Crawford Productions Pty Ltd v Film and Television Production Association of Australia
[1982] FCA 214
•12 OCTOBER 1982
PTY. LTD.
And: THE FILM AND TELEVISION PRODUCTION ASSOCIATION OF AUSTRALIA, THE ACTORS'
AND ANNOUNCERS' EQUITY OF AUSTRALIA, GRUNDY ORGANISATION PTY. LTD. and J.N.P.
PRODUCTIONS PTY. LTD.
V. No. 34 of 1982
2 IR 466
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Northrop J.
MELBOURNE
#DATE 12:10:1982
On the true interpretation of cl.l6 _ ANNUAL LEAVE _ of The Actors Television Programs Award, l973, the expression 'full pay' in sub-cl. (a) thereof, the expression 'ordinary pay' in sub-cl. (d)(i) thereof and the expression 'total earnings' in sub-cl. (d)(ii) thereof include payments made to a performer in respect of repeat showings of a programme when those payments are included in the 'total fee' or 'total negotiated fee' paid to the employee for duties performed under the terms of an engagement entered into under cl.9 of the Award.
The applicants, Crawford Productions Pty. Ltd. and Crawford Productions (Feature Films) Pty. Ltd. are each members of the Film and Television Production Association of Australia, 'the Association', an organization of employers under the Conciliation and Arbitration Act l904, as amended, 'the Act'. Pursuant to s.ll0 of the Act, the applicants are seeking an interpretation of cl.l6(a) and (d)(i) and (ii) of the Actors Television Programs Award, l973, as amended, 'the Award'. The Award applies in all States of Australia and its Territories and is binding upon the Association and each of its members and upon the employers listed in the schedule of the Award. Crawford Productions is an employer listed in the schedule, but Crawford Productions (Feature Films) Pty. Ltd. is not. Actors' Equity of Australia, formerly known as Actors' and Announcers' Equity Association of Australia, 'Actors' Equity', an organization of employees under the Act, is a party to the Award and thus it and its members are bound by the Award. The Award covers employment in serial drama, serial comedy, series drama and series comedy (other than variety), pilots and single plays produced for television exhibition, generally see cls.5 and 6 of the Award and definitions contained in cl.4 of the Award.In their application, the applicants named four respondents, namely the Association, Actors' Equity, Grundy Organisation Pty. Ltd. and J.N.P. Productions Pty. Ltd. Each of the last two respondents are members of the Association. In addition, Grundy Rex Enterprises Pty. Ltd. is an employer listed in the schedule to the Award.
At the hearing of the application counsel appeared on behalf of the two applicants and counsel appeared on behalf of Actors' Equity. There was no appearance on behalf of the other respondents to the application.
Since l August l976, an employee entitled to the benefit of the Award is entitled to four weeks annual leave under cl.l6 of the Award, but the provisions of that clause are complicated by reason of it making provision for an entitlement to three weeks annual leave only prior to that date. Annual leave is to be given at a time fixed by the employer within three months of the date from when the right to leave has accrued. That sub-clause makes provision also for leave to be taken before the right to leave has accrued. Subject to these comments, sub-clauses (a) and (d) are set out in full. The expressions underlined give rise to the present application:
' l6 _ ANNUAL LEAVE
(a) An employee shall be allowed by his employer a continuous period of three weeks annual leave on full pay, exclusive of public holidays, once after each completed year of service (less the period of annual leave) and shall prior to going on leave be paid in addition to payment for the three weeks abovementioned a sum equal to l7 l/2% of such payment provided however that for leave becoming due and taken on or after l August l976 the length of such leave shall be extended to four weeks and that the said payment of l7 l/2% will be calculated on the amount of that leave.
...
(d) (i) Where an employee's engagement terminates and the employee has become entitled to annual leave the employer shall be deemed to have given the annual leave (or such portion of it as has not been taken by the employee) from the date of termination of the engagement and shall forthwith pay to the employee, in addition to all other amounts due to him, his ordinary pay for the period of leave due.
(ii) In respect to any period of employment which is less than twelve months, such period being computed from the date of the commencement of the engagement (or, where the employee has during the engagement become entitled to annual leave, computed from the date on which he became entitled to annual leave), the employer shall forthwith pay to the employee, in 3/49ths of his total earnings for such period of employment or in the case of leave or any part thereof becoming due after l August l976, one-twelfth of his total earnings for that period.
