Shop, Distributive and Allied Employees' Association v Toys R Us (Australia) Pty Ltd
[1996] IRCA 182
•15 May 1996
DECISION NO: 182/96
C A T C H W O R D S
INDUSTRIAL LAW - AWARD - INTERPRETATION - Application of awards to employees employed in supervisory and/or managerial functions - Wide incidence clause read down by reference to award as a whole - Award covering shop assistants construed not to extend to managers - Limits on power of court to interpret award - No power to apply award to disputed facts
Industrial Relations Act 1988, s.413.
Shop Distributive and Allied Employees’ Association Toys R Us Western Australia Interim Award 1994;
SDAEA - Toys R Us (South Australia) Interim Award 1994.
Master Builders Association of Victoria v Australian Building Construction Employees and Builders’ Labourers’ Federation (1981) 35 ALR 284;
State of Victoria v Australian Teachers Union (1993) 49 IR 149.
SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES’ ASSOCIATION -v- TOYS R US (AUSTRALIA) PTY LTD
Nos VI 95/4805 & VI 95/4806
Before: North J
Place: Melbourne
Date: 15 May 1996
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
No VI 95/4805
No VI 95/4806
B E T W E E N :
SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES’ ASSOCIATION
Applicant
AND
TOYS R US (AUSTRALIA) PTY LTD
Respondent
JUDGE: North J
PLACE: Melbourne
DATE: 15 May 1996
REASONS FOR JUDGMENT
The Shop, Distributive and Allied Employees’ Association (“the Association”) is an organisation of employees registered under the Industrial Relations Act 1988 (“the Act”). It is a party to an award made by the Australian Industrial Relations Commission (“the Commission”) applicable in Western Australia and entitled the Shop Distributive and Allied Employees’ Association Toys R Us Western Australia Interim Award 1994 (“the WA award”) and to another award made by the Commission and applicable in South Australia entitled the SDAEA - Toys R Us (South Australia) Interim Award 1994 (“the SA award”). Both awards were made on 10 August 1995.
The Association has applied to the Court under s.413 of the Act for an interpretation of each award.
The respondent is the employer party to each award. To understand the controversy between the parties, it is necessary to know a little of the business and organisation of the respondent and of some proceedings in the Commission. The respondent conducts two toy stores in South Australia and one in Western Australia. It employs staff in the following ascending classifications devised by it -
Store Associate;
Department Supervisor;
Front End Manager, Sales Floor Manager, Storeroom Manager;
Assistant Store Director; and
Store Director.
The respondent negotiated an Enterprise Flexibility Agreement (“the agreement”) with some employees and sought approval from the Commission under s.170NC(1) of the Act to implement the agreement. The Association opposed the application. One of its grounds of opposition was that the Commission was bound to refuse approval under s.170NC(1)(c)(i), which requires that the agreement cover all employees in respect of whom wages and conditions of employment are regulated by one or more awards that bind the employer. The agreement covered Store Associates and Department Supervisors. It did not cover the other employees of the respondent, namely, Front End Managers, Sales Floor Managers, Storeroom Managers, Assistant Store Directors and Store Directors (“employees in the contested classifications”). In the course of the application for approval to implement the agreement, the Association contended that the employees in the contested classifications were covered by the WA or SA awards and consequently, on that aspect, the Commission was bound to refuse approval. The respondent contended that the WA and SA awards did not cover the employees in the contested classifications and consequently, on that aspect, the Commission was bound to approve the implementation of the agreement. Before the resumption of the part heard application for approval before the Commission, the Association instituted the applications for interpretation which are presently before the Court. In light of the commencement of the applications to the Court, the Commission decided, pending the decision of the Court, not to determine the question whether the employees in the contested classifications were covered by the awards. The Commission did determine that it would give its approval in respect of all issues arising in relation to the agreement, apart from the issue arising under s.170NC(1)(c)(i), subject to some presently irrelevant amendments required by the provisions of the Act.
Thus, the Association sought an interpretation of each of the awards in order to advance its objection to the approval of the agreement. It now asks the Court to determine that employees in the contested classifications are covered by the awards. To make that determination, the Court would need to characterise the nature of the work covered by the awards, and decide if the work performed by the employees in the contested classifications was such work. Whether the Court should engage in such a process in an application under s.413 is a subject to which I shall return later in these reasons. I will first consider the nature of the work covered by the awards.
