VAN MINH, WARRIS MUHAMMED, GRAHAM FRANCIS MURPHY, GRAHAM LESLIE NICHOLSON, MAXWELL JAMES O’BRIEN, DIANNE JOAN O’LOUGHLIN, DESMOND CARL PERKINS, DAVID CLIFF REYNOLDS, ASHLEY ROOCROFT, PAULINE ROSEWARNE, THEO CHARLES SUERWALD, EUNICE SCHLAEFER, ROBERT JOSEPH SMETHURST, RODNEY WILLIAM SMITH, STEPHEN JAMES STRACKE, NIKOLA STRINIC, JASON DOUGLAS VOUMARD, PATRICIA KAYE WALKER, JEFFREY SCOTT WALKER, GREGORY SCOTT YUILE
Applicants
AND:
STATE OF SOUTH AUSTRALIA
RespondentJUDGE:
VON DOUSSA J
DATE OF ORDER:
10 MAY 1999
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1. The application be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
SG 92 OF 1997
BETWEEN:
AUSTRALASIAN MEAT INDUSTRY EMPLOYEES UNION AND OTHERS
ApplicantsAND:
STATE OF SOUTH AUSTRALIA
Respondent
JUDGE:
VON DOUSSA J
DATE:
10 MAY 1999
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
The Australasian Meat Industry Employees Union (the Union) and sixty seven of its members (the employee applicants) seek remedies under s 178 of the Workplace Relations Act 1996 (Cth) by way of penalty and payments which they allege are due to them under an industrial agreement. In the alternative the sixty seven employee applicants seek damages for breach of their contracts of employment.
Prior to 10 April 1997 the South Australian Meat Corporation (SAMCOR) operated an abattoir at Gepps Cross in the State of South Australia. SAMCOR was incorporated by the South Australian Meat Corporation Act 1936. The sixty seven employee applicants were employed by SAMCOR. On 10 April 1997 SAMCOR was dissolved by the Governor of South Australia pursuant to s 13(1) of the South Australian Meat Corporation Act, and its assets and liabilities vested in the Crown and the Right of the State of South Australia. The applicants seek in these proceedings to enforce rights which they allege arise from liabilities incurred by SAMCOR.
For some two years before its dissolution SAMCOR had been running at a loss. Its operations were being scaled down, and its customers were going elsewhere. Many of SAMCOR’s employees had few skills which would equip them for employment in other industries, and their future looked bleak. The South Australian Government decided to quit the abattoir. The cheapest course would have been to wind up the operation, retrench the SAMCOR employees, and dispose of the assets. However, the Government decided to pursue the sale of the business as a going concern, continuing to operate the abattoir at a loss in the meantime. The Government decided to offer the abattoir for sale on terms that would preserve, in the long term, the jobs of as many of the SAMCOR employees as possible. Human Resource Management Principles were developed by the Asset Management Task Force (AMTF), a division of the South Australian Treasury to whom the function of disposing of the abattoir was given. The Principles expressed objects including that a purchaser of the abattoir would engage most, if not all, of SAMCOR employees at the time of sale, and that greater redundancy benefits would be paid to those who were not offered employment by a purchaser than were provided for in “The South Australian Meat Corporation Award, 1992” (the Award) which governed the employment of the SAMCOR employees.
The Government’s intention to call for tenders for the sale of the abattoir was notified to the employees, the Union, and other industrial organisations that had members employed at SAMCOR. Thereafter periodic reports on progress were given through SAMCOR news sheets. The tender process commenced in late 1995.
During the early months of 1996 the Union and SAMCOR negotiated over the terms of an agreement for enhanced redundancy payments in the event that a sale of the abattoir occurred. The negotiations, and the agreement ultimately reached, envisaged the possibility that not all employees of SAMCOR would be engaged by a purchaser. On 6 December 1996, pursuant to s 170MC of the Industrial Relations Act 1988 (Cth), the Australian Industrial Relations Commission certified the “South Australian Meat Corporation Redundancy Enterprise Agreement 1996” (the Redundancy Agreement) which had been agreed between SAMCOR, the Union, and other interested industrial organisations. Central to these proceedings is clause 6 of the Redundancy Agreement. Clauses 6(a) and (b) provide:
“(a)An employee who is offered employment with the purchaser will be paid a severance payment based on the employee’s period of continuous service and calculated in accordance with the employee’s rate of pay as defined as follows:
Period of Continuous Service Severance Pay Less than 1 year Nil 1 year but not more than 2 years 4 weeks’ pay More than 2 years but not more than 3 years 6 weeks’ pay More than 3 years but not more than 4 years 7 weeks’ pay More than 4 years 8 weeks’ pay
(b)An employee not offered employment by the purchaser will be paid a severance payment based on the employee’s period of continuous service and calculated in accordance with the employee’s rate of pay as defined as follows:
4 weeks pay plus 2.5 weeks pay for each completed year of continuous service.” (The underlining appears in the text).
Clause 6(c) provides for a period of notice, or payment in lieu, to every employee whether or not the employee was offered employment by the purchaser.
On 24 January 1997 the sale of land and assets of SAMCOR to Agpro Australia Pty Ltd (Agpro) was effected.
On 13 January 1997 the employee applicants by letter were notified of the pending sale, and that their employment would come to an end on completion of the contract for the sale to Agpro, then anticipated to occur on 21 January 1997. In fact completion occurred three days later and the employees were paid by SAMCOR up to and including 24 January 1997.
The applicants contend that in the events which happened at about that time none of the employee applicants was “offered employment with the purchaser” within the meaning of clause 6(a) of the Redundancy Agreement, and accordingly each is entitled to be paid a severance payment in accordance with clause 6(b). The applicants allege that in breach of the Redundancy Agreement the employee applicants were only paid a severance payment calculated under clause 6(a). The monetary claims for payment or damages are for the difference between severance payments calculated under clause 6(b) and the payments actually received. In aggregate the total amount claimed is approximately $1.16 million (excluding the claim for the applicant Mr Reynolds in respect of which there is a continuing dispute about the amount which would be due to him if the applicants otherwise succeed).
The respondent denies that SAMCOR acted in breach of the redundancy agreement. The respondent asserts that each of the employee applicants was offered employment by the purchaser. Moreover, the respondent asserts that they accepted that employment, and that since 7 April 1997 Agpro has provided them with more regular work and higher remuneration than they had received as SAMCOR employees, so that in the exercise of its discretion the Court should not make a monetary award under s 178(6) even if the employment provided to them by Agpro were not in consequence of an offer of employment within the meaning of clause 6(a). The claims for damages for breach of contract are denied, first on the ground that clause 6 of the Redundancy Agreement was not a term of their contracts of employment, and secondly, on the ground that the alleged breach has not caused the applicants any loss.
The circumstance that has caused the dispute between the parties is that between 24 January 1997 and 7 April 1997 no actual work was made available for the applicant employees and during that period they received no remuneration from Agpro.
The important primary facts are for the most part not in dispute. The narrative account which follows sets out the facts as I find them to be. On the few factual questions where there is a significant dispute, I have identified that dispute and reasons for my conclusion.
