Australian Bank Employees Union v Australia & New Zealand Banking Group Ltd
[1989] FCA 544
•12 SEPTEMBER 1989
Re: AUSTRALIAN BANK EMPLOYEES UNION
And: AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
No. SI4 of 1989
FED No. 544
Statutory Interpretation - Industrial Law
30 IR 352
COURT
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Von Doussa J.(1)
CATCHWORDS
Statutory Interpretation - Claim for penalty for non-observance of Award - repeal of legislation creating substantive rights and obligations - proceedings commenced after repeal - transitional provisions not expressly preserving rights - whether rights preserved by Acts Interpretation Act - whether contrary intention appeared in legislation.
Industrial Law - probationary officer - termination of employment - payment in lieu of notice - construction of Award.
Conciliation and Arbitration Act 1904, s.119
Industrial Relations Act 1988, s.178
Industrial Relations (Consequential Provisions) Act 1988, ss.3,67
Acts Interpretation Act 1901, s.8
Bank Officials (Federal) (1963) Award, clauses 25,29,38A
HEARING
ADELAIDE
#DATE 12:9:1989
Counsel for the applicant : Mr T.D. Bourne
Solicitor for the applicant : Stanley & Partners
Counsel for the respondent : Mr D.J. Bleby, Q.C. with
Mr G. Smith
Solicitor for the respondent : Freehill, Hollingdale & Page
JUDGE1
The applicant and the respondent are parties to and bound by the Bank Officials (Federal) (1963) Award ("the Award"). In these proceedings the applicant alleges that the respondent has committed a breach or non-observance of a term of the Award, and seeks to recover a monetary penalty and a sum not paid in lieu of notice to Tania Sue Guy who was at material times a member of the applicant organization. The parties have argued the case on an agreed statement of facts, and on agreed documents.
The essential issue between the parties concerns the proper interpretation of clause 38A of the Award. Clause 38 has the compendious title "Termination, Change and Redundancy", and sub-clause A deals with the topic of "Termination of Employment".
On 9 May 1988 Ms Guy was engaged by the respondent, and she commenced duties that day. She was dismissed from that employment by the respondent on 28 October 1988, that is, within six months of the date of commencement. Her dismissal was not based on conduct that justified instant dismissal or by reason of redundancy - events which would have attracted clauses of the Award other than clause 38A. The respondent paid Ms Guy one week's remuneration in lieu of notice, asserting that pursuant to the Award she was entitled to one week's notice of termination. It is the applicant's case that Ms Guy was entitled under the Award, and in the events that happened, to four weeks' notice of termination, and four weeks' pay in lieu of notice.
These proceedings were commenced by application in the Industrial Division of the Court on 14 March 1989. On 28 October 1988 the relevant legislation in force was the Conciliation and Arbitration Act 1904, and at that time the application now before the Court could have been instituted under s.119 of the Conciliation and Arbitration Act 1904. However before the application was issued that Act was repealed by s.3 of the Industrial Relations (Consequential Provisions) Act 1988. The repeal occurred on 1 March 1989, and on the same day the Industrial Relations Act 1988 came into force. Section 178 of the Industrial Relations Act 1988 makes provision for the imposition and recovery of penalties for the breach of a term of an award and is the section which corresponds to s.119 of the previous Act. The application and the submissions of counsel do not reveal under which Act the proceedings have been brought. In a passing reference to jurisdiction counsel referred to s.67 of the Industrial Relations (Consequential Provisions) Act 1988, but otherwise the topic was avoided. Section 67 does not apply to the present proceedings. It reads:
"67(1) A proceeding under section 119 of the previous Act that, before the commencement, had not been completed shall, after the commencement, be dealt with, in spite of Division 2 of this Part, as if the previous Act had not been repealed.
(2) Where a proceeding referred to in subsection (1) was instituted by a former Registrar or an Inspector under the previous Act, a Registrar or inspector under the Industrial Relations Act shall, at the commencement, take the place of the former Registrar or the Inspector, as the case may be, and the proceeding shall continue accordingly."
