CATCHWORDS Industrial law - dismissal of employee allegedly by reason of the circumstance that he was entitled to the benefit of an award - award binding upon employer with respect to employees whether members of the organisation or not - whether duty owed to non-member - informant a non-member - whether "employee ... entitled to the benefit of" an award - Conciliation and Arbitration Act 1904 s.5{1)(b). , Lee Leontiades v. F. T. Manfield Pty Limited (S.A. No. 13 of 1980) Coram: Keely J. Date: 8 May 1980 Place: Adelaide * FROM ORAL JUDGMENT IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S.A. No. 13 of 1980 er ee ee ee INDUSTRIAL DIVISION IN THE MATTER of the Conciliation and Arbitration Act 1904 BETWEEN: LEE LEONTIADES Informant and F. T. MANFIELD PTY LIMITED Defendant f REASONS FOR JUDGMENT 8 May 1980 KEELY J. Lee Leontiades (the informant) on 28 February 1980 laid an information against Frank T. Manfield Pty Ltd alleging that on 26 September 1979 at Magill it dismissed "the informant from its employ by reason of the circumstance that the said informant was entitled to the benefit of an industrial award, namely the Building Trades Construction Award 1975 contrary to the provisions of s.5 of the Conciliation and Arbitration Act 1904' (the Act). Mr Tilmouth appeared for the informant and Mr R. D. Lawson for the defendant which pleaded not guilty. It was established either by evidence or by admission that at all material times: 1. The defendant was incorporated. 2. The informant was employed by the defendant as a carpenter. 3. The defendant was bound by the National Building Trades Construction Award 1975 (the award) in respect of its employees whether members of an organisation of employees bound by the award or not. 4. The informant was not a member of any organisation of employees registered under the Act and was not bound by the award. 5. The defendant dismissed the informant on 26 September 1979, Mr Lawson submitted in his final address that as a matter of law the informant was not an employee "entitled to the benefit of ... an award" within the meaning of s.5(1)(b) of the Act and that, if not so entitled, he could not have been dismissed "by reason of" that circumstance. This question of law was referred to, but not decided, in Klanjscek v. Silver (1961) 4 F.L.R. 182. In that case Spicer C.J., Joske and Eggleston JJ. said (p.187): "We should add that we have decided this case on the assumption that the expression 'entitled to the benefit of an award' is equivalent to the expression 'a person to whom the employer is bound to accord the wages and conditions prescribed by the award'. ... it may not be true to say that an employee who is neither a party to the award nor a member of a union which is a party to the award is entitled to the benefit of the award (see Reg. v. Graziers Association of New South Wales; Ex parte Australian Workers Union (1956) 96 C.L.R. 317 at p-324). But it is unnecessary for purposes of the present case to decide whether this strict inter- pretation of the section is to be adopted .. The scope and meaning of the provision are by no means free from difficulty, and we think we should confine our conclusion to the ground mentioned above." In Blackley v. Devondale Cream (Vic.) Pty Ltd (1968) 117 C.L.R. 253 the High Court found it unnecessary to decide the same question - see Barwick C.J., (with whom McTiernan J. agreed) at p.257 and Menzies J. at p.271 cf. Taylor J. at p.269. However, in the present proceedings it is necessary to decide whether the informant, who was not a member of any relevant union and was not bound by the award, was at the time "entitled to the benefit of" the award. On of his dismissal the evidence it has not been suggested that the informant was a party to the industrial dispute in settlement of which the award was made. Nor was he at any time a member of any organisation of employees which was a party to that dispute. Accordingly, no such organisation ould have put forward claims on his behalf - see The King v. Hibble and Others; Ex parte Broken Hill Proprietary Company Limited (1921) 29 C.L.R. 290 at p.298. The question of whether a "non-unionist" (i.e. an employee who is not a member of any organisation of employees bound by an award made under the Act) can obtain any rights under the award has been referred to in a number of judgments of the High Court. In Long v. Chubbs Australian Company Limited (1935) 53 C.L.R. 143 Rich, Dixon, Evatt and McTiernan JJ. said (p.150): "The object of the clause is not to confer advantages on apprentices, although, no doubt, in framing it their interests have not been forgotten. Its object is to benefit the members of the organization by preventing what were considered