Under the Award, clause 4, the employee applicants were engaged by SAMCOR as regular daily employees. The Award relevantly provided in clause 4:
“(a)Employees, except those specifically engaged as casuals, shall be engaged as regular daily employees, or regular part-time daily employees…
(b)A Regular Daily Employee shall be employed by the day or shift; and without prejudice to the provisions of this award as to payment for Award holidays, sick leave and annual leave, his or her employment shall terminate at the end of each day or shift on which he or she is employed.
(c)Notwithstanding the termination of his or her employment at the end of each day or shift, the engagement of a Regular Daily Employee shall continue and he or she shall remain a Regular Daily employee until his or her engagement as such is terminated as herein prescribed…
(d)In consideration of the rights conferred on Regular Daily Employees by this award, a Regular Daily employee shall attend and offer himself or herself for employment at a place specified by the employer at the normal starting time on each ordinary working day unless notified that on a particular day he or she is not required to attend, and, if notified to attend, at such other times as employees may be required to work pursuant to clause 12 of this award.
Provided that, subject to the rights conferred on the employer under sub-clause (a) of this clause, if a Regular Daily Employee has not been notified on the immediate working day before that he or she is not required to attend for work on the following working day and such employee has attended and offered himself or herself for employment at the normal starting time on that day, and such employee was not offered employment, he or she shall be paid for the day according to the rate of pay prescribed by his or her classification.
The foregoing proviso is not intended to interfere with or have application in any way in respect to instructions emanating from the employer to any employee to attend and offer for work at a place specified by the employer; nor is it intended to prevent any employee who has been informed by his or her employer that he or she is not required, from attending and offering for work at the usual place of employment; nor does it interfere in any way with the intention of subclause (e) of this clause, which provides a loading of 10 per centum for employees to attend and offer for work.
…
(h)An employee shall perform such work as the employer may from time to time require and, subject to this award, shall perform it at such times as the employer may require…”
As a matter of longstanding practice the requirements of clause 4(d) were met by SAMCOR putting up each day a list of employees required for work the following day, and as necessary by SAMCOR telephoning its employees to advise them of the following day’s requirements. It was common place for the applicant employees not to be called for work on some days. Particularly during the declining fortunes of SAMCOR during 1996 some employees, depending in part on their seniority, were only called one or two days a week.
On 18 December 1996 all SAMCOR employees were informed that Agpro was now the preferred purchaser. On 19 December 1996 all SAMCOR employees were informed that SAMCOR had been sold and that discussions were proceeding with the new owner in respect of its requirements for the continued running of SAMCOR. Employees were asked to indicate if they wished to be considered for employment with the new owner.
A second letter of 13 January 1997 which accompanied the letter that notified the employees of the termination of their employment said in part:
“The Treasurer, Stephen Baker announced that ‘Agpro’s plan is to better utilise the SAMCOR facilities by augmenting the service kill function with the export of meat…’. He further stated that ‘the Government has gone to great lengths to try and achieve the best possible outcome for the industry, taxpayers and workers and to ensure the future of the abattoir’.
…
For your information, SAMCOR has been advised that AGPRO intend to have letters of offer available to prospective employees by Friday 17 January, 1997.
Management understands that some changes in the operation may be planned and that AGPRO intend to commence operations at the earliest opportunity.”
Friday 17 January 1997 was to be, and turned out in fact to be, the last slaughter day and the last day of operations by SAMCOR, apart from final loading and incidental activities which are not presently relevant.
Although none of the applicants at that time had seen the contract for sale between the Treasurer of the State of South Australia and Agpro, it contained the following provisions regarding SAMCOR employees:
“6.1 Offer of Employment
6.1.1At least seven (7) clear business days prior to settlement the Vendor must provide or procure that the Corporation provides to the Purchaser an accurate summary of the date of commencement of employment and of the terms and conditions of employment of the Employees.
6.1.2The Purchaser must at least one (1) clear business day prior to settlement offer to at least one hundred (100) of the Employees employment with the Purchaser from and conditional on settlement, on terms and conditions no less favourable than those governing the Employee’s employment on the settlement day.
6.1.3At least one (1) clear business day prior to settlement the Purchaser must inform the Vendor of the identity of those Employees to whom it will offer employment pursuant to clause 6.1.2.
6.2Termination of Employment
The Vendor must terminate or procure that the Corporation terminates the employment of each Employee on settlement.
…
6.4Transferring Employees
In relation to the Transferring Employees, but subject to clause 6.6:
6.4.1the Vendor must pay or procure that the Corporation pays to each Transferring Employee at settlement the amounts (if any) whether arising under any agreement, any legislation, any award, or otherwise, in respect of:
6.4.1.1accrued salary, wages, holiday pay and sick leave;
6.4.1.2accrued entitlements to long service leave; and
6.4.1.3any other remuneration or entitlement arising out of employment which would be payable if the Transferring Employee’s employment were terminated at settlement;
…”
The expression “Transferring Employees” is defined in the contract as meaning employees who accept the Purchaser’s offer of employment.
Mr John Emery, one of the employee applicants had been an employee of SAMCOR since August 1957. In January 1997 he held the position of leading hand/supervisor, and was the Union’s general delegate for the SAMCOR site. In January 1997 Mr Desmond Lilley was the General Manager of SAMCOR. On 16 January 1997 the Union, by its secretary Mr Graham Warren, its solicitor Mr Jay Weatherill and Mr Emery, met with representatives of SAMCOR including Mr Lilley, and representatives of the purchaser, Mr Sadri and Mr Ian Walsh. The Union was keen to ascertain what “changes in the operation” anticipated by the letter of 13 January 1997 the purchaser contemplated, and by letter dated 14 January 1997 to Agpro, the Union had sought the opportunity to discuss the future of industrial relations matters, and other matters.
The evidence of Mr Emery is that one of the Agpro representatives said at the meeting on 16 January 1997 that Agpro would not start killing until they “got an agreement”. Mr Emery said that he left the meeting not knowing when Agpro might commence operations. Mr Weatherill recollected that Agpro said that the abattoir would be difficult to run profitably if conducted under the terms and conditions of the Award. Agpro was considering the introduction of a new tally system and other changes in the mode of operation. I find that the discussion ranged over many possibilities, but that Agpro did not put forward any firm proposal to the Union for the future operation of the abattoir.
On 17 January 1997 there were at least two meetings, and probably three between representatives of SAMCOR (including Mr Lilley), Agpro (including Mr Sadri and Mr Bill Shaw) and Mr Emery. At the last of the meetings Mr Haddock and Mr Button, consultants to AMTF were also present. These meetings concerned the foreshadowed letters to the SAMCOR employees offering employment with Agpro.
In the first of these meetings Mr Shaw showed Mr Emery the proposed text of a letter offering employment to the SAMCOR employees which Agpro had chosen as those to whom an offer would be made. The text was headed “draft” and relevantly included the following:
“We offer you a job with Agpro subject to the following:
-agreement being reached with the AMIEU as to common terms and conditions to apply;
- medical clearance being given. This will be done by our medical staff;
-your signing of a contract. Its contents will be advised in the near future.
The date of commencement can not be advised as yet. This is subject to certain commercial considerations, but particularly the need to reach agreement with the AMIEU.”
Mr Emery informed Mr Shaw that the text was “not on”. Mr Shaw inquired what parts of the text Mr Emery considered should be deleted. Mr Emery informed him that there had been no mention at any earlier time of the requirements of a medical clearance or a contract, and that there should be no changes to the existing work conditions. Mr Emery said “the award is our contract of employment, nothing else”.
