Belton v General Motors-Holden's Limited

[1984] HCA 54

HIGH COURT OF AUSTRALIA

Mason A.C.J., Murphy, Wilson, Deane and Dawson JJ.

LESLIE BELTON v. GENERAL MOTORS-HOLDEN'S LIMITED

(1984) 154 CLR 632

24 August 1984

Constitutional Law (Cth)

Constitutional Law (Cth)—Inconsistency between Commonwealth and State laws—State statute providing for relief for employees whose dismissal harsh or unreasonable—Commonwealth award providing for retrenchment payments—Termination of employment provision of award expressed to be subject to State statute—Whether award provision applies to termination by retrenchment—The Constitution (63 &64 Vict. c. 12), s. 109—Industrial Conciliation and Arbitration Act 1972 (S.A.), s. 15(1)(e).

Decision

MASON A.C.J., MURPHY, WILSON, DEANE and DAWSON JJ. This appeal, which is brought from a decision of the Full Court of the Supreme Court of South Australia, raises the question whether s.15(1)(e) of the Industrial Conciliation and Arbitration Act 1972 (S.A.), as amended ("the State Act"), is by virtue of the General Motors-Holden's Limited (Part 1) General Award 1982 ("the 1982 Award") made in accordance with the provisions of the Conciliation and Arbitration Act 1904 (Cth) ("the Commonwealth Act") inconsistent with that Act and rendered invalid to the extent of the inconsistency by s.109 of the Constitution.

2. The appellant was one of sixty-four employees retrenched by the respondent from its plants at Elizabeth and Woodville in South Australia as a result of a decision made in March 1983 to rationalize its production of motor vehicles in the light of declining market trends. In carrying out the retrenchments, the respondent relied on the provisions of cl.6(b) of the 1982 Award. The appellant thereupon commenced proceedings in the Industrial Court of South Australia under s.15(1)(e) of the State Act for a determination that his dismissal was harsh, unjust or unreasonable and for an order directing the respondent to re-employ him in his former position on terms not less favourable than if he had not been dismissed from his employment and for payment of wages lost.

3. The respondent then sought in the Supreme Court of South Australia relief by way of prohibition directed to the Industrial Court. By majority (Wells and Bollen JJ., Zelling J. dissenting), the Full Court held that the Industrial Court lacked jurisdiction to hear the appellant's application on the ground that s.15(1)(e) of the State Act was inconsistent with the Commonwealth Act to the extent that it sought to operate in respect of the retrenchment of an employee in accordance with cl.6(b) of the 1982 Award. The Court made absolute an order nisi prohibiting the Industrial Court from proceeding with the appellant's application other than for the purpose of determining whether the appellant was retrenched in accordance with the provisions of cl.6(b) of the 1982 Award. The order of the Court was expressed to be subject to the proviso that if the appellant was not retrenched in accordance with cl.6(b) the order should be of no effect.

4. Section 15(1)(e) of the State Act confers jurisdiction on the Industrial Court:

"to hear and determine any question as to whether the dismissal from his employment of an employee, not being an employee who has under any Act or law a right of appeal or review against his dismissal, was harsh, unjust or unreasonable and the Court may, if it thinks fit, direct the employer of that employee to re-employ that employee in his former position on terms that are not less favourable to the employee than if he had not been dismissed from his employment ... ".

5. The relevant provisions of the 1982 Award, in addition to cl.6(b), are contained in cll.3(b), 6(a), 6(f) and 6(i). Clause 3(b) is in the following terms:

"3 - INCIDENCE OF AWARD

.....

(b) From the date of coming into operation of this award any other award or determination or ordinance or state Act or industrial provision which might otherwise have applied to employees covered by this award shall be as a term and condition of this award excluded from applying to such employees and the company. Provided however, that this subclause shall not affect the operation of the Vehicle Industry (Long Service Leave) Award, 1977 as amended from time to time. And further provided that this subclause shall not affect the operation of section 15(1)(e) of the Industrial Conciliation and Arbitration Act 1972-1974 of the State of South Australia or any order made thereunder (and shall be deemed never to have affected such operation)."

Clause 6 is headed "6 - CONTRACT OF EMPLOYMENT". Clauses 6(a) and 6(b)(i) and (ii) provide:

"(a) Except as hereinafter provided employment shall be by the week. An employee not specifically engaged on a part-time basis or as a casual employee shall be deemed to be employed by the week.

