South Australian Employers' Chamber of Commerce and Industry Inc. v United Trades and Labour Council of South Australia Inc. No. Scgrg-97-423 Judgment No. 6349 Number of Pages 16 Industrial Law

[1997] SASC 6349

IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA

COX, PERRY AND DEBELLE JJ

CATCHWORDS:

Industrial law - minimum standard of remuneration - held on appeal from a case stated by the Industrial Relations commission to the Industrial Relations Court that the jurisdiction conferred on the Commission to fix minimum rates for defined industrial groupings, such as particular industries or trades, but extended to permit the Commission to fix minimum standards of remuneration applicable to all employees - discussion as to the expression "class of employees" in the Industrial and Employee Relations Act 1994. Industrial and Employee Relations Act 1994 ss26, 69, 70-72, 79, 81, 90, 94, 191 and 214 and Schedules 2-5, referred to. Re General Workers Award South Australia State Award (1996) 66 IR 125, considered.

HEARING:

ADELAIDE, 7-8 July 1997 (hearing), 3 October 1997 (decision)

#DATE 3:10:1997

#ADD 7:10:1997

Appearances:

Appellants:

Counsel: Mr G L Muecke

Solicitors: R J Manuel & Co

Respondents:

Counsel: Mr P A Heywood-Smith

Solicitors: Duncan And Hannon

Intervener Attorney-General for South Australia:

Counsel: Mr E Brooks

Solicitors: Crown Solicitor (SA)

ORDER:

Appeal allowed.

COX J

The issues raised in this appeal are described in the judgments of the other members of the Court.

It was, I think, inappropriate and confusing for the respondent to describe the order it sought under Schedule 2 of the Industrial and Employee Relations Act 1994 as an "award". Notwithstanding the very general definition of "award" in s4 of the Act, it is plain from s69 and the Schedule itself that an order of the Commission fixing a minimum rate in accordance with the Schedule is an order sui generis which is to be contrasted with, not identified with, an award. I agree with the Full Industrial Court that the classification of employees to whom a Schedule 2 order will apply need not be made along conventional trade or occupation or industry lines. The fact that the order will apply to employees "in an industry" - see the definitions of "employee" and "contract of employment" in s4 - does not mean that the classification has to be made in industry terms. I see nothing wrong in principle, therefore, in the kind of classification (Levels 1 to 12) proposed by the respondent. However, the different classes are defined in rather general terms and it may not always be easy to identify a particular worker with his appropriate class. As the fixing of a minimum rate under Schedule 2 can have the effect under s69 of rewriting the remuneration provisions in a contract of employment, it is obviously necessary that the classes of employees specified in a Schedule 2 order be described in the order with some precision.

The minimum rate of remuneration for an employee under an award is defined in subs(1) of the Schedule as "the hourly rate prescribed by the award applicable to ordinary hours of employment (not including payments in the nature of allowances, penalties, loadings or overtime)." I think it follows that the Commission's power under subs(3) to fix a minimum rate of remuneration for classes of employees who are not under an award must be limited to the kind of hourly rate envisaged in subs(1). Thus the Commission may not, in fixing a minimum rate, include payments in the nature of allowances, penalties, loadings or overtime. The respondent's application proposes a table of figures, applicable to the twelve Levels, with four columns showing for each level the "Base Rate per week," the "Supp Pay't per week," the "S/N per week" and the "Award Rate per week". The accompanying text explains that "Supp Pay't" refers to supplementary payments representing payments in lieu of equivalent over-award payments, and that "S/N" refers to safety net adjustments computed in accordance with a review of wage fixing principles that was made in December 1993. As long as it is made clear that it is the last column, not the first, that reflects the minimum rate fixed under the Schedule - the expression "Award Rate" is misleading and would be better avoided - , it is open to the Commission to set out, if it so wishes, the method by which it reached the minimum rates. However, as I interpret the Schedule, the minimum rate must be an hourly rate, although I can see no objection to the Commission providing readers with a ready reckoner, as it were, and showing additionally in its order what the minimum rate would be if expressed in weekly terms. Clause 7.2 of the proposed order refers to an hourly rate for casual and part-time employees. Again, this is unobjectionable as long as it is made clear that the hourly rate for such persons is the same as the hourly rate fixed generally for employees of the same class who work ordinary hours, for there may only be one hourly rate for each class of employees however many hours the employee works. It is open to the Commission to specify a period within which the minimum rate will have effect. However, I do not think it has power to lay down procedures for consultation between parties about putting the Commission's order into operation, as though it were an award. All that the Schedule envisages, in my view, is an application, a hearing with submissions and possibly evidence, and an order fixing the minimum rate or rates. To this extent I find myself in disagreement with the Full Industrial Court.

