Federated Municipal & Shire Council Employees Union of Australia v City of Northcote

[1990] FCA 543

Re: THE FEDERATED MUNICIPAL AND SHIRE COUNCIL EMPLOYEES UNION OF AUSTRALIA
And: THE CITY OF NORTHCOTE
No. V I25 of 1990 FED No. 543
Industrial Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Keely J.(1)

CATCHWORDS

Industrial Law - alleged breaches of award by paying less than full wages - imposition of work bans - employer directing employees to perform work the subject of the bans - employees refusing to undertake "banned" work because of the bans but willing to perform other work - employer not permitting employees to perform other work, directing them to leave work place and refusing to pay wages - whether each employee's failure to work was "as a result of his own actions"

Industrial Relations Act 1988 s. 178

Local Governing Authorities, Employees (Victoria) Award 1984 cl. 13

Gapes v Commercial Bank of Australia Ltd. (1979) 41 FLR 27

Australian Bank Employees Union v National Australia Bank (Gray J. - unreported, delivered 8 March, 1989)

HEARING

MELBOURNE

#DATE 3:10:1990

Solicitor for Applicant: Slater and Gordon

Counsel for Applicant: Mr. W. Haylen and Mr. M. Bromberg

Solicitor for Respondent: Mallesons Stephen Jacques

Counsel for Respondent: Mr. T. Ginnane

ORDER

1. The application for a penalty be dismissed.

2. Liberty reserved to the respondent to apply for costs.

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

JUDGE1

The Federated Municipal and Shire Council Employees Union of Australia ("the union") by its amended application has applied, under s. 178 of the Industrial Relations Act 1988 ("the Act"), for the imposition on the City of Northcote ("the respondent") of a penalty for alleged breaches of terms of the Local Governing Authorities, Employees (Victoria) Award 1984, as varied ("the award"). It has alleged that the respondent failed to pay to each of six of its employees, namely, Messrs. Keith Bradshaw, Terrence Burke, Peter Nott, Glen Wilson, Kenneth Thompson and Lindsay Downie ("the six employees"), the full amounts to which they were entitled under the award in respect of each of two periods ("the relevant periods").

1. On the evidence and the admissions made by the respondent the court finds that at all material times:-
   1. The union was an organisation of employees within the meaning of the Act.
   2. The respondent was a body corporate pursuant to the Local Government Act 1958 (Victoria).
   3. The union and the respondent were bound by the award.
   4. Each of the six employees was a member of the union.
   5. Each of the six employees was employed by the respondent as a weekly employee to perform work which was subject to the provisions of the award.
   6. Each of Messrs. Bradshaw, Burke, and Wilson was employed as a driver, Mr. Nott was employed as a garbage attendant and Messrs. Thompson and Downie were both employed as labourers.
   7. By letter dated 22 May 1990 the Victoria Division of the union informed the respondent (a) of a meeting of members held that day and (b) of the existence of "bans and limitations within the City" in respect of nine specified areas of work, including "(2) ... no litter bin collection within the City", "(3) Station and High Streets totally banned by all members", "(4) Tip is banned by all members" and "(6) Commercial garbage trucks and members ban the rear of High and Station Streets". Some of the nine areas had already been the subject of bans for some time before 22 May 1990.
   8. The respondent, which had had discussions with the union before it received the letter relating to the bans, decided to take certain action in respect of the bans.
   9. Its managerial staff were directed by Mr. Black, the Chief Executive Officer of the respondent, to select "employees who could lawfully and reasonably be instructed to carry out some of the banned duties ...".
   10. The six employees the subject of these proceedings were selected and each of them was instructed at least 3 times to perform some of those duties.
   11. Each of the six employees was told, before he was given the first instruction to perform the work, the details of the procedure that would be followed i.e. that he would be given a lawful instruction; that if he failed to carry out that instruction he would be "stood aside"; that that meant that he would not be permitted to perform any other duties; that he would be required to leave the work site; and that he would not be paid.
   12. Each of the six employees refused to perform the work and in each case did so because of the ban on the work in question - see, for example, transcript pages 31, 45, 55, 66, 86 and 111; but for the bans each would have obeyed the instruction and performed the work.
   13. Each of the six employees, after refusing to obey the instruction to perform the work, was told by Mr. Black that the council was willing to put him back on normal pay from the time when he agreed to perform all of his duties under his contract of employment as directed.
   14. The work which each of the six employees was directed to perform, and refused to perform, was work which the respondent was entitled to require the employee in each case to perform, having regard to the capacity in which he was employed. At the time when the instructions to perform the work were given, none of the six employees said that the work was not work which they could be required to perform.
   15. During the two relevant periods, each of the six employees maintained his refusal to perform the work. Each presented himself for work each morning but in circumstances which made it clear that he would not perform the "banned" work which he had been instructed to perform.
   

