Wright Prospecting Pty Ltd v Hollingsworth, Malcolm, Secretary of the Western Australian Branch of the Australian Journalists Association

[1981] FCA 126

Re: WRIGHT PROSPECTING PTY. LTD.
And: MALCOLM HOLLINGSWORTH, SECRETARY OF THE WESTERN AUSTRALIAN BRANCH OF THE
AUSTRALIAN JOURNALISTS ASSOCIATION
W.A. No. 7 of 1980
Industrial Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIAN REGISTRY
INDUSTRIAL DIVISION
Evatt J.
Ellicott J.

CATCHWORDS

Industrial Law - Appeal from State Industrial Magistrate - Breach of Award - Exemption from award, chief of the general reporting staff exclusively employed as such - Entitlement to notice of termination of services of A grade member after 12 months with less than 10 years continuous service - The Journalists (The Independent) Award 1971 as varied, cl.4 and 11 - Conciliation and Arbitration Act 1904 as amended ss.113,119 - Federal Court of Australia Act 1976 as amended ss.14(3), 24(1)(c).

HEARING

MELBOURNE

#DATE 10:8:1981

ORDER

The appeal be dismissed.

JUDGE1

On 4 August 1980 the respondent Malcolm Hollingsworth the Secretary of the Western Australian Branch of the Australian Journalists Association (the organization), an organization registered under the Conciliation and Arbitration Act 1904 (the Act) commenced proceedings in the Industrial Magistrate's Court, Perth under s.119 of the Act against Wright Prospecting Pty. Limited (the appellant) alleging that it had committed a breach of an award namely, "The Journalists (the Independent) Award 1971" (the award) by failing on 13 June 1980 to give to one of its employees namely Mr Baden Pratt, proper notice of termination of services in accordance with cl.11 of the award.

Mr Hollingsworth was referred to as the complainant in such proceedings which came on for hearing before Mr J. Simpson S.M. at Perth on 24 October 1980 when it was determined that the appellant employer had committed the breach alleged. Consequential orders were made that (inter alia) the appellant employer pay a pecuniary penalty and in addition pay, pursuant to s.119(3) of the Act, certain moneys to Mr Pratt in accordance with the provisions of cl.11 of the award.

The appellant employer appealed against the determination and consequential orders pursuant to s.113 of the Act. The record shows the respondent herein as the Australian Journalists Association (Western Australian Branch). The Branch of the organization cannot be a party to a proceeding such as the present (cf. Williams -v- Hursey (1959) 103 C.L.R.30 @ p.52-55). The proceedings were commenced in the name of Malcolm Hollingsworth as Secretary of the Western Australian Branch under the provisions of s.119(2) of the Act. Apparently the appellant's notice of appeal incorrectly nominated the Branch as respondent. The record accordingly should be amended.

Under s.24(1)(c) of the Federal Court of Australia Act 1976 such appeal was heard on the 5 May 1981 by a Full Court of the Court constituted by J.B. Sweeney, Evatt and Ellicott JJ.. On that day that Court reserved its decision. Before the appeal was determined J.B. Sweeney J. died. The parties thereafter have consented to the determination of the appeal being completed by a Full Court constituted by the remaining two Judges. (vide s.14(3) of the Federal Court of Australia Act 1976).

The appellant is the owner of a newspaper called "The Sunday Independent". Journalists employed on that paper have at all material times been employed subject to the award. For some years prior to 10 August 1978 Mr Pratt had been employed by the appellant as a senior A1 grade journalist. On that date he was appointed chief of staff but received no extra money for that position. He occupied it until 13 June 1980. For approximately four weeks prior to 13 June there had been a general dispute in Perth and around Australia in which journalists including those employed by the appellant had withdrawn their services. Such dispute was settled on a return to work on what was described in evidence as "a no discrimination basis". Mr Pratt was involved in that strike although he did for some time during that period assist in the bringing out of the appellant's newspapers.

On the day he went back to work, 13 June 1980, he assumed his role as chief of staff and started to assign work and carry out duties as though he was chief of staff. However during that day he was called into the office of Mr Howard Sattler, the managing editor of "The Sunday Independent". Mr Sattler then said to him that he was complying with a request Mr Pratt had made to him some time earlier and that henceforth Mr Pratt would be a general reporter for the paper and in that position he could not pay him more than an A grade wage.

Some months earlier a discussion had taken place between Mr Pratt and the editor which related to the editor moving staff without Mr Pratt's knowledge when Mr Pratt was trying to plan for the future of the paper with some of the younger journalists. He was discovering that after organising rounds for the staff they were being told without reference to him that they were going elsewhere. He then had a conversation with the editor during which he became heated and told the editor that if he wanted to be chief of staff as well as editor he (Mr Pratt) would be of much more value to the staff as a general reporter.