I would allow the appeal for the purpose of answering the question asked by the Full Commission as follows -

"The Full Commission has jurisdiction and power to hear the application dated 18 July 1996 made by the United Trades and Labor Council of South Australia Inc. but it does not have power to determine it in the form of the application other than by fixing a single minimum hourly rate for each class of employees specified by the Full Commission."

PERRY J

This appeal raises an important question as to the jurisdiction of the Industrial Relations Commission under the Industrial and Employee Relations Act 1994 ("the Act").

By an application filed in the Commission on 16 July 1996, the United Trades and Labor Council of South Australia ("the UTLC")sought an award providing, inter alia, for what was described in the application as a "minimum standard for remuneration for employees who are not currently covered by the scope of any existing award or enterprise agreement".

Annexed to the application was a draft of the proposed award. Clause 3 of the proposed award is headed "Scope and Persons Bound". It provides: "3.1 Except as provided in 3.2 hereof, this award shall be binding on all persons whether as employers or employees and whether members of an association or not and shall apply to all employees engaged in the classes of employees set forth in the wages schedule herein.

3.2 In relation to those persons who, at the time of the making of this award, were subject to an industrial agreement or an enterprise agreement within the meaning of the Industrial and Employee Relations Act 1994, or another industry, or employer-specific award, this award shall not be binding during the life of any such arrangement.

3.3 The making or existence of this award shall not operate to prevent the making of new, or the extension of existing, industry, or employer, specific awards, or Enterprise Agreements."

The award goes on to prescribe minimum wage rates to be paid to employees classified according to twelve levels of relativity, measured against a basic category described as "tradesperson". The remuneration entitlement of persons falling within each of the levels is expressed in terms of varying percentages of the level of remuneration of a tradesperson, the percentages lying between 78% and 145%. The different levels of remuneration are skill based.

Before embarking on a hearing of the application, the Commission referred a question of law to the Industrial Relations Court for its determination pursuant to s214 of the Act. The question of law was formulated in the following terms:

"Does the Full Commission have jurisdiction and power to hear and determine pursuant to Schedule 2 of the Industrial and Employee Relations Act 1994 the form and content of the application made by the United Trades and Labor Council of South Australia?"

The phrasing of the question is unfortunate. The Full Commission clearly has the ability to hear and determine "the form and content" of any application. In fact the Industrial Relations Court dealt with the question as though the words "the form and content of" were omitted. Counsel agree that this Court should do likewise.

On 3 March 1997, the Industrial Relations Court answered the question in the affirmative.

It is from that decision that the present appeal is brought by leave.

I am indebted to Debelle J, whose reasons I have had the benefit of perusing, for his explanation of the relevant sections of the Act and the statutory framework within which the appeal falls to be determined. I will canvass again only such of those matters as are necessary to explain these reasons.

The Act introduced a new mechanism for the regulation of wages and conditions of employment, namely, the enterprise agreement negotiated at the workplace between management and its employees. This was described in Re General Workers' Award - South Australia - State Award by the Full Industrial Relations Court as a "major shift in focus".

The Act preserves the jurisdiction of the Commission to make an award. An award prevails over a contract of employment to the extent that the award is more beneficial to the employee than the contract (s94).

Enterprise agreements operate to exclude the application of an award "to the extent of inconsistency with the award" (s81(3)). They are subject to approval by the Commission.

An enterprise agreement may only be approved if the Commission is satisfied that:

"the agreement -

(i) is, on balance, in the best interests of the employees covered by the agreement (taking into account the interests of all employees); and

(ii) does not provide for remuneration or other conditions of employment that are inferior to the scheduled standards: and

(iii) does not provide for remuneration or conditions of employment that are (considered as a whole) inferior to remuneration or conditions of employment (considered as a whole) prescribed by the award (if any) that applies to the employees at the time of the application for approval; and ........." (s79(1)(e))

S79(1)(e)(ii) refers to "the scheduled standards". That term is not defined in the Act but it no doubt refers to the various minimum standards set out in Schedules 2-5 (inclusive) to the Act.

The minimum standards set by the schedules are as to remuneration (Schedule 2), sick leave (Schedule 3), annual leave (Schedule 4) and parental leave (Schedule 5). Leaving aside for the moment a consideration of Schedule 2, the operation of which is the subject of contention on the appeal, the other three schedules to which I have referred define standards which are said to be of application to "an employee". There can be no doubt that those minimum standards are of application to all employees, whatever the trade or business may be in which they are engaged.

Other sections of the Act throw further light on the part to be played by the scheduled standards.

In an award the Commission may provide for annual leave, sick leave or parental leave on terms that are more favourable to employees than the scheduled standards (s90(3)). A contract of employment is to be construed as though the scheduled standards relating to sick leave (s70), annual leave (s71) and parental leave (s72) are incorporated in it, unless the provisions of the contract as to those matters are more favourable than the scheduled standards, or the provisions of the contract are in accordance with an award or enterprise agreement.

