R v Holmes; Ex parte Altona Petrochemical Co Ltd

[1972] HCA 20

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Menzies, Windeyer and Owen JJ.

THE QUEEN v. HOLMES; EX PARTE ALTONA PETROCHEMICAL CO. LTD.

(1972) 126 CLR 529

29 February 1972

Conciliation and Arbitration (Cth)

Conciliation and Arbitration (Cth)—Industrial arbitration—Industrial dispute—Preference to unionists—Whether claim for monopoly of employment to members of union—Jurisdiction of Commonwealth Conciliation and Arbitration Commission—"Matter"—Conciliation and Arbitration Act 1904-1970 (Cth), s. 47 (1)*.

Decisions

February 29
The following written judgments were delivered : -
BARWICK C.J. The question in this application for prohibition is whether the written demand of the respondent union, not being granted by the prosecutors, gave rise to an industrial dispute which the respondent Commissioner has jurisdiction to settle by an appropriate award. Generally, if there is such a dispute it will not be a ground for prohibition that the respondent union proposes as a means of settling it an award which the respondent Commissioner either could not or should not make. But other considerations arise where the claim is for an award of preference. (at p533)

2. The principal reason put forward by the prosecutors for saying that no industrial dispute has arisen upon the respondent union's demand is that the demand in substance and effect is that the prosecutors should employ only members of the respondent union and that such a demand does not relate to an industrial matter within the meaning of the Commonwealth Conciliation and Arbitration Act 1904-1970 (the Act) as interpreted by this Court. Put another way, the prosecutors say that because the demand purports to claim preference for the members of the union but demands an award the terms of which do not fairly fall within the scope of s. 47, no industrial dispute can result from the prosecutors' failure to accede to it. (at p534)

3. The Court has decided that the forerunner of s. 47 of the Act is the sole source of authority in the Conciliation and Arbitration Commission to require an employer to grant preference to members of an organization such as the respondent union and that a demand upon an employer for more than that preference does not relate to the relationship of employer and employee so as to found an industrial dispute. See R. v. Wallis ; Ex parte H. V. McKay Massey Harris Pty. Ltd. (1949) 78 CLR 529 ; R. v. Findlay ; Ex parte Victorian Chamber of Manufactures (1950) 81 CLR 537 . Section 47 of the Act was enacted after these decisions in the same terms as its forerunner. (at p534)

4. It follows in my opinion that a demand in the form of a proposed award of preference must be confined within what s. 47 authorizes the Commission to award or order if an industrial dispute is to arise upon it. If the demand is for something which cannot be awarded under s. 47 and which does not otherwise relate to the relationship of employer and employee, its refusal will not give rise to an industrial dispute. Where the demand in the form of a proposed award exceeds what may be awarded under s. 47 the matter cannot, in my opinion, be resolved by leaving it to the Commission to award only that which it might properly award upon a mere demand for an award of preference. If there be such an excess, then, in my opinion, no industrial dispute can arise, and no jurisdiction to make an award is attracted. The matter cannot be treated in my opinion as one in which an inadmissible or inappropriate method of settling what is in truth an industrial dispute has been put forward. (at p534)

5. There is no question that the demand did not relate to the relations of employer and employee as defined. See the beforementioned cases. Consequently the precise question to be answered is whether the log of claims served by the respondent union does demand more than the preference which s. 47 allows the Commission to award. The question in the case will therefore be answered by considering the substantial meaning and effect of the written demand, reading it with a generous lack of technicality and with an emphasis upon its intent as a whole, regarding the effect its acceptance would produce as being properly within that intent. The purpose of the examination is to ascertain whether its claims fairly fall within the scope of s. 47. (at p535)

6. The log of claims is in the following terms :

"In this log - 'The award' means the Clerks (Oil Companies) Award 1968 or any award which rescinds or replaces that Award ; 'The union' means the Federated Clerks' Union of Australia; 'Employer' means employer respondent to this log of claims. 1. Method of Engagement. An employer shall observe the following procedure in engaging employees for employment under the Award. (a) A member of the union or a person holding a current certificate under s. 47 (3) of the Conciliation and Arbitration Act may be employed at any time.

(b) Any other employee may be employed not less than twenty one days after the employer has notified the union that an opportunity for employment exists and of the nature of the work involved in the employment. Provided that in an emergency an employer may engage an employee for not more than three days without complying with the requirements of this clause, but shall not thereafter continue or extend the employment and shall not renew it except after notification in accordance with this clause and subject to cl. 3 (sic). 'Preference'.

2. Preference. An employer shall give preference to members of the union

as hereinafter prescribed in relation to the matters hereinafter specified - (a) In relation to the matter of engagement in any employment covered by the Award, the employer shall give preference to all members of the union who have indicated to the employer their desire for employment by him within fourteen days prior to the giving of the relevant notice under cl. 2 (b) (sic), or who so indicate, either directly or through the union, within fourteen days after the receipt of the notice by the union. Provided that an employer shall be excused from the obligation to give preference in accordance with this sub-clause in the case of any particular member of the union if at the time of making the engagement the employer has reasonable grounds to believe and does believe that the member is incapable of performing the duties of the employment, being work the nature of which was notified to the union pursuant to cl. 2 (b) (sic). An employer shall not, within the meaning of this sub-clause, have reasonable grounds for believing that an employee is incapable of performing the duties of the employment, unless he has made reasonable enquiries in the circumstances including the giving of a reasonable opportunity to the employee to establish his capacity.

(b) In relation to the matters of - (i) grading an employee hitherto on the incremental scale under the Award (except where the grading of a particular employee is compulsory under the Award), (ii) grading an employee into a higher grade under the Award, or

(iii) promoting an employee to a graded position, or from one graded position to a more highly graded position under the Award. the employer shall give preference to all members of the union who are employed on the incremental scale or in a grade lower than that in which an employee is to be graded.

