Lennie v Hawkes
[1996] IRCA 472
•4 Oct 1996
DECISION NO:472/96
CATCHWORDS
INDUSTRIAL LAW - claim by applicants for recovery of wages - lockout - whether applicants validly locked out of their employment - whether employer entitled to refuse to pay remuneration - whether lockout protected action
Industrial Relations Act 1988 ss 170PD, 170PG, 170PH, 170PM, 179
Industrial Relations Reform Act 1993
Employment Contracts Act 1991 (NZ)
Amalgamated Society of Engineers (Perth Branch) v Millars’ Karri and Jarrah Co (1902) Ltd (1907) 9 WAR 207
Gapes v Commercial Bank of Australia Ltd (1979) 41 FLR 27
Stemp v Australian Glass Manufacturers Co Ltd (1916-1917) 23 CLR 226
Witehira v Presbyterian Support Services (Northern) [1994] 1 ERNZ 578
No. DI 1044 of 1996
JUDITH ANNE LENNIE v DAVID HAWKES AND SARAH J BUTTERWORTH
No. DI 1045 of 1996
ROBERT LAIRD v DAVID HAWKES AND SARAH J BUTTERWORTH
JUDGE: Marshall J
PLACE: Melbourne (heard in Darwin)
DATE: 4 October 1996
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
NORTHERN TERRITORY DISTRICT REGISTRY)
No. DI 1044 of 1996
BETWEEN: JUDITH ANNE LENNIE
Applicant
AND: DAVID HAWKES AND
SARAH J BUTTERWORTH
Respondents
JUDGE: Marshall J
PLACE: Melbourne (heard in Darwin)
DATE: 4 October 1996
ORDER
THE COURT ORDERS THAT:
1.The respondent shall pay the applicant the sum of $248 on or before 25 October 1996.
2.The proceeding otherwise be adjourned until 10.15 am on 28 October 1996 in Melbourne for the hearing of submissions on the question of interest.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
NORTHERN TERRITORY DISTRICT REGISTRY)
No. DI 1045 of 1996
BETWEEN: ROBERT LAIRD
Applicant
AND: DAVID HAWKES AND
SARAH J BUTTERWORTH
Respondents
JUDGE: Marshall J
PLACE: Melbourne (heard in Darwin)
DATE: 4 October 1996
ORDER
THE COURT ORDERS THAT:
1.The respondent shall pay the applicant the sum of $243.73 on or before 25 October 1996.
2.The proceeding otherwise be adjourned until 10.15 am on 28 October 1996 in Melbourne for the hearing of submissions on the question of interest.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
COURT OF AUSTRALIA )
NORTHERN TERRITORY DISTRICT REGISTRY)
No. DI 1044 of 1996
BETWEEN: JUDITH ANNE LENNIE
Applicant
AND: DAVID HAWKES AND
SARAH J BUTTERWORTH
Respondents
No. DI 1045 of 1996
BETWEEN: ROBERT LAIRD
Applicant
AND: DAVID HAWKES AND
SARAH J BUTTERWORTH
Respondents
JUDGE: Marshall J
PLACE: Melbourne (heard in Darwin)
DATE: 4 October 1996
REASONS FOR JUDGMENT
These matters, which were heard together, are applications under s179 Industrial Relations Act 1988 (“the Act”) for the recovery of monies which the applicants contend are owed to them by the first respondent pursuant to the Northern Territory Teaching Service Award 1981 (“the award”). Whether or not the applicants are entitled to succeed depends on the resolution of the issue in the proceedings as to whether the applicants had been validly locked out by the respondents at certain times when deductions were made from the wages of each applicant.
THE PARTIES
The applicants are members of the teaching service in the Northern Territory. The first respondent is the Commissioner for Public Sector Employment in the Northern Territory and the employer of the applicants. The second respondent was the Acting Commissioner for Public Sector Employment at a time relevant to the occurrence of material events in relation to the proceedings. Each applicant is a member of the Australian Education Union (“AEU”).