2. The union's counsel placed reliance upon clauses 6 and 17 of the award but accepted that those clauses had to be read subject to the provision in sub-clause 13(a)(i). He said that "the essence of this case ... revolves ... around" sub-clause 13(a)(i) of the award. It provided as follows:
   

"A weekly employee other than an employee engaged under the provisions of Clause 19 of this award, shall be entitled to payment in full for any working week while he is so employed even though he may actually be required to work during a portion only of a week. Provided, however, that where an employee as a result of his own actions works less than thirty-eight hours a week he shall be paid on an hourly basis. The hourly rate shall be calculated by dividing the appropriate weekly rate by thirty-eight."

1. In my opinion the first part of that sub-clause, construed in the context of the award, entitled each of the six employees to a full week's pay even though the employer only required the employee to work for less than the full weekly hours. That part of the sub-clause is dealing with - and limited to - a situation where the employee works for less than a full week as a result of the employer's decision to only require the employee to work for a portion of the week. In my opinion the terms of that part of the sub-clause do not entitle an employee to payment in full in circumstances where the employer required him to work for the full week but the employee as a result of his own actions worked less than the full week. The sub-clause then continued "Provided, however, that where an employee as a result of his own actions works less than thirty-eight hours a week he shall be paid on an hourly basis." Those words, in my opinion, support the meaning attributed by me to the first part of the sub-clause.

2. The union's counsel advanced several submissions as to the correct construction of sub-clause 13(a)(i) of the award. First, that the sub-clause "operates so that for the period that there continues in existence a contract of employment, there is an obligation on the employer to pay the award rate of pay for the classification." Second, that "when in a bans and limitation situation employees say we are willing to do ... a significant proportion of the duties and those duties would, in fact, occupy either the 35 hours that in practice operate(s) or the 38 hours that the award provides as the hours of employment those people are entitled to be paid in full". The first and second submissions in my opinion are not sustainable as a matter of construction of the sub-clause.

3. The third submission was that the "direction given by the employer under this type of award to say if you do not do the particular class of work or the particular type of work I do not want any of it performed does not absolve the employer from the obligation to pay the award rate. In those circumstances the proviso cannot operate because frankly it is not as a result of his own actions that the employee is not working. It is the result of the actions of the employer". It is clear on the evidence that each of the six employees was required by the respondent to work for the whole of the week; applying sub-clause 13(a)(i), in my opinion it can not be said that any of the six employees was "required to work during a portion only" of the week. On the contrary, each of them worked "less than thirty-eight hours a week" and that was "as a result of his own actions".

4. I am unable to uphold any of those three submissions as to the correct construction of sub-clause 13(a)(i) of the award and as to its application to the facts disclosed by the evidence in the present case.

5. The union's counsel also sought to rely upon the decision of a Full Court of this Court in Gapes v Commercial Bank of Australia Ltd. (1979) 41 FLR 27. Citing it, he contended that his first submission (which is set out above) is "the law, and binding on the court" and that sub-clause 13(a)(i) "is, on analysis, on proper analysis, a Gapes type award clause". I have read carefully the transcript of counsel's argument and am unable to uphold it.