Provided that an employer shall be excused from the obligation to give preference in this sub-clause in the case of a particular member of the union if the grading is incidental to the filling of a particular position and such member is incapable of performing the duties of that position. An employer who proposes to do any of the things referred to in sub-pars (i), (ii) and (iii) of this paragraph shall give twenty-one days notice of his intention to do so to the branch secretary of the union in the area or locality concerned ; provided that he shall be excused from giving such a notice if all his employees within the scope of the Award are members of the union.

(c) In relation to the matter of retention in employment covered by the Award, the employer shall give preference to all members of the union employed by him under the Award.

Provided that an employer shall be excused from the obligation to give preference in accordance with this sub-clause in the case of a particular member of the union who - (i) is being dismissed for misconduct which justifies instant dismissal ; (ii) is incapable of performing the duties of his

employment (otherwise than by temporary illness, incapacity or injury) ; or

(iii) has reached a retiring age which is applied generally to all clerical employees in his employment. Seven days prior to giving a member of the union notice of intention to terminate his services (otherwise than in any of the circumstances referred to in sub-pars (i), (ii) and (iii) of this paragraph), the employer shall notify the branch secretary of the union in the area or locality concerned of the name of the member and the reason for his employment being terminated ; provided that he shall be excused from giving such a notice if all his employees within the scope of the Award are members of the union.

(d) In relation to the matter of determining the times when employees employed under the Award shall take their annual leave or any other leave to which such employees are entitled, preference shall be given to members of the union. Such preference shall be given in the following manner - (i) Each year an employer shall ask his clerical employees the time when they wish to proceed on leave to which they may be entitled. (ii) Where an employer refuses to allow all of the employees, who have selected a particular time, to take their leave at the time selected, he shall give preference to members of the Federated Clerks' Union of Australia in deciding which employees shall be permitted to take leave at the time they have selected."

The log can be severed into four parts, namely, to use the language of the log,

(i) a demand as to the matter of engagement of employees ; (ii) a demand as to the matter of grading and promoting employees ; (iii) a demand as to the matter of retention in employment of employees ; and (iv) a demand as to the matter of determining the times at which employees shall take annual or other leave. (at p537)

7. The demand as to the matter of engagement is made in two
distinct parts, respectively headed "Method of Engagement" and "Preference". I shall first deal with each of these parts as standing alone. I shall later deal with them on the footing that they form together one demand. (at p537)

8. Before doing so I should express my opinion upon a submission made by the prosecutors that the demand was so ill-expressed, lacking in precision and ambiguous as to be incapable of acceptance or rejection : cf. Reg. v. Commonwealth Conciliation and Arbitration Commission ; Ex parte Melbourne and Metropolitan Tramways Board (1965) 113 CLR 228, at p 239 . However, although its draftsmanship and manner of expression leaves a great deal to be desired the substantial meaning of the demand, in my opinion, is capable of elucidation and comprehension. Consequently, so far as its expression is concerned the demand was, in my opinion, capable of forming the basis of a dispute, and I would therefore reject this submission of the prosecutors. (at p538)

9. I turn now to cl. 1 of the log of claims. A demand for an award that an employer may at any time employ a member of the union but for a space of twenty-one days may not employ anyone who is not a member of the union is clearly a demand for something which could not be awarded under s. 47. It is in terms a demand that there be an award that at least for a period of twenty-one days there be a total exclusion of all persons not members of the union from employment with any of the prosecutors in relation to the particular task which the particular prosecutor wishes to have performed save in an "emergency", whatever that may be, when a non-unionist may be employed for a maximum of three days. It needs no argument or citation of authority, in my opinion, other than those to which I have already referred to justify the conclusion that such an award could not be made under s. 47 and that such a demand is not as to the relations of employer and employee. Thus in my opinion cl. 1, as an independent demand, could not give rise to an industrial dispute. (at p538)

10. I turn then to cl. 2 (a) headed "Preference". Section 47 needs somewhat close examination in relation to this demand. That section authorizes the Commission by award or order to direct that preference shall be given to such organizations or members of organizations as are specified in the award or order. Preference is to be as to matters given in a manner, and subject to conditions (if any), specified in the award or order. I read the provision as authorizing an award or order directing the giving of preference to such members of the organization as may be specified in the award or order. I do not read it as authorizing an award or order that preference be given to such specified organizations or their members. In my opinion, it is necessary to carry the qualification "such" down to the members. That is not to say that such members of organizations need be named in the award or order but, in my opinion, they must be identifiable by some certain description contained in the award or order. (at p538)

11. The word "preference" is not defined in the Act nor has it been defined in any of the predecessors of s. 47. Our attention was called in argument to the various phases through which a provision as to the giving of preference has passed in the history of conciliation and arbitration in Australia. No doubt difficulties were experienced in practice in the application of a requirement to give preference "all other things being equal" or in the case of persons "being equally qualified". Preference in the predecessor of s. 47 was limited to preference in employment and was to be preference to members of organizations over persons seeking employment at the same time. But in s. 47 expressions such as "other things being equal" are not present ; and the authority given to the Commission is to direct that preference be given in a manner to be specified in relation to matters to be specified. Thus the present provision commits to the Commission the task of specifying in what way preference is to be given in respect of matters which it specifies to such members of an organization as it specifies. The Parliament apparently thus thought to remove the difficulties and uncertainties which have been thought to have attended the application and enforcement of a comparable provision in earlier times. But although the matters in respect of which preference may be given and the manner in which it is to be given are now to be left to the Commission, the basic concept of the provision remains, namely that it is "preference" which may be directed to be given. Much must turn on the connotation of this word, for it constitutes the principal limitation on the power. In ordinary speech I prefer when I favour or esteem one thing or person before another ; or in fewer words when I choose between things or people. It seems to me I can only prefer or show preference if I have more than one thing or person between whom to make a choice. I can only give preference if I allow my choice to fall upon or favour one above or before another. This connotation of preference or of giving preference seems to me to be in accord with the use of the word preference in all the versions of the provision for preference which have appeared in the Act. I do not think that the elision for example of the expression "all things being equal" has made any change in the connotation of the word "preference" or of the expression "that preference be given". Nor do I think that its industrial setting requires any departure from the ordinary meaning of the word "preference". (at p539)