It is probable that the proposed text of the offer was then altered slightly by Agpro, and letters were prepared by Agpro for each of the employee applicants purporting to offer employment. SAMCOR also prepared other letters to the balance of the SAMCOR employees whose employment at the abattoir was to finish. The letters prepared by Agpro were given to Mr Lilley, and, it seems, a copy was forwarded to the AMTF. The AMTF then contacted Mr Lilley and informed him that the letters were not to be given out, and were to be held in his safe.
Late in the afternoon, a further meeting occurred in Mr Lilley’s office at which Mr Emery, another site delegate for the Union, Mr Mezzatesta, and representatives of Agpro were present. On this occasion the redrafted proposed offer of employment was shown to Mr Emery and Mr Mezzatesta. As revised, the relevant portion of the proposed letter said:
“We are pleased to offer you regular daily employment with Agpro Australia Pty Ltd. This employment will initially be under the terms and conditions defined by the current South Australian Meat Corporation (SAMCOR) Award, subject to:
- medical clearance being given; and
- your signing of an employment contract.
You should be aware that negotiations are progressing with the AMIEU to define and implement a new SAMCOR award.
Please contact Ms Diane Snewin, to make arrangements for a medical and to complete the employment contract…”
Again Mr Emery protested that the conditions of a medical clearance and a contract of employment were not acceptable and had not been discussed previously with the Union. He said that the Redundancy Agreement and the Human Resource Management Principles developed by AMTF stated that the terms and conditions of employment would be the same as prior to the sale, that is the Award. Mr Mezzatesta said to Mr Shaw that the SAMCOR employees were over in the car park waiting to learn their future and were feeling angry and traumatised by not being informed. Mr Sadri asked for the letters held by Mr Lilley. Mr Lilley said he was instructed not to release them. Mr Lilley telephoned officers of the AMTF and told them to attend SAMCOR forthwith and “sort out this mess” as he was anxious to ensure the workers received their letters.
Messrs Haddock and Button representing AMTF later arrived at SAMCOR premises, and a further meeting ensued in Mr Lilley’s office. Mr Lilley invited Mr Emery to explain to Messrs Haddock and Button what the Union required. Mr Emery said “Sale conditions are between Agpro, AMTF and the Government. Employment conditions are ours. No other conditions except those that are in place now are acceptable for the employees offered a job”. Mr Button said “We agree”. Mr Emery said, “As long as status quo remains we will bargain for an enterprise bargaining agreement mutually along the track”. The text of the letter offering employment to the employee applicants was then redrafted by deleting the conditions that made the offer subject to medical clearance and the signing of a contract of employment. As amended, the text of the offer of employment read:
“We are pleased to offer you regular daily employment with Agpro Australia Pty Ltd. This employment will initially be under the terms and conditions defined by the current South Australian Meat Corporation (SAMCOR) Award.
You should be aware that negotiations are progressing with the AMIEU to define and implement a new SAMCOR Award.”
Mr Emery informed the meeting that in its amended form he was prepared to take the letter to the employees over in the car park. Mr Emery then went to the car park and addressed the employees. He reported that the objectionable clauses had been deleted from the proposed letters of offer, and that “the status quo remains”. The employees were informed that their envelopes were available to be collected in the workers’ canteen, and if not collected would be posted. There were two lots of envelopes, one offering a job to some of the employees, and the other advising the remaining employees of their redundancy.
On 20 January 1997 a meeting occurred at SAMCOR between representatives of Agpro and the Union. This meeting extended over some two hours. The Agpro representatives proposed that the tally system be changed, and various proposals were canvassed by Agpro. The Union representatives maintained the position that the Award conditions should continue. Mr Weatherill was one of the Union representatives present, and he kept brief notes of topics discussed. At the conclusion of his notes he recorded “no wages or hours or duties – not an offer”. In context, that appears a fair summary of the matters canvassed by Agpro representatives: they had not specified any particular wage that would be the result of their proposed changes, nor had they specified particular hours or changes in duty that might be involved. In that sense there was no offer of alternative terms and conditions to those applying under the Award.
In his affidavit evidence Mr Emery deposed that at the meeting on 20 January 1997 Mr Weatherill said to representatives of Agpro that “no wages or hours or duties had been offered and so they (sic) had been no offer of employment”. However, Mr Weatherill in his affidavit deposed that he merely said that there had been no wages, hours or duties offered. Neither in his affidavit nor in his oral evidence did Mr Weatherill say that he informed the meeting that because no wages, hours or duties had been offered there had been no offer of employment. Mr Emery had available to him Mr Weatherill’s notes when he prepared his affidavit and it seems that Mr Emery has read more into the notes than is warranted as his recollections do not enable him to remember exactly what was said. I am not satisfied that anything was said beyond that deposed to by Mr Weatherill. On the contrary, I think it is unlikely that Mr Weatherill said that there had been no offer of employment, as the discussions were proceeding at this time on the basis that Agpro was offering employment. As I have observed, I think Mr Weatherill’s note conveys no more than an accurate summary of the fact that the alternative possibilities being discussed by Agpro were very general and indefinite.
On 21 January 1997 Union representatives again met with representatives of Agpro, this time at the offices of Agpro’s lawyers. Again no concrete proposal was put by Agpro, but their lawyer concluded the meeting by saying that a proposal would be put in writing at some future time. No such proposal was received by the Union.
On 24 January 1997 (that is the last day of employment of the employees by SAMCOR) a Union delegation including Mr Emery again met with representatives of Agpro. On this occasion Mr Sadri said that he wished to address the Union members. Mr Emery arranged for this to occur at the SAMCOR premises on Wednesday 29 January 1997. Twice in his evidence when he was asked who attended the meeting on 29 January 1997 Mr Emery said that those present were employees who had been offered a job.
On 24 January 1997 SAMCOR also despatched to each of its employees paperwork appropriate to the termination of employment, including a final group certificate, a statement giving details of notice, severance, annual leave, long service leave and taxation, and a cheque for the amount due. Each of the employee applicants received payments which included a severance payment calculated under clause 6(a) of the Redundancy Agreement.
At the meeting on 29 January 1997 Mr Emery spoke first, introduced Mr Sadri as the Managing Director of Agpro, and outlined negotiations which had been occurring between the Union and Agpro. He said that a private operator was now coming to the works, and the workforce needed to look to flexibilities to enable the private operator to start off. Mr Warren then spoke saying that Union members were anxious to start work under existing conditions but outlined flexibilities that he considered were possible. Mr Sadri then spoke. He informed the meeting that Agpro wished to operate the abattoir on a more regular basis than had occurred in the past, he wanted profit share arrangements with the employees, and he had proposals to improve the canteen facilities. A motion was then moved by one of the employees from the floor and carried that the Union members were willing to start work on Monday 3 February 1997 under the terms and conditions of the Award. (In his affidavit filed in advance of the trial Mr Emery says the resolution was that the members were willing to “commence employment” on 3 February 1997, but in his oral evidence he said that the resolution was to “start work”. Mr Warren also said that the resolution was to “start work”, and I so find). The employees also resolved that as the company had approached the Union seeking alterations to the terms and conditions of employment, the Union was authorised to put an offer to provide additional flexibility provided that it was still consistent with the Award. Mr Warren gave evidence that after the resolution was passed he looked at Mr Sadri who nodded his head at the outcome of the resolution. Employees present were then invited to complete a document setting out their personal particulars. The document was entitled “Application Form” and asked questions of the kind which would normally be asked of someone seeking employment. The first question on the form is “position applied for”. The evidence indicates that the employees present completed the forms, or at least parts of them, and handed them to an Agpro employee. The evidence does not suggest that any employee found it necessary to ask questions about how to complete the form, or as to the “position applied for”.