The interpretation sought by the applicants is set out:
'On the true interpretation of cl l6 _ ANNUAL LEAVE _ of The Actors Television Programs Award, l973 the expression 'full pay' in sub-cl (a) thereof, the expression 'ordinary pay' in sub-cl (d)(i) thereof and the expression 'total earnings' in sub-cl (d)(ii) thereof do not include payments made to a performer in respect of repeat showings of a programme or the distribution of a programme overseas.'
A reference must be made to a number of provisions contained in the the Award. Under cl.9, the whole of the terms of an engagement are required to be specified by the employer when the engagement is made, are to be confirmed in writing and to be given to the employee. It is not necessary to refer to the details of that clause. To understand the clause, reference must be made to the definitions contained in cl.4 and in particular to the words 'engagement', 'performance' and 'programme'. For present purposes it is not necessary to make further reference to those matters. Clause l0 prescribes minimum rates of pay for various classifications and with respect to various types of shows. The introductory words of the clause are set out:
' l0 _ RATES OF PAY
The minimum rates of pay to be paid by the employer to an employee for rehearsal, performance or work incidental to the production of programs shall be as set out in this clause.'
The rates of pay specified relate to a person who is engaged by the week, engaged by the day, or engaged by the hour. Clause ll prescribes the hours and spread of hours of work. Clause l2 relates to overtime and penalty rates. The Award makes provision for special allowances to be paid in specified circumstances. The Award makes no express reference to repeat showings of a programme or the distribution of a programme overseas.
Both counsel contended that in cl.l6 the expressions 'full pay', 'ordinary pay' and 'total earnings' respectively are to be construed as excluding payments made to an employee for overtime or by way of penalty payments or by way of allowances. In the light of those contentions, which in my opinion are correct, and in the absence of award provisions relating to repeat showings, it is not readily apparent how the present application comes within s.ll0 of the Act. The nature of the jurisdiction conferred by that section is discussed in Master Builders Association of Victoria v. Australian Building Construction Employees and Builders' Labourers' Federation (l98l) 35 A.L.R. 284 per Evatt and Northrop JJ. at pp.286-289 and is relevant to the present application.
In the present application counsel relied upon material contained in affidavits sworn by John Templar Chambers, the General Manager of the first applicant, on oral evidence given by him and upon material contained in an affidavit sworn by Robert Alexander, the Federal Secretary of Actors' Equity. From what appears from that material and from what was conceded by counsel, the issue of repeat showings, sometimes called repeats, replays or residuals, for many years has been a matter in controversy between employers and employees in this industry. In its simplest form the issue can be identified as follows. Employees are engaged to perform as actors in the appropriate show. The performance is recorded and the performance thereafter can be shown from the recording itself and can be shown an indefinite number of times. Each showing after the first is known as a repeat, replay or sometimes as a residual. To some extent each repeat deprives the employee of the opportunity to be engaged to perform the same show or a similar show to be used instead of the repeat, thus depriving the employee of possible future engagements. In order to lessen the controversy, a practice has developed in the industry under which the employee was paid an additional amount of money by way of compensation for repeats. In Australia, the normal practice is for this additional amount of money to be paid before the repeat showing. This practice is described as 'up front' payments and the amounts are paid at the same time as the employee is paid his fee for taking part in the performance. In many overseas countries, the additional amount is paid when the repeat is shown even though this may be many years after the actor engaged in the performance. There appears to be no uniform practice in Australia with respect to payments for the distribution of a programme overseas.