12. Section 47 does not say over whom preference is to be given. As I read the section it does mention who may be directed to be preferred e.g. such members of an organization as are specified in the award or order. But though it does not say so expressly the section must be contemplating that the preference to be given to such specified members is a preference over other persons. As the matters in relation to which preference may be directed to be given are not limited to employment, these other persons, it seems to me, must be persons who are so concerned in or related to the specified matter that, but for the direction as to the giving of preference, the person bound by the award or order would do for or in relation to those persons what in obedience to the direction as to preference he will do for or in relation to the members of the organization. That is to say, for example, in the case of employment, the member of the organization and the other person must each be persons whom the employer would employ. Their capacities need not be equal ; nor need they in all or any respects be equal but, withal, each must in my opinion be a person who the employer would engage to perform the work the specification of which of course is entirely a matter for him. Compare the views of Street J. in Davis v. Western Suburbs Hospital (1941) 42 SR (NSW) 26, at p 31 . The work required to be done by the employer must of course be work of a kind which fairly falls within the possible coverage of the organization according to its constitution. Thus it seems to me that the structure of the present section emphasizes that the occasion for the giving of preference is to be an occasion when a choice can be made. Then, of the two or more persons each of whom is for example employable according to the employer's requirements, the member of the organization is to be preferred. In my opinion, the giving of preference does not mean that the right of the employer to specify his requirements is overridden or weakened or that membership of the organization is to be the sole determinant in the decision of the employer to employ or dismiss etc. as the case may be. (at p540)

13. Two things in my opinion flow from these considerations : first that the award or order cannot create the occasion for the making of a choice : the occasion must result from the initative of the employer in requiring labour for the task he specifies. Second that the award or order cannot deny or prevent the occasion for a choice arising. The award or order must be limited to dealing with an occasion which in fact has arisen in the ordinary course of business. (at p540)

14. Clause 2 (a) of the demand requires preference to be given to all members of the organization who indicate within the stated time their desire for employment by the employer bound by the award. This seems to envisage that there can be no employment of a person not a member of the organization until there is no member of the organization who desires the employment whom the employer cannot believe on reasonable grounds to be incapable of performing the duties of the proposed employment ; a state of mind the employer may not attain unless he has made reasonable inquiries and given the member applicant for the employment, which must mean all of them in turn, a reasonable opportunity to establish his capacity. I mention in passing that there would seem to be no criteria of what is reasonable in the circumstances so as to satisfy either the expression "reasonable inquiries" or the expression "reasonable opportunity". (at p541)

15. The terms of the paragraph are apparently an attempt to provide a manner of giving preference in the engagement for employment. But they do not, in my opinion, specify the members of the organization to whom preference is to be given. A reference to all members who indicate their desire for employment does not enable an identification to be made of the member who is to be preferred over any non-member for any particular employment. For example, five members of an organization being apprised of the availability of employment with a prosecutor may indicate in due time their desire for employment by that prosecutor. The clause does not provide a means of determining which one is to be preferred over the non-member applicant for the job. If they are the only applicants an occasion for preference in the sense of the section does not arise. But if there is a non-member applicant between whom is the choice to be made? : to whom is preference to be given? That problem is, in my opinion, insoluble by reference to the terms of the log of claims. (at p541)

16. If the clause means that no non-member may be employed until there is no member or no "capable" member of the organization desirous of being employed it does not in my opinion provide for preference within the meaning of s. 47. In my opinion a direction to give preference to all members of the organization who desire employment is not within the scope of the power given by s. 47. A demand for such a direction cannot in my opinion give rise to an industrial dispute. Being of this opinion I have no need to pursue the difficulties I feel as to the terms of the proviso to the paragraph : nor the difficulties inherent in the word "capable" in relation to the requirements of the employer. (at p541)

17. Whilst I quite understand the convenience to the organization and its members of a provision combining cll. 1 and 2 (a) of the log of claims there is, in my opinion, no warrant under s. 47 for making an award or order in such terms. The conjunction of those two parts of the demand is designed to ensure that an occasion is created on which to exercise a preference, that is to say, by preventing the prosecutors from engaging anyone to do the desired work until some member or members of the organization decide to apply for the job. As I have said the power to direct the giving of preference does not, in my opinion, extend to the making of an order or award to create the opportunity or occasion for the exercise of preference. Consequently, whether taken separately or in conjunction, cll. 1 and 2 (a) do not, in my opinion, constitute a demand or demands for preference within s. 47. They are, in my opinion, incapable of giving rise to an industrial dispute within the meaning of the Act. (at p542)

18. What I have already written when applied to the terms of cl. 2 (b) and (c) leads to the conclusion that neither of these two paragraphs contain a demand which can give rise to an industrial dispute. (at p542)

19. I turn lastly to cl. 2 (d) of the log of claims. In this paragraph the members of the organization to whom preference is to be given might be identified as those members who have selected that particular time at which to take their leave, annual or otherwise, which an employee or employees not a member or members of the organization have selected for the same purpose. It is then said that these members - all of them - are to be given preference. That is to say that no non-member employee is to be allowed to take his leave at the particular time unless all members of the organization desiring to do so have taken their leave at that time. But the time for taking leave is primarily a matter for selection by the employer, the demands of whose business must necessarily be considered, not merely in his own but in his employees' interests. I am unable to accept the view that the proposed terms are a manner of giving preference in the taking of leave. Membership of the union is sought to be made the sole criterion of allotment of a date for the taking of leave. Any occasion for choice between employees is sought to be prevented. Thus an element to my mind indispensable to the concept of preference is missing. The clause is not directed to the occasion when the employer is presented with two applications for leave, one by a member and one by a non-member, either of which the employer according to the exigencies of his business would be prepared to grant. The paragraph on the contrary as I have said is designed to avoid or prevent such a situation arising. That is to say, to avoid or to prevent an occasion existing for the exercise of preference as I understand that word. These considerations are to my mind fatal to a submission that this paragraph demands preference within s. 47. Having reached that conclusion I have no need to consider whether an award can so far enter the employer's field of management as to enable an award or order to be made in the terms of sub-par. 1 of cl. 2 (d). (at p542)