It cannot be said that an application issued after the repeal of s.119 was "A proceeding under Section 119 ... that, before the commencement, had not been completed ...". At "the commencement", that is, at the commencement of the Industrial Relations Act 1988, there were no proceedings under s.119 of the previous Act so as to invoke the power given by s.67(1). Nor can the present proceedings be brought under s.178 of the Industrial Relations Act 1988. There is nothing to suggest the presumption against retrospectivity, which is to be applied strictly where the enactment attaches penal consequences, is not to apply: see The Colonial Sugar Refining Company, Limited v. Irving (1905) AC 369 at 372-373; The King v. Chandra Dharma (1905) 2 KB 335 at 338; and R. v. Miah (1974) 1 WLR 683 at 694. The Industrial Relations (Consequential Provisions) Act 1988, although it makes provision in s.67 for continuing proceedings under s.119 of the previous Act which were on foot at 1 March 1989, makes no provision for commencing and prosecuting a claim after 1 March 1989 for relief under s.119 in respect of a breach of a term of an award which occurred before that date. No transition provision has been included to cover such a case.
Resort must be had to s.8 of the Acts Interpretation Act 1901, the relevant parts of which read:
"8. Where an Act repeals in the whole or in part a former Act, then unless the contrary intention appears the repeal shall not -
(a) revive anything not in force or existing at the time at which the repeal takes effect; or
(b) affect the previous operation of any Act so repealed, or anything duly done or suffered under any Act so repealed; or
(c) affect any right privilege obligation or liability acquired accrued or incurred under any Act so repealed; or
(d) affect any penalty forfeiture or punishment incurred in respect of any offence committed against any Act so repealed; or
(e) affect any investigation legal proceeding or remedy in respect of any such right privilege obligation liability penalty forfeiture or punishment as aforesaid, and any such investigation legal proceeding or remedy may be instituted continued or enforced, and any such penalty forfeiture or punishment may be imposed, as if the repealing Act had not been passed."
There can be no doubt that if a breach of a term of the Award as alleged had occurred on or about 28 October 1988 Ms Guy and the applicant thereupon acquired rights under s.119 of the previous Act and the respondent incurred corresponding obligations. The question, however, is whether the Industrial Relations (Consequential Provisions) Act 1988 discloses a contrary intention so as to oust the operation of s.8 of the Acts Interpretation Act 1901.
In Poletti v. Ecob (as yet unreported, judgment 8 June 1989, no. NI 8 of 1989) Gray J. had to consider a similar omission from the express provisions of the Industrial Relations (Consequential Provisions) Act 1988 which did not preserve or provide a right of appeal, previously available under s.113(1) of the previous Act, from a judgment, decree, order a sentence of a State court. The question was whether a party to proceedings under s.119 of the previous Act, which had been continued before a State court under s.67(1) of the Industrial Relations (Consequential Provisions) Act 1988, retained the right of appeal under s.8 of the Acts Interpretation Act 1901, notwithstanding the repeal of s.113(1). His Honour said at pp 8-9:
"The next major question is whether the Consequential Provisions Act discloses a contrary intention, so as to oust the effect of s.8 of the Acts Interpretation Act 1901. The Consequential Provisions Act does not contain an express intention to oust the effect of s.8 of the Acts Interpretation Act 1901. Appeals from State courts are simply not mentioned in it. But a contrary intention need not be express. It is necessary to construe repealing legislation to ascertain the intention which it discloses. This must be done by looking at the whole of the repealing Act and especially at any transitional provisions to be found in it. See Yule v. Junek
(1978) 139 CLR p 1 especially at pp 5, 9-10, 18 and 26.
