Hawkins v Queensland Meat Export Company Pty Ltd
[1996] IRCA 339
•31 Jul 1996
DECISION NO: 339/96
CATCHWORDS
INDUSTRIAL LAW - INTERPRETATION OF AWARD - meaning of “engagement” - applicant was a “regular daily employee” who was “engaged” to work seasonally at meatworks - TERMINATION OF EMPLOYMENT - REDUNDANCY - whether applicant’s engagement terminated at end of season or at time meatworks not re-opened - requirement of NOTICE - whether NOTICE OF TERMINATION of engagement required on REDUNDANCY
Industrial Relations Act 1988 (Cth): s 170db(4) & (5); s 413
The Constitution: s 109
The Meat Processing (Angliss Group) Award 1981
Queensland Meatworks Industrial Agreement Award 1983
Dawn May, Arctic Regions in a Torrid Zone: The History of the Ross River Meatworks 1892-1992 (1992, Department of History & Politics, James Cook University, Townsville, Qld)
Australian Meat Industry Employees Union v Sunland Enterprises Pty Ltd (1988) 81 ALR 213.
Bechara v Gregory Harrison Healey & Co (Industrial Relations Court of Australia, Madgwick J, 19 April 1996, unreported)
Food Preservers Union of Australia v Wattie Pict Ltd (1975) 172 CAR 227
Metal Trades Industry Association of Australia v The Amalgamated Metal Workers’ and Shipwrights’ Union (1983) 152 CLR 632
Short v F W Hercus Pty Ltd (1993) 40 FCR 511
Termination, Change and Redundancy Case (1984) 8 IR 34
Termination, Change and Redundancy Case (TCR No.2) 295 CAR 673
HAWKINS v QUEENSLAND MEAT EXPORT COMPANY PROPRIETARY LIMITED TRADING AS SMORGON MEAT GROUP
QI 1306 of 1995
CORAM: MADGWICK J
PLACE: SYDNEY
DATE: 31 JULY 1996
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
NEW SOUTH WALES
DISTRICT REGISTRY
No. QI 1306 of 1995
BETWEEN HAWKINS
Applicant
AND QUEENSLAND MEAT EXPORT COMPANY
PROPRIETARY LIMITED TRADING AS
SMORGON MEAT GROUP
Respondent
CORAM: MADGWICK J
PLACE: SYDNEY
DATE: 31 JULY 1996
MINUTES OF ORDER
IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
NEW SOUTH WALES
DISTRICT REGISTRY
No. 1306 of 1995
BETWEEN HAWKINS
Applicant
AND QUEENSLAND MEAT EXPORT COMPANY
PROPRIETARY LIMITED TRADING AS
SMORGON MEAT GROUP
Respondent
CORAM: MADGWICK J
PLACE: SYDNEY
DATE: 31 JULY 1996
REASONS FOR JUDGMENT
MADGWICK J:
Introduction
This case arises out of the closure of the Ross River meatworks at Townsville.
Slaughtering and associated meat processing work was carried out at the meatworks on a seasonal basis during the drier months of the year, commencing in January or February and continuing until October or December.
There was a need, as in some other abattoirs, to provide industrial regulation of the terms of work for regularly seasonally-employed meatworkers of appropriate commitment, experience and abilities. A further peculiarity of the Ross River and like slaughtering and associated operations was that certain contingencies, such as shortages of livestock; unavailability of markets for the sale of slaughtered beef; power or water failure, or industrial disputation, not infrequently led to a desire by the employers to stand some or all employees down for a day or more. Thus there was a need to provide fair terms for a fluctuating work force in conditions of inconstant work. The solution arrived at over the years, as elsewhere in the meat industry, was the provision in industrial instruments for a category of "regular daily employees". This involved a notion of continuing "engagement" of employees, perhaps initially (when the concept was first prescribed over 30 years ago) conceived of as being engagement by the employer to continue for the season, but their "employment" only by the day. The continuing engagement permitted counting of the period(s) of engagement for annual leave, long service leave and other purposes.
This case concerns whether, under the relevant award (The Meat Processing (Angliss Group) Award 1981 - "the Award"), regular daily employees were entitled to notice of termination of their engagements (or payment in lieu) as on redundancy, in addition to redundancy pay, when, just before what would have been the 1995 season at Ross River, the respondent employer decided to cease operations at the works, and not to re-open them for the 1995 season.
Ms Hawkins, a former slicer at the works, seeks an interpretation of the award pursuant to s 413 of the Industrial Relations Act 1988 (Cth) to resolve this matter.
Ms Hawkins' circumstances
Ms Hawkins was a regular daily employee at Ross River, and had worked there during periods of each consecutive year for 13 years up to and including the 1994 season. She last worked at the meatworks on 2 December 1994, when the 1994 season closed.
After telling Ms Hawkins' union representatives on 27 February 1995 that the plant would not re-open, Mr Scholes, the respondent's Manager of Employee Relations, wrote to Ms Hawkins (and the other formerly regular daily employees) on 1 March, informing them of the following:
"... a definite decision has been made by [the respondent] that the meatworks will remain closed permanently.
This means that you will not be re-engaged at the meatworks.
The attachment to this letter deals with the severance payment due ... under clause 8C - Redundancy of the [Award] as a result of this decision. The benefit has been calculated for your severance as at the close of last season when your employment and engagement as a regular daily employee was terminated."
Ms Hawkins was paid her "accrued pro rata long service leave entitlement" and a "redundancy payment" in accordance with cl 8C of the Award.
However the Award also provided, in para 8B(a)(i)(1), for four weeks notice of the termination, at least in certain circumstances of change, of the engagement of employees. Ms Hawkins was not given four weeks notice of anything.