20. For these reasons I am of opinion that none of the provisions of the log of claims contains a demand which upon the prosecutors' refusal or failure to agree could give rise to an industrial dispute. Accordingly, in my opinion the Commissioner would have no jurisdiction to entertain this matter. The rule for prohibition should be made absolute. (at p543)

McTiernan J. This is a matter within s. 75 (v.) of the Constitution in which a writ of prohibition is sought. The writ is sought by employers of members of the Federated Clerks' Union of Australia employed in the petrochemical industry in New South Wales, Victoria, Queensland and Western Australia. The respondents in the matter are a Commissioner under the Commonwealth Conciliation and Arbitration Act 1904-1970 (the Act) and the union. The Commissioner is a submitting respondent. The union opposes the issue of the writ sought by the employers. The question at issue is whether the Commissioner has jurisdiction to hear and determine an inter-State industrial dispute raised by the total disagreement of the employers with the union about claims which the union served on the employers with respect to preference to members of the union employed in the petrochemical industry in the States of New South Wales, Victoria, Queensland and Western Australia. (at p543)

2. The Commissioner obtained cognizance of the dispute under s. 28 of the Act. After hearing counsel for the union and counsel for the employers the Commissioner found that : "an industrial dispute within the meaning of the Act exists" in the States mentioned above between, on one side, the union and its members and, on the other side, the employers who are seeking prohibition ; and that "the matters which form the subject of the dispute are those set out in the said log of claims". At the instance of the employers, further argument on the question of the Commission's jurisdiction took place before Mr. Commissioner Holmes. In his decision he summarized the argument of counsel on each side. The summary of the argument for the employers is as follows : Mr. Dey, counsel for the employers,

". . . submitted that notwithstanding the generality of the definition of industrial matter as appears in s. 4 of the Conciliation and Arbitration Act 1904-1970 (Cth) the power to grant preference is confined to the extent authorized by s. 47 of the Act. Before dealing with what he termed 'the various aspects of the authorities' Mr. Dey went broadly through the log of claims from the union. Having completed this exercise Mr. Dey then dealt exhaustively with decision of the High Court of Australia on what he said were cases of particular importance on the question of preference and compulsory unionism. The cases he cited were R. v. Wallis ; Ex parte Employers' Association of Wool Selling Brokers (1949) 78 CLR 529 and R. v. Findlay ; Ex parte Victorian Chamber of Manufactures (1950) 81 CLR 537 . He said the decisions of these cases clearly set out the limit of the Commission's jurisdiction and that whilst the log had been framed to make it acceptable and to enable it to meet requirements it failed to do so. Mr. Dey concluded by saying the log as drafted was beyong the Commission's power to award on two bases. Firstly it paid lip service to the word 'preference' and failed to place itself outside the invalidity flowing from the Wallis (1949) 78 CLR 529 and Findlay (1950) 81 CLR 537 cases. Secondly it failed to meet the requirements of the Act in that it did not specify the matters in relation to which preference was to be given nor did it specify the manner of so doing."

The summary of the argument for the union is as follows :

"Mr. Wootten said Parliament had legislated to grant power to the Commission to award preference. This was a logical thing when one considered that the Act has as one of its objectives the organization of bodies of employees and employers and their registration under the Act. The union made no apology for the fact that the claim, if granted, would interfere with the free choice of employers. That is precisely what Parliament had legislated for in s. 47. The point about granting preference to a unionist was that he was given an advantage and so long as the Commission did not make it an offence not to belong to a union or make it illegal to employ non-unionists s. 47 gave power to the Commission to confer advantages, in accordance with the section, on persons who are members of unions. Mr. Wootten traced the history of s. 47 of the Act. In particular he dealt with the present s. 47 and contrasted it with the section (then s. 56) as it was

prior to 1947. Mr. Wootten said the log of claims quite clearly 'relates to an industrial matter'. If by some chance it was found not to comply with s. 47 that would not be fatal unless the Commission was unable, within the ambit of the claim, to make an award which did comply with s. 47. Parliament had legislated for preference and it must surely have intended its intention to be effective. It had taken away the limitations that prior to 1947 had made jurisdiction ineffective."

The Commissioner's decision was as follows :

"I have studied the submissions put to me. I have not heard any of the merits of the union's log of claims. The matter, therefore, cannot be determined on any basis other than what has been put to me. There is no way in which I can determine whether the claims would be granted, in whole or in part, or be refused. It is my opinion, having found a dispute within the meaning of the Act exists, that this Commission has jurisdiction to hear and determine the dispute. Accordingly Mr. Dey's submissions are rejected and the Commission rules it has the jurisdiction to hear and determine this dispute."

It is common ground between the union and the employers that the power of the Commission to grant preference is confined to the extent authorized by s. 47 of the Act : see Anthony Hordern and Sons Ltd. v. Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 . (at p545)

3. The ground of the present order nisi is that the Commissioner has no jurisdiction to proceed to hear the dispute about the matters set out in the log of claims, in whole or in part, because :

"(1) the log of claims is not expressed with sufficient precision to give rise to an industrial dispute ; (2) the log of claims makes demands for preference to members of the respondent union which are outside the meaning of preference in s. 47 of the said Act ; (3) the log of claims makes demands which the said Commissioner has no power to grant as being in substance demands for compulsory unionism ; (4) the log of claims in par. 1 (b) makes a demand which relates to the prevention of the establishment of the relation of employer and employee."

For my part I would not uphold any of these objections to the jurisdiction of the Commission to determine whether or not to exercise the power conferred on the Commission by s. 47, in respect of the several matters set forth in the log of claims or any of them. (at p545)

4. The log of claims divides itself into three clauses viz. (1) "Method of Engagement" ; (2) "Preference" ; and (3) "Information concerning Union membership". First, there is an interpretation clause, which is the following :

"In this log - 'The Award' means the Clerks (Oil Companies) Award 1968 or any award which rescinds or replaces that Award ; 'The Union' means the Federated Clerks' Union of Australia ; 'Employer' means employer respondent to this log of claims."