abuses from which consequential disadvantages to them would arise. The only rights given by the clause are given to the organization and to its members. The only duties imposed are imposed upon employers from whom the organization demanded that they should deal with all apprentices in a manner similar or analogous to that prescribed by the award. The rights and duties, therefore, created by this clause are, we think, confined to the disputants. It is true that when, in compliance with the award, an employer and an apprentice enter into a contract of apprenticeship, mutual rights and duties will arise between them. But these rights and duties will rest entirely in contract. They will not spring from the award." In Metal Trades Employers' Association and Others v. Amalgamated Engineering Union and Others (1935) 54 C.L.R. 387 Latham C.J., expressed the view that an award could not confer rights upon non-unionists saying (p.405): (an award) "... cannot impose duties or confer rights upon persons who are neither parties to, nor represented in any'manner in, the dispute or the arbitration proceedings." (and p.406) "Such an award would not confer rights upon non-unionists, but it would impose duties upon employers ..." (see also p.408) McTiernan J. (at p.443) said: "The award would not give any rights to the non- unionists: it would create duties in the employers who do not employ any unionists, to the union and its members." Similar views were expressed by Rich and Evatt JJ. (p.422). In The King v. Kelly; Ex parte State of Victoria (1950) 81 C.L.R. 64 at p.82 Latham C.J., Dixon, McTiernan, Williams, Webb and Fullagar JJ. said: "The award does not affect any non-disputant. It does not create (as the common rule would create) actual rights and duties as between persons who are non-disputants." In The Queen v. Graziers Association of N.S.W.; Ex parte Australian Workers Union (1956) 96 C.L.R. 317 at p.324 Dixon C.J., f McTiernan and Kitto JJ. made it quite clear that where an award (as in the present case) imposes a duty on an employer to pay no less than minimum wages to non-members of a union, the duty on the employer is not owed to the non-members because they are not parties to the dispute settled by the award. The High Court cases which I have cited establish that the award in the present case did not confer any rights upon the informant and the duty imposed by the award upon the defendant in respect of the informant was not a duty owed to the informant who was not a party to the dispute. In my opinion the informant, as an employee to whom no duty was owed by the employer - although there was a duty owed to the union in respect of him - and as an employee who obtained no rights under the award was not "an employee ... entitled to the benefit of" the award within the meaning of s.5(1)(b) of the Act. In my opinion, the words "entitled to the benefit of" an award mean "entitled" as a matter of legal right. In this counecLion in The Queen v. Austin; Ex parte Farmers and Graziers Co-operative Company Limited (1964) 112 C.L.R. 619 the High Court granted prohibition to the Arbitration Commission which : had purported to order employers "to pay to certain of their employees ... all wages ... payable under the terms of" a Federal award. Barwick C.J., (with whom McTiernan, Kitto, Taylor and Owen JJ. agreed) said (p.627) that the question before the Arbitration Commission was "whether or not the employees of the prosecutors were entitled, as a matter of legal right, under the terms of the award" to payment and (p.629) "it was, in truth, an attempt to determine the legal rights of the dismissed employees ... the orders were made in an attempted enforcement of legal rights". The meaning of the word "entitled" has been considered ' by courts in connection with a variety of statutes. For example, in Sterling Engineering Co. Ld. v. Patchett (1955) A.C. 534 the statutory provision under consideration by the Privy Council was s.56(2) of the (U.K.) Patents Act 1949 which provided, so far as is material, that: "1... the court ... may unless satisfied that one or other of the parties is entitled, to the exclusion of the other, to the benefit of an invention made by the employee ...". Viscount Simonds (with whom Lord Porter and Lord Tucker agreed) said (p.545): "... the word 'entitled' refers to legal right. The court must therefore determine the legal rights ...". Lord Reid said (p.545): "Tt is, I think, clear that under sub-section (1) what has to be determined is the legal right of the parties" and (p.546): "The ordinary meaning of the word 'entitled' is w entitled as a matter of legal right ...". The meaning of the word "entitled" was also considered in In re Miller's