Barrass v State of Victoria
[1999] FCA 1166
•24 AUGUST 1999
FEDERAL COURT OF AUSTRALIA
Barrass v State of Victoria [1999] FCA 1166
INDUSTRIAL LAW – award interpretation – whether applicants entitled to paid leave pursuant to relevant award – whether cl 16 of the award only applicable to persons relevantly employed as at the date of the making of the award – whether cl 16 of the award has retrospective operation and accordingly entitles those employed at “the date of commencement” of the award to leave loading – meaning of “the date of commencement of this award”.
WORDS & PHRASES – “the date of commencement of this award”
Workplace Relations Act 1996 (Cth) s178
Public Sector Management Act 1992 (Vic)
Public Service (Non Executive Staff-Victoria) Interim Award 1996
Re Municipal Officers (Brisbane City Council) Interim Award (1966) 8 FLR 297, referred to
Corlett Bros. Pty Ltd v Transport Workers Union of Australia, Industrial Union of Workers, Western Australian Branch [1975] WAIG 644, referred to
Telegraph Newspaper Co Pty Ltd v Australian Journalists’ Association (1962) 3 FLR 39, referred to
City of Wanneroo v Holmes (1989) 30 IR 362, referred to
Printing and Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444, followed
Federated Engine-Drivers’ and Firemen’s Association of A/asia v Adelaide Chemical and Fertilizer Co Ltd (1920) 28 CLR 1, followed
Tziortis v ACI Australian Glass Manufacturers Co (1973) 22 FLR 60, distinguished
IAN BARRASS (& OTHERS ACCORDING TO SCHEDULE 1) v STATE OF VICTORIA
VG 303 OF 1998
MARSHALL J
MELBOURNE
24 AUGUST 1999
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 303 OF 1998
BETWEEN:
IAN BARRASS (& OTHERS ACCORDING TO SCHEDULE 1)
ApplicantAND:
STATE OF VICTORIA
RespondentJUDGE:
MARSHALL J
DATE OF ORDER:
24 AUGUST 1999
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.It is declared that the respondent has breached and/or failed to observe the terms of cl 16 of the Public Service (Non Executive Staff-Victoria) Interim Award 1996 (“the Award”) by failing to pay each applicant leave loading in respect of the periods set out in the schedule to this order which is entitled “Schedule A”.
2.The application be adjourned until 9.30 am on 14 September 1999 for the hearing of submissions concerning any other order which the parties contend that the Court should make as a consequence of the Court’s reasons for judgment delivered today.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
SCHEDULE A
NAME
TERMINATION DATE
BARRASS, lan 4 March 1994 to February 1996 BATCH, Steve 4 March 1994 to 21 June 1996 BENEDICT, Simon 4 March 1994 to 30 June 1996 BERTOLUS, Kim 4 March 1994 to 1 November 1996 CLEELAND, Jason 4 March 1994 to 2 February 1996 DILLON, Kathleen 4 March 1994 to 10 May 1996 GRANNAS, Linda 4 March 1994 to 4 October 1996 HINES, Geoff 4 March 1994 to 3 November 1995 HUNT, Jan 4 March 1994 to 26 September 1996 LU, C.C. 4 March 1994 to 31 May 1996 McCUTCHEON, Gerald 4 March 1994 to 14 June 1996 MORAN, Jim 4 March 1994 to 21 June 1996 MURPHY, Kerry 4 March 1994 to 14 June 1996 PETTIFER, Geoff 4 March 1994 to 9 August 1996 PITT, Michael 4 March 1994 to 28 June 1996 RATCLIFFE, Raymond 4 March 1994 to 30 June 1995 ROBERTSON, Peter 4 March 1994 to 9 December 1996 RYAN, Rory 4 March 1994 to 21 June 1996 RYBA, Kazimiera 4 March 1994 to 9 December 1996 SANG, Joe 4 March 1994 to 27 September 1996 SHADDOCK, Marlene 4 March 1994 to January 1996 SLATTERY, Daniel 4 March 1994 to 29 November 1996 STANFORD, Paul 4 March 1994 to 30 March 1996 TIPPET, Patricia 4 March 1994 to 18 June 1996 WATSON, Linda 4 March 1994 to 27 September 1996 WILLIAMSON, Max 4 March 1994 to 4 December 1996 WREST, Tom 4 March 1994 to 20 October 1996
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 303 OF 1998
BETWEEN:
IAN BARRASS (& OTHERS ACCORDING TO SCHEDULE 1)
ApplicantAND:
STATE OF VICTORIA
Respondent
JUDGE:
MARSHALL J
DATE:
24 AUGUST 1999
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
On 6 July 1998 the applicants (Mr Barrass and others listed in Schedule 1 to these reasons) made application pursuant to s178 of the Workplace Relations Act 1996 (Cth) (“the Act”) for the imposition of penalties upon the respondent for its breach or non-observance of cl 16 of the Public Service (Non Executive Staff-Victoria) Interim Award 1996 (“the Award”).