The question is: should she also have been paid four weeks wages in lieu of notice for what she alleges was, pursuant to cl 8B(a)(i)(1) of the Award, the termination of her engagement as an employee?
The Award
The most relevant provisions appear to be these.
Clause 6 provides that employees may be engaged as "Regular Daily Employees", casual employees, or part-time regular daily employees, and are to be informed, when engaged, of the nature of their engagement. Thus, there are only regular daily employees (full-time or part-time), and casuals.
Clause 7 provides:
"7 - REGULAR DAILY EMPLOYEES
(a) A Regular Daily Employee shall be employed by the day or shift, and, without prejudice to the provisions of this award as to payment for award holidays, sick leave and annual leave and Seasonal Allowance, his employment shall terminate at the end of each day or shift on which he is employed.
(b) Notwithstanding the termination of his employment at the end of each day or shift, the engagement of a Regular Daily Employee shall continue and he shall remain a Regular Daily until his engagement as such is terminated as herein prescribed. Such engagement may be terminated by notice on either side as from the end of the ordinary working hours on the day on which it is given, whether the employee is employed on that day or not, or at any later time specified by the notice. ... Such engagement shall be deemed to be terminated if the employment of the employee, is summarily terminated in accordance with subclause (c) of this clause.
(c) Nothing in this award shall affect any common-law right of an employer to terminate summarily the employment of any employee, ...
(d) An employer shall have the right to deduct payment for any day during which an employee cannot be usefully employed ... because of any strike, power failure, or any breakdown of machinery or due to any cause for which the employer cannot reasonably be held responsible, other than a shortage of stock which is not the result of a strike or of the misconduct of employees of the employer...
(f)(i) In consideration of the rights conferred on regular daily employees by this award, a regular daily employee shall attend and offer himself for employment at a place specified by the employer at the normal starting time on each ordinary working day unless notified that on a particular day he is not required to attend, at such other times as employees may be required to work pursuant to clause 17 - Overtime.
(ii)Subject to the rights conferred on the employer in this clause, a regular daily employee who was not notified on the immediate preceding working day that he was not required to attend for work on the following day and such employee has attended and offered for employment at the normal starting time and is not offered employment shall be paid for the day the ordinary rate prescribed by the award for the classification in which he was normally employed.
(g) A Regular Daily Employee who is a time-worker shall, for each day or shift actually worked, be paid at the ordinary rate per day prescribed by this award for the classification in which he is employed. The ordinary rates per day prescribed by the award have been fixed on the basis that they include a loading of ten per cent. The amount so included in the ordinary rate per day shall form part of the employee's ordinary pay for all purposes of this award."
Clause 8B provides (the emphasis has been added):
"8B - INTRODUCTION OF CHANGE
(a) Notwithstanding the provisions of subclause 7(c) of this award, where the employer intends to introduce changes to machinery, procedures or other relevant matters likely to affect the employment of employees, such employees whose engagement may be terminated as a result of such changes shall be entitled to notice of termination as follows.
Termination of employment
(i)Notice of termination by employer
(1)In order to terminate the engagement of an employee the employer shall give to the employee the following notice:
Period of continuous service Period of notice
1 year or less 1 week
1 year and up to the
completion of 3 years 2 weeks
3 years and up to the
completion of 5 years 3 weeks
5 years and over 4 weeks
(2)In addition to the notice in subparagraph 8B(a)(i)(1) hereof employees over 45 years of age at the time of the giving of the notice with not less that two years continuous service, shall be entitled to an additional week's notice.
...
(4)Payment in lieu of the notice prescribed in subparagraph 8B(a)(i)(1) and/or 8B(a)(i)(2) hereof, shall be made if the appropriate notice period is not given. ...
...
(7)For the purposes of this clause, continuity of service shall be calculated in the manner prescribed by subclauses 23(l), (m), (n) and (o) of this award."
[So far as is here relevant, cl 23, dealing with "Annual Leave", provides:
(e) The service of a Regular Daily Employee shall be deemed to be continuous for the purpose of this clause notwithstanding the termination of his employment at the end of each day's work, provided that his engagement as a Regular Daily Employee is not terminated ...".]
"(8)The service of an employee with the employer means the period during which an employee has served his or her employer under an unbroken contract of engagement; provided that a contract of engagement shall be deemed not to have been broken by reason only of an interruption or determination thereof, if the interruption or determination has been made by the employer by reason of slackness of trade (including unavailability of stock for slaughter) if the employee is re-engaged by the employer within eight months of such interruption or determination.
...
(v) Termination of engagement by an employer shall not be harsh, unjust or unreasonable.
For the purpose of this clause, termination of engagement shall include termination with or without notice. ..."
Clause 8C provides:
"8C - REDUNDANCY
Discussions before termination
(a) (i) Where the employer has made a definite decision that the employer no longer wishes the job the regular daily employee has been doing done by anyone and this is not due to the ordinary and customary turnover of labour and that decision may lead to termination of engagement, the employer shall hold discussions with the employees directly affected and with the union.
...
Severance pay
(c) In addition to the period of notice prescribed for ordinary termination in subclause 8B(a), and subject to further order of the Commission, a regular daily employee whose engagement is terminated for reasons set out in paragraph 8C(a)(i) hereof, shall be entitled to the following amount of severance pay in respect of a continuous period of service.
Period of continuous service Severance pay
1 year or less Nil
1 year and up to the completion
of 2 years 4 weeks pay
2 years and up to the completion
of 3 years 6 weeks pay
3 years and up to the completion
of 4 years 7 weeks pay
4 years and over 8 weeks pay
...
(n) Where the employer has made a definite decision to permanently close down an abattoir, boning room and/or prepacking area, room or factory, including the sale of assets, business or premises, employees of such enterprise shall be entitled to all of the provisions of this clause.
