JUDGMENT NO. somes al ox ccLnen IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY Nos. V. 20 and 21 of 1983 we eee we INDUSTRIAL DIVISION BETWEEN IAN SEYMOUR Applicant AND STAWELL TIMBER INDUSTRIES PROPRIETARY LIMITED (RECEIVER AND MANAGER APPOINTED) Respondent 19 NOVEMBER, 1984 KEELY J. REASONS FOR DECISION Ian Seymour (the applicant), an inspector appointed under the Conciliation and Arbitration Act 1904 (the Act), has brought two applications under s. 119 of the Act. Each application seeks the imposition of a penalty upon Stawell Timber Industries Proprietary Limited (Receiver and Manager appointed) (the respondent) for allegedly breaching the Carpenters and Joiners Award 1967 (the award) on 11 occasions in successive weeks commencing on 29 June, 1978 and concluding on 7 September, 1978. Each of the alleged breaches consists of a failure to pay to an apprentice (Mr. Timothy John Hughes in matter V. 20 of 1983 and Mr. Geoffrey Miller in matter V. 21 of 1983) all wages, allowances and other monies ... due to the said employee pursuant to Clause E35 Part III and the Industrial Training (Carpentry and 2. Joinery Trades Apprenticeship) (Amendment) Regulations 1977 not later than the time of cessation of work on that day contrary to the provisions of Clause £30 of the Award." On 7 November, 1983 the respondent's solicitors filed points of defence in which the respondent made no admissions, save for the incorporation of the respondent. It denied that it was bound by the award and contended further that "it was not bound by the Award by operation of law", giving as particulars that a receiver and manager- of the respondent was duly appointed on 12 June, 1978. Relying upon the same particulars, it also contended that each of the two apprenticeships "was determined by operation of law" on or about 12 June, 1978, "alternatively suspended by operation of law" between 29 June, 1978 and 7 September, 1978. If I were required to decide the issue raised by that defence it would be my opinion on the basis of the authorities cited to me by the applicant, that the appointment of a receiver and manager, as particularized, did not determine the two apprenticeships in question. Mr. T. Ginnane, of counsel, appeared for the applicant in both matters which, on his application, were heard together. At the commencement of the hearing on 1 October, 1984, Mr. N. Fryde, solicitor, appeared for the respondent to state that "it no longer wished to appear in these proceedings, as the company is insolvent and legal costs can no longer be met", confirming a statement in a letter, dated 28 September, 1984, from the respondent's 3. solicitor to the applicant's solicitors, a copy of which had been forwarded to the Registrar. Mr. Fryde told the Court that a reference in that letter to the respondent being in liquidation was incorrect and that the respondent is not in liquidation. The award consisted of five divisions. Division E, which was headed "Joinery Shops", contained clauses El, E30 and E35 which included the following provisions :- "El - Application of Division E (a) Subject to the exceptions and modifications contained in this Division, Divisions A and E shall apply to the employment of all persons employed in the classifications of joinery work defined in this Division. E30 - Payment of Wages (a) All wages, allowances and other moneys due shall be paid not later than the time of cessation of work on Thursday of each working week or otherwise by mutual arrangement..." Clause E35, which was headed "Junior Labour", was divided into three parts. Part 1 was headed ""Unapprenticed, South Australia". Part 11, which was headed "Apprentices, South Australia", provided, amongst other things, that :- "(b) The minimum ordinary rate of pay to be paid to apprentices shall be in accordance with the percentages as set out in the table herein of the rate of pay prescribed by clause E4 for a Carpenter or Joiner in the locality in which they are employed." Sub-clause (b) then prescribed various percentages. The award prescription in relation to apprentices in Victoria was in terms quite different from the award prescription which determined the rates of pay for apprentices in South Australia, contained in sub-clause (b). The full text of that prescription, which was contained in Part 111 of clause E35, was as follows :- "Part 111 - Apprentices, Victoria Except where inconsistent with this Division, the Regulations of the Apprenticeship Commission of Victoria shall apply to apprentices in that State." Mr. Ginnane, on behalf of the applicant, submitted that, as a matter of construction, Part 111 of Clause 35 did not merely preserve the operation of the regulations as regulations made under State law (except where inconsistent with Division E of the award) but that it incorporated