Counsel were not able to point to any legal right in the employee arising from the performance which was in the nature of a proprietary right in the record of the performance or with respect to repeat showings. Nevertheless, it was contended that the normal practice in Australia is for the written terms of engagement required by cl.9 of the Award to make special reference to repeat showings and the payment for this, known as residual payments, to be made at the same time as payment is made for the performance engaged in by the employee. In other words there are 'up front' payments for repeats. To this end and to illustrate the Australian practice, two forms of written engagement were tendered in evidence. It was conceded that these forms were typical of 'up front' payments. One form of agreement made provision for engagement by the week for a period of ten production weeks with a provision for extension of that term. Under that agreement the employee purported to grant to the employer the exclusive and unlimited television playing rights of the show. There were certain provisos applicable to that purported grant but these need not be considered. The agreement contained a clause to the effect that the employer would pay to the employee 'by way of remuneration for his or her services and for the abovementioned rights' the sum set forth in a schedule to the agreement. The agreement specified the basis by which that sum was calculated as follows:
'(a) Payment for first playing _ Basic negotiated fee
(b) Residual payment for first repeat _ 35% of basic negotiated fee
(c) Residual payment for second repeat _ 25% of basic negotiated fee
(d) Residual payment for third repeat _ l0% of basic negotiated fee
(e) Rights in the series for two playings for the rest of the world with the exclusion of a network sale in the United States of America ...'
The relevant part of the schedule is set out:
"REMUNERATION: During the Period of Engagement the Company shall pay to the Artiste the sum of $358.90 per production week made up as follows :-
(a) Basic Negotiated Fee 2ll.l0
(b) Australian rights to
three (3) replays (as per
Clause 3 (b), (c) & (d)) l47.80 ------ TOTAL NEGOTIATED FEE $358.90 ------"
The second form of agreement was for the engagement for specified days and the relevant provisions are set out:
'FEE
The company shall pay the artiste by way of remuneration for his his services and for the limited rights herein granted the sums set forth below.
(a) Payment for first playing
- BASIC NEGOTIATED FEE $50.65
(b) Residual payment for lst repeat
- 35% OF BASIC NEG. FEE $l7.73
(c) Residual payment for 2nd repeat
- 25% OF BASIC NEG. FEE $l2.66
(d) Residual payment for 3rd repeat
- l0% OF BASIC NEG. Fee $ 5.06 ------ TOTAL FEE $86.l0 x 3 PLUS HOLIDAY PAY ON GROSS
EARNINGS. (EXCLUDING RESIDUALS)"
In support of the interpretation sought by the applicants, counsel contended that in cl.9 of the Award, the expressions 'full pay', 'ordinary pay' and 'total earnings' did not include residual payments but were to be construed as referring to the basic negotiated fee only. He contended that the residual payments were made with respect to the sale of quasi proprietary rights and did not constitute part of the rates of pay of the employee. He contended further that the residual payments could not be considered as wages since they were not and could not be made the subject of industrial matters under the Act and therefore could not lawfully be made a term of an award in settlement of an industrial dispute. He relied further upon the fact that when the Award was made in l973 the Commission had determined the maximum rates set out in the Award without regard to the subsequent reproduction or showing of the performance for which the wages were prescribed.
The contentions by counsel for the applicants are rejected. The Award determines minimum rates of pay. An employer and an employee are free to negotiate any rate of pay or wage to be paid under an engagement but that rate of pay or wage must not be less than the minimum prescribed by the Award. In calculating the amount of the rate of pay or wage, the parties are free to have regard to any matter which they consider relevant. A total wage or rate of pay may include many different component parts. For many years the customary wage prescribed generally by awards made by the Commission included two basic components, namely a basic wage and a margin. In determining the amount of the margin many different factors were taken into account. The basic wage component could be varied from time to time without making a variation to the margin, and likewise the margin could be varied, vis a vis the basic wage.
In the present case, similar principles apply. When residuals are paid 'up front' the rate of pay or wage paid to the employee for work done is the total of the basic negotiated fee and the residuals. That sum is the rate of pay or wage of the employee and is paid to him for the performance undertaken by him. The differentiation between the basic negotiated fee and residual payments may be of importance for other purposes but under cl.l6 of the Award the 'total negotiated fee' or the 'total fee' paid comprise the 'full pay', 'ordinary pay' or the amount of 'total earnings'.
In the result the following interpretation is made:
'On the true interpretation of cl.l6 _ ANNUAL LEAVE _ of The Actors Television Programs Award, l973, the expression 'full pay' in sub-cl. (a) thereof, the expression 'ordinary pay' in sub-cl. (d)(i) thereof and the expression 'total earnings' in sub-cl. (d)(ii) thereof include payments made to a performer in respect of repeat showings of a programme when those payments are included in the 'total fee' or 'total negotiated fee' paid to the employee for duties performed under the terms of an engagement entered into under cl.9 of the Award.'
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