BACKGROUND FACTS
The factual background to the proceedings is not in dispute. In July 1995, AEU gave notice pursuant to s170PD of the Act to the first respondent and to the Australian Industrial Relations Commission of its intention to initiate a bargaining period for the purpose of negotiating a new certified agreement under the Act. In August 1995, February 1996 and March 1996, AEU gave notice in writing under s170PH of the Act of its intention to take industrial action in support of claims which were the subject of an extant industrial dispute between AEU and the first respondent. Industrial action was subsequently taken by AEU members which attracted protected action status under the Act.
On 17 April 1996, AEU again gave written notice of its intention to take industrial action in accordance with s170PH of the Act. The industrial action was described as:-
“On going stop work action by AEU NT members in NT Department of Education workplaces across the Northern Territory from 7 am Monday 22 April 1996 for a period of 240 hours and/or until such time as an agreement is negotiated and settled between the parties.”
Notice was also given of ongoing extensions of bans on work performed during and outside school hours.
On 23 April 1996, members of AEU throughout the Northern Territory stopped work between 11.00 am and 2.00 pm. Participation in the stop work meeting was protected action in accordance with the notice given by AEU on 17 April 1996. Each applicant attended that meeting.
(i) The first letter
By letter dated 22 April 1996 the first respondent purported to give notice to AEU of his intention to lock out employees engaging in industrial action. Omitting formal parts, the letter read:
“Re:NOTICE OF INTENTION TO LOCK OUT
Further to the bargaining period initiated by your union by notices of initiation of a bargaining period dated 28 June 1995, I hereby give your union 72 hours notice of intention to take lock out action. Separate notices will be given to each employee in accordance with section 170PH(2)(b) of the Industrial Relations Act 1988.
Pursuant to section 170PH(3) of the Act we notify you that the intended action is lock out action. It is intended to lock out those employees who, through participation or proposed participation in industrial action, are not available or not intending to be available to perform classroom and associated duties or other duties during school hours on any day or part of a day. This will occur on each occasion that members of your Union participate or indicate an intention to participate in the above mentioned action and the view is formed that lock out action is an appropriate response. Lock out action will commence on Friday, 26 April 1996 which is more than 72 hours after the giving of this notice to you.”
The applicants each received a letter from the first respondent indicating his intention to take lockout action. In each case the letters were undated, but it appears from the evidence that they were received by the applicants on or about 23 April 1996, although Ms Lennie was unable to say whether she received her letter before or after she attended the stop work meeting. Omitting formal parts, the letters were in identical terms as follows:
“RE: NOTICE OF INTENTION TO LOCK OUT
On 17 April 1996 your Union gave notice under the Industrial Relations Act of intention to take industrial action. Specifically notice was given that:
‘On going stop work action by AEU NT members in NT Department of Education workplaces across the Northern Territory from 7 am Monday 22 April 1996 for a period of 240 hours and/or until such time as an agreement is negotiated and settled between the parties.’
Notice was also given for ongoing extension bans on various work performed either during or outside school hours.
Your Union has today been notified of my intention to take lock out action pursuant to the Act. I notify you that it is my intention to lock out those employees who, through participation or proposed participation in industrial action, are not available or not intending to be available to perform classroom and associated duties or other duties during school hours on any day or part of a day. This will occur on each occasion that employees participate or indicate an intention to participate in the above mentioned action and the view is formed that lock out action is an appropriate response. Lock out action will commence on Friday, 26 April 1996 which is more than 72 hours after the giving of this notice to you.
If lock out action is taken, it will be applicable to any day or days on which the specified duties are not performed or it is indicated they will not be performed.
Lock out means, in the simplest terms, that you are not to turn up for work for the duration of the period specified by your employer. You will not be paid for the period you are locked out.
You are further advised that, in the event that you decide to perform work during a period you are locked out, you will still not be paid, and you could be held personally liable for any incident or consequence that arises in relation to your having worked.”
No lockout action was taken on 26 April 1996.
(ii) The second letter
On 3 May 1996 AEU gave notice under s170PH of the Act of its intention to take industrial action. Pursuant to s170PH(3) of the Act AEU provided details of the intended action and the days on which it would take place in the following terms:
“On going stop work action by AEU NT members in NT Department of Education workplaces across the Northern Territory from 7 am Monday 6 May 1996 for a period of 7 weeks until 24 June 1996 and/or until such time as an agreement is negotiated and settled between the parties.”