Towards the end of the meeting a question came from the floor addressed to Mr Sadri asking him “When are we going to start work?”. Mr Sadri said in response “That is up to these people” and raised his hand in motion towards Mr Emery and Mr Warren.
On 30 January 1997 the Union wrote to Agpro, referring to the meeting the preceding day, and saying:
“Employees/members clearly indicated that they wanted to commence work next Monday in accordance with your wishes.
A resolution was moved and carried by your employees to offer for employment Monday under the conditions outlined under the current award, i.e. South Australian Meat Corporation Award 1992.
The Union has sought the approval of employees/members to offer your Company certain issues of flexibility in relation to tally/piecework arrangements and have that approval.
We are prepared to offer …”
The letter then set out ten proposals for change, and invited discussion on those matters.
On 4 February 1997 Agpro wrote to the Union saying that it could not afford to commence operations under existing work practices. A number of issues were identified to achieve “a fundamental change of direction” which, it was said, would have potential benefits for both parties which in the case of employees included greater chance of success of the venture, a greater change of five days work per week on a regular basis, and the maintenance of the ordinary weekly rate. The letter concluded:
“As soon as the necessary savings are achieved to allow Agpro to operate profitably, operations can commence. Until then, it will be necessary to maintain the stand down situation for all employees.”
The evidence indicates that on 6 February 1997 the Union wrote to AMTF complaining that Agpro had not made what the Union regarded as a “reasonable offer of employment” and sought total redundancy packages on behalf of its members who had been employed by Agpro. The AMTF responded to that correspondence on 13 February 1997 saying that officers of AMTF had met with Mr Sadri who had indicated that Agpro’s intention was to simplify administrative requirements, and that Agpro was prepared to give a guarantee to the members of the Union that they would not be financially worse off as a result of the proposed new arrangements. AMTF advised that it considered an offer of employment had been made which complied with the requirements of the Redundancy Agreement.
On 14 February 1997 the Union wrote to Agpro saying that it was anxious to secure a start to normal operations as soon as practicable in accordance with existing Award conditions and said “We also ask that Agpro Australia Pty Ltd provide a detailed list of employment, wages and conditions for that resumption in the form of an offer of employment”. The letter went on to indicate that the Union was willing to reach agreement on a number of variations to the Award. On 18 February 1997 Agpro replied saying it was equally anxious to secure a start to new SAMCOR operations, but needed a further three days before it would be in a position to offer a detailed response – presumably to the Union’s expression of willingness to reach agreement on topics indicated in its letter.
On 19 February 1997 the Union filed unfair dismissal applications against Agpro on behalf of each of the employee applicants. There was a separate application in the name of each employee applicant. The applications alleged that each of the employee applicants had been dismissed from employment with Agpro effective from 4 February 1997 the particular given being:
“Wrongful repudiation of the contract of employment by Agpro Australia Pty Ltd in refusing to offer work other than in accordance with the letter dated the 4th day of February, 1997.”
On 27 February 1997 lawyers acting for the Union wrote to Agpro saying that the proposal contained in its letter of 4 February 1997 was unacceptable and that the Union demanded that its members be employed under the terms and conditions defined in the Award “in accordance with the letter of offer which was accepted by each of the employees who signed applications for employment with your company”. The letter went on to say that the lawyers believed that Agpro’s letter of 4 February 1997 amounted to an unlawful termination of the employee applicants’ employment, and that action had been commenced for unfair dismissal. On the same day the lawyers wrote to AMTF asserting a quite different position. To AMTF they said:
“Pursuant to the terms of the SAMCOR Redundancy Enterprise Agreement 1996 we contend that members have not been offered employment when looked at as a whole are (sic – the terms and conditions of which are) no less favourable than their current terms and conditions of employment. Accordingly we seek the enhanced redundancy benefit provided for in the agreement for all the employees who have not yet received it.
Proceedings will be issued in due course in the South Australian Industrial Relations Court seeking the enforcement of these entitlements if they are not paid forthwith.”
On 3 March 1997 the unfair dismissal applications were listed for conference hearing before Commissioner Fairweather. The lawyer appearing for Agpro raised four issues said to impact upon the jurisdiction of the Commission, three of which were premised on an existing employment relationship between each applicant and Agpro, and the fourth of which was that there had been no formal acceptance by the employee applicants of the “employment contract” between them and Agpro. Mr Warren, as advocate for the applicants, informed the Commission that on the last matter there had been a meeting at SAMCOR on 30 January 1997 (sic-29 January 1997) at which time all the applicants had been spoken to by Mr Sadri, had been offered employment by him, and had all accepted to start work on the following Monday at, and on, the SAMCOR Award wages and conditions. He said that, unfortunately, shortly afterwards Mr Sadri withdrew the offer in a letter addressed to the Union on 6 February 1997 (sic-4 February 1997) in which he wanted substantial reductions in mannings and conditions. As a result of discussion with the Commissioner, the Commissioner recommended that the applicants notify an industrial dispute pursuant to s 99 of the Workplace Relations Act 1996.
On 7 March 1997 the Union filed a notification of alleged industrial dispute between it and Agpro in the Australian Industrial Relations Commission. The notification included assertions by the Union that:
“(a)a dispute exists between the AMIEU and AGPRO Australia Pty Ltd in relation to its operation of SAMCOR; the employment of members of the AMIEU and wages and conditions of employment.
(b)The AMIEU asserts that AMIEU members/AGPRO employees have been unlawfully stood down from their normal duties.
(c)The AMIEU asserts that AGPRO seeks to not offer employment under the existing terms and conditions until the employees agree to reduce the conditions, mannings and alter the piecework systems which currently apply within the South Australian Meat Corporation Award to the detriment of the employees.
(d)The AMIEU asserts that a number of the employees have been terminated from their employment with Agpro…”
On 11 March 1997 lawyers for the Union wrote to Agpro saying, inter alia:
“We are instructed by them that on 4 February 1997 you communicated with the Union to the effect that your company was not prepared to offer employment to Union members if they insisted on working to the terms of the South Australian Meat Corporation Award 1992, which is incidently the terms upon which employment was offered and accepted.
The decision of the company to withhold work and thereby wages amount, in our opinion, to a breach of Section 334 of the Workplace Relations Act 1996.
We seek the immediate reinstatement of our members on terms set out in the South Australian Meat Corporation Award 1992. Further we reserve the right to refer to this letter and any failure to act upon it in proceedings taken by the Union against your company for the breach of Section 334 of the Act.”
On 11 March 1997 representatives of the Union including Mr Emery met with representatives of Agpro. At that meeting Mr Sadri said that Agpro intended opening but that the dispute with the Union was delaying that event.