If transitional provisions are construed as exhaustive, they will disclose a contrary intention, even though the right which would otherwise be preserved by s.8 of the Acts Interpretation Act 1901 is not mentioned specifically. See G.F. Heublein and Bro. Inc. v. Continental Liqueurs Pty. Ltd. (1962) 109 CLR 153 at pp 159-60 and 161-162. If the transitional provisions are not construed as exhaustive, an accrued right not mentioned will not be regarded as destroyed. See Donovan v. Repatriation Commission (1985) 58 ALR 634 at pp 639-640.
However the contrary intention is to be ascertained, it must be clear that there is a presumption that a statute is not intended to take away existing rights. See Maxwell v. Murphy
(1957) 96 CLR 261.
The Consequential Provisions Act does not contain transitional provisions of a general or all-embracing nature; rather, it deals with the effects of repeal of the Conciliation and Arbitration Act 1904 in a piecemeal fashion. No doubt the Parliament hoped to cover all situations, but that is a different intention from an intention that any right not mentioned specifically is to be abolished, despite s.8 of the Acts Interpretation Act 1901. In my view, the Consequential Provisions Act provisions are not exhaustive. It follows that no contrary intention has been shown for the purposes of s.8 of the Acts Interpretation Act
1901. The right of appeal under s.113 of the Conciliation and Arbitration Act 1904 is preserved in respect of the orders of the Chief Industrial Magistrate."
I respectfully adopt as correct his Honour's approach to the question. In my view no contrary intention is disclosed such as to prevent the preservation of such rights as the applicant had under s.119 of the previous Act immediately prior to its repeal. In my opinion these proceedings are validly brought in pursuance of a right under s.119 of the Conciliation and Arbitration Act 1904 which is preserved by s.8 of the Acts Interpretation Act 1901.
The respondent employed Ms Guy as a junior, Grade 2 clerk in accordance with clause 4 of the relevant appendix to the Award relating to the respondent. At the time of her engagement Ms Guy signed a Service Agreement - a printed form in common use by the respondent - which set out the terms of her employment. It is agreed that initially Ms Guy's employment was probationary. Clause 2 reads:
"2. Without limiting the application of any of the provisions of this Agreement hereinafter provided in any manner whatsoever, the Officer's employment shall from the date of commencement be probationary for a period of six months or such longer period as the Bank may during the period of probation determine."
The respondent's practice of employing officers initially for a probationary period is longstanding. It is recognized in clause 29 of the Award, which provides that in the calculation of the length of service of any officer any period of probation which shall have been served shall be included. Clause 12 of the Service Agreement, so far as it is material, also provides:
"12. The employment of the Officer shall be terminated by any of the following events :-
(a) ...
(b) ...
(c) (i) The expiration of one calendar month's notice of termination of service given in writing on either side or such lesser period as is mutually agreed or provided for in any industrial award or agreement for the time being in force and applicable to the employment of the Officer by the Bank.
(ii) The Bank's immediate termination of service and payment to the Officer of one month's salary in lieu of one calendar month's notice in writing.
(iii) ...
Provided also that where notice of termination of service is given or service is terminated without notice as aforesaid during any period of probationary employment of the Officer referred to in Clause 2 of this Agreement then this sub-clause (c) shall be read and construed as if the expression 'one week's notice' were substituted for the expression 'one calendar month's notice' in paragraphs
(i), (ii) and (iii) hereof and the expression 'one week's salary' were substituted for the expression 'one month's salary' in paragraphs (ii) and
(iii) hereof.
(d) ..."
The material provisions of the Award throughout Ms Guy's period of employment read:
"25. ENGAGEMENT
An officer shall be engaged and employed by the month (which shall be deemed to be a 4 week period) except where otherwise mutually agreed to in writing between the individual banks and their individual officers.
...
38. TERMINATION, CHANGE AND REDUNDANCY A. Termination of Employment Unfair Dismissals
(a) ...
(b) ...
(c) ...
(d) Notice of Termination by the Bank
(i) In order to terminate the employment of an officer or part-time employee the Bank shall give to the officer of part-time employee the following notice: Officer or Part-time Employee 4 weeks except where otherwise mutually agreed to in writing between the individual bank and the individual officer or part-time employee.