Notice was also given of ongoing extensions of bans on work performed either during or outside school hours. Stop work action was not taken until 10 May 1996.
By letter dated 8 May 1996 the second respondent advised AEU that the view had been formed that lockout action was an appropriate response to the intended industrial action on 10 May 1996. Omitting formal parts, the letter read:
“RE: NOTICE OF INTENTION TO LOCK OUT
I refer to the Commissioner’s Notice of Intention to lock out (“the Notice”) dated 22 April 1996.
This notice should be read in conjunction with the Notice.
In the Notice the Commissioner gave notice that pursuant to section 170PH(3) of the Act, the intended action is lock out action. You were notified that this action will occur on each occasion that members of your union participate or indicate an intention to participate in specified action and the view was formed that lock out action is an appropriate response.
I now advise and notify you that the view has been formed that lock out action is the appropriate response to the industrial action threatened by the AEU (NT Branch) commencing Friday 10 May 1996. In this context ‘industrial action’ means attendances at stop work meetings, rolling stop work action and walk out action.
Separate notices will be given to each employee.”
Each applicant received a letter dated 8 May 1996 from the second respondent indicating that the view had been formed that lockout action was an appropriate response to the intended industrial action. Omitting formal parts, the letters were in identical terms as follows:
“RE: NOTICE OF INTENTION TO LOCK OUT
I refer to the Commissioner’s Notice of Intention to lock out (“the Notice”), which was previously given to you.
This notice should be read in conjunction with the Notice.
In the Notice the Commissioner gave notice to you that on each occasion you participated in or indicated an intention to participate in specified action and the view was formed that lock out action is an appropriate response, then you will be locked out.
I now advise and notify you that the view has been formed that lock out action is the appropriate response to the industrial action threatened by the AEU NT Branch commencing Friday 10 May 1996. In this context, ‘industrial action’ means attendances at stop work meetings, rolling stop work action and walk out action.
I confirm the advice in the Notice that lock out applies to the whole day on which you do not, because of industrial action, perform your duties for any part of the day. In simple terms you will not be paid for the day or days on which you are locked out. You are directed not to work or to resume work on any day you are locked out.
As previously advised, in the event that you disobey the direction and decide to perform work during the day or days on which you are locked out, you will not be paid, and you could be held personally liable for any incident or consequence that arises in relation to your having purported to work.”
(iii) 10 May 1996
On 10 May 1996 AEU members in the Darwin region, of which the applicant Mr Laird was one, stopped work for two hours between 9.30 am and 11.30 am. The stop work was protected action in accordance with the notice given by AEU on 3 May 1996. Mr Laird is presently employed in the position of Appraisals Officer located at the Northern Territory Department of Education, Schools Policy Branch. It is not in dispute that Mr Laird commenced work on 10 May 1996 at the usual time of 8.00 am and performed his normal duties until 9.30 am. At 9.30 am he left work to attend the stop work meeting and returned to his place of work at 11.30 am, where he reported to Mr Makepeace, the Director of the Schools Policy Branch.
The respondents relied upon an affidavit of Mr Makepeace exhibited to which was a statement dated 13 May 1996 by a Mr Young in relation to a discussion between Mr Makepeace and AEU members involved in the stop work meeting on 10 May 1996. The contents of that statement are not in dispute. The statement was in the following terms:
“AEU(NT) STOPWORK MEETING AND SUBSEQUENT
LOCKOUT. 10 MAY 1996
Upon return to work at Tamar House at 11.30 am after the 2 hour stopwork meeting on 10 May, four AEU members reported to Mr C Makepeace, the Director of Schools Policy.
Mr Makepeace was advised that the latest Government EBA offer had been rejected by the meeting, and that the members concerned were reporting back for work.
In view of the two letters members had received concerning a lockout notification, Mr Makepeace was asked if those involved were locked out, as well as the ramifications of the lockout.
Mr Makepeace advised as follows:
.those who undertook industrial action were locked out for the remainder of the day
.that there would not be any physical lockout
.that the full day’s pay would be lost by those involved in the industrial action
.that the members concerned could carry on with their work should they so desire, but that they would not receive any pay, and that the Department of Education would not be held liable in any way as a consequence of continuing to work
.that the letter advising of the lockout was quite explicit.