The clause relating to "Method of Engagement" reads thus :

"An employer shall observe the following procedure in engaging employees for employment under the Award."

"Employee" is not defined in the log of claims. Section 4 (1) of the Act, the Interpretation section, provides that :

"In this Act, except where otherwise clearly intended - 'Employee' means any employee in any industry and includes any person whose usual occupation is that of employee in any industry."

"Employees", in cl. 1, means persons whom employers are engaging for employment covered by "the Award" as defined. (at p546)

5. Paragraph (a) of cl. 1 provides that a member of the union or a person holding a certificate under s. 47 (3) of the Conciliation and Arbitration Act may be employed at any time. This paragraph shows that the union's claim is not obnoxious to s. 47 (3), the purpose of which is to prevent inequality between members of the union and persons, if any, who are not members but whose conscientious beliefs do not allow them to be members of an industrial union of employees. But par. (a) makes no claim that a person who is not a member of the union and has no such conscientious beliefs may not be employed at any time. But if an award were made in the terms of par. (b) of cl. 1, the procedure would interfere with the freedom of an employer bound by the award to adopt his own procedure in engaging persons for employment covered by the award who are not members of the union and not within the scope of s. 47 (3). Clause 1 (b) is in words as follows :

"Any other employee may be employed not less than twenty-one days after the employer has notified the union that an opportunity for employment exists and of the nature of the work involved in the employment. Provided that in an emergency an employer may engage an employee for not more than three days without complying with the requirements of this clause, but shall not thereafter continue or extend the employment and shall not renew it except after notification in accordance with this clause and subject to clause 2 'Preference'."

The subject matter of cl 1 - "procedure in engaging employees for employment under the Award" is in my opinion an "industrial matter" within the meaning of the Act, s. 4 (1), par. (h). (at p546)

6. Clause 2 of the award begins thus : "An employer shall give preference to members of the union as hereinafter prescribed in relation to the matters hereinafter specified." The matters are : "engagement in any employment covered by the Award", cl. 2 (a) ; "grading an employee hitherto on the incremental scale under the Award (except where the grading of a particular employee is compulsory under the Award)," cl. 2 (b) (i) ; "grading an employee into a higher grade under the Award", cl. 2 (b) (ii) ; "promoting an employee to a graded position, or from one graded position to a more highly graded position under the Award", cl. 2 (b) (iii) ; "retention in employment covered by the Award", cl. 2 (c) ; and "determining the times when employees employed under the Award shall take their annual leave or any other leave to which such employees are entitled", cl. 2 (d). (at p547)

7. Section 47 (1) of the Conciliation and Arbitration Act 1904-1970 provides that :

"The Commission may, by an award, or by an order made on the application of an organization or person bound by an award, direct that preference shall, in relation to such matters, in such manner and subject to such conditions as are specified in the award or order, be given to such organizations or members of organizations as are specified in the award or order."

The Act does not enumerate the matters in relation to which the Commission may by an award or order direct that preference shall be given to organizations or members of organizations. It was virtually conceded by counsel for the employers seeking the writ of prohibition that the matters specified in cl. 2 of the log of claims are all "matters" within the scope of s. 47. Counsel for the union convincingly argued that all the matters specified in cl. 2 are within the scope of the section : see Reg. v. Commonwealth Conciliation and Arbitration Commission ; Ex parte Transport Workers' Union of Australia (1969) 119 CLR 529, AT PP 546-547 , per Barwick C.J. (at p547)

8. By cl. 2 (a) the union claims in relation to the matter of engagement in employment that,

". . . the employer shall give preference to all members of the union who have indicated to the employer their desire for employment by him within fourteen days prior to the giving of the relevant notice under cl. 1 (b), or who so indicate, either directly or through the union, within fourteen days after the receipt of the notice by the union."

Under cl. 1 (b) the notice contains not only a statement that, "an opportunity for employment exists" but also a statement describing "the nature of the work involved in the employment". It seems that the second element required to be put in the notice is relevant to the proviso to cl. 2 (a). The proviso added to cl. 2 (a) by the log of claims reads thus :

"Provided that an employer shall be excused from the obligation to give preference in accordance with this sub-clause in the case of any particular member of the union if at the time of making the engagement the employer has reasonable grounds to believe and does believe that the member is incapable of performing the duties of the employment, being work the nature of which was notified to the union pursuant to cl. 1 (b). An employer shall not, within the meaning of this sub-clause, have reasonable grounds for believing that an employee is incapable of performing the duties of the employment, unless he has made reasonable enquiries in the circumstances including the giving of a reasonable opportunity to the employee to establish his capacity."

It seems to me that the fundamental precept of cl. (2) (a) is that the union claims preferential employment for its members who are capable of performing the duties of the employment in which an employer gives notice to the union that an opportunity for employment exists, but without prejudice to applicants capable of performing the duties and are not members of the union but are within the scope of s. 47 (3). If the Commission should decide to make an award for preferential employment at all for members of the union or any class of members it would have the power to adopt cl. 2 (a) in its entirety or modify the whole or any part of cl. 2 (a), including of course the proviso, provided such alterations are within the ambit of cl. 2 (a). (at p548)

9. As regards the matters of grading and promotion, the union demands by cl. 2 (b) that :

". . . the employer shall give preference to all members of the union who are employed on the incremental scale or in a grade lower than that in which an employee is to be graded."

But again this is a demand which is qualified by the log of claims. The proviso to cl. 2 (b) reads thus :

". . . an employer shall be excused from the obligation to give preference in this sub-clause in the case of a particular member of the union if the grading is incidental to the filling of a particular position and such member is incapable of performing the duties of that position."

