Cliffard Jarrad v Silver Top Taxi Service

[1980] FCA 52

Re: CLIFFORD JARRAD
And: SILVER TOP TAXI SERVICE (1980) 43 FLR 1
No. V33 of 1979
Industrial Law - Conciliation and Arbitration

COURT

IN THE FEDERAL COURT OF AUSTRALIA

INDUSTRIAL DIVISION
VICTORIAN DISTRICT REGISTRY
Sweeney(1), Evatt(1) and St. John(1) JJ.

CATCHWORDS

Industrial Law - proceedings for penalty under s.119 - appeal from single judge - breach of award - employees employed to do work for which rates fixed in award and not paid their wages for such work - deductions from wages pursuant to authorities given by employees - deductions for shortages incurred in course of employment as petrol attendant - interpretation of clause in award authorising deductions for "a lawful purpose specified in the authority" - meaning of "lawful" - whether authority specified the purpose for which the deduction is made and whether that purpose is a lawful one

- Vehicle Industry Repair, Services & Retail Award, 1976

- Conciliation and Arbitration Act, 1904 (C'wealth), s.119

- Truck Acts of various States

- Labour & Industry Act, 1958 (Vic.), s.198

- Truck Act (N.S.W.) s.10

- Industrial Arbitration Act, 1900 (N.S.W.) ss.20, 92

Conciliation and Arbitration - Alleged breach of award by employer - Deductions from wages due to employees under award - Authorities given by employees for deductions - Whether authorities specified lawful purpose - Meaning of "lawful purpose" - Construction of authority - Interpretation of award - Meaning of "shortages" - Meaning of "reimburse" - Insufficient facts before trial judge - Conciliation and Arbitration Act 1904 (Cth), s. 119 - Truck Act, 1900 (N.S.W.), s. 10 - Industrial Arbitration Act, 1900 (N.S.W.), ss. 20, 92 - Labour and Industry Act 1958 (Vic.), ss. 3, 198 - Vehicle Industry Repair, Services and Retail Award 1976 (Cth).

HEADNOTE

Clause 7 (g) of the Vehicle Industry Repair, Services and Retail Award 1976 ("the award") provided that: "An employer may deduct from moneys due to an employee such amount as is authorized in writing by the employee for a lawful purpose specified in the authority."

The respondent, an employer bound by the award, made deductions from the wages of employees who had given authorities in writing in the following terms: "It is hereby agreed that I shall reimburse the company for any shortages incurred in the course of my duty as a petrol attendant and the company is authorized to deduct such shortages from my weekly salary."

The appellant by a summons under s. 119 of the Conciliation and Arbitration Act 1904 sought the imposition of a penalty on the respondent for an alleged breach of the award consisting of the failure to pay those employees the wages fixed by the award. The summons was dismissed.

On appeal,

Held: Per curiam - (1) Clause 7 (g) of the award enabled deductions to be made for any purpose that was not contrary to law.

(2) (a) The authorities had been properly given under cl. 7(g) of the award for a lawful purpose which was specified - to reimburse the employer in respect of moneys received by the employee for which he was accountable to the employer. Reading v. Attorney-General, (1951) AC 507, applied. (b) If the only deductions that had occurred were for the purposes stated in the authorities no breach of the award would have been shown.

(3) Although on the facts before the trial judge his decision was correct: (a) the award could not be interpreted nor the authority construed without specific facts including evidence of industry practices; and (b) to perform those two functions on the evidence before the trial judge was a hazardous task as it was not clear whether the shortages in issue referred to instances where money had actually been received and was not accounted for or whether they comprehended instances where money had not actually been received, although it should have been.

Accordingly the proper course was to order that the appeal be allowed and the matter be re-tried.

HEARING

Melbourne, 1980, March 12-13; April 29. #DATE 29:4:1980

APPEAL.

Appeal from a decision of Keely J.

The facts appear from the headnote and the judgment.

D. M. Ryan, for the appellant.

R. J. Spicer, for the respondent.

Cur. adv. vult.

Solicitors for the appellant: Holding, Redlich & Co.

Solicitors for the respondent: W. Carew Hardham & Co.

