Manildra Flour Mills (Manufacturing) Pty Limited v National Union of Workers on Behalf of Craig Fahy and Ors

[2013] HCATrans 63

[2013] HCATrans 063

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S302 of 2012

B e t w e e n -

MANILDRA FLOUR MILLS (MANUFACTURING) PTY LIMITED

Applicant

and

NATIONAL UNION OF WORKERS ON BEHALF OF CRAIG FAHY

First Respondent

NATIONAL UNION OF WORKERS ON BEHALF OF MICHAEL GIBSON

Second Respondent

NATIONAL UNION OF WORKERS ON BEHALF OF DAVID VAUGHAN

Third Respondent

NATIONAL UNION OF WORKERS ON BEHALF OF MATTHEW DAVIS

Fourth Respondent

Application for special leave to appeal

HAYNE J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 MARCH 2013, AT 11.19 AM

Copyright in the High Court of Australia

____________________

MR A.R. MOSES, SC:   Your Honour, if it pleases the Court, I appear with my learned friend, MR M.P. CLEARY, for the applicant.  (instructed by Berry Buddle Wilkins Lawyers)

MR I. TAYLOR, SC:   If it please the Court, I appear with my learned friend, MR A.P. JOSEPH, for the respondent.  (instructed by Slater & Gordon Lawyers)

HAYNE J:   Yes, Mr Moses.

MR MOSES:   Yes, if your Honours please, could I identify the four general issues we seek to raise in this application and then move to the relevant provision of the industrial instrument which is the subject of controversy and then the facts?  The general issues are, firstly, that provisions of industrial instruments which are clear and unambiguous are to be construed according to the basic conventions of the English language as they bind the parties on pain of pecuniary penalties.

Your Honour Justice Hayne in Australian Communication Exchange observed that the words of the provisions of an industrial instrument are not to be strained to achieve a result that is considered to be fair and desirable according to some standard of fairness or proper employment practice.  Secondly, when construing an entitlement or requirement pursuant to an industrial instrument the Court is to have regard to the obligations arising out of the contract of employment between the parties and not just the terms of the industrial instrument.  It is the performance of the obligations pursuant to a contract of employment which confer on the employee the right to remuneration under the award.  The interpretation and application of the award in this case was not approached in this manner.

Thirdly, the employee’s subjective belief as to an alleged obligation to perform work is irrelevant to the determination of their obligations pursuant to their contracts of employment or any right to receive payments to an award which must be determined on an objective basis.  Finally, whether a delay of nearly two years in the delivery of a judgment concerning proceedings which required in part the resolution of conflicting evidence which was not dealt with at first instance because there was an erroneous finding that there was no conflicting evidence meant that there was a denial of procedural fairness and justice which required that the matter be remitted for a retrial.  The proper construction of standing by clauses which is ‑ ‑ ‑

HAYNE J:   Well, before you come to that, the first five proposed grounds in your notice of appeal, and I think it is fair to say the bulk of your summary of argument, was directed to this question of procedural fairness, was it not?

MR MOSES:   It was, your Honour.

HAYNE J:   Do I understand from the way in which you opened the case that the question of procedural fairness is now advanced as a final or tack‑on submission?

MR MOSES:   I was not proposing to put it in that way, your Honour, but I can deal with it at the outset.

HAYNE J:   Take such order as you wish, Mr Moses, but ‑ ‑ ‑

MR MOSES:   The reason I was going to deal with it in the manner that I had proposed, your Honour, was that in order to highlight to the Court the evidence that was not dealt with by the Court at first instance and its importance was that I needed to go through the facts in any event dealing with the interpretation of the award and its application.

HAYNE J:   Because the complaint about want of procedural fairness at first instance may be – I do not say it will be – may be thought to be met and the fact you then had a full rehearing.

MR MOSES:   That is correct, your Honour.  The relevant finding of the appellate judge is to be found at page 54 of the application book at paragraph 40, and what your Honours will ascertain from his Honour’s reasoning there is that there was, in essence, no denial of procedural fairness in that the issue was one that could be dealt with by the Court.  Now, the difficulty with that is, and if I could just take your Honours to the two passages which we rely upon on the procedural fairness point.

If your Honours go to page 23 of the application book at paragraph 37, line 50.  Your Honours, this related to the direction which was said to have been given by Mr O’Shea, an employee of the applicant, that individuals were to “keep themselves in readiness for a call back” including not travelling outside a certain radius of the flour mill, as well as not consuming alcohol.  There was said to be no conflict in respect of the evidence of the four employees and Mr O’Shea on this point.  That, of course, was wrong.