In circumstances where an abattoir, boning room and/or prepacking area, room or factory is closed and not reopened within a period of eight consecutive calendar months from the date of closure, it shall be deemed to be permanently closed down and the provisions of this clause shall apply."
Section 44 provides:
“44 - SEASONAL ALLOWANCE
(a) This clause shall apply to any employee, whether adult juvenile, other than a casual employee, who is terminated from a Works department which sustains a completed seasonal shut-down.
(b) When an employer, through no fault of the employee, terminates engagement of an employee who had been terminated at the closure in the previous year and recommenced when required at the commencement of the current season and has been employed by the employer for less than 180 days and/or shifts in the calendar year, the employer shall pay to the employee, in addition to all other moneys to which he is entitled, a Seasonal Allowance calculated in accordance with this clause.”
Consideration of the issues
The employer's ability to terminate the engagement
The Award gives the employer two sources of power to terminate an employee's "engagement". One is under cl 7 and contemplates actual notice, but as little notice as a moment before the end of ordinary working hours will suffice. The other is in cl 8B which clause as a whole appears to have as its subject "Introduction of Change", notwithstanding that subcl 8C(c) refers to the "period of notice prescribed ... in subcl 8B(a)" as being "for ordinary termination". In that regard, I think that the reference to "ordinary" notice is a mere slip - the result of seeking to paste into a daily-hire award a clause in standard form cut from more usual kinds of awards, as I explain below.
It also appears from cl 8B(a)(i)(8) that, despite the power to terminate a regular daily employee's engagement all but summarily under cl 7, a "contract of engagement" may be the subject of "interruption" as well as "determination" on account of slackness of trade.
Indeed, what habitually had happened at Ross River, so far as the respondent and employees such as Ms Hawkins were concerned, could loosely be described in the language of cl 8B(a)(i)(8): one might say that their contracts of engagement were interrupted at the end of each season although notice of termination thereof was not given - this would involve reading "contract of engagement" when considered in conjunction with "interruption" as referring to the performance of the contract of engagement. The "interruption" would be made "by the employer"; it would be made "by reason of slackness of trade (including unavailability of stock for slaughter)" - trade is slack and stock are unavailable in the Northern wet season; and the employees would, next season, be "re-engaged [in the sense that the opportunity for performance of their contract of engagement would be afforded to them] by the employer within eight months of such interruption".
It would make some sense, since the work at Ross River was seasonal, that the award should have been predicated upon the possibility of such an "interruption" of an engagement without loss of continuity of service and the inconvenience and other consequences of a termination of the engagement which I shall shortly mention. The only textual impediment to such a comprehension of the Award which I can discern is to be found in cl 7(f)(i), which obliges a regular daily employee, whose engagement continues, to attend and offer for employment "on each ordinary working day". But it does no violence to language to regard that expression as not including days bona fide determined as falling after the conclusion of one season's work, in bona fide seasonal establishments, and before the commencement of the next season's work. Such days are not "ordinary working days". The definition clause, cl 50, does not make a term of art of that phrase, although in the context, for example, of cl 17 - "Overtime", it would mean Monday to Friday of a week in which the employer wanted some work done.
Alternatively, the reference to an "interruption" of a "contract of engagement" may simply have been made for more abundant precaution and to refer to a situation in which an employer has not affected a "contract of engagement" at all, but has merely avoided any obligation to pay wages, by exercising the employer's power to notify, pursuant to subcl 7(f)(i), employees that on "particular day[s]", namely those between the seasons, they are not required to attend for work.
A third possibility is that the phrase simply refers to a possibly de facto (or, at least, employer-perceived) indeterminate status, in the usual between-seasons period, of people who were regular employees: here, it was usual not to pay long service leave to certain employees who had, under the Award, an entitlement thereto on termination, which entitlement they did not have under State law, cf. cl 52A "Long Service Leave". On the other hand, the respondent would permit employees to elect whether or not to take their sick leave credits; this is an award that provides for accumulation of sick leave entitlements and for payment (a) of such entitlements in excess of 128 hours "when taking annual leave"; and (b) of "all outstanding sick leave credits accrued" where "an employee's services are terminated": cl 19.
In any case, the point is clear that termination of an employee's engagement is conceived of as an act that requires notice and has serious and particular consequences under the Award.
As I explain in more detail in the next section, Ms Hawkins was not given such notice at the end of the 1994 season. Hence, in my opinion, her engagement was not then terminated.
1A. The alleged termination of Ms Hawkins' engagement
The major argument for the employer was that Ms Hawkins' engagement was terminated at the end of the 1994 season. The evidence as to this is as follows.
Shortly before the close of the 1994 season, on or about 2 December 1994, Ms Hawkins was told by Mr Hoey that the meatworks would reopen in 1995 "sometime around late February". There was then no unusual feature, so far as she was concerned, about events at the end of the 1994 season, as compared with past years. By about 7 November 1994, Ms Hawkins was aware that work for the 1994 season was likely to cease fairly soon; however it seems that she worked until 2 December 1994.
The executive chairman of the respondent's group of companies announced to employees on 23 December 1994 that:
"Some months ago we announced that the group had received several unsolicited approaches to sell all or part of the business. These approaches soon led to rumours that were potentially damaging to our standing in the marketplace.
...
I am delighted that we can now put an end to these issues and advise everyone that Smorgon will continue in the meat business.
...
Smorgon have been successful, dominant players in the meat industry in the past and we know with everyone's continued effort and support, we will attain that position once more.
I would like to thank you for your support through this period and I look forward to welcoming 1995 with renewed vigour and optimism."
As late as 12 February 1995 there was, apparently, on the part of local management of the abattoir, every plan to commence operations for the 1995 season.