6. In my opinion the ratio of the decision in Gapes Case is distinguishable because in that case:-
   (a) the award created obligations "with respect to payment of salary (that) do not depend upon actual performance of particular duties" (per Smithers and Philip Evatt JJ. - 41 FLR at 29); in the present case the sub-clause relied upon expressly provided that payment shall be "on an hourly basis" where "an employee as a result of his own actions works less than thirty-eight hours a week ...";
   (b) "the employee was performing duties appropriate to his classification, although not all of such duties, and the employer was accepting such performance ..." (41 FLR at 29); in the present case the six employees were not performing any of their duties after refusing to obey the instruction to perform the work in question;
   (c) the only clause in the award relied upon as supporting a contention "that non-performance of part of the duties ... will justify a reduction in salary" was sub-clause 12(c) (41 FLR at 29). But that sub-clause only permitted a deduction from salary in respect of time when an employee had "been absent from duty without the consent of the bank ..." (41 FLR at 33). On the facts in that case that sub-clause did not support the employer's case because the employee was not "absent from duty without the consent of the bank"; on the contrary, he continued to work. In the present case the award contained sub-clause 13(a)(i) which expressly provided for a reduction in pay "where an employee as a result of his own actions works less than thirty-eight hours a week ...".

7. It may be added that Smithers and Philip Evatt JJ. in their joint judgment said (at 31):
   

"Whether when an employee refuses to perform a

significant part of his duties and the employer

rejects performance of the remaining part of the

duties and excludes the employee from rendering such part performance, the state of employment upon which the relevant obligations under the award depend, has come to an end or is suspended is a question that

does not arise here."

For the reasons given I am unable to uphold the union's submission that the present case is governed by Gapes Case.

1. Nor am I able to uphold the union's submission insofar as it sought to rely upon the decision of Gray J. in The Australian Bank Employees Union v The National Australia Bank (unreported - delivered 8 March 1989). That case, which dealt with the same award as that in Gapes Case, is also distinguishable on the facts from the present case. As Gray J. pointed out (p 25) "the Award provides for the payment of remuneration without requiring the performance of duties as a condition precedent to such payment" (cp. the observations made in Gapes Case 41 FLR at 29 and 33). In addition, Gray J. (p 28) rejected the employer's submission that it had "in fact declined the services of its employees". His Honour said (p 29) that there was "no hint in the passage (in the employer's circular) of a direction to cease work altogether", that it (p 30) "did not tell them in plain terms to cease all work" and that (p 31) "the respondent accepted and retained the benefit of the work which they had done". The facts before Gray J. were plainly very different from those in the present case.

2. Perhaps it should be added that argument has been heard as to the meaning of certain obiter dicta by Gray J. in that case and by Deane J. in Gapes Case and also in relation to a passage, in the judgment of Smithers and Philip Evatt JJ. in Gapes Case, which may also be an obiter dictum, although the union's counsel submitted that it was part of the ratio. As it is not necessary for me to form an opinion on those matters in order to decide the present case, it is undesirable that a further obiter dictum should be expressed. Nor is it necessary to refer to any of the other authorities cited.

3. The union's counsel submitted that, if his contentions as to the construction of the award failed, "a question then arises whether there has been a significant performance of work or not". Having read his argument (transcript pages 243-255) in my opinion it cannot be upheld. During the relevant periods there was no performance of work at all. During that part of his final address counsel also examined the transcript of the evidence as to the nature of the "normal duties" of the six employees and whether the work which they were instructed to perform was in that category. I have considered the submission on that aspect and have dealt with it in the findings set out earlier in these reasons for judgment - see items 6, 12, 13 and 14. It was quite clear that each of the six employees would have obeyed the instruction and performed the work if it had not been the subject of the bans.

4. For the foregoing reasons, on the evidence the respondent did not breach any term of the award. The application for a penalty will be dismissed. At the request of the respondent's counsel liberty will be reserved to the respondent to apply for costs. If it decides to so apply, it shall file and serve upon the applicant within 14 days a written submission setting out in full its arguments, including all necessary references to authorities and any other relevant material, in support of the application. The court will consider that written submission before deciding whether it is necessary to relist the matter for an oral hearing of any such application.