Factual background
There are twenty-seven individual applicants in this proceeding. Each of them was a State public servant who was engaged in a department of the respondent listed, as at 4 March 1994, in Schedule 1 to the Public Sector Management Act 1992 (Vic) (“the PSM Act”).
Each applicant was an employee of the respondent on 4 March 1994 but was no longer in the employ of the respondent by 18 December 1996. Each applicant, whilst so employed, was eligible for membership of the CPSU, the Community and Public Sector Union (“the Union”), an organisation of employees registered under the Act. The evidence does not disclose whether any of the applicants were in fact members of the Union during the period 4 March 1994 to 18 December 1996 or at any other time.
At some time prior to March 1994 the Union served a letter of demand and log of claims upon the respondent. On 4 March 1994 the Australian Industrial Relations Commission (“the Commission”) made a finding of industrial dispute between the Union and, inter alia, the respondent. On 18 December 1996 the Commission made the Award in partial settlement of the dispute.
The terms of the Award were largely agreed between the Union and the respondent. There were two matters which were the subject of an arbitration by a Full Bench of the Commission. Both matters concerned the retrospective operation of certain award provisions. The first was about salaries. The second concerned the issue of leave loading which is the subject of this proceeding.
In its decision dated 11 December 1996 the Full Bench under the heading “Matters in Dispute” said as follows:
“There are two further matters in dispute on which the parties could not agree. These were the commencement dates for various increases in wages under clause 12 - Salaries, as a result of the making of an interim award and a claim for the retrospective operation, to 4 March 1994, of the leave loading in clause 16. The claim on salaries is in the following terms:
·An employee to whom clause 11.3 applies shall have his or her salary (less $834) increased by 3% and then a further 4% per annum with effect from the first pay period to commence on or after 26 November 1995.
·An employee who had been translated to the 5 level structure on or before 25 November 1995 but who has not received a 4% pay increase from the first pay period on or after 25 November 1995, shall have his/her salary increased by 4% from the first pay period to commence on or after 26 November 1995.
·With effect from the first pay period to commence on or after 8 December 1996, the salary payable to each employee shall be increased by a further 3%.
After hearing submissions from the parties, we have concluded that exceptional circumstances exist which would allow us to grant the claim pursuant to s.146(2) of the Workplace Relations Act 1996 (the Act) and we have decided to grant the claim. The retrospective operation of the wages clause will, however, apply to ordinary time worked only.
Also, in respect of the claim for the leave loading clause to operate retrospectively to 4 March 1994, we consider that exceptional circumstances exist and have therefore decided to grant the CPSU claim.
Our detailed reasons for our decision on these matters will be given in due course.”
Despite the last sentence in that passage cited from immediately above the Court was not referred to any further “detailed reasons” which were given by the Full Bench.
The Award
Clause 3 of the Award is the “Definitions” clause. “Employee” is defined in cl 3.3 as including:
“…employees and officers of the Crown employed pursuant to either Division 4, 4A, 5 or 5A or Part II of the Public Sector Management Act 1992 (Vic) and “employed” shall be given a like meaning.”
Clause 3.6 provides that:
“Employer means the State of Victoria which acts through its servant or agent who, for the purposes of this award, is the relevant Secretary or other Officer who has all the functions of a Department Head in respect of the Department, Administrative Office, Office or Commission, as the case may be, in which the member of staff is employed.”
Clause 4 of the Award is headed “DATE OF OPERATION” and provides as follows:
“4.1Clause 12 of this award shall come into effect from 25 November 1995.
4.2Clause 16 of this award shall come into effect from 4 March 1994.
4.3The remaining provisions of this award shall come into effect from the date of making of this award.
4.4The award shall continue in force for a period of four months.”
By virtue of cl 5 the Award is made binding upon the Union and the respondent “in respect of all employees however described eligible to be members of the CPSU” with some immaterial exceptions. That clause provides as follows:
“5. APPLICATION OF AWARD AND PARTIES BOUND
This award is binding upon:
5.1The State of Victoria, in respect of all persons falling within the scope of Schedule 1 to the Public Sector Management Act 1992 (Vic) as at the date of commencement of this award, in respect of all employees however described eligible to be members of the CPSU other than:
5.1.1employees covered by the State Government Schools Professional, Administrative, Clerical, Computing and Technical (P.A.C.C.T.) Vic. (Interim) Award 1992 [Print K5038 [S0299]];
5.1.2persons employed pursuant to Part 2, Division 2 of the Public Sector Management Act 1992 (Vic) (''Department Heads") and each such person's appointed Deputy;
5.1.3persons employed pursuant to Part 2, Division 3 of the Public Sector Management Act 1992 (Vic) ("Senior Executive Officers");
5.1.4persons employed pursuant to Part 9A or Part 9B of the Public Sector Management Act 1992 (Vic) ("ministerial officers and parliamentary advisers" and “judicial employees" respectively);
5.1.5persons excluded from the operation of the Public Sector Management Act 1992 (Vic) pursuant to s.5 of that Act;
5.1.6employees eligible to be members of the Health Services Union of Australia.