When Ms Hawkins was last paid in 1994 she was paid, among other things, her accrued annual leave entitlements but not her accrued sick leave credits. An "Employment Separation Certificate", intended to assist Ms Hawkins to deal with the Department of Social Security, was also then furnished to her. This referred to her "employment" having been "terminated due to shortage of work". However, Ms Hawkins was not paid her unused long service leave entitlements until March 1995, when the "Statement of Termination Payment" form required by the Australian Taxation Office was also prepared by the respondent. It was wrongly asserted by the respondent to the Taxation Office, by backdating the form, that "2 December 1994" was the "[d]ate of payment" of the termination payment including the long service leave component.
The argument was that no particular formality was required for the notice of termination of the engagement and that, in the circumstances, no other sense could be made of the relationship between the parties than that, as at December 1994, the respondent as employer had terminated the engagement.
I do not agree. It is true that no particular formality need govern or accompany the giving of such notice; nevertheless, such notice must be clear and unequivocal. There simply was no such thing here.
As to the circumstances being only consistent with such an interpretation, the provisions of the Award are not so straightforward as the submission implies, as I have shown above. Further, the circumstances are consistent with the respondent simply not having exercised its prima facie award right to terminate the engagement.
Was Ms Hawkins entitled to notice under subcl 8B(a)(i)?
It was contended for the respondent that subcl 8B(a) is concerned only with a situation where there will be some continuation of the employer's operations at the establishment in question, and not, as here, with a complete and final closure of an establishment. It is true that the introductory words of subcl 8B(a) could suggest that, and that paras 8B(a)(i)(5) and 8B(a)(ii), for example, could only apply where there was some such continuation. However, reading the Award as a whole, the submission cannot be sustained.
Clause 8C deals with "Redundancy" and para (c) deals with "Severance Pay". Paragraph (c) makes it clear that a Regular Daily Employee is entitled to severance pay at the rates set out therein if his/her engagement is terminated "for reasons set out in para 8C(a)(i) hereof". The last-mentioned paragraph obliges an employer to hold discussions with affected employees and their union,
"[w]here the employer has made a definite decision that the employer no longer wishes the job the regular daily employee has been doing done by anyone and this is not due to the ordinary and customary turnover of labour ...".
In other words, severance pay is not limited to redundancy consequent upon any concept that might be derived from a narrow meaning of the phrase "changes to machinery, procedures or other relevant matters likely to affect the employment of employees" in subcl 8B(a).
Whatever (if, actually, anything) may have been intended by the word "ordinary" in subcl 8C(c), one thing is clear: subcl 8C(c) appears plainly to have been intended to give employees made redundant for any reason a right to severance pay as well as the right to "the period of notice prescribed ... in subcl 8B(a)".
Thus it is clear that the intention in cl 8B(a) was also to confer that right to notice, via subcl 8B(a), in those broad circumstances, and Ms Hawkins was entitled to the notice.
Was Ms Hawkins entitled to pay in lieu of notice, and, if so, in what amount?
As I understand the argument for the respondent, it is two-fold. First, it is said that the right to notice comes from subcl 8C(c) and that subclause refers only to a "period of notice" under subcl 8B(a) and not to pay in lieu thereof.
But this argument appears to depend on robbing subcl 8B(a) of the broader meaning which, as I have just explained, I think it has; if subcl 8B(a) has that broader meaning, then it is an independent source of entitlement to notice and to pay in lieu thereof, regardless of whether there is a less than full description of the 8B(a) right in subcl 8C(c). In any case, it is a narrow and pedantic approach (and such as is by modern lawyers shunned) to construe the reference to "notice" in an Australian industrial instrument as not contemplating pay in lieu thereof, in accordance with the balance of subcl 8B(a).
It is secondly submitted that the payment in lieu of notice should be that which Ms Hawkins would have earned had her engagement not been terminated. Because the works were not going to be re-opened, she would, it is said, even had her engagement not been terminated, have earned nothing; so that is what she should receive. At the heart of this argument is the proposition that an award entitlement to pay in lieu of notice is to be treated analogously with a right to damages for breach of an employment contract by failure to give due notice of termination of the employment, or with a statutory right to "compensation" in lieu of notice: cf. s 170db(4) and (5) of the Industrial Relations Act 1988 (Cth).
The analogy however, in my opinion, may, at least in some circumstances, be a false one. There may be a distinction between, on the one hand, common law concepts of compensatory damages and statutory rights to "compensation" very apt to attract common law doctrines applicable to such damages, and, on the other, other rights, whether arising at common law or by statute, to ascertainable sums which are not really or only compensatory in their nature. Such sums may be provided for, for example, by way of solatium or encouragement to meet another, primary obligation. I touched upon this in Bechara v Gregory Harrison Healey & Co (Industrial Relations Court of Australia, Madgwick J, 19 April 1996, unreported) in the context of the obligation to mitigate loss in unlawful termination claims under the Act. See also Australian Meat Industry Employees Union v Sunland Enterprises Pty Ltd (1988) 81 ALR 213 at 222-3.
It is not necessary to consider the matter further here because of para 8B(a)(i)(5), which disposes of the argument by express provision:
(5) In calculating any payment in lieu of notice the employee shall, on the day of ceasing engagement, be paid his or her classification rate for the period of such notice. A further payment shall be made to the employee at the end of the period of notice (which has been paid for in lieu) based on what the employee would have received in respect o f ordinary pay had the engagement not been terminated, less the initial payment made. (emphasis added)
Ms Hawkins must be paid her "classification rate" for the period of the notice she ought to have had.
Section 170db of the Industrial Relations Act
It was argued that cl 8B of the Award was impliedly repealed by the passage of s 170db of the act as from 1 April 1994 and that when, as from 16 November 1994, reg 30bc excluded meat industry daily-hire employees from the operation of s 170db, there was no revival of cl 8b.