I asked Mr Makepeace if he intended to provide written advice that the members concerned had actually been locked out. He declined, saying that those concerned had received ‘all they will get’.
The four members then tidied offices before leaving the building.”
On 10 May 1996 Ms Lennie commenced work at the usual time of 7.45 am and performed her normal duties until 1.00 pm. Ms Lennie is currently employed as an Executive Teacher Level 1 at the Gray Primary School in the Palmerston region. Ms Lennie’s duties involve both face to face teaching and administrative tasks. She stopped work at 1.00 pm when she learned that teachers in the Darwin region had been locked out. Ms Lennie did not return to work that day.
(iv) 16 May 1996
On 16 May 1996, Mr Laird commenced work at the usual time of 8.00 am and performed his normal duties until 1.45 pm. Thereafter he left work in order to attend a stop work meeting in protest at a lockout of AEU members in the Arnhem region. He did not attempt to return to work that day other than to collect his bag.
Ms Lennie commenced work at the usual time of 7.45 am and performed her normal duties until 1.45 pm. She stopped work at 1.45 pm having learned earlier that afternoon that teachers in the Arnhem region had been locked out. She did not return to work that day.
On 29 May 1996 each applicant received a payslip which indicated that deductions had been made from their pay in the amount of a full day’s salary plus daily allowance in respect of each of 10 and 16 May 1996. This was the first occasion on which the applicants learned they would be docked a whole day’s pay in respect of each of 10 and 16 May 1996.
The competing contentions and the legislative setting
The respondents resist the applicants’ claims for payment for work done. They rely upon s170PG(5) of the Act which, they allege, entitles them to refuse to pay any remuneration to the applicants for work done on 10 and 16 May 1996; being days on which they allege that the applicants were locked out of their employment pursuant to s170PH(3) of the Act. They do not take issue with the amounts claimed by the applicants (as amended in the case of Mr Laird) in the event that the Court accepts the submissions of the applicants.
Counsel for the applicants, Mr Brian Lawrence, submitted that the claims for work done comprise five discrete amounts, four of which raised the same legal issue, and would attract the same treatment. The applicants each claim payment for hours actually worked by them on each of 10 and 16 May 1996. They are the four amounts which attract identical treatment. The fifth amount is claimed by Mr Laird to be payable to him for the period on 10 May 1996 after he returned from the stop work meeting and presented himself for work but was directed not to work by Mr Makepeace. He makes the claim on the basis that he was ready, willing and able to work, and that the lockout notices which purported to entitle the first respondent to lock him out on that day were ineffective to do so.
The applicants allege that on each of the days for which they claim payment they were not locked out of their employment as a matter of fact. They also allege that the notices they received from the respondents did not have the effect of locking them out. They allege non-compliance on the part of the respondents with the notice provisions of the Act (s170PH) which have the effect of making a lockout “protected action” under the Act. They say that the entitlement of the employer to refuse to pay remuneration in respect of a period of lockout is limited by the Act to lockouts which attract protected action status.
The resolution of the issues in dispute requires an interpretation of provisions introduced into the Act by the Industrial Relations Reform Act 1993 which establish the right of an employer to lock out its employees during a bargaining period. These provisions are contained in Div 4 of Pt VIB of the Act. Lockout action taken in accordance with the regime provided for in the Act is identified as “protected action”, that is, protected from legal liability that might otherwise attach to that action.
Section 170PG of the Act provides that:
“170PG(1) [Identification of] This section identifies certain action (‘protected action’) to which the provisions set out in section 170PM are to apply.
170PG(2)[Industrial action] During the bargaining period, an organisation of employees that is a negotiating party, a member of such an organisation who is employed by the employer, or an officer or employee of such an organisation acting in that capacity, is entitled, for the purpose of supporting or advancing claims made by the organisation that are the subject of the industrial dispute, to organise or engage in industrial action directly against that employer and, if the organisation, member, officer or employee does so, the organising of, or engaging in, that industrial action is protected action.