On 12 March 1997 lawyers for Agpro wrote to the Union’s lawyer saying, in part:
“At present, employees have been stood down in accordance with the terms of the SAMCOR Award 1992. As you are aware, such stand downs are common practice in the industry.
We note that there is a conference before Commissioner Fairweather on Friday, 14 March 1997. This arises from a dispute notification by the AMIEU. We consider that this is the appropriate forum to discuss any concerns…”
On 14 March 1997 a conference occurred before Commissioner Fairweather. The lawyer for Agpro said that work could not begin at the abattoir for at least two to four weeks as it was necessary to obtain a new part for a heat exchanger, and the Australian Quarantine Inspection Service had to check the beef hall. The lawyer for the Union said that employees had not been paid for public holidays as required by the Award where workers were employed but merely stood down. The lawyer for Agpro said this was an oversight and would be corrected. The evidence shows that Agpro then offered to pay for public holidays, but omitted to include the Australia Day public holiday on 26 January 1997.
At a further Commission hearing on 21 March 1997 the lawyer for Agpro informed the Commission that Agpro could not operate under the Award terms and conditions at a kill rate of less than 600 head of beef per day, and this was an unrealistic level of operation. At the conclusion of that hearing Mr Sadri requested Mr Emery to inspect the abattoir to identify any mechanical deficiencies that might prevent the start of operations. Mr Emery did so, and noted that the heat exchanger was dismantled. This item of equipment was an essential one for the operation of the abattoir.
On 21 March 1997 Agpro wrote to the employee applicants in the following terms:
“Re: Employment
We refer to your engagement as an employee of Agpro Australia Pty Ltd.
As you are aware, discussions have been ongoing between the AMIEU and us as to when we will be able to offer work. These discussions are ongoing, and include obtaining the assistance of the Australian Industrial Relations Commission.
At this point, you continue to be stood down as advised previously. This stand down will continue until we are in a position to offer you work. We will advise you when this occurs. …”
On 24 March 1997 at a further meeting between representatives of the Union and Agpro, Agpro indicated that 3 April 1997 was a potential start date. At that meeting Mr Emery again asserted that the Union wanted the Award conditions which applied before the sale.
On 25 March 1997 Agpro again wrote to the employee applicants saying:
“We refer to the current stand down arrangements applying to you as an employee of AGPRO Australia Pty Ltd (AGPRO). We confirm AGPRO intend to offer work to you on Thursday, 3 April 1997.
Please contact AGPRO by no later than 12 noon on Tuesday 1 April 1997 to confirm whether you are available…”
On 27 March 1997 lawyers for the Union wrote to Agpro responding to the letters to the employee applicants dated 21 March 1997 saying:
“We do not accept that Agpro Australia Pty Ltd or any associated company has made any genuine offer of work to these persons nor do we accept that they are employed by Agpro Australia Pty Ltd or any associated company. Further we do not accept that any of these persons have been stood down in accordance with the Award or otherwise…”
On 1 April 1997 the lawyers for the Union wrote to Agpro in response to Agpro’s letter to the employee applicants dated 25 March 1997 repeating the assertions that they did not accept that Agpro had made any genuine offer of work to the employee applicants, did not accept that they were employed by Agpro, and did not accept that they had been stood down in accordance with the Award. The letter continued:
“We note that the company intends to offer work to these persons on Thursday 3 April 1997. We also have concerns about the genuineness of this offer of work bearing in mind the admissions made by the company, that, operating in accordance with the Award is not viable and that, even if all members of the Union worked for free the company would still lose money from their slaughtering operations.
Notwithstanding this we accept the offer of work on behalf of the members of the Union on terms and conditions provided for in the South Australian Meat Corporation Award 1992…”
On the evening of 2 April 1997 the employee applicants were contacted by telephone by Agpro and advised that Agpro would have insufficient stock, and that they should not attend at SAMCOR the following day. Notwithstanding this advice the employee applicants attended work on Thursday 3 April 1997. Mr Emery was one of those people. When he arrived he was advised that no work would be available because of the inability to arrange Australian Quarantine Inspection Service inspectors to oversee the work and because there had been a delay in receiving a spare part for the heat exchanger. The employees were informed that the kill would not start until Monday 7 April 1997.
On 3 April 1997 there was a further hearing before Commissioner Fairweather of the unfair dismissal applications. Notes prepared by Mr Warren who attended the hearing record that the Commissioner said to the parties that Agpro’s failure to offer work might be treated as an illegal stand down, but he would not treat it as a dismissal. The Commissioner said that the workers would not succeed in unfair dismissal proceedings which were doomed to failure – workers were reasonably offered employment but not engaged on that date but later on another day. The Commissioner adjourned the proceedings for the parties to consider their positions. Ultimately the unfair dismissal proceedings were discontinued. Following a further hearing before Commissioner Fairweather in August 1997 at which, according to notes kept by a Union officer, the Commissioner recommended the discontinuance of the applications partly because of information from Mr Sadri that there was a breakdown of the heat exchanger and other equipment which meant that work could not be provided on 3 February 1997, and partly on the basis that even if they had been stood down not in accordance with the Award they had received approximately thirteen weeks pay under the notice and severance provisions of the Redundancy Agreement which would more than compensate them for the period they had to wait before they were given work at Agpro.
Notwithstanding a suggestion in the evidence of Mr Warren that the unfair dismissal proceedings were discontinued because it was deemed that the applicants were not employees, I am satisfied on the evidence that they were discontinued because Commissioner Fairweather had indicated that he did not consider there had been a dismissal by Agpro.
By letter dated 3 April 1997 the employee applicants were advised that Agpro proposed to commence operations on Monday 7 April 1997 and that they should attend for work that day.
On 7 April 1997 operations at the abattoir recommenced. The employee applicants have worked regularly since that time, and for the most part have worked five day weeks. Their average remuneration since 7 April 1997 has been significantly higher than before the sale. The actual comparisons are set out in schedules marked exhibit R8. The applicants’ evidence does not suggest that there were any variations to the Award terms and conditions agreed by 7 April 1997, or that any variations have occurred since then. The inference to be drawn from the evidence is that the employee applicants worked on 7 April 1997 on Award conditions, and continued to do so thereafter.
The present proceedings were commenced on 26 November 1997.
It is against this summary of the facts that the contentions of the parties must be resolved. The respondent contends that the employee applicants were offered employment within the meaning of clause 6 of the Redundancy Agreement by the letter of 17 January 1997 which offered employment initially under the terms and conditions defined by the Award, an offer which the respondent contends was confirmed by the events of 29 January 1997. Alternatively, if the view were taken that the offer of 17 January 1997 should be treated as withdrawn because of the statements made by Agpro in the course of meetings with the Union the following week, the events on 29 January 1997 constitute a renewal of the offer.
The critical pleading in the amended statement of claim is paragraph 10.4 which succinctly puts the case of the employee applicants. It reads:
“10.4A letter dated 17 January 1997 purporting to contain an offer of employment was received by each applicant on or shortly after 17 January 1997. The letter did not constitute an offer of employment pursuant to the terms of the SAMCOR Redundancy Agreement.
10.4.1The letter did not advise the duties that were offered.
10.4.2The letter, whilst asserting that employment would be under the terms of the Award, indicated (wrongly) that negotiations are progressing with the AMIEU to define and implement a new SAMCOR award.