The WA award
The relevant clauses of the WA award are:
“3 - SCOPE
This award shall apply to all workers employed in any calling or callings herein mentioned in the industry or industries carried on by Toys R Us Australia Pty Ltd who are eligible to be members of the SDAEA and to the SDAEA.
......
6 - DEFINITIONS
(1)‘Shop Assistant’ shall mean a worker performing one or more of the following functions in retail or wholesale establishments:
(i)the receipt into and preparation for sale and or display of goods in or about any shop,
(ii)the prepacking or packing, weighing, assembling, pricing or preparing of goods or provisions or produce for sale,
(iii)the display, shelf filling, replenishing or any other method of exposure or presentation for sale of goods,
(iv)the sale of goods by any means,
(v)the receiving, arranging or making payment by any means,
(vi)the recording by any means of a sale or sales,
(vii)the wrapping or packing of goods for despatch.
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26 - WAGES
PART I
The minimum rates of wages payable to workers under this award shall be as follows:-
(1)ADULTS (Classifications and Wage per week)
| (i) Who works ordinary hours Monday to Friday | (ii) Who works ordinary hours between Monday and Saturday | (iii) Who works ordinary hours between Monday and 1.00 pm Saturday with the completion of ordinary hours after 1.00 pm Saturday | |
| Shop Assistants, | $ | $ | $ |
| Base Rate Award Rate | 385.00 393.00 | 397.30 405.30 | 410.30 418.30 |
The award rate set out in this subclause which includes the Safety Net Adjustment also set out in this subclause, shall be paid for all purposes of the award.
(2)An employee in (1) - (5) above who is required by the employer to be in charge of a shop, store or warehouse or other employees shall be paid an in charge allowance for all purposes of the award calculated as follows:
(a)if placed in charge of a shop, store or warehouse with no other employees or if placed in charge of less than three other employees - 3.4% of the rate specified in subclause (1) - (5) above, as appropriate.
(b)if placed in charge of three or more other employees but less than ten other employees - 6.2% of the rate specified in subclause (1) - (5) above, as appropriate.
(c)if placed in charge of ten or more other employees - 11.2% of the rate specified in subclause (1) - (5) above, as appropriate.”
The award is comprehensive in providing for numerous conditions of employment, such as hours of work (clause 9), overtime (clause 13), holidays (clause 14), annual leave (clause 15), sick leave (clause 25) and introduction of change (clause 38). These clauses are expressed to apply generally to “employees” or “workers”, without reference to the work done by the particular employee or worker. A typical example is clause 15(1) which provides for annual leave as follows:
“Except as hereinafter provided a period of four consecutive weeks’ leave with payment of ordinary wages as prescribed shall be allowed annually to a worker by his employer after a period of twelve months’ continuous service with such employer.”
If each of these clauses is read in isolation, it could be regarded as applicable to any worker employed by the respondent, that is to say, the clause is not qualified in its application to persons performing any specified function. This is the argument pressed by the Association. On this argument, the award, at least in respect of clauses expressed in general terms, is not limited to shop assistants, but applies generally to all employees of the respondent, including managerial staff.
This approach does not take account of other relevant provisions of the award and the structure of the award as a whole. Clause 3 maps out the area of operation of the award. It provides that the award applies to workers “employed in any calling or callings herein mentioned”. The only reference in the award to a calling is in clauses which set rates of pay such as clause 26, and in that clause, as in the others, the only calling referred to is “shop assistants”. This calling is specifically defined in clause 6(1). No other calling is defined. Clause 3, read with clause 26 and like wage setting clauses, means that the award applies only to employees of the respondent who are shop assistants within the meaning of the award. This construction means that the apparently unqualified provisions, such as clause 15, must be read as limited to making provision for shop assistants only and not all workers employed by the respondent in its stores.