The final part of cl. 2 (b) reads :

"An employer who proposes to do any of the things referred to in sub-pars. (i), (ii) and (iii) of the paragraph shall give twenty-one days' notice of his intention to do so to the Branch Secretary of the union in the area or locality concerned ; provided that he shall be excused from giving such notice if all his employees within the scope of the Award are members of the union."

Clause 2 (c) is a claim that in relation to the matter of retention covered by the Award, the employer shall give preference to all members of the union employed by him under the Award. As in the cases of engaging employees, grading and promoting employees, there is a proviso to the claim in cl. 2 (c). The proviso reads thus :

"Provided that an employer shall be excused from the obligation to give preference in accordance with this sub-clause in the case of a particular member of the union who - (i) is being dismissed for misconduct which justifies instant dismissal ;

(ii) is incapable of performing the duties of his employment (otherwise than by temporary illness, incapacity or injury) ; or

(iii) has reached a retiring age which is applied generally to all clerical employees in his employment."

A further claim is included in cl. 2 (c) which reads thus :

"Seven days prior to giving a member of the union notice of intention to terminate his services (otherwise than in any of the circumstances referred to in sub-pars. (i), (ii) and (iii) of this paragraph), the employer shall notify the Branch Secretary of the union in the area or locality concerned of the name of the member and the reason for his employment being terminated ; provided that he shall be excused from giving such a notice if all his employees within the scope of the Award are members of the union."

Clause 2 (d), the claim for preference in the matter of leave is in words as follows :

"In relation to the matter of determining the times when employees employed under the Award shall take their annual leave or any other leave to which such employees are entitled, preference shall be given to members of the union. Such preference shall be given in the following manner - (i) Each year an employer shall ask his clerical employees the time when they wish to proceed on leave to which they may be entitled.

(ii) Where an employer refuses to allow all of the employees, who have selected a particular time, to take their leave at the time selected, he shall give preference to members of the Federated Clerks' Union of Australia in deciding which employees shall be permitted to take leave at the time they have selected."

Clause 3 of the log of claims reads :

"An employer may inquire from the Branch Secretary of the union in the area or locality concerned as to whether or not a particular employee is a member of the union, and for the purposes of discharging his obligations hereunder shall

be entitled to rely on the correctness of the answer he is given." (at p549)

10. The claim in this log of claims for preferential hiring is, in substance, that the employers agree with the union that they will hire members of the union who have the capacity to perform work for which the employers need more employees or more employees than they have at the time of hiring the union members to carry on, subject to the union on its part agreeing with the employers that non-union members may be hired by them when qualified members of the union are not applying to be hired or the union cannot supply them, without obligation on the part of the employers to ask the non-union employees to join the union. This is an example of preference within the meaning of s. 47 of the Act, so far as the hiring of employees for work covered by an award is concerned. (at p550)

11. It seems clear from the wording of the log that the union's draftsman kept the words of s. 47 (1) steadily in mind and regarded with care the dicta in R. v. Wallis (1949) 78 CLR 529 and R. v. Findlay (1950) 81 CLR 537 . In my opinion it is a wrong interpretation of the log of claims that it makes claims which infringe the rationale of those cases. The objections to jurisdiction enumerated in the order nisi proceed from an erroneous interpretation of the log. (at p550)

12. In my opinion the log of claims is well drafted ; the document is wholly intelligible ; the ambit of the disagreement between the union and the employers resulting from their rejection of the claims made by the log can be readily ascertained from the language used to express each claim. I have come to the conclusion that there results from the rejection of the log by the employers an industrial dispute, which the Commission is competent to settle, as to every matter the subject of a claim expressed by the log ; and that every such matter is an "industrial matter" within the meaning of the Act. The Commissioner has jurisdiction to direct preference in relation to each matter in respect of which it is claimed and in such manner as it is claimed and for such members of the union as it is claimed, or otherwise within the ambit of the dispute and in accordance with s. 47. (at p550)

13. For these reasons I would discharge the order nisi. (at p550)

Menzies J. A number of oil companies, parties to the Clerks (Oil Companies) Award, seek prohibition against John Bede Holmes, a Commissioner of the Conciliation and Arbitration Commission, and the Federated Clerks' Union of Australia, a party to the award, to prevent the further hearing by the Commissioner of what he has determined is an industrial dispute between the prosecutors and the union. This is the return of an order nisi granted by the Chief Justice. (at p550)

2. The log of claims, the non-acceptance of which it has been decided gave rise to an industrial dispute, is in the form of a letter dated 23rd November 1970, from the federal secretary of the union to each of the prosecutors and to others. It claims what are described as conditions of employment of all the clerical employees of the oil companies, whether members of the union or not. Those conditions, with certain formal corrections, are :

1. Method of Engagement. An employer shall observe the following procedure in engaging employees for employment under the Award. (a) A member of the union or a person holding a current certificate under s. 47 (3) of the Conciliation and Arbitration Act may be employed at any time.

(b) Any other employee may be employed not less than twenty one days after the employer has notified the union that an opportunity for employment exists and of the nature of the work involved in the employment. Provided that in an emergency an employer may engage an employee for not more than three days without complying with the requirements of this clause, but shall not thereafter continue or extend the employment and shall not renew it except after notification in accordance with this clause and subject to cl. 3 (sic). 'Preference'.

2. Preference. An employer shall give preference to members of the union

as hereinafter prescribed in relation to the matters hereinafter specified - (a) In relation to the matter of engagement in any employment covered by the Award, the employer shall give preference to all members of the union who have indicated to the employer their desire for employment by him within fourteen days prior to the giving of the relevant notice under cl. 2 (b) (sic), or who so indicate, either directly or through the union, within fourteen days after the receipt of the notice by the union. Provided that an employer shall be excused from the obligation to give preference in accordance with this sub-clause in the case of any particular member of the union if at the time of making the engagement the employer has reasonable grounds to believe and does believe that the member is incapable of performing the duties of the employment, being work the nature of which was notified to the union pursuant to cl. 2 (b) (sic). An employer shall not, within the meaning of this sub-clause, have reasonable grounds for believing that an employee is incapable of performing the duties of the employment, unless he has made reasonable enquiries in the circumstances including the giving of a reasonable opportunity to the employee to establish his capacity.