the regulations into the award. He acknowledged that in clause El of the award, where it was sought to "incorporate" into the award the provisions of another document, it had expressly used the words "specifically incorporated herein". Those words appeared in clause El({b) in the following provision :- "Otherwise such respondents shall observe the provisions of the Timber Workers Award with respect to such employees and that award shall be read and construed as if it had been specifically incorporated herein ..." The applicant submitted that Part 111 of clause E35 of the award imposed upon the respondent an obligation, enforceable by proceedings for the imposition of a penalty under the Act, to comply with the regulations of the Apprenticeship Commission of Victoria which were in force at the time of the making of the award in 1967 and also with amendments to those regulations made from time to time. He contended that the respondent breached clause E30 of the award by failing to pay to the two apprentices, within the time prescribed by that clause, the "wages .. and other monies .. due .. pursuant to clause E35 Part 111". Accordingly a question has arisen as to which of two possible constructions of clause E35 Part 111 of the award is correct. The applicant contended that the clause imposed a duty to pay prescribed wages to apprentices in Victoria, notwithstanding the different language used in clause E35 Part 11 which expressly imposed such a duty in respect of apprentices in South Australia. The alternative construction is that clause E35 Part 111 manifested an intention to preserve the operation of the Victorian regulations "as State law save to the extent that State law directly collides with the provisions of the award" - per Spicer C.J. in McManus v General Electric Co. of Australia Ltd. (1971) 18 F.L.R. 374 at 375-6. The regulations tendered in evidence in the proceedings were made by the Governor-in-Council. They were (1) the Apprenticeship (General) Regulations 1970, as amended pres 6. by the Apprenticeship (General) (Amendment No. 2) Regulations 1973, made under the Apprenticeship Act 1958 (Vic.) (2) the Apprenticeship (Carpentry and Joinery Trades) Regulations 1968, made under that Act and (3) the Industrial Training (Carpentry and Joinery Trades Apprenticeship) (Amendment) Regulations 1977, made under the Industrial Training Act 1975 (Vic.), which amended the Apprenticeship (Carpentry and Joinery Trades) Regulations 1968 as amended. The regulations referred to in (2) and (3) above prescribed minimum weekly rates of wages to be paid to apprentices in the Joinery Trade in the State of Victoria. Those rates of wages were expressed as a percentage of "the wage rate and the tool allowance prescribed from time to time for the classification 'Joiner (as defined)' in Part 11" of the Determination of the Carpenters Board made under the Labour _and Industry Act 1958 (Vic.), which determination was also tendered in evidence. Because of the strong reliance placed by the applicant upon the decision of the Commonwealth Industrial Court in McManus v General Electric Co. of Australia Ltd. (supra), it is desirable that the relevant passages from the reasons for judgment of the judges who constituted the majority (Spicer C.J. and Smithers J.) be set out in considerable detail. Spicer C.J. at pp. 375-376 said :- "The complaint in this matter alleges a breach by the respondent (defendant) of cl. 7(q) of the Metal Trades Award in that it failed to comply with cl. 9(b) of Apprenticeship Regulation 11(Q.) made under The Apprenticeship Act of 1964 (Q.) in relation to an apprentice employed by it. Clause 7(q) of the Metal Trades Award is as follows: 'In any State in which any statute relating to apprentices is now or hereafter in force or in which any authority with statutory power has issued or may issue any regulations relating to apprentices such statute and such regulations shall operate in such State provided that the provisions thereof are not inconsistent with this award. The provision of any statute, award or regulation relating to the attendance of apprentices at technical school during ordinary working hours or to disciplinary powers of apprenticeship authorities over apprentices and employers shall not be deemed to be inconsistent with this award.' Clause 9(b) of Apprenticeship Regulation 11 reads as follows : 'Employers shall purchase and supply to their apprentices who have been indentured for a period of four years tools of trade as stated herein :- (i) To apprentice electrical fitters and/or mechanics tools to the value of $15 per year during each year of experience. (ii) To apprentice electrical mechanics (automotive) tools to the value of $11 per year during each year of experience.' To succeed with his complaint the complainant