5.2 CPSU, the Community and Public Sector Union ("CPSU").”
Clause 11 of the Award is headed “Classification of Positions”. It deals with the classification of employees by reference to a 5 band structure. It provides as follows:
“11.1 The employer shall appoint or translate each employee into the five level structure.
11.2Each employee shall be appointed or translated into the five level structure and shall be classified and allocated to a salary band ("a band") utilising a position specification and at least one of the following evaluation methods:
11.2.1 an analysis of points factors using the Cullen Egan Dell Points Factor Evaluation System ("PFES") and the following ranges:
Points range
BAND PFES
BAND‑1 100‑159
BAND‑2 160‑244
BAND‑3 245‑374
BAND‑4 375‑574
BAND‑5 575 +11.2.2 a comparison with narrative standards for the work;
11.2.3a comparison with benchmark position specifications contained in the narrative standards;
11.2.4such other method as is agreed between the employer and the CPSU or as is determined by the Commission.
11.3An employee who as at the date of making this award is appointed but has not translated to a position in a broadbanded classification structure shall translate to the appropriate level in the relevant broadbanded structure based on the classification to which the employee's position has been classified using one of the evaluation methods referred to in clause 11.2.
11.4An employee may dispute the band allocation determined by the employer for the position to which the employee is appointed. Any dispute is to be dealt with in accordance with the Dispute and Grievance Procedure contained in this award.”
Clause 12 is the clause which deals with salaries. The first four sub-clauses provide as follows:
“12.1With effect from 8 December 1996, the salaries to apply to the five level structure shall be as follows:
BAND SALARY RANGE
Minimum Salary Maximum Salary
$ $BAND-1 22,583 to 27,583
BAND-2 26,480 to 37,514
BAND-3 35,306 to 48,547
BAND-4 43,030 to 60,683
BAND-5 55,167 to 77,23412.2An employee to whom clause 11.3 applies shall have his or her salary (less $834) increased by 3% and then a further 4% per annum with effect from the first pay period to commence on or after 26 November 1995. Provided that the retrospective operation of this clause will only apply to salary in respect of ordinary time worked.
12.3An employee who had been translated to the five level structure on or before 25 November 1995 but who has not received a 4% pay increase from the first pay period on or after 25 November 1995, shall have his/her salary increased by 4% from the first pay period to commence on or after 26 November 1995. Provided that the retrospective operation of this clause will only apply to salary in respect of ordinary time worked.
12.4With effect from the first pay period to commence on or after 8 December 1996, the salary payable to each employee shall be increased by a further 3%.”
Clause 16 is headed “Leave Loading”. That clause provides as follows:
“16. 1Subject to provisions of clause 16.3 each employee shall, in respect of recreation leave, be entitled to be paid in addition to his or her salary specified in clause 12 the greater of the two amounts calculated in accordance with the following:
16.1.1an allowance at the rate of 17‑1/2% of the employee's salary for the purposes of this clause; or
16.1.2an allowance equal to any additional payments to which an employee would be entitled for shifts Saturday or Sunday duty which the employee would be required to perform if he or she were not proceeding on recreation leave.
16.2The "salary" for the purposes of this clause includes allowances or other payments which the employee, would normally receive.
16.3The maximum allowance payable under clause 16.1 shall not exceed an amount calculated in respect of the annual salary amounts specified below in respect of the corresponding period:
From 4 March 1994 until 31 August 1994
$45,210.00
From 1 September 1994 until 25 November 1995
$46,566.00
From 26 November 1995 until 7 December 1996
$48,429.00
From 8 December 1996
$49,882.00
The competing contentions
Mr Moore, of counsel, appeared for the applicants. He submitted that each applicant was entitled to be paid leave loading by the respondent with effect from 4 March 1994.
Mr Kaufman, of counsel, appeared for the respondent. He submitted that the Award is only applicable to persons employed in the Victorian Public Service on 18 December 1996, the day the Award was made.
Mr Moore made the following four points in support of his submission:
(1)An award by its terms may have operative effect prior to the time at which it is made even if the employees in question have ceased to be employed at the time the award is made; subject to the retrospectivity not exceeding the date of the dispute finding and upon the award otherwise applying to such employees.
(2)On a plain reading of the Award the applicants are entitled, unambiguously, to leave loading, given:
(a)that cl 4.2 of the Award provides for cl 16 to come into effect from 4 March 1994, the date of the dispute finding; and
(b)that the definition of “employee” in cl 3.3 of the Award when read with cll 4.2 and 16 is referable to a person who was employed on and from 4 March 1994 by the respondent in one of the departments then listed in Sch 1 to the PSM Act; and
(c)that an examination of cll 4.1, 11.3 and 12.2 shows that where the Award has intended that retrospective operation be given to a provision and that such operation only apply to persons employed at the time of the Award’s making specific language is used to give effect to that intention.