On 19 June 1980 Mr Sattler wrote to Mr Pratt as a result of a request from him in the following terms:-

"This is to confirm that, following your conversation with me approximately 2-3 months ago I am replacing you as chief of staff. At that time you indicated among other things that you were dissatisfied with the lines of communication between us and that you would be just as happy to return to a position of general reporter.

I am now able to accede to your request.

In line with the re-establishment of the responsibilities and the staff structure of the editorial department, you will henceforth be paid as an "A" grade journalist under the terms of the A.J.A. award."

After being told that he had been downgraded to a general reporter, Mr Pratt complained to the organization who took the matter up with the appellant.

On 20 June 1980 the respondent as Secretary of the Western Australian Branch of the organization wrote to the editor of "The Sunday Independent" in the following terms:-

"Your letter written to Mr Baden Pratt has been passed to me.

The A.J.A. takes the gravest exception to his downgrading as indicated in your letter to him of June 19.

Enclosed please find a photostat copy of the judgment in the Holesworth v. Truth case of 1956 in which the judge clearly finds that in order to down grade a person he or she has to be dismissed in accordance with the Award and then at the end of the statutory notice be re-engaged on the lower salary.

Your letter of June 19 does not comply with that judgment and the Association advises that that procedure must be strictly followed. Therefore Mr Pratt must be paid at the rate of an A1 Grade journalist for the next 12 weeks commencing on June 19, plus the 6% VDT allowance before any move can be made to demote him.

In the interests of good industrial relations the A.J.A. seeks to have Mr Pratt's downgrading rescinded. You yourself were involved in the 1967 strike on downgradings when the A.J.A. resisted to the utmost downgradings on a matter of principle. Since that strike there has rarely been a downgrading in the industry.

We would again ask you to reconsider the downgrading."

Further correspondence ensued but it is unnecessary to set it out.

At the hearing before the Magistrate it was alleged that Mr Pratt had not agreed to his being downgraded in this manner and that the appellant was not entitled to do so unilaterally without proper notice in accordance with the award. The learned Magistrate upheld this submission and although the appellant appealed against this finding it was not pressed at the hearing of the appeal.

The evidence discloses that prior to his being downgraded on 13 June 1980 Mr Pratt was a senior A1 grade reporter. The effect of the appellant's attempt to downgrade him was to treat him as an A grade reporter. The respondent claimed that in these circumstances the appellant was bound to give Mr Pratt 12 weeks notice under the terms of the award and the Magistrate agreed with this submission.

At the hearing of the appeal the appellant did not, as has already been indicated, press its argument that it was entitled to downgrade Mr Pratt. It did, however, rely on two other grounds. First, it said that the award did not apply to Mr Pratt because of cl.4 thereof which provided that it did not apply to "the chief of the general reporting staff exclusively employed as such." It also submitted that, before he was entitled to 12 weeks notice under the award he had to show that there had been the required period of continuous service under cl.11(b)(ii). It argued that because of the strike this could not be established.

The learned Magistrate considered both these grounds. He held that there was sufficient evidence before him to establish that Mr Pratt was, at all relevant times, a journalist employed under the award and that it was not for him to show that he was not a chief of the general reporting staff exclusively employed as such. He also held that the term "continuous service" in cl.11(b)(ii) was not applicable to the words "after 12 months" appearing therein. Clause 11 is set out fully later herein.

The first question for consideration is whether by reason of cl.4 of the award it did not apply to Mr Pratt. This clause is entitled "Exemptions from award" and it provides:-

"This award shall not apply to the undermentioned:-

(i) managing editor, the editor or the chief of the general reporting staff exclusively employed as such;

(ii) any other member the greater part of whose regular duties can be demonstrated to the Commonwealth Conciliation and Arbitration Commission to place him in a position in which he exercised executive and disciplinary authority substantially similar or superior to any person exempted under paragraph (i) hereof."

On this particular issue the evidence was very sketchy. Mr Pratt stated that he was appointed chief of staff on 19 August 1978 but that he received no extra money for that position. He gave evidence that on the morning of 13 June 1980 he was working at the "Sunday Independent" and that his grade was a senior A1 grade reporter. He said that after the strike he went back to the building and assumed his role of chief of staff and started to assign work and carry out duties as though he was chief of staff.

It was after that that he had the conversation in which the editor sought to downgrade him. He was not cross-examined on the nature of his employment as chief of staff but in re-examination the following evidence was given:-

"Mr Hollingsworth: You actually worked during the strike? - - - - - Yes.

