Clothing and Allied Trades Union v Snugglerite Industries Pty Ltd

[1990] FCA 493

Re: CLOTHING AND ALLIED TRADES UNION OF AUSTRALIA
And: SNUGGLERITE INDUSTRIES PTY. LTD.
Nos. V I38 of 1989 and I8 of 1990
FED No. 493
Industrial Law
34 IR 124

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Keely J.(1)

CATCHWORDS

Industrial Law - alleged breaches of award - whether "outworkers" were engaged by employer to perform work "in his or her establishment or establishments" - whether requirement that an employer apply to outworkers "the terms and conditions of employment provided by the award" obliged the employer to grant preference in the engagement of outworkers - whether breaches of award "arose out of a course of conduct" by the respondent

Industrial Relations Act 1988 s. 178

HEARING

MELBOURNE

#DATE 7:9:1990

Solicitors for Applicant : Slater and Gordon

Counsel for Applicant : Mr. M. Bromberg

Solicitors for Respondent : Swersky and McPhee

Counsel for Respondent : Mr. F. Parry

ORDER

Matter No. VI 38 of 1989

The application for the imposition of penalties upon the respondent be dismissed.

No. VI 8 of 1990

1. A penalty of $500 be imposed upon the respondent Snugglerite Industries Pty. Ltd. in respect of the 12 breaches of clause 40 of the Clothing Trades Award, 1982 found to have occurred between 8 April, 1988 and 25 October, 1989.

2. The said penalty shall be paid by the respondent to the Clothing and Allied Trades Union of Australia.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

The court has before it two applications by the Clothing and Allied Trades Union of Australia ("the Union") for the imposition of penalties for alleged breaches of the Clothing Trades Award 1982 ("the award"). At all material times the Union was a registered organisation under the Conciliation and Arbitration Act 1904 ("the previous Act") and under the Industrial Relations Act 1988 ("the Act") and is a party to the award. At all material times the respondent was a body corporate, and was bound by the award; it employed the persons named in the two amended statements of claim.

1. Both applications alleged breaches of clause 40 of the award, which is a preference clause. Broadly stated, the clause required an employer to contact the Union before engaging employees. Those persons who were members of the Union could then notify the employer of "their desire for employment by him".

2. Application VI 38 of 1989 related to "outworkers". Clause 40 relevantly provided as follows:-
   

"(a) The employer shall from 12 August 1977, observe the following procedure in engaging employees covered by

the Clothing Trades Award, 1982 to perform work in his or her establishment or establishments:

(i) A member of the union or a person holding a current certificate under section 144A of the Conciliation and

Arbitration Act may be employed at any time. ...

(ii) Any other person may be employed not less

than seven calendar days after the employer has notified the Secretary of the relevant State Branch of the union that an opportunity for employment exists and of the nature of the work involved in the employment.

...."

1. I reject the submission advanced by the applicant's counsel that there is any ambiguity in the word "establishment" in sub-clause 40(a) of the award. I accept the submission of the respondent's counsel that, in sub-clause 40(a) of the award, the words "perform work in his or her establishment or establishments" do not apply to work performed in the homes or garages of properties occupied by the outworkers. The respondent also placed reliance upon the fact that the sub-clause, in referring to the "establishment", uses the possessive case. In its submission the words "his or her establishment" were referring to work performed at premises owned, or at least occupied, by an employer i.e. in this case to the respondent's place of business at Peverill Street, Brunswick.

2. In matter number VI 38 of 1989 I find that the outworkers did not work at the "establishment" of the respondent employer, within the meaning of sub-clause 40(a) of the award. It follows that the respondent employer was not obliged to notify "the Secretary of the relevant State Branch of the union that an opportunity for employment exists ...".

3. The applicant's counsel also sought to rely on clause 27 of the award, which provided for the granting of permits to outworkers and for various entitlements of such outworkers (see also clause 27B of the award, which was inserted, by variation, on 7 October 1987, and came into force on 5 November 1987). Sub-clause 27(b)(vii) relevantly provided that an employer bound by the award shall apply to outworkers "the terms and conditions of employment provided by the award excluding" certain specified clauses. Clause 40 was not excluded.

4. The applicant's counsel argued that the preference provision in clause 40 of the award was one of the "terms and condition of employment provided by the award" - the words used both in sub-clause 27(b)(vii) and in clause 27B(xvi) (the variation which came into force in November 1987 i.e. after the occurrence of five of the alleged breaches but before the remaining four). I accept the submission of the respondent's counsel that clause 40 imposed upon the employers an obligation as to their "method of engagement" of employees (i.e. before there was a contract of employment) and was not the prescription of a term or condition of employment. Having been unable to accept either of the submissions by the applicant's counsel, it follows that in my opinion the nine breaches of the award alleged in matter number VI 38 of 1989 have not been established and that application must be dismissed.