(3)Nothing in cl 5 of the Award affects the second submission recorded immediately above, given that:
(a)“the date of commencement of this award” to give meaning to an intention to grant retrospective operation to a provision, must, in the context of cl 16 of the Award, mean “the date of commencement of operation of this award” and not “the date of the making of the award” as is provided in cl 11.3; and
(b)it is open to the Commission to provide different operative dates for different award clauses; and
(c)any other construction would lead to ambiguities in the way the Award is construed, including uncertainty about the identification of relevant departments in Sch 1 to the PSM Act;
(d)the Award, if interpreted in the manner contended for by the applicants, was not made beyond the jurisdiction of the Commission, given that its operation does not reach back beyond the date of the dispute finding.
Mr Kaufman submitted that cl 16 of the Award came into effect from 4 March 1994 but did not operate until 18 December 1996. He also submitted that the reference in cl 5.1 of the Award to Sch 1 to the PSM Act is a reference to departments of State which existed as at 18 December 1996. Mr Kaufman contended that the words “the date of commencement of this award” means “the day the award was made”. He cautioned against confusion between “when the award commences to bite, and what obligations it creates when it bites.” Mr Kaufman submitted that the respondent has an obligation to pay leave loading only to employees employed in the departments specified in Sch 1 to the PSM Act as at 18 December 1996.
Mr Kaufman submitted that the difference in wording in cl 11.3 when compared with cl 16 was to stress a relevant prospective operation for the broadbanding exercise. However he conceded that if the words “as at the date of making of this award” had appeared in cl 5.1 of the Award instead of the words “at the date of commencement of this award”, the applicants submissions would be untenable. Although not pressing the point strongly, Mr Kaufman also contended that the transcript of the submissions made before the Full Bench reveals that the respondent and the Union intended that retrospectivity only apply to present employees for leave loading purposes.
In the alternative Mr Kaufman submitted that if the Award is to be interpreted as Mr Moore contends it should be interpreted, then the Commission acted beyond its jurisdiction by making cl 16 of the Award retrospective to that degree. Mr Kaufman acknowledged that the wages and conditions of the applicants were the subject of the relevant industrial dispute found by the Commission to exist. However he submitted that by 18 December 1996 the scope of the dispute had changed in that it no longer included any demand for industrial entitlements for persons not then employed by the respondent. Mr Kaufman contended that the dispute had changed and that it no longer encompassed the applicants.
Mr Kaufman submitted that in any event, the application is incompetent having regard to the terms of s178(5)(ca) of the Act. Section 178(5) of the Act provides as follows:
“178(5) A penalty for a breach of a term of an award or order may be sued for and recovered by:
(a)an inspector;
(b)a party to the award or order;
(c)an employer who is a member of an organisation and who is affected by the breach;
(ca) a person:
(i)whose employment is, or at the time of the breach was, subject to the award; and
(ii)who is affected by the breach;
(d)an organisation that is affected, or any of whose members are affected, by the breach; or
(e)an officer or employee of an organisation that is affected, or any of whose members are affected, by the breach where the officer or employee is authorised, under the rules of the organisation, to sue on behalf of the organisation.”
Mr Kaufman contended that the “person” referred to in s178(5)(ca) of the Act must be in employment at the time of the breach of the Award, that being employment which is subject to the Award. He submitted that it was not possible for the Award to be breached before 18 December 1996. Therefore, he contended, as at 18 December 1996 the applicants were not in employment which was subject to the Award.
In response to Mr Kaufman’s submission on s178(5)(ca) of the Act Mr Moore submitted that the paragraph deals with two classes of persons:
(1)a person whose employment is subject to an award; and
(2)a person whose employment was subject to an award at the time of the breach of the Award
Mr Moore further submitted that the applicants are persons who, by virtue of cl 4.2, were at the time of the breach subject to the Award. Mr Moore acknowledged that the date of the breach was 18 December 1996 but contended that on that day the applicants should have been paid leave loading because of the Award. Their previous employment with the respondent was, on 18 December 1996, subject to the Award because on that day the Award, with its retrospective effect, applied to them due to the provisions of cl 4.2 thereof. Mr Moore submitted that the applicants were subject to the Award on 18 December 1996 although no longer in the employ of the respondent and accordingly had the requisite standing to make this application.
The Award interpretation issue
Properly construed, the Award has retrospective effect for the purposes of entitlement to leave loading to 4 March 1994. That retrospective effect applies to any person who was employed by the respondent on and from 4 March 1994 notwithstanding that any such person was not employed when the Award was made.