As for remuneration, it is clear from the combined operation of s69, s79(1)(e) and Schedule 2 that an award or enterprise agreement may fix a rate of remuneration less than the minimum standard. However, where there is no relevant award or industrial agreement, a contract of employment is to be construed as if it provided for remuneration in accordance with the relevant minimum standard under Schedule 2, unless the contract provides for a more favourable rate.

S69 and Schedule 2 are as follows:

"69(1) A contract of employment is to be construed as if it provided for remuneration at in accordance with the relevant minimum standard under Schedule 2 unless - (a) a rate that is more favourable to the employee is fixed by the contract of employment; or (b) the rate of remuneration is fixed in accordance with an award or enterprise agreement.

(2) A rate of remuneration fixed by a contract of employment, or an award or enterprise agreement, must be consistent with the Equal Remuneration Convention"

"Schedule 2 Minimum Standard for Remuneration

1. (1) The minimum rate of remuneration for an employee for whom there is an award and an award classification is the hourly rate prescribed by the award applicable to ordinary hours of employment (not including payments in the nature of allowances, penalties, loadings or overtime).

(2) If there is no applicable award and award classification, the minimum rate of remuneration is a rate fixed by the Full Commission under this section.

(3) The Full Commission may, on its own initiative, or on application by the Minister, the United Trades and Labor Council, or the South Australian Employers' Chamber of Commerce and Industry - (a) fix a minimum rate of remuneration for a class of employees for whom there is no applicable minimum rate under subsection (1); or (b) vary a minimum rate previously fixed."

The appellant contends that the Commission has no jurisdiction pursuant to Schedule 2 of the Act to make an award fixing a minimum rate of remuneration for a "class of employees" defined in the manner contained in the application. In particular, the appellant contends that a "class" for the purposes of the schedule cannot be defined so widely as to include all employees, whatever the industry or trade in which they might be engaged, except those "subject to an industrial agreement or an enterprise agreement ... or other industry or employer specific award" (see clause 3.2 of the proposed award).

The appellant contends that there must be what it describes as a "commonality of interest" between the persons to whom the fixation under Schedule 2 is to apply, defined by reference to a trade, a business or a particular occupation. The appellant contends that there cannot properly be a fixation under Schedule 2 of a minimum rate of remuneration applicable generally to employees other than those having the benefit of an award or enterprise agreement, and that the proposed classification of the twelve skill levels measured against the "tradesperson" does not identify a class or classes of employees within the meaning of paragraph 3(a) of Schedule 2.

The appellant sought support for its contentions from the decision of the Full Industrial Relations Court in the General Workers' Award case (supra).

That case concerned an application for the making of an award which, it appears, was in terms not dissimilar from the award sought in the application now in question. The award sought in that case provided for twelve levels of relativity to a "tradesperson" spanning the same percentages as those in the proposed award now in question.

But in that case, the UTLC invoked the general award-making jurisdiction of the Commission, in particular that contained in s26(b), which confers jurisdiction on the Commission to "make awards regulating remuneration and other industrial matters".

In that case, the Industrial Relations Court held that the terms in which the jurisdiction in s26 was cast, in the context of the statutory definitions of "industrial matter", "industry", "employer", "employee" and "contract of employment", evinced a "legislative intention which confines the Commission's award-making power to specific groups of employees and employers who have a common interest". In reaching that view, the Industrial Relations Court drew attention to the fact that in the Industrial Relations Act 1972, which was repealed by the Act now in question, the award-making jurisdiction was extended by s25a. That section conferred jurisdiction on the Full Commission to "make an award of general application regulating remuneration or conditions of employment".

In the decision of the Industrial Relations Court from which the present appeal is brought, the court noted the absence of a jurisdiction to make an award of general application such as that which had been conferred by s25a of the repealed Act, a circumstance which was regarded as decisive in the General Workers' Award case. But the court distinguished the General Workers' Award case, principally on the ground that the application now in question was not brought pursuant to the general award-making power, but was brought pursuant to the special jurisdiction conferred on the Commission by Schedule 2.

In doing so, the court adopted the argument put by counsel for UTLC that: "... the special jurisdiction to fix minimum standards is conferred by Part 1 of Chapter 3 of the Act; that Part 1 is under the heading of 'General Conditions of Employment'; and that Schedule 2 should be read as being part of this power to regulate general conditions of employment in that Section 69 which is in that Part makes reference to the relevant minimum standard under Schedule 2.