The Association contended that clause 26 Part 1 (2), in effect, referred to a managerial calling, that is to say, a calling involving an employee being in charge of a store or in charge of other employees without that employee being a shop assistant as defined. There is no basis for such a construction. It is common ground that the reference to “(1) ‑ (5) above” in subclause (2) comes from the pre-existing State award, entitled the Shop & Warehouse (Wholesale & Retail Establishments) State Award 1977, upon which the WA award was modelled. In the State award, the reference to “(1) - (5)” was probably to subclauses describing the functions of a wide variety of employees engaged in the retail industry. It is also common ground that the reference in the WA award to “(1) - (5) above” should be simply to “(1) above”. That means that the “in charge” provision relates only to shop assistants, for only shop assistants are referred to in the previous subclause. Further, the nature of the payment prescribed is an allowance which is expressed as a percentage of the wage rate specified for shop assistants. This again indicates that the payment is directed to shop assistants who are performing additional “in charge” duties, and not to separate non-shop assistant employees engaged solely in managerial functions. I would therefore interpret the WA award as applying only to shop assistants as defined, whether carrying out “in charge” duties or not. Consequently, I reject the construction contended for by the Association that the award applies to all employees of the respondent employed in the toy store in Western Australia, or to employees who are not shop assistants and who undertake “in charge” duties.
The SA award
The relevant clauses of the SA award are:
“4 - SCOPE AND PERSONS BOUND
This Award shall be binding on the SDAEA, Toys R Us and all persons who are in the employ of Toys R Us engaged in the sale of goods wholly by retail, or partly by retail and partly by wholesale.
......
63 - DEFINITIONS
......
A Shop Assistant is an employee whose principal function is to make direct sales to the public and in doing so accepts or arranges payment for goods sold.
A Supervisor (without buying responsibility) (2 - 4 employees, 5 ‑ 8 employees, or 9 or more employees) is a person in charge of employees who directs the performance of their work and who is in turn responsible to the manager of the department or stock buyer.
......
SCHEDULE A.
Schedule 2. Wages and Allowances for Employees Working in Establishments which Trade After 12.30pm on Saturday In Any Given Week
This Schedule shall operate from the first full pay period commencing on or after 20th December 1994.
IMPORTANT NOTE: The wages set out in this schedule apply only to employees working in establishments which trade after 12.30pm on Saturday in any given week. If the establishment in any given week does not trade after 12.30pm on Saturday, the wages set out in this schedule must not be used. Where an establishment does not trade after 12.30pm on Saturday in any given week, the wages set out in Schedule 1 of this Award must be used for that week.
The wages set out in this schedule apply to all employees covered by this Award except for employees employed: [sic]
HOW TO USE THIS SCHEDULE: The hourly rates set out in the columns headed ‘Ordinary hourly rate for full-time and part-time employees’ and ‘Ordinary casual hourly rate for non-overtime purposes’ are to be used (as may be appropriate) for calculation of all non-overtime wages. Where an employee works overtime or on a Sunday or public holiday, the appropriate penalty is to be calculated by reference to the columns headed ‘Overtime hourly rate for full-time and part-time employees’ or ‘Overtime hourly rate for casual employees’ (as may be appropriate). In other words, the time and one-half or double time penalty (as may be appropriate) is to be calculated by using the rates set out in the overtime hourly rates columns.
EMPLOYEES OTHER THAN DISPLAY EMPLOYEES
| Base rate $ | Supple- mentary payment $ | Arbitrated Safety Net Adjustment $ | Total weekly wage $ | |
| Adult Employees Shop Assistant | 358.90 | 51.10 | 16.00 | 426.00 |
| Junior Employees Under 17 years (50%) | 179.50 | 25.50 | 8.00 | 213.00 |
| 17 years (60%) | 215.30 | 30.70 | 9.60 | 255.60 |
| 18 years (70%) | 251.20 | 35.80 | 11.20 | 298.20 |
| 19 years (80%) | 287.10 | 40.90 | 12.80 | 340.80 |
| 20 years (90%) | 323.00 | 46.00 | 14.40 | 383.40 |
| Ordinary | Ordinary | Overtime | Overtime | |
| Adult Employees Shop Assistant Junior Employees | 11.21 | 13.45 | 10.54 | 12.64 |
| Under 17 years (50%) | 5.61 | 6.73 | 5.27 | 6.32 |
| 17 years (60%) | 6.73 | 8.07 | 6.32 | 7.59 |
| 18 years (70%) | 7.85 | 9.42 | 7.38 | 8.85 |
| 19 years (80%) | 8.97 | 10.76 | 8.43 | 10.92 |
| 20 years (90%) | 10.09 | 12.11 | 9.48 | 11.38 |
[These rates are based on a percentage of the base wage for an adult shop assistant ($358.90) plus a percentage of the adult supplementary payment ($51.10) plus the arbitrated safety net adjustment.]