(b) In relation to the matters of - (i) grading an employee hitherto on the incremental scale under the Award (except where the grading of a particular employee is compulsory under the Award), (ii) grading an employee into a higher grade under the Award, or

(iii) promoting an employee to a graded position, or from one graded position to a more highly graded position under the Award, the employer shall give preference to all members of the union who are employed on the incremental scale or in a grade lower than that in which an employee is to be graded.

Provided that an employer shall be excused from the obligation to give preference in this sub-clause in the case of a particular member of the union if the grading is incidental to the filling of a particular position and such member is incapable of performing the duties of that position. An employer who proposes to do any of the things referred to in sub-pars (i), (ii) and (iii) of this paragraph shall give twenty-one days notice of his intention to do so to the branch secretary of the union in the area or locality concerned ; provided that he shall be excused from giving such a notice if all his employees within the scope of the Award are members of the union.

(c) In relation to the matter of retention in employment covered by the Award, the employer shall give preference to all members of the union employed by him under the Award.

Provided that an employer shall be excused from the obligation to give preference in accordance with this sub-clause in the case of a particular member of the union who - (i) is being dismissed for misconduct which justifies instant dismissal ; (ii) is incapable of performing the duties of his

employment (otherwise than by temporary illness, incapacity or injury) ; or

(iii) has reached a retiring age which is applied generally to all clerical employees in his employment. Seven days prior to giving a member of the union notice of intention to terminate his services (otherwise than in any of the circumstances referred to in sub-pars (i), (ii) and (iii) of this paragraph), the employer shall notify the branch secretary of the union in the area or locality concerned of the name of the member and the reason for his employment being terminated ; provided that he shall be excused from giving such a notice if all his employees within the scope of the Award are members of the union.

(d) In relation to the matter of determining the times when employees employed under the Award shall take their annual leave or any other leave to which such employees are entitled, preference shall be given to members of the union. Such preference shall be given in the following manner - (i) Each year an employer shall ask his clerical employees the time when they wish to proceed on leave to which they may be entitled. (ii) Where an employer refuses to allow all of the employees, who have selected a particular time, to take their leave at the time selected, he shall give preference to members of the Federated Clerks' Union of Australia in deciding which employees shall be permitted to take leave at the time they have selected." (at p553)

3. The prosecutors assert that jurisdiction to hear and determine
the so-called dispute is lacking because :

"(1) the log of claims is not expressed with sufficient precision to give rise to an industrial dispute ; (2) the log of claims makes demands for preference to members of the respondent union which are outside the meaning of preference in s. 47 of the said Act ; (3) the log of claims makes demands which the said Commissioner has no power to grant as being in substance demands for compulsory unionism ; (4) the log of claims in par. 1 (b) makes a demand which relates to the prevention of the establishment of the relation of employer and employee." (at p553)

4. The most important question to be decided is whether, by its
log, the union is claiming more than could give rise to an industrial dispute for the settlement of which a direction that preference should be given to the union or its members - hereinafter called "unionists" - as authorised by s. 47 of the Conciliation and Arbitration Act could properly be made. This section confers the only power which the Commissioner has to award or direct preference. I shall refer to non-members of the union as "non-unionists". (at p553)

5. Section 47, when it was s. 56 of the Commonwealth Conciliation
and Arbitration Acts 1904-1948 and 1904-1949, was considered by this Court in two cases : R. v. Wallis ; Ex parte H. V. McKay Massey Harris Pty. Ltd. (1949) 78 CLR 529 - which, like this, was a case concerned with the jurisdiction to hear an alleged dispute - and R. v. Findlay Ex parte Victorian Chamber of Manufactures (1950) 81 CLR 537 - which was concerned with the validity of an actual award. By these cases it was decided that s. 56 is exclusive and exhaustive ; that it is limited to granting preference in employment ; that it does not authorize compulsory unionism or the giving of a monopoly of employment in the industry to the members of a union or the complete exclusion from employment of persons not belonging to a union. Furthermore, it was decided that a claim for a monopoly of employment by a union could not bring about an industrial dispute because such a claim did not relate to the relations of employers and employees. In the judgments, however, it was recognized that there is a difference between seeking a monopoly - i.e. the complete exclusion of others - and seeking a partial exclusion of others which might be preference. The second case also dealt with the construction and application of the section. This will require consideration later. (at p554)

6. The passages in the various judgments in Wallis' Case (1949) 78 CLR 529 most relevant here are as follows :

Latham C.J. (1949) 78 CLR, at p 544:

"The provisions of s. 56 do not authorize more than preference to unionists. They do not enable a commissioner to declare non-unionists black so that they cannot get work in the industry to which they belong. If there is, however, power to exclude non-unionists, the exclusion may be partial or complete. Partial exclusion is preference to others. There would be no rational reason for Parliament carefully prescribing conditions in relation to preference, i.e. partial exclusion, if it were intended that there should be an unlimited power to order complete exclusion in any case. Accordingly, in my opinion, the definition of 'industrial matters' should not be so interpreted and applied as to authorize the making of an award for complete exclusion."

Rich J. (1949) 78 CLR, at p 548 :

"The provision challenged in the proposed awards provides for a monopoly in favour of the Federated Clerks' Union and a wholesale exclusion of other persons whether or not members of an organization from a wide sphere of employment and a corresponding obligation on employers to employ only members of the union. In my opinion there is no statutory justification for the provision in question."

Dixon J. (1949) 78 CLR, at pp 548-549 :

"If the conciliation commissioner had power to make an award or order in the terms of these demands and he made such an award or such an order it would go much further than insuring that where members of the Federated Clerks' Union of Australia are available for employment they shall be employed in preference to persons who are not members of that organization and are not members of any other organization of employees that includes clerks serving in the industry."

McTiernan J. (1949) 78 CLR, at p 554 :

"But neither demand is, in my opinion, for preference. It is a demand that the employers should not engage or retain in employment any person who is not a member of the union. That is different from a demand for preference. The gist of the demand is not preference to members of the union but exclusion of persons who are not members of it as a sanction to ensure that all employees are members of the union."