The minimum standards fall into two categories, they being:

(1) remuneration; and

(2) leave,

and in relation to the latter there are three types of leave. He submitted that it is clear that the minimum standards relating to leave apply to all employees (with the exception of casual employees) without regard to the industry in which they are employed. He submitted that the same approach should apply in the case of the minimum standard of remuneration. He pointed out however, and in our view importantly, that when the Commission sets a minimum rate of remuneration for employees, there must be a means of differentiating between groups or classes of employees as employees have different levels of skill and different qualifications, which in turn require different levels of remuneration; and in this sense it must be contrasted with leave standards. He submitted therefore that the minimum rate of remuneration cannot apply across the board to all employees and that there must be a means of identifying a class of employee or employees in relation to whom a particular minimum rate should apply; and that the application before the Commission does precisely that, ie it seeks to set out a number of minimum rates of remuneration relating to a number of different classes of employees."

In my opinion, that argument is sound. Furthermore, I agree with the conclusion of the Industrial Relations Court that, for the purposes of Schedule 2, there is "no logical necessity to relate a class of employees to an industrial grouping". There is no warrant in the Act to restrict the meaning to be given to the word "class" where it appears in Schedule 2 so as to confine its application to a group of employees with some common association in trade or industry. The use of the word "class of employees" in Schedule 2 does not serve to distinguish the potential ambit of its operation, in the relevant sense, from the ambit of operation of Schedules 3, 4 and 5. The three last mentioned schedules create minimum standards which may operate across the board in areas not covered by existing awards or enterprise agreements. There is no reason to construe Schedule 2 so as to preclude the fixation of a minimum standard of remuneration on a similar basis, if in the exercise of its discretion the Commission sees fit to do so.

It is, perhaps, unfortunate that in its application the UTLC seeks the making of an award. Although the word "award" is defined in s3 of the Act to mean "an order of the Commission regulating remuneration or other industrial matters", it is more commonly used to describe a prescription providing both for remuneration and for general conditions of employment of employees covered by the award.

Although the application is expressed to be "for a minimum standard for remuneration as per appendix A", appendix A takes the form of a draft award of a kind which, having regard to the manner in which it is cast, is in the common form of an award made pursuant to the general award-making jurisdiction under s26 of the Act.

I agree with Cox J that the jurisdiction conferred by paragraph 1(3) of Schedule 2 of the Act is limited to the fixation of a minimum rate of remuneration. I agree also that the Commission would have the power to define a period within which the minimum rate is to apply, but that it would not have the power to make an order as sought in Schedule 1, clause 1.1.1 of the proposed award, providing for consultation between the parties. If disputes arise as to matters such as the classification of particular workers for the purpose of the proposed table of minimum rates, no doubt any such dispute could be resolved by invoking the ordinary jurisdiction of the Commission under s26 of the Act, pursuant to which an opportunity for the parties to confer would ordinarily be created. But that would be a process extrinsic to the jurisdiction conferred by Schedule 2, which is strictly limited to the fixation of a minimum rate.

I have experienced some difficulty in resolving the question whether the expression "minimum rate" in paragraph 1(3) of Schedule 2 of the Act should be construed as an hourly rate, as opposed to a rate struck by reference to some other interval of time, such as a week or period of 38 hours. Not without some hesitation, I have reached the view that it should be construed as Cox J suggests.

I agree that the appeal should be allowed for the purposes of answering the question posed by the Full Commission in the terms suggested by him.

DEBELLE J

This appeal from a decision of the Full Court of the Industrial Relations Court concerns the jurisdiction of the Full Commission of the Industrial Relations Commission.

Pursuant to s214 of the Industrial and Employee Relations Act 1994 ("the Act") the Full Commission had referred a question concerning its jurisdiction to the Full Court of the Industrial Relations Court. The question stemmed from an application made on 18 July 1996 by the United Trades and Labour Council of South Australia Inc ("the UTLC") for an award to establish a minimum standard for remuneration within South Australia for employees who are not covered by an award or enterprise agreement. Shortly stated, the application sought an award fixing a minimum standard of remuneration to operate at twelve levels of skill designated in the application. Before taking any evidence and before hearing the application, the Full Commission referred the following question of law to the Full Court of the Industrial Relations Court:

"Does the Full Commission have jurisdiction and power to hear and determine pursuant to Schedule 2 of the Act the form and content of the application made by the UTLC?"

On 3 March 1997 the Industrial Relations Court published its reasons and answered the question in the affirmative. The South Australian Employees Chamber of Commerce and Industry Inc, one of the respondents to the application, has appealed from that decision. The Attorney General has intervened on behalf of the Crown pursuant to s9(2) of the Crown ProceedingsAct 1992. Speaking broadly, the intervenor supported the appellant.