If your Honours go to page 50 of the application book at paragraph 27, line 60, his Honour concluded correctly that the evidence did contradict the evidence of the electricians concerning this issue.  That was a matter that in the appeal before his Honour was not resolved by his Honour, nor could it have been because his Honour did not have the benefit of seeing the witnesses.  The importance of this point was simply this.  Each of the employees asserted that the reason they understood that they were to hold themselves in readiness to be called back for approximately nine hours per day, seven days per week, was that they received a direction from Mr O’Shea to the effect described by his Honour at page 50 of the application book.

Now, Mr O’Shea disputed that and that evidence was something that needed to be resolved on the application because it underpinned what was said to have been the understanding of the individuals as to their obligation to be held in readiness and it was not ‑ ‑ ‑

BELL J:   This was a matter that Justice Cowdroy addressed, noting that there were concessions made by Mr O’Shea in the course of cross‑examination which tended to provide some support for the acceptance of the electrician’s evidence.  His Honour was able to assess the evidence since these were concessions made by Mr O’Shea.

MR MOSES:   Your Honour, if your Honour goes to paragraphs 84 to 86 of the judgment at page 65 where his Honour deals with the evidence both of Mr O’Shea and Mr Campbell.  The important point to note, your Honours, in respect of this issue and the way in which it was addressed by his Honour was that it did not deal with any concession as to what was said to the electricians.  It did not go to that issue, your Honour.  It went to the uncommunicated thoughts of both those gentlemen.  Now, that could never be held, your Honour, to, as it were, underpin an understanding of the individuals as to what their contractual obligations were.

That is the problem with this case, your Honour, in that because of the two‑year delay ‑ and what Justice Cowdroy said was, well, perhaps a draft judgment may have been prepared and put down to one side and hence one perhaps need not worry too much about the delay, but the problem is and the prejudice caused to the applicant here is that there was a conflict in the evidence between the parties.  The trial judge at first instance was of the view that there was no conflict; that was plainly wrong.  Then the appellate judge deals with the matter in the manner described at 84 to 86, where his Honour does not say – and we say nor could it be said on the evidence that was adduced from the witnesses during cross‑examination – that they conceded that they said anything to the individuals concerning these matters.

BELL J:   Justice Cowdroy does not proceed on any different basis.  The question of the delay simply does not seem to bear relevantly on the capacity of the judge reviewing the record of the proceeding to assess the merits of the contentions of the parties.

MR MOSES:   Your Honour, the way that we put it, and we would be repeating ourselves if I put it again, is simply this.  There was a credit issue that needed to be resolved between Mr O’Shea and the four electricians concerned as to whether he did in fact say those words to them.  He denied it.  They said he said it, and neither the trial judge nor the appellate judge has dealt with that controversy.  The way that his Honour deals with it is in a different manner to deal with the evidence as to what the expectation of Mr O’Shea was or perhaps may have been rather than what he communicated to the individuals concerned.

That is the highest we can put it, your Honour, in terms of that issue.  This matter has been touched upon, of course, by this Court in NAIS and his Honour Justice Hayne, although dissenting in that case, made some observations at paragraph 135 in respect of the relevance of delay when it comes to courts perhaps being different than tribunals, but that is how we put the matter, your Honours, and the complaint that we make on procedural fairness.

HAYNE J:   Yes.

MR MOSES:   Thank you, your Honour.  Your Honour, if I can deal very briefly, if I can, concerning the construction point.  Clause 25.3 of the award is to be found at page 1 of the materials book.  Your Honours will note clause 25.2 of the award.  There was no dispute that the employees in question received payments pursuant to this clause when, in fact, they returned to work to deal with an emergency before their normal shift commenced.  The controversy is clause 25.3, and that had three elements.  A requirement issued by the employer that the employee stand‑by a period of some time during which the employee is required to hold themselves in readiness and, finally, an instruction from the employer that the employee is no longer required to stand‑by.

Your Honours, the claims that were pleaded by the respondent employees were, in essence, in identical form.  The summary of those claims are to be found at page 2 of the application book at line 45, PC7.  Your Honours will note that underpinning the claim was said to be the operation of a roster.  The evidence was clear in the proceedings that at no time was any instruction or direction given by the applicant requiring the employees to hold in readiness for a call back from time to time or at any specific time, nor was there any direction given by the applicant that the respondents be released from that readiness.

The respondents created a roster amongst themselves in order to deal with what may be call back requests that may emanate from the flour mill from time to time and hence trigger a payment under clause 25.2 if they attended the worksite.  The undisputed evidence was that the respondents determined who would take the call amongst themselves and if that person was not available then another employee would be contacted and if not a contractor would be contacted.  No employee was obliged to hold themselves in readiness.

Your Honours, I have dealt with this question about each of the respondents asserting that in aid of holding themselves they did not travel outside a certain radius and did not consume alcohol.  I will not repeat what I have said about that, suffice to say that there has been no finding that that was something communicated by an employee of the applicant to the respondents.