Webb J. (1949) 78 CLR, at p 555 :

"Nowhere in the Act can I find any authority to exclude persons from employment because they are not members of a particular organization, or of a class within that organization, when such members are not available and willing to undertake the particular employment." (at p555)

7. The passages in Findlay's Case (1950) 81 CLR 537 most relevant to the question whether there is here an industrial dispute are as follows :

Latham C.J. (1950) 81 CLR, at p 544:

"The demand contained in the log was a simple demand for compulsory unionism."

and (1950) 81 CLR, at p 546 :

"Apart from what has already been said as to the complete ineffectiveness for all relevant purposes of the inclusion of the claim for compulsory unionism in the log, preference to unionists is different in kind from a monopoly of employment for unionists."

Dixon J. (1950) 81 CLR, at p 550 :

"Now in the present case there was no dispute about preference in terms. A log of claims was delivered by the union containing a demand that no employer (subject to the provisions of any relevant Commonwealth law in force) should employ any person on work covered by the log unless such person were a financial member of the union. To this claim the employers did not accede. Does such a claim raise an industrial dispute covering preference in employment to the members of the union? In my opinion it does not . . . "

McTiernan J. (1950) 81 CLR, at p 552 :

"The respondent union demanded in effect that the employers should use their economic power over their employees to compel those who were not members of the union to join it. The power to award preference implies the existence of two groups, unionists and non-unionists. The effect of the union's demand, if conceded by the employers, would have been to eliminate the second group from the industry."

Webb J. (1950) 81 CLR, at p 553 :

"A clause which, like cl. 61, has the effect of making an employer await the union's nomination of a unionist, no matter how urgently the services of an employee may be required, and then to select an unqualified unionist, if the union sees fit to nominate one, and which also has the effect of requiring the employer to dismiss a qualified non-unionist and employ in his place an unqualified unionist nominated by the union, might necessarily lead to the termination of an employer's operations. Such a clause is as objectionable as the clauses held invalid in Wallis' Case (1949) 78 CLR 529 ; and in any event is, I think, also invalid as going beyong preference as commonly understood." (at p556)

8. The various claims made in the log must be examined in the
light of the foregoing decisions to determine whether what is sought is preference to the union or its members. (at p556)

9. The first demand is that, subject to a proviso, no person, not a
unionist or a person holding a certificate under s. 47 (3) of the Act, can be employed until twenty-one days after an employer has notified the union that there is a particular job to be filled. The proviso would allow employment in an emergency for no more than three days. If there is a unionist applicant for the job he must be engaged unless, on reasonable grounds, the employer believes him incapable of doing the job. (at p556)

10. The effect of this embargo upon employment is that an employer wanting to fill a job may not be able to do so for at least twenty-one days for there may be no application within that time by a unionist, or by a unionist capable of doing the job. It was argued that such a claim by itself would be a claim with respect to an industrial matter. As presently advised I am not disposed to accept this contention but in the view which I take it is not necessary for me to express a concluded opinion upon it. (at p556)

11. By itself such an embargo is not a claim for preference to unionists, but it is argued that, because an effective system of preference depends upon giving those to be preferred an opportunity to seek engagement for vacant jobs before they are filled by those to be deferred, an embargo upon the engagement of a non-unionist for a limited time would be a step to the end of granting effective preference to unionists and a claim for such an embargo relates to an industrial matter, i.e. preferential employment. (at p556)

12. I accede to this argument. I think that a provision that no non-unionist should be engaged, unless and until an employer has ascertained in a specified manner that there is no competent unionist available for engagement, could be part of the provision of preference for unionists. Such a provision would, of necessity, prevent the immediate engagement of a non-unionist. Nevertheless, some limitation upon the liberty of an employer to engage non-unionists, to forestall any competition from unionists for jobs, does seem to me to fall within the conception of preference in employment to unionists. If a claim for preference in employment be made out, the Award granting it should contain such provisions as are necessary to make it effective and I consider that a limitation upon the right to employ, to ensure that those to be preferred have a real opportunity to offer for work when it becomes available, falls within that description. It may well be that, in settling this particular dispute, a wise arbitrator would impose less restrictive conditions upon employers than the embargo as sought, but the conditions sought are, in my opinion, not so extreme that to grant them as they stand would, of necessity, involve going beyond the making of a legitimate provision within a system for the granting of preference to unionists. Refusal of this part of the log does, I think, give rise to an industrial dispute. (at p557)

23. I do not myself think that the claims for preference in the log are necessarily beyond the Commission's power because if granted they might in effect compel all men and women employed in clerical tasks to join the union. I consider that, as I have said, the claims are for other reasons beyond the jurisdiction of the Commission. I have said so much as to s. 47 (2) only to emphasize that, if I be wrong and that it is within the power of the Commission to grant the forms of preference sought, then there is no presumption either that it should not do so. That would be a grave question for the Commission. It would not be a matter for this Court. (at p574)

24. It is not necessary that I deal with the fourth ground of the order nisi, namely that the proposed cl. 1 (b) "makes a demand which relates to the prevention of the establishment of the relation of employer and employee". This seems to echo words that Latham C.J. used in Metal Trades Employers Association v. Amalgamated Engineering Union (1935) 54 CLR 387, at p 405 . Certainly the clause, if adopted by the Commission, would prevent the making of a contract for the services of a person not a member of the union for twenty-one days, except in an emergency and then only temporarily. But I think that the provisions of cl. 1 are invalid by reason of their relationship to cl. 2 and I need not further consider whether cl. 1 (b) would be objectionable if it could be separated from the other claims in the log and stood alone. (at p575)

25. For the reasons I have given I would make absolute the order nisi for prohibition. (at p575)

Owen J. For the reasons given by my brother Menzies I am of opinion that the order nisi should be discharged. (at p575)

Orders

Rule nisi for prohibition discharged. Prosecutors to pay the costs of the respondent Union.