must in the first instance establish that cl. 9(b) of the regulations operates in relation to the apprenticeship scheme established under the award as part of that award. Whether this is so or not depends upon the interpretation of cl. 7(q) of the award. It seems to me that there are two views which can be taken as to the meaning and intent of cl. 7(q). One is that it operates to indicate the field in which the Federal award applies and avoids the operation of that award in such a way as to override the State laws to the extent indicated in the clause. On this view the award is not to be taken as covering the whole field but preserves the operation of State law as State law save to the extent that State law directly collides with the provisions of the award. The other view is that cl. 7(q) in effect incorporates the State law in the Federal award to the extent indicated in the clause. It is to be noted that there are provisions in the award that expressly incorporate State law, for example, cl. 6(e). The absence of such a provision in cl. 7{q) weighs against the view now being considered. However there are other features of cl. 7(q) which point in the other direction. It appears to give to the State law an operation it would not otherwise have. It is to operate in relation to the scheme of apprenticeship established by the award and to apprentices under that scheme ... On the whole therefore I have reached the conclusion that this second view is the one which should be adopted ..." Smithers J. said :- (at p. 377) ".. If the apprentice Flynn were an apprentice who had entered into apprenticeship under the State statute then clearly, the failure to supply the tools to him would be a breach of the regulations and presumably of the State Act. No doubt he could be prosecuted in respect of such a breach. But apprentice Flynn had not entered into an indenture of apprenticeship with the respondent pursuant to the provisions of the State Act. His apprenticeship was the creature of the award. His indenture was entered into pursuant to the elaborate provisions of cl. 7 of the award. ... Although it appeared to be conceded that the relevant regulation purports of its own force as such and considered independently of the award to impose the obligation in question upon the respondent in respect of Flynn in his capacity as a Commonwealth apprentice, I am not satisfied that this is so. (at p. 380) It is therefore necessary to consider the alternative contention of the respondent. Is cl. 7(q) declaratory or does it "enact" something? The presumption is that a term of an award saying that certain statutes and regulations are to operate expresses the intention to prescribe that they shall operate to confer rights and impose duties upon the parties to the award. ... (at p. 381) On this basis cl. 7(q) is seen to provide that the provisions of State laws concerning apprentices and relating to the schooling and discipline matters referred to and other State laws, provided the provisions of these latter are not inconsistent with the award, are to operate as terms of the award prescribing the mutual rights and duties of employers and employees. eee If on its proper interpretation cl. 7(q) does say that such laws are to operate with respect to parties bound by the award, it seems to me to be inescapable that the clause must be read as saying that the provisions of those laws shall operate in relation to Commonwealth apprentices as though they were provisions relating to them. However, it is competent for a Commonwealth award to prescribe by reference thereto that the provisions of a State law which applies to persons and situations specified therein shall operate with respect to particular persons and situations within the jurisdiction of the award-making authority. If it does this then rights and duties similar in nature and extent to those conferred and imposed by the provisions of the State law in relation to the parties the subject of the State law are thereby conferred and imposed by the award itself upon the parties specified in the award. It appears to me that this is what cl.7(q)} sets out to achieve and does achieve despite difficulties of interpretation due to a paucity of words..." Joske J. in his dissenting judgment said that it was "hard to believe that the conciliation commissioner intended to incorporate into his award, in addition to existing provisions of the State law, possible future provisions of an entirely unknown character". The apprenticeship governing the employment of the apprentice in that case was entered into pursuant to a scheme of apprenticeship established under clause 7 of the Metal Trades Award. Smithers J. (at p. 377 ~- see also p. 381) 10. concluded that the relevant State regulation did not of its own force, considered