170PG(3)[Lockout] Subject to subsection (6), during the bargaining period, the employer is entitled, for the purpose of:
(a)supporting or advancing claims made by the employer that are the subject of the industrial dispute; or
(b)responding to industrial action by any of the relevant employees;
or for both of those purposes, to lock out all or any of the relevant employees from their employment and, if the employer does so, the lockout is protected action.
170PG(4)[Performance of work prevented but contract not terminated] The reference in subsection (3) to the employer locking out employees from their employment is a reference to the employer preventing employees from performing work under their contracts of employment without terminating those contracts.
170PG(5)[Employee remuneration not payable] If the employer locks out employees from their employment in accordance with subsection (3), the employer is entitled to refuse to pay any remuneration to the employees in respect of the period of the lockout.
170PG(6)[Continuity of employees’ employment not affected] The employer is not entitled to lock out employees from their employment under subsection (3) unless the continuity of the employees’ employment for such purposes as are prescribed by the regulations is not affected by the lockout.
170PG(7)[Effect of section] This section has effect subject to the following provisions of this Division.”
The only provision that is relevant for current purposes in so far as the limitation contained in s170PG(7) is concerned is s170PH, which provides:
“170PH(1) [72 hours’ written notice of intention] Any action taken as mentioned in subsection 170PG(2) by an organisation of employees, a member of such an organisation, or an officer or employee of such an organisation acting in that capacity, is not protected action unless at least 72 hours’ written notice of the intention to take the action has been given by the organisation to the other negotiating party or each of the other negotiating parties.
170PH(2)[Lock-out by employer] Any action taken as mentioned in subsection 170PG(3) by the employer to lock out employees from their employment:
(a)is not protected action unless 72 hours’ written notice of the intended lockout has been given by the employer to the other negotiating party or each of the other negotiating parties; and
(b)is not protected action in so far as it relates to a particular employee unless, at least 72 hours before the lockout begins, the employer has given written notice to the employee, or has taken other reasonable steps to notify the employee, of the intended lockout.
170PH(3)[Written notice to provide details] A written notice or other notification under this section must state the nature of the intended action and the day when it will begin.
170PH(4)[Notification before commencement of bargaining period] A written notice or other notification under this section may be given before the start of the bargaining period.”
Section 170PM should also be reproduced. That is the section which grants immunity in respect of protected action. It provides:
“170PM(1) [Order does not apply to protected action] An order made by the Commission under section 127 does not apply to protected action.
170PM(2) [Bans clause] A bans clause does not apply to protected action.
170PM(3)[Protected action immunity against the law]
Subject to subsection (4), an action does not lie under any law (whether written or unwritten) in force in a State or Territory in respect of any industrial action that is not protected action unless the industrial action has involved or is likely to involve:
(a)personal injury; or
(b)wilful or reckless destruction of, or damage to, property; or
(c)the unlawful taking, keeping or use of property.
170PM(4)[Defamation] Subsection (3) does not prevent an action for defamation being brought in respect of anything that occurred in the course of industrial action.”
Was there a lockout?
Mr Lawrence contended that there was no lockout of the applicants in fact. He further contended that the notices received by the applicants were ineffective in purporting to lock them out of their employment. He submitted that in order for a lockout to have occurred, the notices need to have been accompanied by an “overt act”. Counsel for the respondents (Mr Stephen Rothman SC with Dr Graham Floyd Smith) submitted that the legislation does not require an overt act. They contended that the action of the respondents in serving the lockout notices was sufficient to establish a lockout of the applicants for the purposes of the Act.
Section 170PG(4) of the Act provides that the reference in s170PG(3) of the Act to the employer locking out its employees:
“... is a reference to the employer preventing employees from performing work (emphasis supplied) under their contracts of employment without terminating those contracts.”
A lockout was described by McMillan J (with whom Parker CJ and Rooth J agreed) in the Full Court of the Supreme Court of Western Australia, in Amalgamated Society of Engineers (Perth Branch) v Millars’ Karri and Jarrah Co (1902) Ltd (“ASE”) (1907) 9 WAR 207 at 210-211 as:-
“... the converse of a strike; it is the refusal by an employer to allow his workmen to work unless they will accept his rate of wages or the conditions of labor he imposes.”
See also Stemp v Australian Glass Manufacturers Co Ltd (1916) 23 CLR 226 where Higgins J at 244 referred to “closing the works”.