T. J. GINNANE

ORDER

1. That the appeal be upheld and the order dismissing the summons set aside.

2. That there be a new trial of the summons.

Appeal allowed. New trial ordered.

JUDGE1

This is an appeal by Mr. Jarrad, an officer of an organization, namely the Vehicle Builders Employees' Federation of Australia, Victorian Branch, against an order of His Honour Mr. Justice Keely of 14 November, 1979. The proceedings before His Honour sought the imposition of a penalty under Section 119 of the Commonwealth Conciliation and Arbitration Act, 1904 ("the Act"). The application was dismissed.

The breaches alleged were in respect of employees of the Silver Top Taxi Service who were employed under the Federal Vehicle Industry Repair, Services and Retail Award, 1976, ("the Award"). The allegation was that the employees were employed to do work for which rates had been fixed in the Award and that they were not paid their wages for such work.

Admissions were made that the appellant was an officer of the organization, that the respondent was bound by the Award and that at relevant dates the employees were employed under the Award on work to which the Award applied. It was common ground that the employees were entitled for the relevant periods to wages at the rates fixed by the Award.

The dispute, however, concerns deductions made from the wages of the said employees. The deductions were made pursuant to authorities which had been given by each of the employees. In each case an authority had been given in writing in the following terms:
"It is hereby agreed that I shall re-imburse the Company for any shortages incurred in the course of my duty as a Petrol Attendant and the Company is authorized to deduct such shortages from my weekly salary. The Company in turn agrees to refund to me all monies paid which are in excess of my daily sales sheet."

The real issue arises under Clause 7(g) of the Award. Clause 7 so far as is relevant to this appeal provides as follows:
"(a) All wages shall be paid weekly except where it has been the practice to pay fortnightly. Such wages shall be paid in cash, provided that with the authority in writing of the employee payment may be made either by cheque or by payment into a bank account specified in the authority; provided further that such authority may be withdrawn at any time by not less than seven day's notice in writing to the employer.

(b) An established pay day and/or pay period shall not be changed except by not less than four week's notice by the employer to his employees.
. . .
(g) An employer may deduct from moneys due to an employee such amount as is authorised in writing by the employee for a lawful purpose specified in the authority.

(h) On or prior to pay day an employer shall state to each employee in writing the total amount of wages to which he is entitled, the amount of overtime included therein, details of any deductions made therefrom and the net amount being paid to him."

The employees were employed as driveway attendants; they worked shifts and their duties were the sale of petrol and oil. At the beginning of each shift the attendant checked with the outgoing employee the readings on the bowsers showing amounts of petrol and showing the cash equivalent. As each sale was made each bowser recorded the amount of petrol sold and the price involved. At the commencement of his shift the attendant had an amount of cash for use for change, etc. At the end of the shift the attendant checked with the oncoming employee and recorded the amounts of petrol recorded as having been sold from a particular bowser and the amount of the money equivalent in respect of sales from that bowser. He recorded these and was able to check the amount of money shown by the bowsers as having been received. He then checked cash he held and recorded this amount together with the sum which he had received at the start of his shift for use as change, etc. Any shortfall in the amount shown from the records as received and that actually handed over by him was treated as a shortage except in a case where there may have been a malfunction of a bowser. Any excess which he had was treated as moneys in excess of the daily sales sheet.

It was suggested before us that the word "shortages" had acquired a particular meaning in the industry but there was no evidence of this before His Honour and of course none before us. While we do not seek to deny that a word may acquire a special, almost technical meaning in a trade, this meaning must be proven and we think this has not been done.

The case turned primarily on the meaning of Clause 7(g). Before His Honour Mr. Justice Keely it was argued that Clause 7(g) was to be treated as subordinate to Clause 7(a) and to Clauses such as Clause 10(a), Clause 12, Clause 14(b) and Clause 16(a), dealing with rates of payment for various classes of employees. This submission was that no deduction could be made which would result in an employee receiving less in respect of each pay period than the amounts so specified. His Honour rejected this submission and we agree with him.

Mr. D.M. Ryan, counsel for the appellant also argued that Clause 7(g) was inserted to cover the same area as had been previously covered by the Truck Acts in various States. Consequently, he argued we should so interpret the word "lawful" that it exclude any of the types of deductions which would not have been permissable under a Truck Act.