| ADULT SUPERVISORS ALLOWANCE | $ extra per week | $ extra per hour |
| Employee in charge of shop | 15.30 | 0.40 |
| Supervisor of 2 to 4 employees | 15.30 | 0.40 |
| Supervisor of 5 to 8 employees | 21.40 | 0.56 |
| Supervisor of 9 or more employees JUNIOR SUPERVISORS ALLOWANCE | 25.30 | 0.67 |
| Employee in charge of shop | 15.30 | 0.40 |
| Directing or supervising 2 to 4 employees | 6.50 | 0.17 |
| Directing or supervising 5 to 8 employees | 11.90 | 0.31 |
| Directing or supervising 9 or more employees | 13.80 | 0.36 |
| 19 Years and Over - Without Buying Responsibility Employee in charge of shop | 15.30 | 0.40 |
| Directing or supervising 2 to 4 employees | 13.80 | 0.36 |
| Directing or supervising 5 to 8 employees | 19.00 | 0.50 |
| Directing or supervising 9 or more employees | 23.70 | 0.62 |
MEAL ALLOWANCE (Clause 13) $6.60 per entitlement
LOCOMOTION ALLOWANCE (Clause 40) $0.41 per kilometre
FIRST AID ALLOWANCE (Clause 42) $1.30 per day or $6.60 per week”
Again, the Association contended that the award was not restricted to making provision for shop assistants but extended to making provision for all employees of the respondent, including those undertaking managerial functions.
Wage rates are a central and fundamental provision of the award. They are the foremost obligation of the employer to the employee and provide, in most cases, the essential reason for employees engaging in employment. Wage rates are specified in the award for shop assistants and supervisors, and both these terms are defined. Unlike the “in charge” provision in the WA award, the definition of supervisor in the SA award does not require the person to fall within the definition of shop assistant as well. But I accept the argument put by Mr Lawrence, who appeared as counsel for the respondent, that a supervisor under the SA award is limited to a first line supervisor, because such an employee is defined as being responsible to the manager of the department. The definition of supervisor necessarily excludes managers of departments themselves, and also excludes managers above managers of departments. I therefore reject the construction contended for by the Association that a supervisor comprehends all managerial personnel employed by the respondent.
On their own, the provisions specifying wage rates for certain categories of employees only, and the fact that those categories of employees are defined within the award, strongly indicate that the other provisions of the award, apparently applicable to all employees, only apply to the employees for whom wage rates are specified. It seems unlikely, for instance, that clause 13, which requires payment of a meal allowance to “an employee”, was meant to apply to an employee for whom a wage rate was not specified.
The circumstances in which the award was made confirm the view expressed and show that the award was not intended to govern managerial employees other than supervisors as defined. It was common ground that the award was modelled on the pre-existing State award, and was intended by the parties as an interim measure to preserve the existing rights conferred by the State award. So far as relevant, clause 4 of the pre-existing State award, entitled the Retail Industry (South Australia) Award, provided:
“Clause 4. Scope and Persons Bound
This Award shall be binding on all persons engaged in the industry of the occupations of persons employed (whether wholly or in part):
(a) in buying and/or purchasing and/or acquiring goods;
(b) in or about any shop in receiving, preparing for sale or hire, goods;
(c) in displaying, shelf-filling, replenishing, price entering or marking, demonstrating, promoting, or any other method of exposing or presenting for sale or hire of, goods in or about any shop;
(d) in selling or hiring goods by any means;
(e) in the provision of a consumer service in or from a shop;
(f) in recording by any means a sale or hire and/or in wrapping and/or preparing goods for despatch;
(g) in despatching goods, including transferring goods between stores or shops;
(h) in the supply of food or beverages in or in connection with a canteen, a cafe, a restaurant, a tea room, a takeaway chicken shop or a fish shop which is located in or about a shop operated by an employer otherwise bound by this Award;
(i) supervising and directing persons employed in or in connection with/and/or planning and organising the functions or combinations of functions described in paragraphs (a) to (h) inclusive as set out above;
who are in the employ of an employer engaged in the sale of goods wholly by retail, or partly by retail and partly by wholesale, or engaged in the hire of video cassettes or clothing (other than industrial clothing) but in all cases excluding any persons who are employed pursuant to an Industrial Agreement within the meaning of the Industrial and Employee Relations Act 1994.”