Agreement: Uniacke v. Attorney General (1947) 1 Ch. 615. In that case Wynn-Parry J. said (p.624-5): "The crucial question, therefore, is did they become 'entitled' to the annuities on Mr. Noad's death? The word 'entitled', as used in this section, appears to me necessarily to carry the implication that for a person to be entitled to property under this section it must be capable of being postulated of him that he has a right to sue for and recover such property." I accept Mr Tilmouth's submission that, in considering any such judgments, it is necessary to consider carefully the context in which the word "entitled" appeared in the legislation or instrument under consideration. Mr Tilmouth conceded, rightly in my view, that the informant was not "an employee entitled to the benefit of an award" within the meaning of s.123 of the Act for the purposes of suing for an amount claimed to be "due to him under the award", However, he submitted that the words "employee ... entitled to the benefit of ... an award" in s.5(1)(b) of the Act bore a different meaning and were not limited to an employee who was entitled as of legal right to the benefit of an award. ac: He submitted that the words should be construed as including an employee who in fact enjoyed "the benefit of ... an award" e.g. because - as in this case - the employer was bound by the award in respect of him despite the fact that he was a non- member of the claimant union. Prima facie the words in s.5(1)(b) and s.123 of the Act should be given the same meaning although the context may establish a different meaning. In this connection Mr Tilmouth sought to rely upon the context of the provision including the other paragraphs in s.5(1) and the objects of the Act as supporting his argument as to the meaning of s.5(1)(b) but I am unable to hold that the context has such an effect. Mr Tilmouth sought to rely upon the judgment in The Graziers Association of New South Wales v. Labor Daily Limited and Another (1930) 44 C.L.R. 1 as showing that, upon the application of a party to the award, orders can be made against a mon-party to an award. However that case, in my view, does not support his argument as it depends on the particular section there under consideration (s.48 of the Act then in force) as to which the Court said (p.9): "It is difficult to discover in the language of the section any restriction upon its operation". I am also unable to accept his argument that, by reason of the express references in s.5(1l)(a), (d) and (f) of the Act to "member of an organisation", the word "employee" in s.5(1)(b) should be construed as including non-members of an organisation which is a party to the award. The word "employee" must be construed in its context, namely, "employee ... is entitled to the benefit of ... an award". Mr Tilmouth also cited Blackley v. Devondale Cream (supra) as showing that there is "some jurisdiction to enforce matters relating to non-unionists" but I am unable to see how that assists his argument. Mr Tilmouth also argued, as an alternative to his earlier arguments, that the informant, being employed under a contract which entitled him to the same wages and conditions as those contained in the award, was thereby an employee "entitled to the benefit of ... an award" within the meaning of s.5(1)(b). I am unable to accept that argument because in my view the contract does not entitle the informant to the benefit of the award but merely to the benefit of the contract - although that contract fixes the informant's wages and conditions by adopting those in the award. As to this alternative argument, in my view the fact that the wages and conditions prescribed by the award are applicable to the informant does not stem from the award but from the contract and the "benefit" obtained by the informant is accordingly not "the benefit of ... an award", Having reached the conclusion that the words "entitled to the benefit of ... an award" in s.5(1)(b) of the Act mean entitled as a matter of legal right, and that the informant was not so "entitled", it follows that the informant has failed to prove "all the relevant facts and circumstances ..." which he must prove in order that the onus of proof as to the reason for the dismissal should lie upon the defendant by reason of the provisions of s.5(4) of the Act. However, Mr Lawson refrained from submitting that there was no case to answer and called as a witness Mr Frank Manfield, the managing director of the defendant. He was cross-examined at some length as to the reasons for the dismissal of the informant and it seems desirable that I should also express my views as to that subject. I accept the evidence given by Mr Manfield in the following passages from the transcript: "Q. Was your decision to dismiss Mr Leontiades based upon any consideration relating to his claim for a mileage allowance?