On what basis? - - - - I was told by the management and the management, in my opinion, didn't know that I was exempt until the last minute and it surprised everybody in the office, that under the terms of the award I was one of those people exempt. It is interesting that as chief of staff and in that exempt situation they asked me to be chief sub-editor because of my ability to bring the paper out by myself; a job they did not offer me in the rearrangement that was advertised at the previous wage.

Mr Hollingsworth: You only went to work - - - - ? - - -

I went to work while the issue was one of money. When the people were sacked and people came into the office, I took advice from people I respect. The advice was I should leave the office immediately. At the same time the A.J.A. were informing me that, in fact, I was not exempt. That is since, but looking at the award would prove that I was not exempt. That, really, is a contentious matter because the management has felt that I have been exempt all along. I feel they have run a particular attitude because of that. In fact I am not exempt from the award."

In another part of the evidence it was stated that in a graded list as at 31 March (which, it is proper to assume, refers to March 1980) he was shown as an A1 grade journalist. A further graded list as at 1 July (1980) dated 1 August (1980) showed him as an "A" grade journalist. When this evidence was tendered before the Magistrate counsel for the employer said that there was no dispute about the grading at the relevant times.

At the hearing before the Magistrate the employer did not call any evidence. No doubt evidence could have been tendered which would have made it clear to the Magistrate whether Mr Pratt had been employed exclusively as chief of the general reporting staff or not. However the parties chose not to do so and the learned Magistrate in finding for the respondent on this issue said:-

"It came out in evidence he (Mr Pratt) was chief of staff but to bring him within the application of the award, it only had to be proved that he was a journalist employed by the "Sunday Independent" newspaper which was done. The question as to whether he was chief of staff exclusively employed as such and thereby exempted from the award was not an issue raised in cross-examination nor by evidence and therefore I do not believe the complainant was required to adduce evidence in regard to the matter."

Clearly enough the evidence as to the nature of Mr Pratt's employment as chief of staff was left in an unsatisfactory position. The fact that he was chief of staff in itself did not, of course, mean that he wasn't subject to the award for it is only a chief of the general reporting staff "exclusively employed as such" who is exempt. There was no evidence as to the basis on which he was engaged as chief of staff or as to the scope, whilst in that position, of his duties. There was a suggestion in that part of the evidence which has been quoted that he was exempt but Mr Pratt subsequently asserted (without objection) that he was not exempt.

In our view it was open to the learned Magistrate on the evidence before him to find that Mr Pratt was at the time employed as a journalist and that therefore he was subject to the award. He had evidence before him that Mr Pratt was employed as chief of staff but this did not in our view go far enough to require the Magistrate to find that he was exempt. Indeed the effect of Mr Pratt's assertion in evidence, not objected to, was that he was not exempt. The evidence which he gave on which the Magistrate based his finding that he was employed as a journalist was not precise. However it was the only evidence before the Magistrate. In our view, it was not only open to him to conclude from it that Mr Pratt was employed as a journalist by the appellant but it was also the correct finding to make on the evidence.

In all the circumstances, therefore, we are not prepared to interfere with the Magistrate's finding on this ground.

The second submission put on behalf of the appellant was that even if the award applied to Mr Pratt he had not had continuous service prior to his being downgraded from his position as a chief of staff or senior A1 grade journalist. He had been on strike. Therefore, it was submitted, he had not been in continuous service during the period of his employment with the appellant.

The correctness or otherwise of this submission depends upon the true construction of cl.11 of the award. This clause which is entitled "Termination of Service" provides:-

"Notice of termination other than in accordance with the following periods shall be agreed to in writing by the employer and confirmation of the members written notice shall be given within 14 days of its receipt otherwise the members date of termination shall be taken to be correct.

(a) in the first 26 weeks of service - one week;

(b) after 26 weeks of service:

(i) Special A and A grade members with ten years or more continuous service as a cadet or a member of the classified staff with the same employer - 16 weeks

(ii) Special A and A grade members after 12 months, with less than 10 years continuous service as a cadet or a member of the classified staff with the same employer - 12 weeks.

(iii) Special A and A grade members with less than 12 months continuous service as a cadet or a member of the classified staff with the same employer - 8 weeks.

(iv) B grade members - 8 weeks.

(v) C grade members - 4 weeks.

(vi) D grade members - 4 weeks.

(vii) Cadets - 2 weeks.

(c) Subject to the provisions of sub-clause (e) of this clause, an employer who terminates the employment of a member otherwise than by notice as prescribed in sub-clause (a) and (b) of this clause, shall pay to the member an amount equal to his salary for the appropriate number of weeks notice of termination.