Mr Lawrence submitted that the language of s170PG of the Act required some objectively identifiable act that would make it clear to the ordinary observer that an employee had been locked out. However, he did not go so far as to say that what was required was prevention by means of physical exclusion of an employee from the workplace.
Mr Rothman also submitted that physical prevention was not required. He submitted that an employee could be relevantly prevented from performing work under his or her contract of employment by being given written notice, whether or not that notice was given in sufficient time to make the lockout a protected action.
The question of what type of act can amount to a lockout has been considered by a Full Court of the New Zealand Employment Court. In Witehira v Presbyterian Support Services (Northern) (“Witehira”) [1994] 1 ERNZ 578 the Full Court was required to interpret provisions of the Employment Contracts Act 1991 (NZ) (“the NZ Act”) which recognised a right to lock out employees where such action related inter alia to the negotiation of a collective employment contract. The Court was obliged to consider the statutory definition of lockout under the NZ Act which defined lockout as inter alia “the act of an employer ... in breaking some or all of the employer’s employment contracts”. The Court was required to consider in particular whether that definition comprehended a “partial” or “notional” lockout, that is a lockout which involved no actual exclusion of employees or cessation of production, but where the employer deliberately breached its contractual obligations to its employees, in this case by underpayment of wages. The Full Court concluded that the Parliament could not have intended by the statutory definition to comprehend a lockout which involved no lost production to the employer but which would relieve employers of the obligation to pay the correct amount of remuneration during the period of the lockout. It concluded that such a construction, which benefited one party so absolutely, could not have been intended by the Parliament. In so deciding the Full Court overturned a previous ruling to the contrary which gave partial lockouts privileged status under the NZ Act.
As Witehira illustrates, it is open to a legislature to enact a statutory definition of lockout which comprehends circumstances which might appear to have little in common with traditional conceptions of lockout, such as those referred to in ASE.
Parliament might have provided a statutory definition of lockout which required no more than service of a notice of lockout. Indeed, Mr Rothman contended that this was the effect of the provisions under examination in these proceedings. He submitted that the statutory regime currently in place provides for lockout by way of notice. In ordinary parlance this might be called a “technical” lockout, since it does not display the indicia normally associated with the term, be it a physical lockout of employees, a refusal by the employer to furnish its employees with work, or a shut down of premises.
I do not believe that s170PG of the Act should be construed in the way contended for by Mr Rothman. I do not believe that the reference in s170PG(4) of the Act to an employer preventing the performance of work comprehends the type of prevention alleged by Mr Rothman to have occurred in this case, i.e., a conditional prevention which may be put in place if certain events occur. In this case, that concept means that an employee, notwithstanding the performance of work for the greater part of a day, was in truth prevented from performing any work on that day because of the taking of industrial action towards the end of that day.
Whilst s170PG(4) of the Act does not require either the complete cessation of work or the physical exclusion of employees from the workplace, it demands a clear and unambiguous act by reference to which employees can know that they are locked out as a matter of fact. Fairness and common sense demands that employees who are the recipients of such notices are locked out by reference to an act which can be unambiguously construed as such, given the possible consequence of loss of remuneration. It must be unambiguously clear to employees that they are prevented from performing work during a certain, ascertainable, period of time.
This approach can be tested by reference to Ms Lennie’s situation on 10 May 1996. The uncontradicted evidence of Ms Lennie was that she performed her normal duties on that day until she heard early in the afternoon that teachers in the Darwin region had been locked out. She decided to stop work in sympathy with fellow AEU members.
On the respondent’s analysis, leaving aside for the moment any question in relation to compliance with s170PH of the Act, the notices themselves were sufficient to establish a lockout of Ms Lennie for the entire day and to disentitle her to a full day’s pay from the moment she engaged in walk out action. It is not to the point, they say, that Ms Lennie may not have had an intention to engage in industrial action when she arrived for work on the morning of 10 May 1996, and in fact performed her duties as normal for part of that day. They refer to those parts of the notices which purport to lock out employees who do not, because of industrial action, perform their normal duties on any day or part of a day. Thus the respondents are obliged to concede that there is an element of retrospectivity in their argument.