The Award has application in the States of New South Wales, Victoria, Queensland, South Australia and Tasmania. Examining the Truck Act provisions in Australian States, it appears that in the State of Victoria the relevant provisions now appear in Section 198 of the Labour and Industry Act, 1958. That Section provides that:
"Where any employer employs any person on work for which the lowest prices or rates have been fixed in a determination, such employer shall be liable to pay and shall pay in full in money without any deduction, other than a deduction permitted to be made by virtue of sub-section (1B), to such person the price or rate so determined."

Sub-section (1A) provides for payment by cheque in some circumstances and sub-section (1B) provides that:
"From any moneys payable under sub-section (1), by an employer to a person employed by him, the employer may deduct and pay on behalf of the employee any payment authorized in writing by the employee to be so deducted and paid."

The Act provides that a determination means one made pursuant to the Labour and Industry Act (S.3).

In the State of New South Wales a Truck Act remains in force but it has been very substantially amended since its introduction in 1900. It provides for payment of wages in money only and not otherwise and also allows deductions to be made in certain specified circumstances set out in Section 10 as amended. Regard must also be had to the Industrial Arbitration Act, 1900 of New South Wales which sets up machinery for the making of awards in industries and callings in New South Wales. It gives general powers under Section 20 of the Conciliation Committees and in subsequent Sections to the Industrial Commission in a variety of industrial matters.

Section 92 covers in detail the recovery of wages under awards or industrial agreements and provides that where an employer employs a person to do work for which the price or rate has been so fixed he is laible to pay in full in money to such person the price or rate so fixed without any deduction except such as may be authorized by such Award or industrial agreement or a permit issued under the Act.

Similar provisions are made where an Award or agreement fixes other amounts to be paid by an employer to an employee. It has been held in New South Wales that under the Industrial Arbitration Act and at a time when the Truck Act was in its present form, that an Award could be made authorising the deduction from wages to provide for deductions from the wages of employees for damages to or loss of protective clothing due to negligence or misuse by employees. (Dispute Re Protective Clothing - Kaiser-Walsh-Perini-Raymond, 1958 N.S.W.A.R. 393.)

The position clearly is then that the Victorian Labour and Industry Act has application only to employees working under State Awards and determinations, as does the New South Wales Industrial Arbitration Act. There appears now to be no Truck Act in the old English form in the State of Victoria and we do not know the position in other States. The provisions in New South Wales and Victoria are different.

It seems to us impossible to reach a view that the word "lawful" should be given a different construction according to the position to be found in the State legislation based on the Truck Act in different States.

It is clear then that The Victorian provisions do not apply to employees under this Award. Moreover, although the Truck Act in New South Wales still remains in force, it is inconsistent with the Award provision, and hence invalid to that extent.

While it might at first glance seem to cover a very wide field, the word "lawful", in our view means "not contrary to the law". We think that in dealing with persons between whom a contract of employment exists, this is a reasonable meaning and not one likely to lead to difficulty and confusion. It has long been the position that an employee working pursuant to a contract of employment is, on the one hand, required to obey a lawful command, but may not be required under a contract of employment to do an unlawful act. No particular problem seems to have arisen from these terms either express or implied in contracts and we think then that the word "lawful" has the meaning "not contrary to the law". So interpreted, a purpose to require work to be performed at a rate less than the Award wage or without payment of penalty rates or of overtime would not be a lawful purpose.

The next question which arises is whether the authority specifies the purpose for which the deduction is made and whether that purpose is a lawful one. It was agreed that there was a sufficient specification of a purpose, that purpose being to reimburse the employer for shortages incurred in the course of the employee's duty as a Petrol Attendant. To reimburse means to make good to the Company the moneys it should have received but did not and the reimbursement is to be by deduction.

The shortages must have occurred in the course of the employee's duty as a Petrol Attendant. The phrase "in the course of his duty" involves more than a temporal connection but requires the shortage to have arisen by reason of some action or actions which the employee was employed to perform and either did not perform or did not perform properly.