(ii) In addition to the notice in sub-clause A(d)(i) hereof, officers or part-time employees over 45 years of age at the time of the giving of the notice with not less than two years continuous service, shall be entitled to an additional week's notice.
(iii) Payment in lieu of the notice prescribed in sub-clause A(d)(i) and/or A(d)(ii) hereof shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of notice specified and part payment in lieu thereof.
(iv) In calculating any payment in lieu of notice the ordinary Time rate of pay an officer or part-time employee would have received in respect of the ordinary time he/she would have worked during the period of notice had his/her employment not been terminated shall be used.
(v) The period of notice in this clause shall not apply in the case of dismissal for conduct that justifies instant dismissal or in the case of casual employees or employees engaged for a specific period of time or for a specific task or tasks.
(vi) Continuity of service shall be calculated in accordance with the provisions of Clause 29 - Length of Service - with the exception that service in another bank shall not have application for the purposes of sub-clause A hereof."
Clause 38 was added to the Award with effect from the first pay period to commence on or after 2 December 1985. Clauses 25 and 38 as set out above reflect amendments which were made with effect from the first full pay period to commence on or after 24 December 1987. In clause 25 the amendment involved the addition after the word "month" of the words "(which shall be deemed to be a 4 week period)". In clause 38A(d)(i) the notice period was amended to insert the words "4 weeks except where otherwise mutually agreed ..." in lieu of the words "one month except where otherwise mutually agreed ...".
The respondent relies on clauses 2 and 12(c)(ii) of the Service Agreement, and clauses 25 and 38A(d)(i) of the Award. The respondent contends that by the Service Agreement the parties "mutually agreed to in writing" a shorter period than four weeks as the period of notice required by clause 38A(d)(i). The applicant on the other hand contends that the literal approach to the meaning of clause 38A(d)(i) relied on by the respondent would defeat the purpose and object which underlies clause 38A, and should be rejected. The applicant contends that the respondent's construction of the Award would mean that a bank could at the commencement of the employment of any officer agree pursuant to clause 25 that he or she shall be employed by the week, and as that agreement could apply forever thereafter between the bank and the officer, the evident intent of clause 38A would be defeated. The applicant contends that a purposive interpretation therefore requires the notice provision of clause 38A(d)(i) to be read as meaning "4 weeks except where otherwise mutually agreed to in writing at or after the time of termination between the individual bank and the individual officer or part-time employee".
Counsel for the applicant referred the Court to general statements as to the principles which should govern the construction of awards in Deckers v. Minder Home Inc. (Referral of Question of Law) Case (1978) 45 SAIR 69 at 75-76 and 84-86; Geo. A. Bond & Co Limited (In Liquidation) v. McKenzie (1929) AR (NSW) 498 at 503-504; and The Queen v. Aird; Ex Parte The Australian Workers' Union (1973) 129 CLR 654 at 659. The Court was informed by the parties that clause 38 was drafted by the parties themselves, and inserted in the Award without modification and by consent: see also Australian Conciliation and Arbitration Commission Print G2917 dated 26 May 1986. In these circumstances the applicant argues that the Court should avoid a too literal adherence to the strict technical meaning of the words, and should view the matter broadly. Furthermore, to resolve ambiguity, which it is said exists in clause 38A, the Court should have regard to the circumstances which gave rise to the insertion of the particular provision in the Award.