5. The application in matter number VI 8 of 1990 related to twelve employees and made similar allegations to those in VI 38 of 1989, except that the employees in question worked at the employer's place of business at Peverill Street, Brunswick. Accordingly the submissions by the respondent's counsel, which were upheld in that matter, do not assist it in matter VI 8 of 1990. The respondent's counsel accepted that the evidence before the court indicated "that the employer did not notify the State Secretary that an opportunity for employment existed and of the nature of the work" i.e. before the twelve persons were employed. On the evidence I find that the twelve breaches of the award occurred between 8 April 1988 and 25 October 1989. I am unable to accept the respondent's submission that "at its highest, this is a technical breach of the award."

6. Mrs. Zappelli, who was both a director and the secretary of the respondent company, gave evidence that she was unaware of the existence of the preference clause until a representative of the Union pointed it out to her. Although her evidence was not clear as to the date when that occurred, I am not satisfied that it was before the date of the last breach alleged. In the circumstances I treat the respondent as having been unaware of its obligations under clause 40 at the time of each of the twelve breaches found to have occurred. Between 15 November 1989 and 9 February 1990 the respondent wrote to the Union on several occasions, stating that it had "vacancies ... for experienced overlockers and plain machinists". Those letters were tendered by the respondent, apparently to show that, after the breaches, it attempted to comply with the award. However, in my opinion their terms were not such as to constitute compliance with its obligation under clause 40 of the award.

7. The court heard submissions from the parties on the question of whether s. 178(2) of the Act, and s. 119(1A) of the previous Act, applied so as to require the court to treat the twelve breaches as constituting "a single breach of the term (of the award)". Section 178(2) provided as follows:
   

"Subject to sub-section (3), where:

(a) Two or more breaches of a term of an award or order are committed by the same organisation or person; and

(b) the breaches arose out of a course of conduct by

the organisation or person;

the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term."

1. The respondent's counsel submitted that the provisions of s. 178(2) (and also s. 119(1A)) applied to these twelve breaches. He submitted that the breaches, which took place over a period of 18 months, had occurred not because of a deliberate policy by the respondent to breach the award but because of its non-awareness of the requirements of the award. It was, in his submission, clearly a course of conduct over that period.

2. The applicant's counsel submitted that the respondent's action in respect of the engagement of each employee who was engaged constituted a separate breach of the award. He submitted that, given the period of time over which the breaches occurred, and the fact that they involved different employees, the breaches did not arise "out of a course of conduct" by the respondent.

3. The court was referred to various decisions concerning s. 178(2) or its predecessor s. 119(1A). They included the decision of the Full Court in Quinn v Martin (1977) 31 FLR 25, my decision in Lynch v Buckley Sawmills Pty. Limited (1984) 3 FCR 503, and the decision of Pincus J. in McGarry v School and Office Uniforms Pty. Ltd. (1985) 12 IR 73 at 76.

4. Having considered those decisions, and the submissions of both counsel in the present case, I have concluded that the submission advanced by the respondent's counsel in the present case is correct and that the court is required to treat the twelve breaches of clause 40 of the award as constituting "a single breach" of that clause. Accordingly only one penalty can be imposed by the court.

5. Section 178(4) provides that the maximum penalty that may be imposed is $1,000. The applicant made no allegation of any previous award breaches by the respondent. Mrs. Zappelli frankly admitted that she was unaware of the respondent's obligations under clause 40. However ignorance of the obligation is no excuse. It is perhaps desirable to reiterate that "it is important that the respondent - and other employers bound by the award or by other awards under the Act - understand the importance of complying with an award" (see Lynch's Case, supra, at p. 508). In all the circumstances I have concluded that the proper penalty is $500.

6. I do not accept the submission of the respondent's counsel that the court, in exercising its discretion under s. 356 of the Act, should order that the penalty be paid into the Consolidated Revenue Fund. Because of the importance to the Union of the preference clause which has been inserted in the award by the award-maker, in my opinion there exists a strong case for the court to order that the penalty be paid to the Union; in expressing that opinion, however, I am not suggesting that any such particular reason must be found before the court will so order. In each case the court will consider all relevant circumstances. In my opinion it will normally - perhaps always - be relevant that the applicant has expended a substantial amount of money, and the time of its officers, in bringing the proceedings. The order will be that the penalty be paid to the Union.