It is enough to say that the submission mistakes the nature of s 170db: the section imposes minimal obligations upon employers; it does not give them rights. There was therefore no relevant "covering of the field". See a similar analysis (which led, on the facts, to a different conclusion) in the context of s 109 of the Constitution, in Metal Trades Industry Association of Australia v The Amalgamated Metal Workers' and Shipwrights' Union (1983) 152 CLR 632 at 651.
"The correct approach ... is that [a Commonwealth award] fails to deal with the matter provided for by the [State] statute, unless the award exhibits an intention that there is to be no benefit of that kind or, alternatively, that the benefits for which it provides are to be a complete and exclusive statement of the [relevant party's] entitlement in the relevant area."
Extrinsic materials
I was asked by both parties to have regard to various considerations by the Australian Industrial Relations Commission and its predecessor the Commonwealth Conciliation & Arbitration Commission of allegedly relevant matters in the history of the Award and its predecessors, as an aid to interpretation of the Award. There is no want of willingness on my part, in an appropriate case, to do so. I endorse the good sense, as I admire the erudition, of the consideration of the subject by Burchett J in Short v F W Hercus Pty Ltd (1993) 40 FCR 511 at 517-20. Towards the hope that his remarks might become the standard wisdom on the subject, which I repeat them here, but (because they are lengthy) as an annexure.
In view of the urgings of both parties, I need not consider whether, strictly, such a course is appropriate.
I have also taken it upon myself to consult the reports of the two Commonwealth Conciliation and Arbitration Commission cases in which cl 8B and 8C evidently had their genesis: Termination, Change and Redundancy Case 1984 (TCR No.1) 294 CAR 175 and Termination, Change and Redundancy Case (TCR No.2) 295 CAR 673.
It would be tiresome and may be unfair to consider at length each passage to which I was referred. It is really enough to say that nothing in those materials is of sufficient tendency or strength to gainsay the conclusions I have arrived at by the above process of, as it were, internal construction of the Award. However, in deference to the thoughtful submission made to me, I indicate that I have gleaned the following from those materials:
TCR No.1 and TCR No.2 made it clear that, as a matter of general Australian industrial standards,
(a)The erstwhile, traditional, single week's notice of termination (against the background of which the mere end-of-the-day's notice of termination of engagement for regular daily employees was prescribed in the Award) was inadequate and should be replaced by a scale of from one to five weeks' notice depending on length of service and age.
(b)That improvement would not extend to casual, seasonal, or daily- or hourly-hire employees (295 CAR 679-80).
(c)A similar limitation was not applied to the general award requirements, introduced by the same decisions, that termination of employment should not be harsh, unjust or unreasonable.
(d)Part of the changes in industrial standards then made included recognition that there was need for, and justice in, a requirement that employers consult their employees and their unions immediately a firm decision had been taken about major changes likely to have significant effects on employees.
(e)Employer compensation was to be provided to employees for redundancy, however arising.
(f)Severance pay on redundancy was justified as "compensation for non-transferable credits [such as, in certain circumstances, accrued long service leave] and the inconvenience and hardship imposed on employees" (294 CAR 216-20). The latter, shorthand phrase was likely a reference to what Gaudron J had said in the Food Preservers Union of Australia vWattie Pict Ltd (1975) 172 CAR 227 at 229:
“Such hardships will differ from individual to individual, from occupation to occupation and from industry to industry. Some will however be common to nearly all employees. Regular and continuous employment is the norm in Australian society except for all but females who either elect or are unable to participate regularly and continuously in the workforce. Primarily employment is the chief source of income for Australian families. Its interruption must be attended either by financial hardship or the fear of it. Employment is also part of a worker's daily routine and society; disruption of that routine and social contact necessities a re-organisation of an important aspect of a person's life. Long term employees may also find themselves with a competitive disability as a result of opportunities foregone in the continuous service of their employers."
(g)The redundancy severance payments should be "in addition to the extended period of notice of termination prescribed [by TCR No.1] for ordinary termination". Hence, no doubt, the origin of the word "ordinary" in cl 8C(a) of the Award.
(h)For the extended notice provisions the more generous notion of "continuous service" (which, eg, might not be broken by stand-downs) rather than "continuous employment" was ultimately chosen as the criterion (295 CAR 678).
(i)It fell to Riordan DP of the Australian Industrial Relations Commission in 1989 to consider a claim by Ms Hawkins' union for the application to Part III of the Award (with which we are concerned) of the benefits of the TCR cases: see Print H8683. He noted that not all such plants operate only seasonally, as was the case at Ross River, and that, even where the operations are seasonal, the regular daily employees:
"generally are available, and have an expectation, to return to their respective places of employment at the commencement of the next season when they are re-engaged in accordance with a system based on seniority [prescribed under the Award], which is gained by length of service in a particular class of work with the relevant employer".
The employers argued that "the nature of the contract of employment ... made it inappropriate to apply the standard clause relating to termination change and redundancy to such employees, who, according to the argument, were specifically excluded from the standard clause." In 1988 an employer application to do away with the concept of regular daily hire had been refused.
(j)Riordan DP took the view that the "circumstances of this industry require[d] consideration of a scheme covering redundancy situations which [is] appropriate and ... not necessarily identical to those prescribed in the TCR case":
"The loss of a job in a non-metropolitan meat works is a serious matter because in many areas alternative employment is not readily available, if at all. In such case where alternative employment is not available a retrenched employee will be required to either exist on social security payments until such time as work becomes available or move elsewhere in search of employment in the meat industry. If he succeeds in finding another job in the meat industry at another location accumulated seniority rights are forfeited and he is subject to further uncertainty of irregular employment until he is able to improve his position in the order of seniority.
...