A Minimum Rate of Remuneration

Chapter 3 of the Act (ss66-114) provides for a range of matters concerning terms and conditions of employment. Those matters include general conditions of employment (ss66-71), regulation of industrial matters by enterprise agreements (ss73-89), and regulation of industrial matters by award (ss90-99). Schedules 2-5 to the Act respectively provide for minimum standards for remuneration, sick leave, annual leave, and parental leave. These are called "scheduled standards" in the Act. Schedule 2 provides for a minimum standard for remuneration. It provides:

(1) The minimum rate of remuneration for an employee for whom there is an award and an award classification is the hourly rate prescribed by the award applicable to ordinary hours of employment (not including payments in the nature of allowances, penalties, loadings or overtime).

(2) If there is no applicable award and award classification, the minimum rate of remuneration is a rate fixed by the Full Commission under this section.

(3) The Full Commission may, on its own initiative, or on application by the Minister, the United Trades and Labor Council, or the South Australian Employers' Chamber of Commerce and Industry - (a) fix a minimum rate of remuneration for a class of employees for whom there is no applicable minimum rate under subsection (1); or (b) vary a minimum rate previously fixed."

Section 69 is intended to ensure that all employees are paid in accordance with the relevant minimum standard. It provides: (1) A contract of employment is to be construed as if it provided for remuneration at in accordance with the relevant minimum standard under Schedule 2 unless - (a) a rate that is more favourable to the employee is fixed by the contract of employment; or (b) the rate of remuneration is fixed in accordance with an award or enterprise agreement. (2) A rate of remuneration fixed by a contract of employment, or an award or enterprise agreement, must be consistent with the Equal Remuneration Convention."

Thus, s69 provides for a minimum standard of remuneration and Schedule 2 provides a means to fix a minimum rate where there is no applicable award or award classification. Section 69 recognises that there will be employees who have a minimum rate of remuneration fixed by an award or an enterprise agreement. It seeks to protect those who are not covered by an award or enterprise agreement by providing that an employee's contract of employment shall be construed as if it provided for remuneration at the relevant minimum standard unless the contract of employment provides a rate of remuneration more favourable to the employee. The drafting of s69 is curious in that it contains two prepositions in the expression "remuneration at in accordance with". It seems that the conjunction " or " should be inserted between the two prepositions. As yet, no minimum rate has been fixed by the Full Commission exercising the jurisdiction provided in subs(3)(a) of Schedule 2.

The Jurisdiction of the Commission

The jurisdiction of the Commission is provided in s26 of the Act:

"The Commission has - (a) jurisdiction to approve enterprise agreements regulating remuneration and other industrial matters; and (b) jurisdiction to make awards regulating remuneration and other industrial matters; and (c) jurisdiction to resolve industrial disputes; and (d) jurisdiction to hear and determine any matter or thing arising from or relating to an industrial matter; and (e) other jurisdiction conferred by this Act."

The jurisdiction to fix minimum standards for remuneration as provided in Schedule 2 is obviously another jurisdiction conferred by the Act. There is no issue that the Commission has this jurisdiction. The question as framed assumes the jurisdiction to fix a minimum rate. The issues, in this appeal turn on the nature and content of that jurisdiction, that is to say, whether the application by the UTLC falls within subs(3)(a) of Schedule 2. In other words, the issue is whether it is discernible on the face of the application that the application has been made on behalf of a class of employees as subs(3) of Schedule 2 requires.

The Statutory Framework

The jurisdiction of the Commission to fix minimum standards for remuneration must be considered against the present statutory framework for the regulation of industrial disputes. The Act came into force on 1 November 1994. The objects of the Act as provided in s3 were summarised by the Industrial Relations Court in re General Workers Award (1996) 66 1R 125, 131 in these terms:

"In very general terms the objects of the Act are directed towards encouraging economic prosperity in South Australia, promoting the making of enterprise agreements, providing for awards, encouraging the prevention and settlement of industrial disputes and providing a means for settling such disputes, providing employees with avenues to express employer related grievances and to provide appropriate remedies, providing for freedom of association and eliminating discrimination in employment in accordance with State and Commonwealth law."

The Court re-iterated those observations in its reasons in this matter. One of the important changes in the regulation of wages and conditions of employment effected by this Act is the encouragement of enterprise agreements negotiated in the workplace. It is also one of the objects of the Act to ensure that levels of remuneration and conditions of employment provided by awards should "operate as a safety net underpinning" the enterprise agreements negotiated at the workplace: see s73(c).

Enterprise agreements have no force or effect unless approved by the Commission: see s78. The Commission is charged by the Act not to approve an enterprise agreement unless, among other things, the agreement is in the best interests of the employees covered by the agreement, the agreement does not provide for remuneration or other conditions of employment that are inferior to the standards provided in the schedules to the Act, and does not provide for remuneration or conditions of employment that are (considered a whole) inferior to remuneration or conditions of employment prescribed by a relevant award: see s79(1)(e). In addition, the Commission must be satisfied that the agreement is consistent with the objects of Part 2 of Chapter 3 of the Act and otherwise complies with the requirements of the Act: see s79(1)(f) and (g).