These principles of construction may for present purposes be accepted. I think it may also be accepted that the language used in clauses 25 and 38A(d)(i) gives rise to uncertainty and ambiguity as does the scope of the words "except where otherwise mutually agreed to in writing between the individual banks and their individual officers". However the secondary material on which the applicant seeks to rely does not, in my view, solve the uncertainty. That material comprises the reasons of the Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case (2 August 1984) 26 AILR 227, and the terms of the Award Variation to the Metal Industry Award 1984 which followed (see Print F7390 dated 14 December 1984). A comparison of the structure and language of that Award Variation and clause 38 of the Bank Officials (Federal)(1963) Award illustrates clearly enough that clause 38 has followed on from the Termination, Change and Redundancy Case. The applicant's contention that the reasoning of the Commission in the Termination, Change and Redundancy Case may be applied by analogy to ascertain the object and purpose of clause 38 is, I think, well-founded. However the reasons of the Commission do not compel the construction for which the applicant contends. Rather they suggest to me that those who drafted clause 38A(d)(i) were endeavouring to make provision for the exceptional group of officers whose employment pursuant to clause 25 of the Award was otherwise than by "the month". The applicant drew attention to the following passages in the decision in the Termination, Change and Redundancy Case. At p 228 the Commission said:
"In support of its general position the ACTU relied heavily on the consequences of unemployment for individual employees and, in particular, it referred the Commission to the Report of the Donovan Royal Commission on Trade Unions and Employers' Associations 1965-68 (U.K.). In that Report, in Chapter IX (p 142) dealing with 'Safeguards for Employees Against Unfair Dismissal', the Royal Commission commented on the consequences of dismissal from employment in the following terms:
'In reality people build much of their lives around their jobs. Their incomes and prospects for the future are inevitably founded in the expectation that their jobs will continue. For workers in many situations dismissal is a disaster. For some workers it may make inevitable the breaking up of a community and the uprooting of homes and families. Others, and particularly older workers, may be faced with the greatest difficulty in getting work at all.' In the Food Preservers' Union v. Wattie Pict Limited (the Wattie Pict case)(1975) CAR 227 Justice Gaudron stated:
'Primarily employment is the chief source of income for Australian families. Its interruption must be attended either by financial hardship or the fear of it. Employment is also part of a worker's daily routine and society; disruption of that routine and social contact necessitates a reorganization of an important aspect of a person's life. Long term employees may also find themselves with a competitive display as a result of opportunities forgone in the continuous service of their employers.'"
At p 233:
"Further, in our opinion the traditional week's notice of termination included in Federal awards provides no practical opportunity for those who have been in a particular job for some time to adjust to the proposed change in circumstances, reorganise their lives and seek alternative employment. In particular, in current economic circumstances, one week would not provide sufficient time for many employees to find another job or for employers to find another employee."
And at p 234:
"We have decided that there should be no extension of the notice period for employees with only a short period of service with the employer, but that those employees who, at the time of the receipt of the notice of termination, have been in continuous full time employment with the employer for more than a calendar year should be entitled to an extra week's notice. For each additional two years of service an additional week's notice should apply; with a maximum period of extended notice of four weeks. Employees over 45 years of age shall be entitled to an additional week's notice of termination after two years' service. The increase in the notice period will only apply to permanent 'weekly employees' and it will not apply to casual employees, part-time employees, seasonal employees or employees on daily or hourly hire. Nor will the extended notice apply in cases of misconduct which warrant instant dismissal."
These passages emphasize that the concerns of the Commission were not for the position of employees with only a short term of service with an employer, but for those with lengthy periods of continuous service and those over 45 years of age. These concerns are reflected in the variation inserted into the Metal Industry Award with which clause 38A corresponds. The relevant portion of the variation inserted into the Metal Industry Award reads:
"Notice of termination by employer
(d) (i) (1) In order to terminate the employment of an employee the employer shall give to the employee the following notice: Period of Period of notice continuous
service
1 year or less 1 week 1 year and up to the completion of 3 years 2 weeks 3 years and up to the completion of 5 years 3 weeks 5 years and over 4 weeks
(2) In addition to the notice in subparagraph 6(d)(i)(1) hereof, employees over 45 years of age at the time of the giving of the notice with not less than two years continuous service, shall be entitled to an additional week's notice.
(3) Payment in lieu of the notice prescribed in subparagraphs 6(d)(i)(1) and/or 6(d)(i)(2) hereof shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of notice specified and part payment in lieu thereof.