--- No, not at all. Q. What was the decision based on? A. The decision was based on the fact of the work that I have got in hand at the time." I have been satisfied on the balance of probabilities that the defendant's action in dismissing the informant was not actuated by the reason alleged in the information. Mr Lawson, in a carefully prepared final address, relied upon the evidence that, before the dismissal of the informant, Mr Manfield had already said to the three supervisors "that our work rate is slowing and they (would) be required to work on the tools ... finishing off work of various sub-contractors". -1ll- Further, that before the dismissal Mr Manfield had (because of the downturn in the industry) accepted an offer made by the female clerk employed in the office "to work less hours". Mr Lawson also relied upon certain events which occurred after the dismissal as supporting Mr Manfield's evidence that the defendant was short of work in the later months of 1979. For example, one of the supervisors ceased work of his own accord in November 1979 and was not replaced; further, a labourer had left of his own accord in September 1979 and was not replaced. The defendant must satisfy the Court that it was not actuated by the reason alleged and that reason of course is the one in existence at the time of the dismissal. Accordingly, I accept Mr Tilmouth's submission as to the very restricted use which can be made of the evidence as to later events and as to the dangers of looking at the "reason" of the defendant in the light of those later events. However, the evidence to which I have just referred although it does not directly bear upon the issue, is relevant to the question of whether Mr Manfield should be believed in the evidence which he has given as to the reason ' for the dismissal. Although I have accepted Mr Manfield's evidence ato the reason for the dismissal, it is understandable that the informant suspected that he was dismissed because he had claimed payment for mileage - which payment the defendant was obliged to pay him under the award. On his own evidence Mr Manfield did not give the informant any reason as to why he was being dismissed. Asked by Mr Tilmouth in cross-examination as to this failure, Mr Manfield explained why he had not told the informant that the dismissal was because of a shortage of work. He gave his explanation in a variety of passages in his evidence as follows: "I do not consider that it is my responsibility to tell my staff what work I am doing or what work I have in hand. ... I have dismissed other workmen we have had, over the years and I have never had to tell them the workload I have or the reason for dismissal. ... My previous experience is that immediately the workers, that is the manual workers, realise the work is not there they then have a slow basis. ... Instead of a particular piece of work taking two hours to complete it quite often took four hours so they were ensuring themselves of work. That is the way I have operated over a period of ... I think if I am running my own private business surely I do not come out and discuss my problems with my workers. I expect them to work daily. Whatever I have got to do during the day's work, I do not expect them to worry about me and likewise." I accept Mr Manfield's evidence as to why he did not give reasons; however, although not legally obliged to give his reasons at the time, he might well have avoided these proceedings had he done so. Mr Manfield also explained his failure to give a reason to the informant for the dismissal by saying that the informant "was most upset and very awkward to talk to". It is no surprising that he was upset as he had just been dismissed without any reason being given. In addition, the -13- informant immediately after the dismissal said to Mr Manfield that he had sacked him because he did not want to pay him what he was entitled to and Mr Manfield did not answer that accusation. In cross-examination he said that he did not answer "because I knew it was not true", Mr Manfield's failure to answer this charge by the informant at the time of the dismissal has caused me some difficulty in deciding whether to accept his evidence denying the reason alleged in the information. However, the onus on the defendant is only that of persuading the Court on the balance of probabilities and, for the reasons which I have given, I have been so persuaded. For that reason and because of the conclusion I have reached that the informant was not an employee entitled to the benefit of the award, the information must be dismissed. Leb