Thus, wages and conditions of employment may be fixed either by an award or by an enterprise agreement. The wages and conditions of employment as fixed by an enterprise agreement must at least be equal to the wages and conditions of employment provided in an award. Although many employees are entitled to a minimum standard fixed by either an award or enterprise agreement, there is, of course, a large group of employees who are not. They are employed in a wide variety of occupations and have many different levels of skills.

Schedule 2

Sub-section (1) of Schedule 2 defines the minimum rate of remuneration for employees for whom there is an award and an award classification. Express provision is not made for enterprise agreements. Presumably, Parliament adopted that course because the Act provides that the Commission must approve enterprise agreements and that enterprise agreements must provide a minimum rate of remuneration at least as favourable as the relevant award. Sub-section
(1) prescribes that the minimum rate is the ordinary hourly rate of remuneration without regard to any kind of allowances, penalties, loadings or overtime. In other words, it is the base rate of remuneration. If an award fixes a weekly rate based on a 38 hour week and excludes all allowances, penalties, loadings or overtime, the minimum rate is the weekly rate divided by 38 hours. An award for a particular occupation, say, may provide for different levels of skill and specify a minimum rate for each level of skill.

Sub-section (2) defines the minimum rate as the rate fixed by the Commission. Sub-section (2) does not confer jurisdiction on the Full Commission. Instead, it merely defines a minimum rate where there is no applicable award and award classification. It is subs(3) which invests the Commission with jurisdiction to fix a minimum rate of remuneration. The jurisdiction is limited to fixing a minimum rate of remuneration for "a class of employees for whom there is no applicable minimum rate under subs(1) and to vary a minimum rate which it has previously fixed." The issues in this appeal turn on what is meant by that expression.

Sub-section (3) does not invest the Full Commission with jurisdiction to fix the minimum rate generally for all employees for whom there is no applicable minimum rate under subs (1). As the Industrial Relations Court observed in re General Workers' Award (supra) at 132-133 the jurisdiction conferred by subs(3) contrasts starkly with the Full Commission's former jurisdiction to make an award applying generally throughout the State. Section 25a of the Industrial Relations Act 1972, which was repealed by the present Act provided: "Awards of general application 25a (1) The Full Commission has jurisdiction to make an award of general application regulating remuneration or conditions of employment. (2) An award made under this section is, subject to this section and any qualifications or limitation stated in the award, binding upon all employers and employees. (3) An award made under this section affects a condition of employment of an employee only to the extent to which that condition is inferior to a condition prescribed by the award."

That jurisdiction was very wide. By contrast, the terms of subs(3)(a) of Schedule 2 are notable for the restrictive terms by which the jurisdiction is conferred. Sub-section (3) does not provide that the Commission has jurisdiction to fix "a minimum rate of remuneration for employees for whom there is applicable minimum rate". Instead its jurisdiction is to fix "a minimum rate of remuneration for a class of employees for whom there is no applicable minimum rate." The restrictive terms in which subs(3) confers jurisdiction suggest a legislative intention that the Commission is not to fix a minimum rate applying across the board to all employees. Indeed, the Industrial Relations Court so held in re General Award Case.

One final comment on subs(3). The jurisdiction of the Full Commission to fix a minimum rate of remuneration does not invest the Commission with jurisdiction to make an award of the kind mentioned in s90 of the Act, that is to say, an award generally about remuneration or any other industrial matter. Section 69 is but one of four sections in the Act which deal with minimum standards. Section 69 deals with a minimum rate of remuneration, s70 with minimum standard for sick leave, s71 with a minimum standard for annual leave, and s72 with a minimal standard for parental leave. Each provision has a corresponding schedule in the Act. They are Schedules 2, 3, 4 and 5 respectively. In each instance, the section and its corresponding schedule deals with a discrete topic. In no sense is any one of those minimum standards an award in the sense used in s90. The jurisdiction conferred on the Full Commission by subs(3), therefore, is simply to fix the minimum rate and, if a minimum rate already exists, to vary it if an application to that effect is made. Further, there is a difference between the duty imposed on the Commission by Schedule 2 as distinct from Schedules 3, 4 and 5. Schedule 2 requires the Commission to fix a minimum rate for a class of employees. However, Schedules 3, 4 and 5 enable the Commission to vary the minimum standard for sick leave, annual leave, and parental leave, standards which do not relate to a class of employees but apply generally to all employees.

What Constitutes A Class?