(4) In calculating any payment in lieu of notice the wages an employee would have received in respect of the ordinary time he or she would have worked during the period of notice had his or her employment not been terminated shall be used.
(5) The period of notice in this clause shall not apply in the case of dismissal for conduct that justifies instant dismissal, including malingering, inefficiency or neglect of duty, or in the case of casual employees, apprentices, or employees engaged for a specific period of time or for a specific task or tasks.
(6) For the purposes of this clause, continuity of service shall be calculated in the manner prescribed by subclause 25(e) - Calculation of continuous service of this Award."
The coincidence between the structure and language of this variation and clause 38A(d), with the exception of para.(i) of clause 38A(d), is striking. The significant difference in clause 38A(d)(i) to the corresponding provision in the Metal Industry Award Variation is the elimination of the graduated periods of notice shorter than four weeks which apply under the Metal Industry Award where the period of continuous service is shorter than five years. It can hardly be supposed that the applicant in agreeing to the terms of clause 38A(d) would have intended to abandon the object of the graduated periods of notice in favour of a clause that was not understood generally to achieve conditions at least as favourable to its members. I think the probable explanation and intent of the language employed in clause 38A(d)(i) was to reflect the conditions of employment long established for bank officers, namely that they are engaged by the month (which now means four weeks) and would therefore be entitled in any event to four weeks' notice even where the period of continuous service was less than five years. The parties chose not to lead background evidence about the conditions of employment of bank officers, but the supposition embodied in the preceeding sentence sufficiently appears from the terms of clauses 25 and 29 of the Award and the respondent's Service Agreement. In drafting clause 38A(d)(i) so as to adopt the Award Variation approved in the Termination, Change and Redundancy Case, one situation that had to be catered for was that of an officer in probationary employment who hitherto had been entitled to notice of only one week. Whether there was any other situation in which an officer, in accordance with the practices of the banking industry, might be engaged and employed otherwise than by "the month" was not revealed by the case of either side, but that possibility is not suggested by the evidence. The style of the Bank Officials (Federal) (1963) Award in clause 25 is to cater for probationary employment and any other engagement otherwise than by "the month" by the words "except where otherwise mutually agreed to in writing between the individual banks and their individual officers". It is the same collocation of words which has been employed in clause 38A(d)(i). In my opinion the proviso inserted by those words in that clause is intended to cater for an officer who, prior to the giving of notice of termination, has agreed to an engagement otherwise than by "the month". In the usual case it can be anticipated that such an agreement would operate from the commencement of the employment and be evidenced in a document like the Service Agreement.
In my opinion clauses 25 and 38A of the Award must be read together. The proviso in the notice provision in clause 38A(d)(i) is intended to cater for those circumstances where the bank and the officer have agreed pursuant to clause 25 that the engagement and employment shall be otherwise than by "the month". This was so in the case of Ms Guy, as she was employed under the Service Agreement as a probationary officer. She was entitled to "one week's notice" under clause 12(c) of that Agreement. It follows, in my opinion, that the respondent correctly calculated the payment due to Ms Guy on the termination of her employment.
I am unable to accept the construction contended for by the applicant. I think it is most improbable that the parties would have intended by the language of clause 38A(d)(i) to agree merely that the bank and the officer could modify their legal rights if they chose to do so after those rights became crystalized by the giving of notice of termination. This constrution also involves a substantial departure from the language of the clause.
The applicant may be correct to argue that it is theoretically possible on the construction which I have adopted that a bank could avoid the object of clause 38A by engaging an officer otherwise than as a probationary officer on terms that the engagement could be terminated on one week's notice. However that argument overlooks the practical realities of the situation. The customary conditions of employment, as reflected in the material before the Court, are for an engagement and employment by "the month". If the applicant really perceives a risk to its members, other than probationary officers, arising from the language of clause 38A(d)(i) , that is a risk which has its genesis in clause 25 which has been in the Award for a very long time.
In my view the application should be dismissed.
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