There is authority that a servant who receives property or money by his employment is accountable therefore to his master as principal. See Reading v. Attorney General (1951) 1 A11 E.R. 617 and particularly per Lord Oaksey at Page 621 when his Lordship said:
"I do not think there is any difficulty in imputing to a servant an implied promise that he will account to his master for any moneys he may receive in the course of his master's business, or by the use of his master's property, or by the use of his position as his master's servant. There is nothing illegal in such a promise. On the contrary, in substance it is the basis for the equitable principle that an agent is accountable for profits made in the course of his agency without the knowledge and consent of his principal and no less accountable if the profits arise out of corrupt transactions. An agent is bound to know the law, and, therefore, when he enters into a contract of agency he impliedly undertakes to be accountable for any such profits."
and Corporation of London v. Appleyard (1963) 2 A11 E.R. 834 at 839.

What results from a consideration of the Award clause and the authority is that the deduction which may be made is to reimburse the employer in respect of moneys received by the employee for which he was accountable to the employer.

During argument instances were discussed of possible liability of an attendant in the case of robbery at the petrol station, but it could not in our view be said that the robbery caused a shortage to be incurred in the course of his duty. Similarly there was discussion of a possible requirement that an employer might require reimbursement for a bottle of whisky or the like. But none of these seem to us to fall within the terms of the authority.

The authority does not of course allow a deduction for the purpose of enabling the employment of that employee at a rate less than the Award rate and if the purpose specified amounted to a purpose to commit a breach of the Award and so of the Act in that manner then it clearly would not be lawful.

In our view, the word "lawful" has the meaning which we have discussed earlier and the authority was properly given under sub-clause 7(g) for a lawful purpose which was specified. We are of the opinion that if the only deductions were for the purpose stated in the authority, no breach of the Award would be shown.

Before Keely J. the parties took the course of, on the one hand, the present appellant submitting that any deduction which resulted in a payment less than the minimum Award rate was not permitted under sub-clause 7(g). The present respondent dealt with that submission and reserved his rights in the event of His Honour finding that some deductions achieving this result might be justified and others not. The case finally put for the respondent was that deductions were permissible where a shortage of money had occurred in circumstances which were entirely within the control of the employee from whom the deduction was made.

Construing the Award and the authority on such facts as were put before Keely J. is a hazardous task. "Shortages" in the authority may not mean simply what appears as a deficiency in money as a matter of calculation based on the difference between the gallonage of petrol pumped out and the retail price for such gallonage. The word "re-imburse", in its ordinary meaning, means "put back into the purse". In its context it could limit "shortages" to those instances where money has been received on behalf of the employer and not accounted for by the employee and would not comprehend money not actually received but which should have been. On the other hand, it may mean that the employee is bound to produce to the employer an amount equivalent to the retail price of the petrol pumped out during his shift whether all that amount has been received or not. Industry practice is often reflected in awards. Sometimes that practice is embodied in the award in an otherwise cryptic phrase which is meaningless unless the background practice is the subject of evidence. In the instant case, industry practice at the time of the making of the Award or its amendment may well influence the meaning ultimately to be attached to the words "shortages" and "re-imbursement".

Again the phrase "lawful purpose" presents difficulty when the question "whose purpose?" is asked. Looking only at the terms of the Award, the context would seem to indicate that the "purpose", or as it is defined in the Shorter Oxford Dictionary "the object to be achieved" would be the employee's purpose or object. Payment of a contribution to a medical benefits fund springs readily to mind. This phrase "lawful purpose" is in a context of an employee dealing with his money in his employer's hands in a way which excuses the employer from payment of that money, covered by the authority to the employer. It does not appear that it is an employer's purpose that is contemplated. However, industry practices may provide the key to resolving this difficulty. It may well be that against the background practices, what is really intended is that the employee is liable for the difference between the retail price of the gallonage pumped out during the shift and the amount in the till.

Construction of documents and interpretation of awards can only be made by considering their meaning in relation to specific facts. It is futile to attempt to interpret the Award without them. It is clear however that upon such facts that were before Keely J. his decision was correct.

In these circumstances we think the proper course for us to take is to order that the appeal be allowed and the matter be retried.