As indicated earlier the employees covered by this claim are not seasonal workers in the usually understood meaning of that term. The fact that employers have the necessary flexibility to employ staff on a daily basis is not a reason to deny such employees the benefits of redundancy payments in the regrettable and unfortunate circumstance that their place of employment is permanently closed down. The continuing long term relationship distinguishes the employees covered by this claim from those who are usually understood to be seasonal workers.
It would be inconsistent and contradictory, as well as being unfair, to deny the benefits of redundancy payments to employees with long periods of regular daily service who are entitled to receive and are paid for sick leave, annual leave and long service leave. There is no justification to deny a person the benefits of compensation for redundancy in these circumstances. A serious anomaly would exist if certain employees were retrenched on account of redundancy and the employer had an award obligation to pay the benefits of redundancy pay to those employed on a weekly basis in accordance with part I of the award but not to those employed as regular daily employees in accordance with part III when all the employees concerned were covered by the same award, albeit by different parts of it. There could be other employees who were retrenched at the same time covered by other awards of this Commission who would have an entitlement to redundancy benefits."
Riordan DP went on to conclude:
"Such a situation could well arise. It is inequitable and unfair to have a situation where long term employees can be denied payment on account of redundancy when employees with substantially shorter service are entitled to receive the benefit. It is not sufficient reason to deny these benefits on account of the technical aspect of the daily employment concept."
(k)He then turned to consider the union's claim that "notice of retrenchment ... be given to the relevant employees in accordance with the clause settled as a result of the TCR Case". That is, the union was claiming the 1-5 weeks' notice of termination in all circumstances except for misconduct. The Deputy President gave anxious and detailed consideration to that matter. There were evidently powerful considerations on both sides of that argument. In the end he said (at p 9):
"There are quite significant practical difficulties which can arise in the normal course of events which affect the prospect of giving extended notice to employees who are employed under part III of this award. One example would be the onset of unseasonal and/or unexpected rain of sufficient severity which could drastically alter the availability of stock and bring about premature closure of a meatworks at the end of the season. Further, I am mindful of the need to achieve improved efficiency in the industry and the decision made in respect of the application for the introduction of the 38-hour week and the second tier adjustment in wages is a relevant factor to be considered.
Whilst it may be felt to be discriminatory not to require employers to give the notice specified in the agreed clause now contained in part I of the award, on balance this aspect of the application is refused. There is no good reason why notice should not be given, however, in respect of changes to machinery, procedures or other relevant matters likely to affect the employment of employees.
...
Obviously there must be a point at which a temporary closure becomes permanent for all practical purposes in respect of the employment relationship between employers and employees." (emphasis added)
He concluded that "redundancy payments"
"... should be available, however, only in those cases where the employer has not decided to permanently close down the meatworks concerned and, in fact, intends to re-open the meatworks within [a] period of eight months. In other words it would not be fair and reasonable to deny redundancy payments to an employee for a period of eight months if the meatworks concerned has been closed down and there was no intention to re-open it. The clause to be awarded should reflect this intention."
(m)He then said:
"Apart from the question of extended notice of termination, which is not practicable for employment covered by this section of the award, a clause consistent with the standard clause laid down as a result of the TCR Case with those modifications essential for its proper application to pieceworkers in the meat industry will be awarded. These modifications will include the basis on which payment is to be made having regard to the variations in earnings which occur as a result of employee flexibility as well as variations in the employer's output. The provision for payment of long service leave would be a useful guide in this regard.
The proposed clause will not, of course, apply in respect of annual shut downs. The AMIEU did not include these situations in its claim. The clause will be applicable to permanent closedowns, as defined."
If that passage stood alone, it would tend to assist the respondent's argument. But it does not.
In the first place, at p 9 and in the context of speaking of notice of termination of employment, the Deputy President had said "There is no good reason why notice [ie. such notice, in my opinion] should not be given ... in respect of changes to ... relevant matters likely to affect the employment of employees". It seems clear, in the entire context of the subject matter and the matters then being discussed by him, that Riordan DP meant that the TCR No.1 level of notice of termination should be given where there was an employer-initiated change likely to affect employment, but not where unforeseen events of a kind endemic to the industry, eg. shortage of stock because of unseasonal rain, would, practically speaking, force an employer to reduce employment or close the works temporarily.
In the second place, there are, as I have indicated, two provisions for notice of the termination of employment in the Award. These were inserted in consequence of Riordan DP's decision, according to Mr Scholes' evidence.
This both (i) supports my interpretation of Riordan DP's reasons for decision and (ii) has to be given weight and accounted for. It can comfortably enough be accounted for by the award interpretation I favour, but not by that argued for by the respondent.
(n)Life, including in workplaces, is never static. Practices change. Clear understandings become blurred; out of the blur may emerge a new understanding; the originally clear understanding may then appear anomalous. The origin of award provisions for regular daily employment in the meat industry was consensual and occurred over 30 years ago. I think it likely that there was, at the time of inception of that award prescription, clear understanding of its intended use. I am prepared to assume that there was then a common practice of terminating the engagements of Regular Daily Employees at the end of the season at works such as Ross River. But, if that conclusion and that assumption be correct, things changed thereafter.
By 1991, in the context of a dispute about annual leave arrangements in seasonal meatworks in Queensland covered by another award, the Queensland Meatworks Industrial Agreement Award 1983, Riordan DP was able to say (Print J8580):
"The major change, in respect of this matter, which appears to have occurred during recent years relates to the manner in which employees are treated when meatworks are closed on a temporary basis. The evidence indicates that there has been a growth of the practice of the purported termination of engagement of employees at the end of one year or season and their re-engagement at the beginning of the next. The termination of engagement is a significantly different matter to the termination of employment. This represents a problem for employees in the industry and requires attention by way of award variation.