I do not agree with the approach to the construction of s170PG of the Act urged upon the Court by counsel for the respondents; all the more because it has the effect of entitling an employer who has taken the benefit of work performed without demur to refuse to pay the employee for work performed in reliance on 170PG(5) of the Act on the basis that the employee was locked out. In other words, it is an approach which permits a windfall gain for an employer. I share the view of the Full Court of the New Zealand Employment Court in Witehira that such a situation which benefits one party so absolutely could not have been intended by Parliament. There is no countervailing financial windfall available to employees who engage in protected industrial action.
On this analysis the respondents’ defence to the applicants’ application must fail. I find that the applicants are entitled to be paid for the hours worked by them on 10 and 16 May 1996 respectively.
The foregoing analysis does not deal with Mr Laird’s claim for remuneration for 10 May 1996 on the basis of being ready, willing and able to work for the remainder of that day. Counsel for the applicants conceded that the discussion with Mr Makepeace was sufficient to amount to a lockout for the purposes of the Act. However counsel submitted that insufficient notice had been given to Mr Laird to accord the lockout protected action status, and therefore to entitle the employer to withhold remuneration. It is to this question that I now turn.
Protected action
Even if it could be said that the applicants were in fact locked out on 10 and 16 May 1996, it is my view that they are entitled to succeed on their applications because the lockout action taken in respect of them was not protected action in that there was a failure by the respondent to comply with s170PH(2) of the Act. I do not accept the submission of counsel for the respondents that s170PG(5) of the Act can be construed to entitle an employer to refuse to pay remuneration to locked out employees whether or not the lockout is protected action. It is my view that on the proper construction of the relevant provisions the lockout must be protected action in order for the employer to avail itself of the entitlement to refuse to pay remuneration. My reasons for this conclusion are as follows:
The whole of s170PG of the Act is directed to setting out the characteristics of protected action. This is clear by reference to subsection (1) of s170PG of the Act.
The use of the conjunction “and” in s170PG(3) of the Act in the clause “and the employer does so”, connects the purposes for which lockout action might be directed to its status. Those purposes give the lockout the inherent quality of protected action.
Section 170PG(5) of the Act entitles the employer to refuse to pay remuneration if the employer locks out employees “in accordance with subsection 3”. Those words should be interpreted as including not just the purposes in subparagraphs (a) and (b) of subsection (3), but the status which, on a proper construction of subsection (3), is inherent in those purposes.
On a proper reading of s170PG of the Act the entitlement in s170PG(5) of the Act is limited to lockout action which attracts protected action status. Thus, if the respondents are to bring themselves within that section, the lockout of the applicants must be protected action.
72 hours’ notice
Section 170PH(2)(b) of the Act provides inter alia that lockout action is not protected action in so far as it relates to a particular employee
“.. unless, at least 72 hours before the lockout begins, the employer has given written notice to the employee, or has taken other reasonable steps to notify the employee, of the intended lockout.”
This is to be contrasted with the type of notice that is required in respect of employee organisations in s170PH(2)(a) of the Act, which is:
“... at least 72 hours’ written notice of the intended lockout ...”
In my view s170PH(2)(b) of the Act requires that employees who are facing the prospect of lockout are accorded as great a measure of certainty as can be given in respect of any prospective action, given that the consequence of that action will be the loss of income for the period of the lockout. No doubt that is at least partly why the section requires that employees facing the prospect of lockout are required to be given 72 hours’ notice before the lockout begins.
Whilst Mr Rothman’s primary submission was that the employer is entitled to refuse to pay remuneration even if the lockout is not protected action, he submitted, in the alternative, that in this case the employer gave the applicants the requisite 72 hours’ notice under the Act. In this regard he relied on the combined effect of the two notices received by the applicants.
As stated above, the first notice was received by the applicants on 23 April 1996. It provided inter alia:
“Lock out action will commence on Friday, 26 April 1996 which is more than 72 hours after the giving of this notice to you.”
In fact, no lockout action was taken on this day. The second notice was received by the applicants at the earliest on 8 May 1996. That notice referred to the notice of 22 April 1996 and said: “This notice should be read in connection with the Notice.” It advised employees that the view had been formed that lockout action “is the appropriate response to the industrial action threatened by the AEU NT Branch ...”. The applicants were purportedly locked out two days later on 10 May 1996.