(d) A member who terminates his employment otherwise than in accordance with sub-clauses (a) and (b) hereof shall forfeit any salary which may be due to him.

(e) Notwithstanding the provisions of sub-clauses (a) and (b) hereof, the employer shall have the right to dismiss a member without notice for refusal of duty, wilful and serious neglect of duty, disobedience of instructions or orders, or misconduct, and in such cases the salary shall be payable up to the time of dismissal only.

(f) If a newspaper ceases publication, the employer shall give members 4 weeks notice of termination of their employment in addition to that provided in sub-clauses (a) and (b) hereof. In default members shall receive payment of four weeks' salary in lieu of such notice. Payments made in lieu of notice shall be made from week to week and shall:

(1) Cease if and when a member whose employment has been so terminated secures other employment at a rate not less than that paid to him immediately before the termination.

(2) Be proportionately reduced if and when a member whose employment has been so terminated secures other employment at a rate lower than that paid to him immediately before the termination.

(g) The period of notice in this clause shall not run concurrently with any part of the five weeks annual holiday provided in clause 34."

Mr Pratt commenced employment with the appellant more than 12 months but less than 10 years prior to 13 June 1980, the date on which he was downgraded. It is therefore claimed that he was entitled to 12 weeks notice.

The learned Magistrate dealt with this matter in the following passage:-

"The remaining submissions relate to a break in the continuous service of the employee by striking.

The employee admits to taking part in a strike shortly before his downgrading.

Clause 11(b)(ii) of the Award refers to the period of notice required for termination and reads:

'Special A and A grade members after 12 months, with less than 10 years continuous service . . . . . '

It appears the term 'continuous service' is not applicable to the words 'after 12 months' which is the qualifying period relied upon.

Therefore, I do not consider it was necessary to prove 'continuous service' in this instance."

In our opinion this reasoning was not correct. Sub-cl.(a) fixed the period of notice where services are terminated in the first 26 weeks of service. Sub-cl.(b) applies where they are terminated after 26 weeks of service. However, unlike (a), sub-cl.(b) is designed to deal with several situations dependent on the classification of the employee and in some instances length of service. B, C and D grade members and cadets are entitled to the respective periods of notice stipulated for them in sub-cl.(b) (iv) to (vii) (inclusive) and the length of notice for each category is the same whatever the length of service. Special A and A grade members are dealt with in paragraphs (i) to (iii) (inclusive) and the period of notice to which they are entitled depends on their length of service as a cadet or a member of the classified staff with the same employer. Paragraph (i) applies to those with "10 years or more continuous service", paragraph (ii) to those "after 12 months with less than 10 years continuous service" and paragraph (iii) to those with "less than 12 months continuous service". Together those paragraphs are clearly intended to cover the whole range of possibilities after 26 weeks of service. Paragraph (iii) deals with members "with less than 12 months continuous service". Obviously it was intended to provide for the case not covered by (i) and (ii) and as a matter of interpretation paragraph (ii) in referring to "after 12 months" must have been intended to refer to "after 12 months continuous service". Furthermore to read it this way does no violence to the language of paragraph (ii) for the words it uses namely "after 12 months with less than 10 years continuous service" are clearly capable of being read as meaning "after 12 months (continuous) service with less than 10 years continuous service."

For these reasons we think the learned Magistrate was in error in his interpretation of sub-clause (b)(ii) of cl.11.

This however does not mean that the appellant must succeed on this ground of appeal. This depends on the meaning of the phrase "continuous service" as used in the clause.

In his submissions counsel for the appellant contended that "continuous service" at least meant continuous service at times required by the employer within the period for which the employee was engaged. If an employee was absent for one day without authority, this, he asserted, would breach the continuity of his service and for the purposes of sub-cl.(b)(i) to (iii) it would have to be assessed accordingly. In Mr Pratt's case he had been on strike. This was without authority and therefore the continuity of his service had been broken by it. Thus, even though he had been employed by the appellant for a number of years less than 10 he was not entitled to the notice prescribed by sub-cl.(b)(ii). Presumably on this argument, if the clause is to be read consistently he was only entitled to a week's notice, the period prescribed by sub-cl.(a).

The alternative view is that reference to periods of "service" in these paragraphs are referring not to periods during which an employee actually performed work but to the period of the contract of employment.

In our view the latter is the correct interpretation. There are several indications in cl.11 supporting this view. The clause itself is entitled "Termination of services" and this is clearly a reference to the termination of an employee's contract of service. This is confirmed, if it needed confirmation, by the use of the phrase "terminates the employment" in sub-cl. (c), "terminates his employment" in sub-cl.(f), "termination of their employment" in sub-cl.(f) and "whose employment has been so terminated" in sub-cl.(f)(1) and (2).