Permanent Employment

(b) All employees, unless part-time or casual, shall be regarded as permanent employees. Permanent employees shall be entitled to notice or payment or forfeiture in lieu of such notice in accordance with subclause (f) hereof. Where retrenchments occur, notice shall be given in accordance with the following:

Retrenchments

(i) "Retrenchment" means the situation where the company deems that it has an excess of employees because of a reduction in work available.

(ii) Where an employee with at least twelve months' continuous service with the company is to be retrenched the employee shall be entitled to the following notification of termination of service:"

6. There follows a table which provides for a period of notice expressed in weeks related to years of service. The period of notice increases by two weeks for every additional year of service. It commences with "One year but less than 2 years service 4 weeks notice" and ends with "20 years but less than 21 years service 42 weeks notice". The table is followed by the words "Etcetera, based on the formula of two weeks' severance pay, plus two weeks' pay for each year of service" and the proviso:

"... that in no case shall an employee receive an amount in redundancy pay exceeding that which he would have received if he had remained in employment until normal retirement."

Clause 6(b)(iii) then provides:

"(iii) The company shall pay the employee an amount equal to the wages the employee would have received for ordinary hours occurring between the termination of employment and the expiry of the notice required by paragraph (ii) above."

Clause 6(f) so far as it is material, provides:

"Termination of Employment

(f) (i) Employment shall be terminated by a week's notice on either side given at any time during the week or by the payment or forfeiture of a week's wages as the case may be. Such notice may be given at any time but shall expire at the ordinary finishing time of a working day or shift. Notice given before the commencement of a day's work or shift shall be deemed to have been given at the end of a previous day's work or shift and notice given during a day's work or shift shall be deemed to be given at the end of that day's work or shift. This shall not affect the right of the company to dismiss an employee without notice for malingering, inefficiency, neglect of duty or misconduct and in such cases wages shall be paid up to the time of dismissal only.

..... "

Clause 6(i) provides:

"Saving provision

(i) The provision as to termination of employment by the company contained in this clause shall, in the case of employees employed within the State of South Australia be subject to the operation of the provisions of section 15(1)(e) of the Industrial Conciliation and Arbitration Act 1972-1974 of that State. In the case of an employee ordered to be re-employed in his or her former position pursuant to the provisions of that section, the conditions of employment upon such re-employment shall not be less favourable to the employee than would have been the case if the employee had not been dismissed from employment."

7. The question of inconsistency between an award made under the Commonwealth Act and a State law and the effect of the presence of s.65 of the Commonwealth Act has been dealt with by this Court on a number of occasions (e.g. Ex parte McLean (1930) 43 CLR 472, at pp 483-484; T.A. Robinson &Sons Pty. Ltd. v. Haylor (1957) 97 CLR 177, at pp 182-183; Metal Trades Industry Association of Australia v. The Amalgamated Metal Workers' and Shipwrights' Union (1983) 57 ALJR 639, at pp 642-643, 645-646). It is accepted by the parties that the present case is to be approached by asking whether, in making the 1982 Award, the Conciliation and Arbitration Commission ("the Commission") has exercised its power under the Commonwealth Act to completely prescribe the rights and duties of the respondent and its employees in the case of retrenchment under cl.6(b) to the exclusion of s.15(1)(e) of the State Act. The issue therefore turns upon the interpretation of the 1982 Award.

8. The appellant's case, is that cl.6(i), when it refers to s.15(1)(e) of the State Act, manifests a specific intention to leave the operation of the section unaffected. On the other hand the argument of the respondent, based on an analysis of the language and history of the relevant provisions of the 1982 Award, is that the specific saving provision in cl.6(i) does not operate to preserve an employee's right to invoke s.15(1)(e) when he is retrenched, in which event his entitlements are regulated solely by cl.6(b).

9. The final sentence of cl.3(b), and a provision in terms substantially identical to cl.6(i) except for its use of the plural "provisions" rather than the singular "provision" in the opening phrase, were introduced into The General Motors-Holden's Pty. Ltd. (Pt. 1) General Award 1974 ("the 1974 Award"), a predecessor of the 1982 Award, by a variation made by the Commission following the decision of the Full Court of the Supreme Court of South Australia in Reg. v. The Industrial Court of South Australia; Ex parte General Motors-Holdens Pty. Ltd. (1975) 10 SASR 582. In that case it was held that s.15(1)(e) of the State Act was inconsistent with cl.6(c)(i) of the 1974 Award, which was in terms identical to cl.6(f)(i) of the 1982 Award, and was thereby rendered invalid to the extent of the inconsistency by s.109 of the Constitution. The 1974 Award contained no provision corresponding precisely with cl.6(b) of the 1982 Award although cl.6(e) of the 1974 Award dealt with retrenchment for redundancy in broadly similar terms to cl.6(b) of the 1982 Award but without any equivalent to the existing paragraph (iv) dealing with plant close down and employee relocation. Redundancy was defined to exclude retrenchment as a result of fluctuations in production activity due to changes in the market. The jurisdiction of the Commission to vary the Award was upheld by this Court in Reg. v. Clarkson; Ex parte General Motors-Holden's Pty. Ltd. (1976) 134 CLR 56. Further awards prior to the existing 1982 Award were made in 1976 and 1978. Clause 6(b) had its origin in the 1978 Award where it appeared in the 1982 form, once again without the provisions relating to plant close down and employee relocation.