The contract between the parties, your Honours, if I can just jump to that ‑ that is to be found at page 68 of the application book at line 40.  That is the provision in the contract that Justice Cowdroy relied upon, in part, to make a finding that the contract by reference to the roster required these individuals to be on stand‑by, and that finding is at paragraph 97, page 68 of the application book.  Now, the proposition that we have put in respect of that issue is that the term of the contract is a reference to call backs, not a direction to hold in readiness for a call back.  His Honour, with respect, misinterpreted that contractual term in calling in an aid to conclude that the roster, when read together with that term, allowed a finding to be made that it was implied that the individuals would be held in readiness.

Could I deal then with the next point, which is how clause 25.3 of the award is to be interpreted?  We have set out the principles, which I do not think are disputed between the parties, at paragraph 28 of our submissions at page 85 of the application book.  The principle that has particular relevance is that set out by the Chief Justice when sitting as a member of the Federal Court in the City of Wanneroo which is behind tab 7 of the materials book at page 99, paragraph 57, where his Honour noted that the provisions of an instrument that are clear and unambiguous should be considered according to the basic conventions of the English language as they bind the parties on pain of pecuniary penalties.

We also add in addition to that ‑ and I think, your Honours, if we may have leave to provide your Honours with a supplementary folder which contains this Court’s decision of which your Honour was a member in Australian Communication Exchange that I referred to earlier ‑ we also note your Honour’s observations on the interpretation of industrial instruments at paragraph 115.  On our research, your Honours, that really appears to be the last word that this Court has made on the question of the interpretation of industrial instruments in Amcor which was dealt with in 2005.  Your Honours, whilst construing an agreement, did not have cause to have to deal with the principles.

Can we just draw the Court’s attention to two Full Court judgments which were relied upon by the appellate judge?  The first is Logan v Otis Elevator Company which is reported at tab 11, page 169 of the authorities book.  The Full Bench of the Industrial Relations Court considered a standing by clause in an award similar to clause 25.3 of the award.  The relevant standing by clause is to be found at paragraph 15 at page 173 of the materials book, just above line 16.

We say, your Honour, that that provision is similar to the matter being dealt with in this application.  In Logan at paragraph 20, their Honours found that the purpose of such clauses was to provide compensation “on an ad hoc basis” to employees for being placed on a specific alert.  Their Honours found that the expression used in the clause, namely, that an employee “required to hold himself in readiness” for a call back after ordinary hours:

shall “until released”. . . envisages both a requirement by the employer that the employee hold himself in readiness to work on a specific occasion and a release from readiness.

The reasoning and conclusions by the Full Bench in Logan on the construction of the standing by clause in that case equally applied to the construction of the clause in this present application.  We say it is a matter of some significance because these standing by clauses remain in a series of awards made by the Fair Work Australia Tribunal in terms of its modern awards and are to be found in numerous enterprise agreements in similar terms.

At paragraph 74 of page 62 of the application book Justice Cowdroy sought to distinguish Logan by relying on the decision of the Full Court in Kerley.  What we say, your Honours, is that his Honour erred in his reasoning in that passage.  The mere presence of a roster system constituted

a requirement to hold in readiness and a release from that requirement for the purpose of clause 25.3 of the award.  The decision in Kerley, which is behind tab 5, was different from the facts in this case, and we only need refer to two paragraphs; paragraph 6, firstly, at page 49 of the materials book behind tab 5 of the materials book which sets out the relevant clause, and your Honours will note there it refers expressly to roster.

Then, finally, to paragraph 27 which commences at page 56 of the materials book but which appears on page 57, the last sentence of the first paragraph.  What we get from that, your Honours, is that it is only authority – Kerley is only authority for nothing more than the proposition that the process of employees self‑nominating for the stand‑by teams and the resultant creation of a list of employees who could be called on to return to duty met the requirement contained within that agreement that officers be “rostered or otherwise directed” to stand‑by available for resumption of duty.

Your Honours, I note the time.  Those are the submissions we wish to put, other than to note that the applicant consents to an order that if special leave is granted it would be on the condition that it pay the respondent’s costs both for this application and the appeal, irrespective of the result.  If it please the Court.

HAYNE J:   Thank you, Mr Moses.  We will not trouble you, Mr Taylor.

The applicant’s complaints of want of procedural fairness at first instance in this matter were overtaken by the subsequent hearing and determination of the issues between the parties on appeal to the Federal Court of Australia.  We are not persuaded that any disputed question of principle, whether about construction of industrial instruments generally or standing by clauses in particular, would fall for consideration if special leave to appeal were granted.  It is not shown to be in the interests of justice generally or in the particular case that there be a grant of special leave to appeal.  Special leave is refused with costs.

MR MOSES:   May it please the Court.

HAYNE J:   The Court will adjourn to reconstitute.

AT 11.40 AM THE MATTER WAS CONCLUDED