Although all of the persons concerned with this application are engaged as "regular daily" employees, and the employment is said to cease at the end of each day, the over-riding engagement continues until it is terminated. This qualification is specified in clause 4, Contract of Employment, of the Award. The method by which such engagement may be terminated is also specified in that clause. Further, a regular daily employee has certain duties and obligations to attend and offer for work on each day unless notified on the previous day that he is not required.
The procedure of regular daily employment, with its various conditions and qualification, has been developed over the years. It provides some measure of continuity of employment for the employees concerned and provides the employer with a substantial degree of flexibility in the organisation of the work force. Whether the existing system is desirable or otherwise is not a matter for consideration here and such consideration formed no part of the evidence or argument in the proceedings. The present situation is referred to, however, because it forms an essential part of the background to the reasoning in this decision.
The evidence given in these proceedings indicates in very clear terms that when annual close downs occur in the relevant establishments it is not intended that the contract of employment should be terminated on a permanent basis. Rather, it is established that the contract of employment is usually interrupted for a period, the length of which is not always known with certainty at the time. But it is clear that, almost without exception, there is an intention to resume the contract of employment at a later stage and to treat the employee as having continuity of service for the purposes of sick leave, long service leave, superannuation and the like. It is also clear that the purported termination is generally regarded as being of a kind which does not create an entitlement for the employees concerned to the benefits that would otherwise be available if the employment contract were to be terminated on a permanent basis.
...
The evidence illustrates the reality of the situation; the employment is interrupted for varying periods and later resumed. There is neither an intention nor an action designed to terminate the employment contract in the sense that the engagement to perform work is brought to an end. The reality of the situation is that the daily employment is terminated and the engagement is in real terms, suspended until such time as the relevant establishment is reopened and there is work to be performed. At that stage the earlier engagement is re-activated and regular daily employment is resumed in accordance with the terms and conditions of the Award.
The reality clearly is that the services of employees are not terminated. The employees are not paid the award benefits applicable to redundant employees, certain rights of continuity of employment are maintained, including superannuation benefits, public holidays which occur during the period of close down are paid for providing certain minimal conditions are met and employees are re-employed as regular daily employees in order of seniority in those establishments where seniority agreements exist when the particular plant is reopened.
In addition the employees, whose engagement is represented as having been terminated, are, in most cases, not regarded as having been terminated for the purposes of being paid long service leave benefits, the amounts due on account of redundancy or the accumulated amounts which would be payable from the provident fund scheme applying by agreement with the AMIEU.
There have been suggestions that the practice of terminating the employment of employees for the period of the close down is designed to avoid payroll tax which would otherwise be payable.
Whether or not the scheme of the purported termination of the engagement of employees is designed to avoid the payment of payroll tax which may be levied as a consequence of the relevant Queensland State Legislation is not a matter which is appropriate for comment in proceedings such as these. But there can be no doubt that the result of the action by employers in terminating the engagement of employees is the avoidance of a payment to the Queensland Government which would be payable if employees were to be paid annual leave in the normal manner. It is, of course, to be kept in mind that the employees concerned are not engaged on a weekly basis but rather as "regular daily employees."
No matter how this matter is considered the evidence in these proceedings discloses that the purported terminations of engagement represents a fiction which has the effect of the employer concerned being able to avoid certain obligations to employees. The possibility of there having been, in some instances in the past, a degree of employee compliance with the scheme in some establishments does not justify the conduct of the employers concerned. It is unfortunate that the practice not having been prevented in the recent past now appears to be spreading over a wider area covered by the Award.
It must be observed that the practice has been challenged, at least to some extent, by the AMIEU in recent years. This appears, however, to have been coincidental with the new rules adopted by the relevant Commonwealth agencies to regard payments made in lieu of leave being deemed to have a time equivalent for the purposes of individuals qualifying for social security benefits. But this circumstance would not justify a refusal to regulate what is clearly an unfair treatment of employees." (emphasis added)
None of this, as an illustration of contemporary-enough practice, supports the theory that there is no other analysis possible of Ms Hawkins' position between 2 December and 1 March than that she had had her engagement terminated on the former date.
Conclusion
For all these reasons Ms Hawkins was entitled to pay in lieu of four weeks’ notice of the termination of her engagement on 1 March 1995.
If there is no alternative proposal received by my Associate (by facsimile) within 48 hours, accompanied by short written submissions supporting it, I will make the following orders to give effect to this conclusion:
Declare that on the true interpretation of The Meat Processing (The Angliss Group) Award 1981 the applicant was entitled to pay in lieu of four weeks’ notice of the termination of her engagement by the respondent on 1 March 1995.
Order that, accordingly, the respondent forthwith pay to the applicant:
(a)the sum of $2,189.24, and
(b)interest thereon at the rate prescribed by Order 35 Rule 8 of the Industrial Relations Court Rules.
Footnote: Perhaps, even in the dust of a legal judgment, it is not inappropriate to salute the generations of people, labour and management, who contributed their endeavour and toil, conflict and co-operation, in giving rise to the colourful industrial and social history of the Ross River meatworks (see Dawn May, Arctic Regions in a Torrid Zone: The History of the Ross River Meatworks 1892-1992, (1992, Department of History & Politics, James Cook University, Townsville, Qld)).
ANNEXURE
Extract from judgment of Burchett J in Short v F W Hercus Pty Ltd (1993) 40 FCR 511 at 517-520.
“No one doubts you must read any expression in its context. And if, for example, an expression was first created by a particularly respected draftsman for the purpose of stating the substance of a suggested term of an award, was then adopted in a number of subsequent clauses of awards dealing with the same general subject, and finally was adopted as a clause dealing with that same general subject in the award to be construed, the circumstances of the origin and use of the clause are plainly relevant to an understanding of what is likely to have been intended by its use. It is in those circumstances that the author of the award has inserted this particular clause into it, and they may fairly be regarded as having shaped his decision to do so. The rules of construction, Mason and Wilson JJ. said in Cooper Brookes (Wollongong) Proprietary Limited v. The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297 at 320, are really rules of common sense. Common sense would be much offended by a refusal to look at the facts I have summarized. As Isaacs J. said in Australian Agricultural Company v. Federated Engine-Drivers and Firemen's Association of Australasia (1913) 17 CLR 261 at 272, citing Lord Halsbury L.C.: "The time when, and the circumstances under which, an instrument is made, supply the best and surest mode of expounding it."