10. It is in this context that the respondent submits that the expression "provision as to termination" in cl.6(i) was intended to refer specifically to cl.6(f) which is headed "Termination of Employment" and that the expression does not refer to termination of employment in consequence of retrenchment, retrenchment being dealt with in cl.6(b). In support of its submission the respondent points out that since its inclusion in the 1974 Award the wording of cl.6(i) has remained virtually unchanged notwithstanding that the special provisions on redundancy have given way to the provision on retrenchment in cl.6(b), and argues that it could not have been the intention of the Commission to subject the machinery of retrenchment in cl.6(b) to review under s.15(1)(e). The respondent argues that although the word "termination" occurs several times in cl.6(b), it is entirely incidental to the retrenchment machinery and that its presence for the purposes of cl.6(i) is equivocal. It further argues that the one substantial change which has occurred in the wording of cl.6(i) since its original inclusion in the 1974 Award, the change of the word "provisions" to "provision", serves to confirm the Commission's intention to refer to cl.6(f) of the 1982 Award rather than to all methods of termination.

11. We are unable to accept the respondent's arguments. We do not read cl.6(b) as conferring on the employer a right to terminate employment. Clause 6(a) provides that employment shall be by the week. Clause 6(b) then provides that all employees, other than part-time and casual employees, shall be regarded as permanent employees and that they shall be entitled to notice or payment or forfeiture in lieu of notice in accordance with cl.6(f). This provision looks to that subclause as the source of the employer's right to terminate and makes no independent provision in that respect. Clause 6(b) then goes on to provide that in the case of retrenchment notice shall be given in accordance with the detailed stipulations which we have summarized. The primary purpose of cl.6(b) is to provide, within the framework of cl.(f), an entitlement to an increased period of notice, with an increased entitlement to payment in lieu of notice where the employment of an employee whose period of service exceeds one year is terminated by his employer by reason of "retrenchment" as defined. If we regard the subclause in accordance with its terms, as fixing the period of notice to which an employee is entitled, the point remains that it is cl.6(f) that is the source of the right to terminate and that cl.6(b) is making provision for the entitlement of employees when that right is exercised in consequence of retrenchment. Retrenchment and termination of employment are not mutually exclusive or opposed concepts. Generally speaking, termination of employment is either on notice or for cause - both species are dealt with in cl.6(f). Termination in case of retrenchment is nonetheless termination on notice, retrenchment signifying that the termination takes place or has taken place because the employer deems that it has an excess of employees because it has a reduction in work available.

12. The relationship between cl.6(b) and cl.6(f), as we have thus explained it, demonstrates that cl.6(f) necessarily governs the termination of an employee's employment generally and without qualification, including termination in consequence of retrenchment. This is because cl.6(f), as its heading "Termination of Employment" indicates, is the exclusive source of the employer's right to terminate.

13. This conclusion makes it unnecessary for us to consider other arguments which were advanced by the parties. However, in passing we should mention that we do not agree with the suggestion that the jurisdiction conferred by s.15(1)(e) of the State Act can have no practical operation in the case of a retrenched employee. What the Industrial Court can do in the exercise of its jurisdiction at the instance of a retrenched employee is not a matter for our determination and it is unnecessary for us to consider the difficulties which the appellant might face on the hearing of his application by the Industrial Court and which are referred to by Zelling J. in his judgment in the Full Court. It is enough for us to decide that the Award leaves the operation of the State Act on foot.

14. In the result we would allow the appeal and set aside the order of the Full Court.

Orders

Appeal allowed.

Order of the Full Court of the Supreme Court of South Australia set aside and in lieu thereof order that the order nisi for prohibition be discharged.

Order that the respondent pay the costs of the appellant
in this Court and in the Supreme Court.