By virtue of cl 4.2 of the Award, cl 16 of the Award came into effect from 4 March 1994. It has retrospective operation to that day. As a consequence, the respondent’s obligation to pay leave loading is taken to have commenced at 4 March 1994. The respondent accepts that that is so with respect to employees who were employed on 4 March 1994 and who continued to be employed on 18 December 1996. However it denies that such retrospective operation encompasses persons not still employed by it on 18 December 1996.
The respondent’s view on this issue is at odds with relevant authorities.
In Re Municipal Officers (Brisbane City Council) Interim Award (1966) 8 FLR 297, an employer sought an interpretation of an award applying to it. The Commonwealth Industrial Court said (at 299-301):
“The question the Court is called upon to determine is whether, having regard particularly to the provisions above referred to, persons who were not employed by the council on 15th October, 1965, but were so employed at some time between 1st January, 1964, and that date are entitled to receive for their services the increased rates prescribed by the interim award.
The contention on behalf of the council was that the persons to whom the award applied were to be determined by reference to cl. 3. That clause provides that the award shall bind the council and the organizations referred to therein “in respect of all officers except those over the age of sixty-six years employed by the Brisbane City Council whose positions are covered by this award”. This clause, it is said, speaks as at the date on which the award was made and officers employed comprises those employed at that date or thereafter.
This is the meaning one would attach to the clause in an award which operated only from the date of its making. The natural meaning in the context of cl. 3 of “officers employed” is “officers employed during the operation of the award”.
Clause 3, however, should not be construed as an isolated provision. It must be construed having regard to other provisions of the award including, in particular, cl. 4.
For the council it is said that cl. 4 relates solely to salaries and that those salaries are to be paid as from the date prescribed only to officers employed on or after 15th October, 1965.
It is to be noted, however, that cl. 4 does not provide merely that the increased salaries provided for are to be paid as from 1st January, 1964, or 19th June, 1964. It says that “in so far as salaries payable are concerned” the award (which would include cl. 3) shall come into operation as from the beginning of the first pay period commencing on or after 19th June, 1964. The natural meaning of these words is that, in determining any question relating to salaries, the whole award must be deemed to have been in operation on and from 19th June, 1964.
Accordingly, having regard to the provisions of both cll. 3 and 4, officers employed should be regarded as comprising officers so employed at any time relevant to the operation of particular provisions of the award. In so far as salaries payable are concerned, the provisions, as from the beginning of the first pay period commencing on or after 19th June, 1964, bind the council “in respect of all officers except those over the age of sixty-six years employed” at the relevant pay period.
Therefore, in our opinion the award binds the council in so far as salaries payable are concerned to pay the prescribed salaries to officers not over the age of sixty-six employed by it at any time after 19th June, 1964.
The construction for which the council contended would lead to some strange anomalies in relation to officers employed by the council on 15th October, 1965, who had attained or were about to attain sixty-six years and who had been continuously employed by the council since 1st January, 1964. An officer who had attained that age shortly prior to 15th October, 1965, would not be entitled to the increased salaries because he would not fall into the class in respect of whom cl. 3 is expressed to bind the council. On the other hand, an officer who attained the age of sixty-six years shortly after 15th October, 1965, would satisfy the necessary description and be entitled to the increases as from 1st January, 1964.
If the construction which we have attributed to cll. 3 and 4 is adopted, these anomalies are much less extensive, though they still arise in relation to employees who attained the age of sixty‑six years between 1st January, 1964, and 19th June, 1964. This difficulty can be accounted for by the fact that the award maker was concerned to ensure that the basic wage increases granted in June 1964 should not be received retrospectively to 1st January. The second paragraph of cl. 4, although drawn in the form of a proviso, is not strictly a proviso at all, but an extension of the benefit of the salary increases to cover a period anterior to its coming into operation, although this intention, as the clause stands, is only to be found by implication, since the proviso assumes the extension of the benefits to cover the period 1st January, 1964, to 19th June, 1964, and then provides for a deduction of the basic wage increases in respect of that period. These considerations strongly suggest that the date “19th June, 1964 " in the first paragraph of the clause, was a mistake for " 1st January, 1964". If this date had been given instead of 19th June, the second paragraph would have been correctly expressed as a proviso.
It is apparent, therefore, that the construction we have suggested is supported rather than opposed by the form of the proviso, and certainly the anomalies to which we have referred are of much less moment if this construction is adopted.
We therefore interpret the award by saying that the persons entitled to the prescribed salaries include all persons who were within the class specified in cl. 3 of the award at any time after the beginning of the first pay period commencing on or after 19th June, 1964, whether or not they had left the service of the council or attained the age of sixty-six years prior to 15th October, 1965.”
The same approach was taken by the Western Australian Industrial Appeal Court in Corlett Bros. Pty Ltd v Transport Workers Union of Australia, Industrial Union of Workers, Western Australian Branch [1975] WAIG 644. In Corlett the relevant award had been amended on 4 October 1974 to increase rates of pay with effect from 22 July 1974. The employee the subject of the appeal was employed from 22 July 1974 to 30 August 1974. She was not in employment when the relevant variation to the award was made.