In order to answer the respondents’ submission it is necessary to examine the contents of the notices.
The first notice
Put at its highest, the notice of 22 April 1996 is equivocal. It gives notice of an intention to lock out, but qualifies that intention by the suggestion contained further on in the notice that someone, presumably the first respondent, will at some point in the future “form the view” that lockout action is appropriate. In my view the letter clearly raises an expectation in the recipient that something else will occur before lockout action begins. This expectation is reinforced by the first sentence of the very next paragraph which begins with the qualifying “if”, and begins ”If lockout action is taken ...” (emphasis supplied). It is my view that employees who received this notice were entitled to expect that if the view was formed at some future time that lockout action was appropriate, they would be informed that the view had been so taken.
The second notice
The notice dated 8 May 1996 might be said in one sense to “take the next step” in so far as it fulfils the expectation created in the notice of 22 April 1996. However, there is a circularity in that notice which deprives it of certainty. The last two sentences of the second last paragraph of the notice refer respectively to “the day or days on which you are locked out” and “any day you are locked out”. The first sentence refers to the consequences of lockout; that is, a loss of remuneration. The second sentence is in the form of a direction. The direction states:
“You are directed not to work or to resume work on any day you are locked out.”
However, nowhere in the notice does it state when the recipients of the notice will be locked out. Certainly there is a reference to 10 May 1996, but in my view the sentence just quoted would raise in the mind of the recipient an expectation that something will occur beyond the receipt of this notice at some point in the future which will make it abundantly clear that the recipient is in fact locked out for a particular period of time. The notice is ambiguous on the issue as to when lockout action will occur.
I find in this case that the two notices received by the applicants were, when read together, incapable of satisfying the requirement of s170PH(2)(b) of the Act that the employees be given notice 72 hours before the lockout begins. This is due to the equivocation that is evident in both of the notices, an equivocation that in my view is referable to the selective intent of the notices. It is clear that the notices were only ever intended to lock out those employees who chose to engage in industrial action. It was intended to be a selective, rather than wholesale, lockout of employees. Such a process is bound to be fraught with difficulties, and in this case it has resulted in the failure of the lockout to attract protected action status under the Act.
As I have found that s170PG(5) of the Act requires a lockout to have protected action status for an employer to be entitled to refuse to pay remuneration, I find that the respondent cannot rely on s170PG of the Act to resist the applicants’ claim for payment for work done. The applicants are entitled to be paid for the work actually performed by them on each of 10 and 16 May 1996 respectively. Further, Mr Laird is entitled to be paid for the period on 10 May 1996 after he returned from the stop work meeting and presented himself for work but was directed not to work by Mr Makepeace. There is nothing in the award, which was in evidence before the Court, which would permit deductions from Mr Laird’s wages in the circumstances. See Gapes v Commercial Bank of Australia Ltd (1979) 41 FLR 27 at 28-29.
Exclusive of interest, Mr Laird is entitled to the sum of $243.73, which represents in total his normal daily salary plus allowances for 10 and 16 May 1996, less a deduction representing the period during which he was engaged in industrial action on those days. Exclusive of interest, Ms Lennie is entitled to the sum of $248.00, which represents the number of hours actually worked by her on each of the days on which she took industrial action.
ORDERS
The question of the quantum of interest which should be awarded in each case was not dealt with by counsel. In the circumstances, the Court will do no more than make orders in each case for the payment of the amounts of money referred to in the preceding paragraph and provide for such payment to be made within 21 days. The Court will hear submissions on the question of interest, in Melbourne, at 10.15 am on 28 October 1996. Alternatively, the parties may file consent orders under 035 r10 of the rules of the Court on the question of interest.
I certify that this and the preceding 32 pages are a true copy of the Reasons for Judgment herein of his Honour Justice Marshall.
Associate:
Date:
Counsel for the Applicant: B.D. Lawrence
Solicitor for the Applicant: Holding Redlich
Counsel for the Respondent: S.C. Rothman SC, G.F. Smith
Solicitor for the Respondent: Clayton Utz
Date of hearing: 5 September 1996
Date of judgment: 4 October 1996
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