In this context, the noun "class" denotes a class or group of persons with similar attributes, qualities or characteristics: see Macquarie Dictionary and Shorter Oxford English Dictionary. In the context of industrial legislation of this kind, there is no single determinant of what constitutes a class. A group of employees might constitute a class because they are engaged in the same kind of work, or because they are employed at the same workplace, or because they are employed in the same industry, or because they possess the same skills. No doubt, there are many other means by which a group of employees might constitute a class. But, it is always necessary that there exist a common attribute or attributes by which the employees might be identified as a class.

Little assistance is to be gained from other provisions in the Act. Section 75 provides that an enterprise agreement may be made between the employer and a group of employees. The expression "group of employees" is defined in s4(2) in these terms: "(2) A group of employees consists of - (a) the employees employed, or a particular class of the employees employed, in a single business; or (b) the employees employed, or a particular class of the employees employed, at a particular workplace or workplaces; (and if there is only one employee, or one employee of a particular class, employed in a single business, the employee constitutes a group)."

Although the expression "group of employees', is very similar in meaning to a class of employees, this definition does not assist. There are additional attributes to those mentioned in subs(2) of s4, by which one could identify a class. The definitions in s4(2) is, therefore, of no assistance. The appellant submitted that the definition of "employee" and "contract of employment" in s4 required that the common attribute be employment in an industry. Although, employment in an industry may be one means by which to define a class, it does not follow that it is the sole determinant of a class of employees.

The Application

This application by the United Trades and Labour Council is for an award which is intended to bind all employers and employees who are not subject to an industrial agreement, an enterprise agreement, or employer specific award. It is intended to operate throughout the State. For present purposes, the relevant clauses of the application are Clauses 3, 4 and 7:

" Clause 3 3.1 Except as provided in 3.2 hereof, this award shall be binding on all persons whether as employers or employees and whether members of an association or not and shall apply to all employees engaged in the classes of employees set forth in the wages schedule herein, 3.2 In relation to those persons who, at the time of the making of this award, were subject to an industrial agreement or an enterprise agreement within the meaning of the Industrial and Employee Relations Act 1994, or another industry, or employer-specific award this award shall not be binding during the life of any such arrangement. 3.3 The making or existence of this award shall not operate to prevent the making of new, or the extension of existing, industry, or employer, specific awards, or Enterprise Agreements. Clause 4 This Award shall apply throughout the State of South Australia. Clause 7 7.1.1 The minimum wage rates to be paid to employees for work in ordinary time shall be as set out in Schedules 1 and 2 attached to this award. 7.2 The hourly rate for Casual (Hourly Paid) and Part-time Employees shall be the weekly wage prescribed by Clause 7.1.1 Wages and Schedule 2 to this award for the classification in which the employee is employed divided by 38."

The purported classification of the employees is set out in Schedule 1 of the application. It seeks to classify by reference to twelve levels of skill and competence. It is not necessary to repeat the terms of each of the levels in the application. It is sufficient to refer to levels 1-5: LEVEL 1 (Relativity to "trades person" - 78%) An employee who is undertaking up to 38 hours induction training which may include information on the enterprise, conditions of employment, introduction to supervisors and fellow workers, training and career path opportunities, plant layout, work and documentation procedures, occupational health and safety, equal employment opportunity and quality control/assurance.

An employee at this level performs routine duties essentially of a manual nature and to the level of their training - 1. Performs general labouring and cleaning duties; 2. Exercises minimal judgment; 3. Works under direct supervision; or 4. Is undertaking structured training so as to enable them to work at level 2.

LEVEL 2 (Relativity to "trades person" - 82%)

An employee who has completed up to three months structured training so as to enable the employee to perform work within the scope of this level. An employee at this level performs work above and beyond the skills of an employee at Level 1 and to the level of their training:- 1. Works under direct supervision either individually or in a team environment. 2. Understands and undertakes basic quality control/assurance procedures including the ability to recognise basic quality deviations/faults. 3. Understands and utilises basic statistical process control procedures.

LEVEL 3 (Relativity to "trades person" - 87.4%) An employee who has completed a Production/Engineering Certificate (Level) 1 or equivalent training so as to enable the employee to perform work within the scope of this level.

An employee at this level performs work above and beyond the skills of an employee at Level 2 and to the level of their training. 1. Is responsible for the quality of their own work subject to routine supervision; 2. Works under routine supervision either individually or in a team environment; 3. Exercises discretion within their level of skills and training.

LEVEL 4 (Relativity to "trades person" - 92.4%) An employee who has completed a Production/Engineering Certificate (Level) II or equivalent training so as to enable the employee to perform work within the scope of this level. An employee at this level performs work above and beyond the skills of an employee at Level 3 and to the level of their training: 1. Works from more complex instructions and procedures; 2. Assists in the provision of on the job training to a limited degree; 3. Co-ordinates work in a team environment of works individually under general supervision. 4. Is responsible for assuring the quality of their own work.