Burt J (President) said as follows (at 644-645):
“The appellant’s contention however before the Industrial Magistrate and before us was that the retrospective amendment made to the award only applied to workers who were in employment during the period to which it related back and who were still in employment as at the date upon which the order was made. This was said to be so because an industrial award places an obligation on an employer to his employee by operating upon the relationship of employer and employee. That relationship, it was contended, and rightly so, was created by contract, that is to say, by the contract of employment and not by the award. From this it was said to follow that when in the present case the amendment was made the relationship did not exist and therefore there was nothing upon which the amendment including its retrospective effect could operate.
This submission in my opinion is based upon a fundamental misconception. Notwithstanding the form of the complaint as made in the present case, the essence of it was not that upon the award being amended, that is to say on 4th October 1974 or on the pay-day next following the appellant then or thereafter failed to pay the worker the difference between the old and the new rates of wage for the period to which the amendment was made to relate back. The complaint was that on the pay-days falling within the period 22nd July to 30th August the appellant had failed to pay the worker at the then award rate. And the amendments having been given true retrospective operation, the wage rates during that period were the rates set out in the amending order, and this because being retrospective one is required, as to the past date and to the past period to which it relates, to take the award to have been that which it was not. See South Australian Land Mortgage & Agency Co Ltd v The King (1922) 30 CLR 523 at p. 546 per Isaacs J and compare Re Municipal Officers (Brisbane City Council) Interim Award (1966) 8 FLR 297.”
Wickham J said (at 645):
“The submission that there was no relationship of employer and worker at the date when the award was in force simply denies its provision that it shall take effect as from the first pay period commencing on or after 22nd July 1974. There was a relevant contract of employment existing at that moment and Mrs. Green was entitled to be paid in accordance with the terms of that contract and in accordance with the award made applicable to it by the retrospective order. Because of that retrospective order the award took effect and therefore was in force at the relevant date. It was in the terms of s. 85 binding on the appellant who was then an employer employing Mrs. Green.”
Wallace J was of the view that the case was relevantly indistinguishable from the Brisbane City Council case, saying that (at 646):
“For my part I can see no distinction in substance between saying “The award takes effect as from the first pay period commencing on or after the 22nd July 1974” as opposed to “This award … shall come into operation as from the beginning of the first pay period commencing on or after the 19th June 1964” being the award provision which operated retrospectively in Re Municipal Officers (Brisbane City Council) Interim Award (1968) (sic) 8 FLR 297.
In that case Spicer C.J., Joske, Eggleston J.J. in a joint judgment held against the appellant’s argument herein. With respect I can but agree with their Honours of the Commonwealth Industrial Court in their construction of what I believe to be similar award provisions in this case.
In my view the learned Industrial Magistrate was right in the conclusions he reached and therefore this appeal should fail.”
In Telegraph Newspaper Co Pty Ltd v Australian Journalists’ Association (1962) 3 FLR 39, the Commonwealth Industrial Court held that an employee was entitled to the benefits of an award made after he left his employer’s employ by virtue of the award’s retrospective effect.
The Court said (at 42-43):
“The meaning and effect of an agreement can only be ascertained by a consideration of its language. It is idle to speculate as to what may or may not have influenced the parties to make the agreement, or as to what they may have intended if it is not expressed in the agreement. It is, however, not surprising for an agreement to provide for retrospective payments or that persons employed in the industry during the period of retrospectivity should be entitled to receive such payments although not so employed at the date of the agreement. Such a provision was included in an award and was held valid in Jones v. Lorne Saw Mills Pty. Ltd., and see per Higgins J. in Whittaker Bros. v. Australian Timber Workers' Union. If an agreement on its proper construction includes such a provision, it cannot be excluded on the basis that the parties could never have intended it.
In the present case the parties varied the agreement by deleting the clause setting out the rate of payment to "members" of the organization in McKelvie's grade and substituting a new clause in its place which provided for an increased rate of payment to members in that grade. The variation then provided as follows:‑ "IV. The foregoing variation as to matters of salary only, but not as to overtime and matters incidental to salary, shall come into operation on 1st May, 1960, and otherwise from 1st August, 1960." This clearly shows that retrospective payments are to be made as on and from 1st May, 1960. The payments are to be made to "members" and the original agreement provides that "member" means a member of the complainant organization (cl. 6(a)). Accordingly McKelvie, being a member of the organization and having been employed between lst May, 1960 and 3rd June, 1960, comes within the precise language of the agreement. Reliance was placed by the defendant upon Hunt v. Railway Commissioners for New South Wales but that was a case of an employee who was on extended leave of absence given to him on his retirement and on the construction of the particular award it was held that he was not entitled during his leave to an increased salary payable under a new award. Street J. said:‑ "If a particular set of circumstances is not covered in plain terms by the language of the award in question, then you are not entitled to use a forced or unnatural construction in order to attempt to make the award cover a set of circumstances which is not specifically and directly covered, and which may never have been in the contemplation of the tribunal that made the award."