The State award had wide application across the retail industry in South Australia. It was inappropriate to include the wide scope of the State award in the SA award. Presumably, that is why the clause was severely truncated in the SA award. In modifying the scope clause in the State award for use in the new award, the parties did not intend to enlarge the coverage which previously existed under the State award. The State award defines coverage by reference to the functions of various employees. None of these functions include a supervisory role beyond that of a supervisor, who is defined in identical terms in the State award as in the SA award. I would therefore interpret the SA award as applying only to shop assistants and supervisors as defined.
Should the Court grant the relief sought?
As I said earlier, the Association asks the Court to determine that the employees in the contested classifications are subject to the awards. Having expressed my views about the construction of the awards, the determination sought by the applicant requires the application of that construction to the facts of the case. It is undesirable to embark on that exercise in this case for a number of reasons.
First, the factual basis for such an exercise has not been provided. The evidence tendered by the Association of the nature of the work done by the employees in the contested classifications consisted of a written position description prepared by the respondent for each classification. By way of representative example, the position description for the Sales Floor Manager classification reads as follows:
“POSITION PURPOSE:
To give effective guidance and direction to department supervisors and store associates in the areas of inventory, cash control, customer service, personnel, loss prevention, safety, expense control and especially merchandising so that the store operates efficiently and profitably, with particular emphasis on the Sales Floor.
KEY RESPONSIBILITIES:
-effectively execute day to day operational plans, as directed by Assistant Store Director.
-direct department supervisors in the performance of their jobs to enable the store to run smoothly and efficiently.
-maintain acceptable ‘look’ of store.
-ensure proper pricing and prompt implementation of price changes.
-ensure that goods in storeroom are represented on sales floor.
-ensure that any out-of-stock items are promptly reported.
-ensure that overstock items are represented on selling shelves.
-ensure that markdown and RGD policies are closely followed.
-ensure high standards of customer service.
-ensure maintenance of store presentation and safety standards.
-carry out hands on training/development and evaluation of department supervisors and store associates.
-promote and market the business in the local community.
INDIVIDUAL CHARACTERISTICS
-intelligent and innovative - always questioning, challenging, developing solutions/new ways of doing things.
-management skills - able to delegate effectively.
-excellent planning and organisational skills.
-communication skills - able to deal with people at every level within the company and particularly with customers.
-flexible - able to adapt to change quickly.
-energy - able to motivate subordinates to perform at consistently high levels.
-bottom-line management orientation.
PREVIOUS EXPERIENCE
-history of above par performance.
-minimum 3-5 years retail management in mass merchandising, department or variety store.
-good record of customer service related issues.
-understanding of business principles.
-knowledge of store layouts, merchandising principles, operational procedures.”
It does not appear from the description of the 12 key responsibilities whether some are more important or time consuming than others. Many descriptions, such as “maintain acceptable ‘look’ of store”, are extremely general and do not convey the nature of the work involved in carrying out the particular responsibility. Some responsibilities are described by reference to other company documents which were not tendered in evidence. The “operational plans” referred to in the first listed key responsibility appear, from the position description of the Assistant Store Director classification, to be required to comply with the company’s “standard operating procedures”. It is likely that evidence of these procedures would be necessary evidence to determine the nature of the role of the Sales Floor Manager.
Second, the function of the Court in an interpretation case is limited by the nature of the jurisdiction. In State of Victoria v Australian Teachers Union (1993) 49 IR 149 at 151, Northrop J described the nature of the jurisdiction thus:
“It has been held that the provision is designed to enable the Court to give an authoritative decision on the meaning of an award. Essentially the decision is based upon the proper construction of words used in the award. The construction is to have general application and is not directed to the particular facts of any matter in dispute between parties.”