10.4.3The letter gave no indication as to when employment would commence.
10.4.4The letter gave no indication as to how the offered employment might be accepted.”
In relation to the alternative assertion of the respondent that an offer of employment was made on 29 January 1997, that is denied by the applicants for similar reasons to those pleaded in paragraphs 10.4.1, 10.4.3 and 10.4.4 of the amended statement of claim. For the reasons advanced in those paragraphs the applicants contend that there was no offer of employment ever made that was capable of acceptance.
The applicants further contend that no offer of employment within the meaning of clause 6 of the Redundancy Agreement occurred either on 1 April 1997 or on 3 April 1997 as it was an express (or alternatively implied) term of the Redundancy Agreement that the purchaser must offer employment within the meaning of clause 6 before (or alternatively immediately after) the termination of the employment of SAMCOR employees.
In final submissions it was also contended that the offers purportedly made in the letter of 17 January 1997 were not genuine offers, but on the contrary, were merely made by Agpro to ensure completion without any intention of offering work to the employees. That submission is in substance a submission that the offer purportedly made by Agpro was a sham. In my opinion that submission is not open on the applicants’ pleadings. The first statement of claim filed by the applicants pleaded merely that none of the employee applicants were offered employment within the meaning of clause 6, and accordingly were entitled to a severance payment in accordance with clause 6(b). The respondent’s defence to that statement of claim pleaded that offers of employment were made by the letters of 17 January 1997. The applicants then had filed an amended statement of claim which pleaded, expressly, that the letter of 17 January 1997 did not convey genuine offers of employment. That pleading led to a request for particulars in support of the allegation which, in substance, was a plea that the offers were shams. The applicants did not persist with the pleading that the letters did not contain genuine offers. Instead of providing particulars, the applicants again amended the statement of claim, pleading that the letters of 17 January 1997 did not contain an offer within the meaning of clause 6 for the reasons given in paragraphs 10.4.1 to 10.4.4 set out above. On the basis of that amended pleading counsel for the respondent informed the Court on 30 July 1998 that the respondent no longer intended to join Agpro as a third party, and the matter could be listed for trial. Pre-trial directions were then given, and the matter listed for hearing. No witnesses were called from Agpro. In my opinion the case has been conducted by the respondent on the basis that there was no continuing allegation that if the letters of 17 January 1997 otherwise constituted offers of employment within the meaning of clause 6(a), the offers were not genuine ones. (In any event, the argument that Agpro did not intend any genuine offer of employment would encounter formidable difficulties in proof, given the fact that from 7 April 1997 the employee applicants have been in full time work with Agpro, apparently on the terms initially conveyed in the letter of 17 January 1997.)
It is necessary to refer in more detail to the Redundancy Agreement. By clause 3(b) the Agreement is only to operate in the event of and in respect of the sale of SAMCOR to a purchaser and the termination of employment with SAMCOR by reason of redundancy consequent upon such sale. By clause 4 it is binding upon SAMCOR, relevant industrial organisations including the Union, and each employee of SAMCOR covered by one of a number of specified awards and enterprise agreements including the Award.
Clause 5(a) provides that the Redundancy Agreement will be read and interpreted in conjunction with specified awards and enterprise agreements including the Award.
Clause 5(c) contains a number of definitions including:
“'employee’ means an employee of SAMCOR to whom this agreement applies;
‘former employee’ means an employee who, whilst an employee, is offered, and accepts, employment by the purchaser; and
‘offered employment’ means offered substantially similar duties or duties which the employee possesses the skills and ability to perform on no less favourable terms and conditions of employment (considered as a whole) as the employee enjoyed (considered as a whole) whilst employed by SAMCOR.”
The relevant provisions of clause 6 are set out earlier in these reasons. Clause 8 deals with the topic of sick leave. The clause commences as follows:
“8. SICK LEAVE
(a)An employee who is not offered employment or declines an offer of employment by the purchaser will not be entitled to any payment for any accrued sick leave entitlement standing to his or her credit.
(b)an employee who is employed by the purchaser will be entitled to payment for any sick leave entitlement accumulated during the period of 1 January 1996 to the expiration of the notice of termination of employment with SAMCOR less any sick leave taken during that period. Payment will be calculated in accordance with the employee’s rate of pay as defined.
(c) Sick Leave Bank
(i)SAMCOR shall establish a ‘sick leave bank’ in respect of each former employee which shall be comprised of that former employee’s accrued sick leave standing to the credit of the former employee (‘sick leave credit’) as at the date the former employee ceases employment with SAMCOR.
(ii)Where a former employee’s sick leave entitlement accrued in the course of employment with the purchaser is exhausted, that person will be entitled, during the first two years of employment with the purchaser, to access to sick leave credits remaining in that person’s sick leave bank.
…”
Sub-paragraphs 8(c)(iii) to (v) make further provision in relation to claims for and the grant of sick leave credits payable out of the sick leave bank. The expression “former employee” is only used in clause 8.
Clause 9 deals with long service leave and again uses the expressions “employee who is not offered employment or who declines an offer of employment” and “employee who is employed by the purchaser” (these expressions in clauses 8 and 9 are underlined in the text of the Redundancy Agreement).
In my opinion the Redundancy Agreement deliberately and carefully distinguishes four situations, namely (i) that of an employee who is offered employment; (ii) that of an employee who is not offered employment; (iii) that of an employee who is offered employment and has accepted it, who is referred to in the agreement both as an “employee who is employed by the purchaser” and as a “former employee”; and (iv) that of an employee who is offered employment but declines the offer.
The third situation includes that of a former employee who is given rights under clause 8 in respect of the sick leave bank which may be utilised for periods of sick leave during the subsequent employment with the purchaser. However, the sick leave bank entitlements are not open to an employee in the fourth situation, namely an employee to whom an offer of employment is made but the offer is declined.
In my opinion clause 6(a) applies to every employee who comes within the first situation, that is to every employee who is in receipt of an offer of employment, whether or not the employee subsequently decides to accept the offer. Under the Redundancy Agreement the Government, through SAMCOR, was offering additional benefits by way of severance to employees who through involuntary redundancy would lose the opportunity to continue engagement pursuant to the terms of the Award in the service of the proprietor of the abattoir. It is understandable that the Agreement would not provide a like benefit to an employee who had the opportunity of continuing in that role but voluntarily chose to decline it.
It follows that actual acceptance of an offer of employment is not a pre-condition to the application of clause 6(a) to an employee.
I think that when the Redundancy Agreement is read with the Award, an offer of employment within the meaning of clause 6 is an offer of employment made before or at the time of the termination of an employee’s employment with SAMCOR. A severance payment, and a pay in lieu of notice, are payments which become due to an employee on the termination of employment. The Redundancy Agreement contemplates that an employee’s entitlement will be calculated at the time of termination. This is possible only if an offer is made before or at the time of termination. The applicants in their pleadings concede a measure of flexibility by extending the application of the Redundancy Agreement to offers of employment made immediately after termination. Counsel for the applicants explained that this concession was made as the Redundancy Agreement and Award should be interpreted in a practical way having regard to the exigencies likely to arise in events of the kind which happened. I agree with this submission. So construed, if the only relevant offer of employment were one made on 29 January 1997, in the circumstances of this case such an offer could be within clause 6. However, an offer of employment made on 1 or 3 April 1997 would not be within clause 6. On this point of construction I agree with the submissions made by the applicants’ counsel.