In the case of the Journalists Agreement, McKelvie's case is covered in plain terms by the language of the agreement as varied, there is no question of using a forced or unnatural construction to cover a set of circumstances not specifically and directly covered, and the particular set may well have been in the contemplation of the parties to the agreement. The defendant also relied on In re Crown Employees (Land Surveyors) Conciliation Committee, where a specific clause covering persons who were no longer employed at the date of the award was included in order to make it clear that they were entitled to retrospective payments during their employment, as in effect saying that such a specific clause is necessary. If an agreement or award is, however, already clear, there is no need for any specific clause to make it clear.”
Where it was intended in the Award, for whatever reason, that its retrospective effect was to be confined to persons employed as at the date the Award was made, the Award has said so. Clause 11.3 of the Award makes specific reference to “an employee who as at the date of making of this award”. No such qualification is made in cl 16. Clause 16 refers to “each employee”. Clause 4.2 shows that such a reference includes an employee engaged as at 4 March 1994. On that day each applicant was a person who met the description of “employee” found in cl 3.3 of the Award.
The Award is to be considered as a whole and in context. See City of Wanneroo v Holmes (1989) 30 IR 362 (at 378). When so considered it is apparent that the award maker intended that cl 16 have effect from 4 March 1994. The Commission placed no limitation on such retrospective effect for it to apply only to persons who were still in employment as at 18 December 1996. Consistent with relevant authority the better view of the combined effect of cll 3.3, 3.6, 4.2, 5 and 16 of the Award is that the entitlement to leave loading extends to persons who were employed by the respondent in a relevant department on or after 4 March 1994, but who had ceased to be so employed by 18 December 1996.
Mr Kaufman referred to some passages in the transcript of submissions in the proceedings before the Full Bench of the Commission which, he suggested, supported the respondent’s interpretation of the Award. That material was before the Court without objection. Mr Kaufman told the Court that he did not place heavy reliance on that material. In my view the Court should not have regard to such material in interpreting the Award. Evidence of the actual intention of what parties to an award hoped to achieve by its making is inadmissible. See Printing and Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444, per Gray J (at 450-451). In any event the relevant passages referred to from transcript appear to be equivocal and not clearly supportive of either construction of the Award contended for in this matter.
Restructuring of departments
Mr Kaufman referred the Court to changes in the structure of departments and administrative offices falling within the scope of Sch 1 to the PSM Act prior to 18 December 1996. That reference does not advance the respondent’s case given that at all material times the relevant employer of each applicant was the respondent.
Did the Commission have the power to make an award with such retrospective effect?
In the alternative the respondent submitted that if the Award purports to retrospectively apply to persons who were no longer employed by the State as at 18 December 1996 it is to that extend invalid.
Mr Kaufman submitted that by the time the Award was made the ambit of the dispute had changed such that the Union was no longer claiming wages and conditions on behalf of persons no longer employed by the respondent. I reject that submission. The Union made a claim at least by 4 March 1994 in respect of all persons who were eligible to belong to it and who were employed in materially relevant departments of the State. There is no evidence that it abandoned those claims with respect to persons who ceased to be so employed prior to the making of the Award. In fact its pursuit of retrospective payments of leave loading is an indication to the contrary.
Mr Kaufman further submitted that the Commission is only entitled to make an award governing the relationship of employers and employees. So much is undoubtedly so as a general proposition. However it is clear that an award can have retrospective effect back to the finding of the industrial dispute which underpins it. This was recognised in Telegraph Newspaper where the Court said (at 41):
“A retrospective award may be made in respect of matters which were in issue in the dispute and can be made as to any period covered by the actual dispute; and it may order payment in respect of work done after the point of time when as a fact the industrial dispute began and before the award is made (Federated Engine-Drivers’ and Firemen’s Association of A/asia v. Adelaide Chemical and Fertilizer Co Ltd). Accordingly an agreement must be in relation to an industrial dispute; it can only be made in respect of matters in issue in the dispute; and it cannot impose terms in relation to a period anterior to the dispute. An organization as representing its members may be a party to an agreement, but if one of its members has ceased to be employed in the industry prior to the commencement of a dispute it may be that it does not represent him in the dispute, although he remains a member of the union, since he is not a party to the dispute. On the other hand, if a person is a member of the union at the time the dispute commences, the union may represent him in the dispute and although he has ceased to be employed in the industry at the time an agreement is made, if the agreement operates retrospectively so as to cover the period of his employment in the industry after the dispute arose, he is entitled in respect of that period to the benefits provided by the agreement for persons employed in the category in which he was employed.”