The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps most often, the immediate context is the clearest guide, but the court should not deny itself all other guidance in those cases where it can be seen that more is needed. In literature, Milton and Joyce could not be read in ignorance of the source of their language, nor should a legal document, including an award, be so read.
That much is fairly clear. Where there is seen to be a difficulty, the court can often go to the history of the matter. A number of illustrations will be found in Nurses (South Australia) Award (Interpretation) Case (1981) 48 SAIR (Pt 1) 151. But an ambiguity or obscurity may not be immediately seen on the face of a document. Both the problem and its solution may appear only when the wider context from which an expression first sprang is brought to notice. Is the court then forbidden to look past the document itself that is before it?
The respondent says the instant award is clear, and we must shut our eyes to what went before. I think there are two answers to this argument. On the one hand, I do not accept that the award is clear on its face. The fact that I have given it a meaning by a process of construction (as it happens, contrary to the respondent's contention) cannot disguise the possibility of understanding the language, as the learned judge understood it, differently. (Cf. Pickard v. John Heine and Son Limited (1924) 35 CLR 1 at 9, per Isaacs A.C.J.) That is certainly sufficient to justify a reference to its source. Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form, only a kind of wilful judicial blindness could lead the court to deny itself the light of that history, and to prefer to peer unaided at some obscurity in the language. "Sometimes", McHugh J. said in Saraswati v. R (1991) 172 CLR 1 at 21, the purpose of legislation "can be discerned only by reference to the history of the legislation and the state of the law when it was enacted". Awards must be in the same position.
But even if the language, read alone, appeared pellucidly clear, the tendency of recent decisions - and this is the other answer to the argument put - would seem to require the court to look at the full context. Only then will all the nuances of the language be perceived. The judgment of Mason J. (with which Stephen and Wilson JJ. expressed agreement) in Codelfa Construction Proprietary Limited v. State Rail Authority of New South Wales (1982) 149 CLR 337 at 347-353 contains an extended discussion of the principles upon which a court may take account, when construing a contract, of the circumstances surrounding the agreement of the parties upon those particular terms. In the course of that discussion, Mason J. suggested (at 350) that "perhaps ... the difference ... is more apparent than real" between the view that evidence is admissible only to resolve an ambiguity, not to raise it, and the view that extrinsic evidence is receivable both to raise and to resolve an ambiguity. He concluded (at 352):
"The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although ... if the facts are notorious knowledge of them will be presumed." (Emphasis added.)
The fact is that words are frequently susceptible of more than one meaning. Paradoxically, ambiguity may be born of the reader's clarity of thought which perceives a potentiality for an alternative meaning. But in many cases only evidence of extrinsic facts can show that the potentiality has substance. The old case Macdonald v. Longbottom (1859) 1 El and El 977 (120 ER 1177), to which Mason J. referred, is an example, since there is nothing necessarily ambiguous in the expression "your wool" (indeed Erle J. at 986 described it as "most explicit") - only evidence that at the time the vendor had both wool of his own growing, and also wool which he had bought in from others, could raise an ambiguity, while at the same time solving it once the other party was shown to have known the facts.
Mason J. returned to the subject in his dissenting judgment in K. and S. Lake City Freighters Proprietary Limited v. Gordon and Gotch Limited (1985) 157 CLR 309 at 315, when he said:
"Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasize the clarity of meaning which words have when viewed in isolation, divorced from their context. The modern approach to interpretation insists that the context be considered in the first instance, especially in the case of general words, and not merely at some later stage when ambiguity might be thought to arise."
This is a broad proposition, applicable to problems of construction generally, although it was put forward in the context of statutory interpretation. In that context, this court said (in the joint judgment of Neaves, Burchett and Lee JJ.) in Busby v. Chief Manager, Human Resources Department, Australian Telecommunications Commission (1988) 20 FCR 463 at 468:
"(A)s Dixon C.J. said in Commissioner for Railways (NSW) v. Agalianos (1955) 92 CLR 390 at 397, 'the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed'. See also the dissenting judgment of Mason J. in K. and S. Lake City Freighters Pty Ltd v. Gordon and Gotch Ltd (1985) 157 CLR 309 at 315, where he referred to 'the cardinal rule of statutory interpretation that requires the words of a statute to be read in their context'. If that mode of interpretation is truly followed, there must be occasions when it leads to a passage being understood in a sense it would not bear upon a reading in isolation. This is not a shiny new rule, but an approach embedded in the law at least since Lord Coke: see S.G.G. Edgar, Craies on Statute Law (7th ed., 1971), pp 96-101."
The principles of statutory interpretation referred to are not inapplicable to an award which seeks, in a way, to legislate for the terms and conditions of employment of a number of persons engaged in a particular industry. (Cf. Geo. A. Bond and Co. Ltd. (In Liquidation) v. McKenzie (1929) 28 AR 498 at 503.)
I certify that this and the preceding 28 pages are a true copy of the Reasons for Judgment of His Honour Justice Madgwick.
Associate:
Dated: 31 July 1996
APPEARANCES
Counsel for the Applicant: J A Logan
Solicitor for the Applicant: Connolly Suthers
Counsel for the Respondent: J S Douglas QC and J E Murdoch
Solicitor for the Respondent: Blake Dawson Waldron
Date of hearing: 10 November 1995
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