Hence, the Court cannot exercise jurisdiction under s.413 which is in substance a claim for award enforcement in that the Court is asked to construe the award, to find facts, and to determine whether the award applies to facts found: Master Builders Association of Victoria v Australian Building Construction Employees & Builders’ Labourers’ Federation (1981) 35 ALR 284 at 287. In asking the Court to determine whether the award applies to the employees in the contested classifications, the Association is asking the Court to go beyond its function under s.413 to interpret the award.
Third, the reason the Association asks the Court to determine whether the awards apply to the employees in the contested classifications is to allow the Commission to determine whether s.170NC(1)(c) has been satisfied. This is a function properly performed by the Commission under s.170NC. Just as the Court cannot determine in substance whether there has been a breach of an award by exercise of a power to interpret an award, so the Court cannot determine in substance whether s.170NC has been satisfied by exercise of the power to interpret an award. Such a function would also require the Court to make findings of fact, and to apply the award to the facts.
In the course of argument, the obstacles to the grant of the relief sought by the Association were raised by the respondent and also by the Court. In response, the Association reformulated its application to seek the following interpretation:
In relation to the SA award -
“An employee engaged in selling by retail is an employee whose wages and conditions are regulated by the award pursuant to clause 4, notwithstanding that such employee is not in a classification defined in clause 63 or whose classification or job title is not identified or referred to in the wage schedules in Schedule A to the award.”
In relation to the WA award -
“An employee employed in a position, howsoever titled, which includes undertaking supervisory functions in relation to persons employed as shop assistants is employed in a calling referred to in clause 3 of the award and is an employee whose wages and conditions are regulated by the award.”
The reformulations overcome the obstacles just referred to. However, as is evident from these reasons, I would not interpret the awards in the manner proposed by the Association. It would accord with this view to simply dismiss the application for interpretation. However, an alternative approach is to make a formal declaration expressing the interpretation contended for by the respondent, which was directly contrary to that contended for by the Association. I was urged by the respondent, and I am persuaded, to make such declaration because it should assist the Commission in determining the outstanding issue under s.170NC(1)(c)(i). It will then be able to hear evidence concerning the work done by employees in the contested classifications, make necessary findings, and apply the award as interpreted by the Court to the facts so found.
I certify that this and the preceding sixteen (16) pages are a true copy of the reasons for judgment of his Honour Justice North.
Associate:
Dated: 15 May 1996
Representative for the applicant: J. Ryan, Shop, Distributive & Allied Employees’ Association
Counsel for the respondent: B. Lawrence
Solicitors for the respondent: Baker & McKenzie
Date of hearing: 22-23 April 1996
Date of judgment: 15 May 1996
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
No VI 95/4805
No VI 95/4806
B E T W E E N :
SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES’ ASSOCIATION
Applicant
AND
TOYS R US (AUSTRALIA) PTY LTD
Respondent
MINUTES OF ORDER
JUDGE: North J
PLACE: Melbourne
DATE: 15 May 1996
THE COURT DECLARES:
That upon the true meaning and intent of the Shop Distributive Allied Employees’ Association Toys R Us Western Australia Interim Award 1994 the award:
(a)does not apply to all employees employed by Toys R Us (Australia) Pty Ltd in Western Australia;
(b)only applies to shop assistants as defined in clause 6; and
(c)further to (b), for the purposes of the award, the “in charge” function for which an allowance is provided in clause 26 Part I (2) refers to a function which must be performed by a person who is a shop assistant as defined in clause 6.
That upon the true meaning and intent of the SDAEA - Toys R Us (South Australia) Interim Award 1994 the award:
(a)does not apply to all employees employed by Toys R Us (Australia) Pty Ltd in South Australia;
(b)only applies to shop assistants and supervisors as defined in clause 63; and
(c)further to (b), the definition of “supervisor” in clause 63:
(i)does not require a supervisor to be a shop assistant as defined;
(ii)does not mean that all employees undertaking managerial functions are supervisors as defined, but confines supervisors for the purposes of the award to persons who as well as having the specified supervisory functions are responsible to the manager of the department or stock buyer.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
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