I also reject Mr Kaufman’s submission that Telegraph Newspaper was wrongly decided. It applied the judgments of members of the High Court of Australia in Federated Engine-Drivers’ and Firemen’s Association of A/asia v Adelaide Chemical and Fertilizer Co Ltd (1920) 28 CLR 1. As Higgins J said in Adelaide Chemical (at 15):
“…the award can be made as to any period covered by the actual dispute”
When the applicants were employed by the respondent on and from 4 March 1994 the Union was in dispute with the respondent in relation to the terms and conditions of employment of persons eligible to be members of the Union. The applicants fell within that class of person. The Commission was entitled to make an award which governed the terms and conditions of employees in that class, with retrospective effect to the date of the dispute finding. The dispute finding was the yardstick of the Commission’s jurisdiction for constitutional purposes.
Standing
I accept Mr Moore’s submission that on 18 December 1996 the applicants had a right to be paid leave loading with effect from 4 March 1994 given the Court’s view on the correct interpretation of the Award in that respect. I also accept Mr Moore’s submission that the making of the Award on 18 December 1996 with retrospective effect made the employment of each applicant retrospectively subject to the Award. Consequently each applicant is a person whose employment was subject to the Award as at the time of the breach of the Award and is affected by that breach. Section 178(5)(ca) of the Act gives each applicant standing to bring this application.
Mr Kaufman referred the Court to the judgment of the Commonwealth Industrial Court in Tziortis v ACI Australian Glass Manufacturers Co (1973) 22 FLR 60, in support of his contentions regarding s178(5)(ca) of the Act. Tziortis was decided in the context of s119(2)(c) of the Conciliation and Arbitration Act 1904 (Cth). That provision referred to “any member of any organisation who is affected by the breach”. The Court held that such person must be a member at the time of the breach. At the time Tziortis was decided there was no legislative counterpart to s178(5)(ca) of the Act. Consequently Tziortis is of no assistance in the resolution of the question as to whether the applicants have standing to bring this application.
Section 178(5)(ca) of the Act was not introduced into Federal industrial law until 1990 by the Industrial Relations Legislation Amendment Act (No 2) 1990 (Cth) (Act No 108 of 1990) which amended the Industrial Relations Act 1988 (Cth).
Orders
Counsel accepted that the Court should at this stage only determine whether the Award has been breached and make appropriate declarations, reserving for a later occasion any debate as to what other orders the Court should make.
Consistently with the Court’s views expressed above on the question of the correct interpretation of the Award it is appropriate to make the following declaratory orders and adjourn the matter otherwise.
1.It is declared that the respondent has breached and/or failed to observe the terms of cl 16 of the Public Service (Non Executive Staff-Victoria) Interim Award 1996 (“the Award”) by failing to pay each applicant leave loading in respect of the periods set out in the schedule to this order which is entitled “Schedule A”.
2.The application be adjourned until 9:30 am on 14 September 1999 for the hearing of submissions concerning any other order which the parties contend that the Court should make as a consequence of the Court’s reasons for judgment delivered today.
I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.
Associate:
Dated: 24 August 1999
Counsel for the Applicant:
Mr S Moore
Solicitor for the Applicant:
Gill Kane & Brophy
Counsel for the Respondent:
Mr L Kaufman
Solicitor for the Respondent:
Victorian Government Solicitor
Date of Hearing:
3 August 1999
Date of Completion of Written Submissions:
12 August 1999
Date of Judgment:
24 August 1999
SCHEDULE 1
NAME
ADDRESS
FORMER DEPARTMENT
BARRASS, Ian On court file Agriculture, Energy & Minerals BATCH, Steve
On court file
Business & Employment (Department of State Development)
BENEDICT, Simon On court file Natural Resources & Environment BERTOLUS, Kim On court file National Parks Service CLEELAND, Jason On court file Business & Employment DILLON, Kathleen On court file Business & Employment GRANNAS, Linda On court file Business & Employment HINES, Geoff On court file Treasury & Finance HUNT, Jan On court file Natural Resources & Environment LU, C.C. On court file Arts, Sports & Tourism McCUTCHEON, Gerald On court file Premier and Cabinet MORAN, Jim On court file Health & Community Services MURPHY, Kerry On court file Human Services, Child Protection PETTIFER, Geoff On court file Natural Resources & Environment PITT, Michael On court file Justice RATCLIFFE, Raymond On court file Environment Protection Authority ROBERTSON, Peter On court file Natural Resources & Environment RYAN, Rory On court file Health & Community Services RYBA, Kazimiera On court file Justice SANG, Joe On court file Natural Resources & Environment SHADDOCK, Marlene On court file Victoria Police SLATTERY, Daniel On court file Natural Resources & Environment STANFORD, Paul On court file Agriculture TIPPET, Patricia On court file Justice WATSON, Linda On court file Natural Resources & Environment WILLIAMSON, Max On court file Victoria Police WREST, Tom On court file Corrections
1
5
0