independently of the award, impose the obligation in question upon the respondent in respect of the apprentice in his capacity as a "Commonwealth apprentice" (see also Spicer C.J. at p. 376). Having expressed that opinion Smithers J. proceeded to consider the question "Is cl. 7(q) declaratory or does it 'enact' something?". It was in the context of the consideration of that question (based upon his Honour's conclusion that State law did not operate in relation to "Commonwealth apprentices") that Smithers J. referred to a "presumption ... that a term of an award saying that certain statutes are to operate expresses the intention to prescribe that they shall operate to confer rights and impose duties upon parties to the award". Mr. Ginnane conceded that the decision is not an authority which binds this Court constituted by a single judge but correctly described it as a decision of high persuasive authority. However there are certain matters which arise in considering whether the decision as to the meaning of the Metal Trades award clause should be applied in the present case :- (1) the reasons for judgment of Spicer C.J. suggest that the choice between the "two views which can be taken as to the meaning and intent" (p. 375-6) of the clause was one of some difficulty which was made by reference to "other : features" of the clause and to "the scheme apprenticeship established by the award" - matters which are not present in the award under consideration in the (2) (3) ll. present proceedings; the reasons for judgment of Smithers J. refer to the "difficulties of interpretation due to a paucity of words"; the reasons for judgment of Smithers J. appear to be founded partly upon the "presumption" to which reference has been made. Mr. Ginnane relied strongly upon that "presumption", submitting that clear language would be required to rebut the presumption. He did not advance any authority in support of his contention that the presumption referred to by Smithers J., being one of general application, applied equally to the construction of the award under consideration in the present proceedings. He relied upon the principle that an award provision is intended to achieve a purpose and should not be construed in such a manner as to make it redundant or unnecessary. However, each of the "two views" of the clause referred to by Spicer C.J. plainly permits the existence of such a purpose and accordingly no question of redundancy arises. Accordingly the decision may well be distinguishable on the ground that the apprenticeship there under consideration had been "entered into pursuant to the elaborate provisions of clause 7 of the award". As to this aspect Mr. Ginnane submitted (T. 92) that the judgment of the majority was not significantly influenced by that aspect. He submitted that McManus' case could not be distinguished on the basis that there the award contained "elaborate 12. rovisions" in respect of apprenticeships, which had no Pp P' Pp counterpart in the award presently being considered. It should also be noted that the reasons for judgment of the three judges do not suggest that the award there under consideration had been issued with a preface similar to that issued with the Carpenters and Joiners Award 1967 (117 C.A.R. at p. 16 -set out later) which stated that "regulation of their conditions has been left to the State authority for the present. The rights of the parties on this Matter are reserved, however." It may be added that there is nothing in the reasons for judgment to suggest that any submission was advanced to the Court that the Arbitration Commission had no power to insert in an award a provision incorporating not only the known provisions of an existing State law but "possible future provisions of an entirely unknown character" (ef. Joske J. at p. 376). No member of the Court dealt with the question of the commission's power to so award - and presumably no such argument was put to the Court. On the second day of the hearing, doubtless after considering certain matters raised on the first day, the applicant placed before the Court photocopies of decisions and awards of the Conciliation and Arbitration Commission (and of its predecessor the Commonwealth Court of Conciliation and Arbitration) relating to the history of the 13. award. That material showed, amongst other things, that on 5 January, 1967, Mr. Commissioner Matthews, when making the award the subject of the present proceedings, issued a decision which included the following passage (reported in 117 C.A.R. 13 at pp. 14-15, 16) :- "After a long series of conferences in the final stages of which the Commission participated at the parties' request, the two organizations of employees representing carpenters and joiners have now sought that the Commission make a new award