Sub-cl.(a) and (b) refer respectively to "the first 26 weeks of service" and "after 26 weeks of service" and do not specifically require this service to be "continuous service". Clearly, in the context of the clause itself, the period of service to which these sub-clauses are referring is the period which the contract of service has run.

Clause 11 forms part of the award which was ordered and prescribed by consent of the organization and others including the appellant. In our view the reason why the parties to the award chose to refer to "continuous service" in sub-cl.(b) (i) (ii) and (iii) arises from the fact that these provisions entitle a member who has served the same employer both as a cadet and a member of the classified staff to add together the period of service as a cadet and the periods of service as a member for the purposes of determining entitlement to notice of termination of services.

However the parties apparently considered that those periods of service must be "continuous" if they were to be added together. Obviously a member might serve a cadetship, leave and return to the same employer some years later as a member of the classified staff. Apparently in such a case, it was decided that the member should not be entitled to add the two periods of service together. When added, the total service could not be described as "continuous service" and therefore only the period as a member of the classified staff could be taken into account.

For these reasons we would reject the appellant's submission as to the meaning of the phrase "continuous service". The construction we have adopted is consistent not only with the rest of cl.11 but also with the provisions of the other clauses in the award which relate to termination of services, e.g. cls.19 and 25 applicable to artists and press photographers respectively.

Counsel for the appellant referred us to several cases dealing with the meaning of "continuous service" (Amalgamated Engineering Union Case (1943) 50 C.A.R.734): Country Fibrous Plasterers (Annual Leave) Case (1950) 25 S.A.I.R. 231. See also Industrial Information Digest at pp.725 et seq). These related to the meaning of that phrase in the annual leave provisions of certain awards.

In the Amalgamated Engineering Union Case a clause of the then Metal Trades award dealing with annual leave was considered by O'Mara J . . His Honour found that the record of service of certain employees at a particular time was not one of continuous service for and within a particular necessary period as the record of those employees showed that they were illegally absent from work for some weeks prior to the termination of their employment. His Honour's judgment is cryptic and the cause or causes of the absences which his Honour found to be illegal is or are not stated.

In the Country Fibrous Plasterers Case Pellew P. reviewed the history of awards both State and Federal wherein provision was made for the granting of annual leave to employees. It is clear from his judgment that he was of the opinion that there must be continuity in the actual performance of work for the service to constitute "continuous service". Counsel for the appellant submitted that a fair interpretation of the reasoning in that case indicated that annual holidays, because they depended on continuous service were treated as a reward for not interrupting the year's service by strikes or otherwise.

In the same way, it was argued, the length of notice of termination of service, under this award, is to be seen as a reward for performing services continuously.

Whatever force this argument has in relation to annual holidays it does not, in our view, for the reasons we have given, apply to the present case. The words "continuous service" have been used here to deal with the special case of members who have had previous service as a cadet. Furthermore, if it had been intended to relate the period of notice to the continuity of actual work, one would expect it to be applied to all members of the classified staff and cadets. However under sub-cl.(b)(iv) to (vii) (inclusive), B C and D grade members and cadets are entitled to a fixed period of notice whatever the length or continuity of their service after 26 weeks.

Surely, if the length of notice was seen by the parties as, in part, a reward for continuity of work the same principle would have been applied by them to those employees as well. This was not done.

Another compelling argument against applying the interpretation of the reasoning in Country Fibrous Plasterers Case suggested by counsel for the appellant is that cl.33 of the 1971 award which deals with "Holiday leave" in no way makes that leave dependent on continuous service in the sense contended for. Had that approach been present to the minds of the parties one would at least have expected them to adopt it in relation to annual leave. Indeed cl.33 was varied in August 1975 by an order of a Full Bench of the Commonwealth Conciliation and Arbitration Commission. Such variation makes no reference to continuous service.

In our opinion therefore, particularly in light of what appears to us to be a clear intention to use the phrase "continuous service" in the manner we have already indicated, we consider that the appellant's argument receives no real support from these cases or the reasoning in them.

In view of the construction we have placed upon cl.11(b)(ii) and as the appellant has not suggested that the strike had the effect of repudiating the contract of employment, it is unnecessary for us to consider whether an employee bound by the award who participates in strike action breaks his continuity of service with his employer. Nor is it necessary, assuming a break in continuity of service in the circumstances of this case, to consider the effect of the stated agreement on the settlement of the dispute that the employees reported to work on "a no discrimination basis".

For these reasons we are of the opinion that the appeal should be dismissed.