LEVEL 5 (Relativity to "trades person" 100%) An employee who holds a Trade Certificate or equivalent and is required to exercise the skills and knowledge of that qualifications. 1. Understands and applies of (sic) quality control techniques; 2. Exercises good interpersonal and communications skills; 3. Exercises keyboard skills at a level higher than Level 4; 4. Exercises discretion within the scope of this grade; 5. Performs work under limited supervision either individually or in a team environment; 6. Performs non-trade tasks incidental to their work; 7. Performs work which while primarily involving the skills of the employee's training is incidental or peripheral to the primary task and facilitates the completion of the whole task. Such incidental or peripheral work would not require additional formal technical training; 8. Able to inspect products and/or materials for conformity with established standards."

It is apparent that the application seeks to define classes of employees by reference to trade or personal qualifications and levels of skill and competence. Two aspects of this application may be noticed.

First, the application purports to bind all employers and employees who are not subject to an industrial agreement, an enterprise agreement, or an employer specific award. It also purports to operate throughout the State. In other words, it purports to bind all employers and employees engaged in all industries in South Australia with the exceptions already mentioned. That fact immediately raises the question whether this is an application to fix a minimum rate generally for all those employees who do not fall within those exceptions and not for a class of employees.

Secondly, it purports to identify a class of employees for whom there is no minimum rate under subs(1) of Schedule 2 by the technique of prescribing levels of skill and expertise. Those levels apply across the board to all employees in all industries regardless of the nature of their employment, the nature of the tasks performed, and the nature of the duties performed. The technique has no regard to the question whether employment in all industries involves different levels of skill or as many as twelve levels of skill. Nor does it have any regard to the question whether the prescribed levels of skill are applicable across all industries. Although levels of skill and competence may be appropriate determinants of a class of employees engaged in the same industry or occupation, it is not an appropriate means of classification to apply generally to all employees in all industries as those employees will be performing an enormous range of different duties in different industries. The Court was told that the prescription of the levels is based on, although not identical with, levels prescribed in the Metal Trades Industry Awards. While those prescriptions may be entirely suitable for that industry, they do not readily translate to other industries or occupations. While the Metal Trades Industry is an industry in which one can identify levels of trade or professional qualifications as well as levels of skill or competence, the same cannot be said of other industries or occupations. Reference to Levels 6-12 only serves to re-inforce this conclusion. The proposition that the levels of skill and competence provided in this application are an appropriate determinant of classes of employees can be tested by assuming that no awards or enterprise agreements exist in South Australia. The levels of skill and competence prescribed in this application would not be appropriate, for example, for nurses, aircraft pilots, airline stewards, couriers, cleaners or shearers. Other occupations could be identified for which these levels are inappropriate. Similarly, the minimum rate for cleaners is likely to be different from the minimum rate for nurses which in turn is likely to be different from the minimum rate for shearers.

This application, therefore, is intended to apply generally to all employees and is not made in respect of a class of employees. There is no common interest discernible on the face of the application. The only common interest in this application is that it purports to bind employers and employees who are not bound by an existing award. The Full Commission does not have jurisdiction to hear and determine this application. For these reasons, the technique of prescribing levels of skill and competence does not identify a class of employees.

In reaching this conclusion, I have constantly borne in mind the injunction of King CJ in R v Industrial Commission of South Australia; ex parte Master Builders Association of SA Inc (1981) 26 SASR 535 at 537 to avoid a literal interpretation of legislation of this kind. His Honour said:

"The strictly literal reading must be controlled by the context in which the words are found and the evident purpose of the Act".

Although His Honour was speaking of the definition of "industrial matter" his observations apply with equal force in this context. I have also given all due weight to the submission of Mr Heywood Smith, who appeared for the UTLC, that the philosophy of industrial relations has changed and now emphasises skills. But I repeat that, while levels of skills might be an appropriate means of classification in one industry, it does not follow that same prescription of levels of skill will apply across the board to all industries. However, taking as liberal and as flexible a view as possible of the meaning of subs(3)(a) and bearing in mind the purposes of the Act, I am unable to decide that this application is for a class of employees. The task of identifying a class of employees to satisfy the requirements of subs(3)(a) of Schedule 2 might be difficult. Those difficulties should not cause a court to adopt an interpretation of subs(3)(a) which goes beyond the intention of Parliament. If the difficulties are insuparable, the remedy is to ask the Parliament to amend the relevant parts of the Act.

For these reasons, I would allow the appeal. I would set aside the order of the Full Court of the Industrial Relations Court and order that the question asked by Full Commission be answered, No.