for such employees in the States of Victoria, South Australia and Tasmania in terms agreed on with employers concerned. The parties desire, and the Commission agrees that it is desirable, that the new award should be prefaced by the following statements :- (5) As to apprentices in Victoria, it will be noted from Part 111 of clause B36, for instance, that regulation of their conditions has been left to the State authority for the present. The rights of the parties on this matter are reserved, however." ("Part 111 of clause B36" and Part 111 of clause E35 were in identical terms). That passage shows that, when the award now under consideration was made in 1967, the parties desired (and the Commission agreed that it was desirable) that the award be prefaced by a statement, in relation to apprentices in Victoria, "that regulation of their conditions has been left to the State authority for the present", and that "the rights of the parties on this matter are reserved". Those words appear to give some support to a contention that Part 111 of clause E35 was intended to preserve "the operation of State 14. law as State law save to the extent that State law directly collides with the provisions of the award" ~ pex Spicer C.J. in McManus v General Electric Co. of Australia (supra - at pp- 375-6). Mr. Ginnane' submitted that the words used did not support such a contention as they were equivocal. He also pointed out (T. 135) that the clause in that form had been first inserted in the award which was made in 1953 (75 C.A.R. 535) and said that there was no explanatory statement in that report as to the clause then inserted - either by way of preface or otherwise. In order to assist the Court, he tendered a transcript of part of the proceedings leading to the making of the award in 1953; that document was marked for identification (W) but the Court made it clear that it did not involve any concession by the applicant as to its admissibility and that the applicant's rights were reserved (T. 138). It should be mentioned that Mr. Ginnane also placed some reliance upon an unreported decision of the Supreme Court of Victoria (O'Bryan J.) in R. v The President of the Industrial Training Commission of Victoria and F.L. Bergin (ex parte Ford Motor Co. of Aust.) (delivered 25 June, 1980). However, the decision in that case does not appear to provide any further support for the applicant's contention based upon McManus' case. Because of the matters referred to in these reasons and because the question of the meaning and effect of Part 111 of clause E35 is of an importance that extends beyond the 15. present proceedings, the Court gave the applicant an opportunity to consider applying under s. 118C(1) of the Act for an order that the proceedings be heard and determined by a Full Court. The applicant declined to make such an application but I have nonetheless formed the opinion that this is a proper case for the Court to exercise that power of its own motion and accordingly I so order. The applicant is directed to serve upon the respondent within 7 days a copy of these reasons for decision. It should perhaps be added that, at the conclusion of the first day of the hearing, the two applications were adjourned for two weeks to permit the applicant and the Court to give further consideration to various matters which had been raised. One of those matters arose out of the applicant's reference to the possibility that one or more of the logs of claim, which led to the making of the award in 1967, (which logs of claim were - and are - not in evidence) contained a specific claim that the State law from time to time regulating apprentices should be incorporated into the Federal award in settlement of the dispute. The Court invited the applicant to give consideration, during the adjournment, to obtaining and tendering in evidence the logs of claim upon which the award was founded; the applicant was referred to Australian Timber Workers' Union v Stewart (1936) 55 C.L.R. 72 at p. 77 where Starke J. said :- "The case is thoroughly unsatisfactory from my point of view, for the Court does not know the ambit of the dispute the foundation of the award, nor the claims made before the Arbitration Court." 16. On the resumption of the hearing the Court was informed that .the applicant had been unable to obtain the logs of claim leading to the making of the award. Presumably the difficulty in obtaining them was due to the relative shortness of time available; there could be little doubt that, given sufficient time for the examination of the records kept by the Industrial Registrar, the logs of claim, and the findings of dispute based upon them, could be obtained and placed before the Full Court when the matters come on for hearing next year. ffheen ee mewn ¥ Keel * ANA Novembev ATH