These conclusions lead to the critical issue in the case: what constitutes an offer of employment under the Redundancy Agreement? The Redundancy Agreement is to be read and interpreted in conjunction with a number of specified awards and enterprise agreements. The only one to which the parties have referred is the Award which covers the employee applicants. This question must be answered having regard in particular to clause 4 of the Award which deals with contracts of employment.
Commonly, in workplace relations, an offer of employment would be understood to mean an offer by an employer to enter into a contract of service with the offeree. The acceptance of that offer would thereupon create an employment relationship (unless the offer itself contemplated that the employment relationship would commence at a later date). In the present case however, the applicants contend that for the purposes of clause 6 of the Redundancy Agreement the notion of an employee being offered employment with the purchaser has a different meaning. The applicants contend that an employee will be offered employment with the purchaser for the purposes of clause 6 only where and when actual work is offered.
In the common situation, under the umbrella of an employment relationship constituted by a contract of service between the employer and the employee, the employee promises to serve in the manner and at the times contemplated by the contract, and in exchange the employer promises to pay remuneration in the manner and at the rate agreed. The performance of the service promised is usually a pre-condition to the obligation to pay: Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 465. There is, however, a recognised exception to this rule where the earnings of the employee are dependent on the performance of actual work, for example in the case of some pieceworkers and employees paid on commission. The authors of “The Law of Employment” by Macken, O’Grady and Sappideen, (4th ed., 1997) at 128 observe:
“These exceptions are to be found in contracts of which the essence of the contract is the opportunity to work or to exercise a skill or talent.”
Where such an exception is recognised an employer will be in breach of the contract constituting the employment relationship if the employer does not provide a reasonable amount of work to accord the employee the opportunity to earn that which the parties must be taken to have contemplated: Halsbury’s Laws of England, 4th ed., Vol. 16, para 552 and N L Wallace-Bruce, “Outline of Employment Law” (2nd ed., 1999) para [9.3]. This consequence serves to emphasise that notwithstanding the employer’s failure to provide work the relationship of employer and employee continues in existence. There is a clear distinction between on the one hand the continuing contract which creates the employment relationship, and on the other hand, the actual provision of work by the employer in pursuance of the contract.
In M R Freedland, “The Contract of Employment” 1976, the learned author at 20 observes that a contract of employment:
“… has a two-tiered structure. At the first level there is an exchange of work and remuneration. At the second level there is an exchange of mutual obligations for future performance. The second level – the promises to employ and be employed – provides the arrangement with its stability and with its continuity as a contract. The promises to employ and to be employed … form an integral and most important part of the structure of the contract. They are the mutual undertakings to maintain the employment relationship in being which are inherent in any contract of employment properly so called.”
Relevant to the present case, clause 4(a) of the Award provides that employees may be “engaged” either as casuals, as regular daily employees, or regular part-time daily employees. The expression “engaged” describes the creation of an employment relationship established by the formation of a contract of service, or, in Mr Freedland’s terms – the second level of promises – an exchange of mutual promises for future performance. In the case of regular daily employees (which was the status enjoyed by the employee applicants as SAMCOR employees), the nature of that relationship is confirmed by clause 4(c) of the Award which provides that the engagement of a regular daily employee shall continue until his or her engagement as such is terminated in the manner prescribed by the Award, e.g. by notice.
The expression “employed” is capable of carrying different meanings. Whilst it is commonly used as a shorthand description for the legal status of an employee working under a contract of service, the expression may also be used simply to describe the use in fact of the services of an employee in actual work. It is in the latter sense that “employed” is used in clause 4(b) of the Award which provides that a regular daily employee “shall be employed by the day or shift”. The meaning and effect of clause 4(b) is that the employer shall avail of the services for such an employee by the day or shift. The sub-clause at the same time recognises that the ongoing legal relationship which attracts payments of Award holidays, sick leave and annual leave, continues even though, because the “employment” terminates at the end of the day or shift, the employer may not avail of the services of the employee regularly day by day (or shift by shift) as would commonly occur in a workplace situation.
Thus the “engagement” of a regular daily employee describes an ongoing employment relationship, one that attracts Award holidays, sick leave and annual leave, and that continues until the relationship is terminated as prescribed in the Award. The manner in which the employer is to provide actual work is governed by the provisions of clause 4(d). However, the Award is silent as to the amount of work which must be provided, except perhaps by implication arising from the provision of a ten per cent loading for employees working under regular daily employee conditions and from the Award clauses relating to wage rates and tallies (e.g. clauses 6 and 34). It may be possible from reading the Award as a whole, and in particular the clauses just mentioned, to find an implication that the employer is under an obligation to provide a reasonable amount of work, which in turn poses a question as to what amount of work would be reasonable. It is not necessary to seek to answer these questions for the determination of the present case, and no submissions have been made about them. It is sufficient to note that the Award contemplates that a regular daily employee may be “engaged” by the employer, that is an employment relationship constituted by a contract of service may exist, even though actual work is not available on a regular basis. Moreover, it is in accordance with the Award that a new employee may be “engaged” by the employer, and for the employment relationship to come into being, before the employee actually commences work. The terms of clause 4 contemplate that the call for actual work will come after the engagement is made.
Whilst in clause 4 the term “employment” is used to describe the use in fact of services of an employee in actual work, elsewhere in the Award the term is used to mean the contract of service: see for example in the heading to clause 39(h), and clause 39(j) and in clauses 43 and 44A which are of particular importance in this case as they deal with “Introduction of Change” (and contain notice provisions similar to clause 6(c) of the Redundancy Agreement) and “Redundancy”. The purpose of clauses 6(a) and 6(b) of the Redundancy Agreement is to vary the provisions of clause 44A(c) of the Award. This fact gives a strong indication that “employment” in clause 6 of the Redundancy Agreement is intended to have the same meaning as in clause 44A(c) of the Award. Moreover, a severance payment is one payable on the termination of the contract of service. This is a further indication that the term “employment” is used in clause 6 to refer to the contract of service, not to the actual performance of work.
The definition of “offered employment” in the Redundancy Agreement is equivocal. Whilst, standing alone, the meaning defined could be understood as requiring an offer of actual work, it could also be understood as describing an offer of a contract of service which has particular characteristics. It is necessary to look at the terms of the Redundancy Agreement and the Award as a whole to determine the true meaning. When this is done, I think it becomes clear that the definition is describing an offer of a contract of employment which will require the performance of particular duties on particular terms and conditions.
In the events that happened, I consider the employee applicants were offered employment within the meaning of clause 6(a). By their terms, the letters dated 17 January 1997 offered regular daily employment under the terms and conditions of the Award. The offer was understood by Mr Emery, and conveyed to the workers, as an offer of the “status quo”. In my opinion the evidence establishes that the applicants understood the offer to be an offer of a contract of service with Agpro which would have the effect of continuing their engagement as employees in the abattoir under the terms and conditions of the Award. Those who received the letter of 17 January 1997 considered that they had been offered a job, and for that reason they attended the meeting on 29 January 1997 at which Mr Sadri spoke. When the employee applicants received their termination payments made on 24 January 1997, none of them complained that the severance benefits had been wrongly calculated by applying clause 6(a) rather than clause 6(b) of the Redundancy Agreement. In its dealings with Agpro the Union interpreted the events which had happened as constituting offers of employment which had been accepted: see the Union’s letters of 30 January, 27 February and 11 March 1997. That this was the applicants’ understanding of the position received unequivocal support by the issue of the proceedings for unfair dismissal on 19 February 1997, and later by the giving of a section 99 notification on 7 March 1997.
On the evidence I infer that it was also the intention of Agpro on 17 January 1997 and thereafter to offer contracts of employment to the employee applicants. I consider the proper inference from the evidence is that Agpro did intend to engage the employee applicants on the terms stated in the letter of 17 January 1997, so that the operations of the abattoirs could commence. After an initial delay, operations did commence on those terms and conditions, and the employee applicants have worked regularly since then.
That actual work was not offered to the employee applicants immediately following the Public Holiday on 27 January 1997 or in the period from then until 7 April 1997 may have constituted a breach of Agpro’s duty as employer to provide a reasonable opportunity to work. Such a breach would have given the employee applicants causes of action against the new employer, Agpro, but not against the former employer.
I do not consider that the letter of 17 January 1997 failed to constitute an offer of employment for any of the reasons pleaded in paragraphs 10.4 of the amended statement of claim. In my opinion the letter, in the context of the events happening at that time, did not fail for lack of certainty or meaning. Whilst the offer did not advise each individual expressly the duties that were being offered, none of the employee applicants were in any doubt that they were being offered a continuation of the roles which they had previously fulfilled under the Award. The offer was not further clarified before they actually resumed work on 7 April 1997, and it is not suggested that any of them were uncertain as to what was required of them on that occasion. I consider it is irrelevant that the letter stated that negotiations were progressing with the Union to define and implement a new Award, whether that statement was right or wrong. In any event the evidence shows that discussions were occurring between the Union and Agpro which can fairly be described as negotiations.
Paragraphs 10.4.3 and 10.4.4 of the amended statement of claim plead that the letter of 17 January 1997 gave no indication as to when employment would commence, and how the offer of employment might be accepted. Neither of these apparent deficiencies were identified by any of the applicants or the Union at the time. The letter must be understood in the context in which it was given. The applicant employees were about to finish their contracts of employment with SAMCOR. The offers were made to them before that event occurred, and in my opinion, were intended to and did constitute offers of employment to commence when the existing employment with SAMCOR terminated. As a matter of law the letters did not fail to constitute offers merely because they did not state how the offers were to be accepted. The offers were capable of acceptance in any manner that conveyed the intention of the offeree to accept the offer. I consider the attendance of the employee applicants at the meeting on 29 January 1997, and their conduct at that meeting, constituted an acceptance. That this occurred is borne out by the subsequent correspondence from the Union, and the commencement of the unfair dismissal proceedings. In any event, for reasons earlier given I do not consider the application of clause 6(a) depends on the acceptance of an offer of employment.
For these reasons I consider the applicants have failed to make out their case against the respondent.
This conclusion makes it unnecessary to consider the further submission advanced by the respondent that neither penalty nor payment under s 178(6) of the Workplace Relations Act 1996 should be ordered, even if the employee applicants were not offered employment within the meaning of clause 6(a) of the Redundancy Agreement, as both remedies are discretionary, and on the facts the discretion should not be exercised against the respondent. The imposition of a penalty under s 178(1) and an order for payment under s 178(6) are, by the terms of those subsections, discretionary remedies. In Printing and Kindred Industries Union v Vista Paper Products Pty Ltd (1994) 57 IR 414 at 433, Wilcox CJ in the Industrial Relations Court of Australia held that whilst the Court had a discretion under s 178(6) whether or not to order payment, the subsection gave no discretion as to the quantum of the order. In other words, if the Court in the exercise of its discretion decided to order payment, the Court was constrained to award the full amount of the underpayment. Wilcox CJ also said at 433:
“I accept that the word ‘may’ confers on the Court a discretion whether or not to order payment of an underpayment: see s33A(2A) of the Acts Interpretation Act 1901. Section 178(6) does not prescribe criteria for the exercise of this discretion; so the Court must exercise it by reference to the scope and purpose of the legislation. Plainly, the purpose of s 178(6) is to facilitate the payment to employees of unpaid award benefits. Unlike the earlier provisions of s 178, the section is not penal in character. Accordingly, the extent of the employee’s loss must always be a relevant consideration, in determining whether or not to make an order for payment of the underpayment. Where there is no significant loss, notwithstanding the employer’s failure to comply with the award, the Court might justifiably decline an order.”
In the present case the respondent contends that a proper exercise of the discretion would be in favour of the respondent as the evidence shows that, but for the goodwill of the respondent and its endeavours to secure employment for the employee applicants, it is unlikely that the abattoirs would have been sold as a going concern, and it is unlikely that there would have been any continuing employment for them. It is likely that they would have become unemployed, and would only have received the redundancy benefits provided for in the Award. In the events that happened the applicants became the employees of Agpro and since 7 April 1997 have had the benefit of higher wages and longer hours of employment than they received with SAMCOR, and indeed, on a present assessment, none of the employees can demonstrate an actual loss. There is considerable force in this submission but, as the claim must otherwise fail, it is unnecessary to give it further consideration.
The claim in the alternative for damages for breach of contract must also fail. First, I do not consider that the applicants have established that the provisions of clause 6 of the Redundancy Agreement constituted terms of their contracts of employment. Their contracts of employment with SAMCOR were in existence long before the Redundancy Agreement was entered into by the Union and certified by the Australian Industrial Relations Commission. As a matter of law the provisions of the Award did not constitute implied terms of those contracts of employment: Byrne v Australian Airlines Limited (1995) 185 CLR 410. Section 170MC(1)(f) required that the Australian Industrial Relations Commission be satisfied, before it certified the Redundancy Agreement, that before the application for certification was made reasonable steps had been taken to inform the employees who would be covered by the agreement about the terms and conditions and to explain their effect. It is to be presumed that the Commission was so satisfied, but the evidence before this Court does not indicate how many and which of the employee applicants received such an explanation, nor which of them expressed agreement to the proposed terms. The evidence leaves open the distinct possibility that a number of the employee applicants (unidentified) did not receive such an explanation, and, further, that some of them may not have agreed. The evidence is silent on these matters and cannot support a finding that each of the employee applicants, or any one in particular, agreed to the terms of the Redundancy Agreement. Nor is there any evidence to suggest that SAMCOR and each of the employees agreed to vary the terms of their contracts of employment. Secondly, for the reasons already given, the evidence fails to establish that SAMCOR failed to comply with the conditions of clause 6 of the Redundancy Agreement.
The application will be dismissed.
I certify that the preceding ninety-six (96) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice von Doussa. Associate:
Dated: 10 May 1999
Counsel for the Applicant: Mr P A Heywood-Smith Solicitor for the Applicant: Lieschke & Weatherill Counsel for the Respondent: Mr R J Whitington QC and Mr T L Stanley Solicitor for the Respondent: Crown Solicitor for the State of South Australia Date of Hearing: 14, 15 & 16 December 1998 and 7, 8 & 9 April 1999 Date of Judgment: 10 May 1999
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