a Industrial law - award interpretation - whether council resolutions validly authorised interpretation proceedings - whether proceedings ratified - whether council should be given opportunity to ratify - vefusal to dismiss or perpetually stay application - matters Board of Reference empowered to decide - whether suitability of employee for promotion by council 1s a matter assigned to Board - whether clause ambiguous - relevance of employer's right to choose and promote employees unless clear case of industrial injustice exists. Conciliation and Arbitration Act 1904 s.110 Local Government Act 1934 (S.A.) Local Government (Proceedings of Councils) Regulations 1984 The Municipal Officers (South Australia) General Conditions Award 1981, clauses 31,33. THE CORPORATION OF THE CITY OF BURNSIDE and THE MUNICIPAL OFFICERS' ASSOCIATION OF AUSTRALIA and BRIAN FREDERICK CALLER No. SA No. 5 of 1985 KEELY d. MELBOURNE 23 May 1985 IN THE FEDERAL COURT OF AUSTRALIA ) ) SOUTH AUSTRALIA DISTRICT REGISTRY ) S.A. No. 5 of 1985 ) INDUSTRIAL DIVISION ) BETWEEN: THE CORPORATION OF THE CITY OF BURNSIDE (Applicant) AND: THE MUNICIPAL OFFICERS' ASSOCIATION OF AUSTRALIA and BRIAN FREDERICK CALLER (Respondent) MINUTE OF ORDER JUDGE MAKING ORDER : Keely d. DATE OF ORDER : 23 May 1985 WHERE MADE : Melbourne THE COURT ORDERS THAT: 1. The application for the order and declaration set out ain paragraphs 2 and 3 of the notice of motion filed on 18 April 1985, 1s refused. 2. The further hearing of paragraph 1 of that notice of motion is adjourned to a date to be fixed. 3. The further hearing of the application for an interpretation 1s adjourned to a date to be fixed. 4. Liberty to apply is reserved to both parties. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) SOUTH AU INDUSTRI ) STRALIA DISTRICT REGISTRY ) S.A. No. 5 of 1985 ) AL DIVISION ) 23 MAY, (the un2 orders "qd, 2. 3. BETWEEN: THE CORPORATION OF THE CITY OF BURNSIDE (Applicant) AND: THE MUNICIPAL OFFICERS' ASSOCIATION OF AUSTRALIA and BRIAN FREDERICK CALLER (Respondent) 1985 KEELY J. REASONS FOR JUDGMENT The Municipal Officers' Association of Australia on) has moved for the following declarations A Declaration that Norman Waterhouse & Mutton, Solicitors have no lawful instructions from the applicant to institute or maintain these proceedings. An Order that the proceedings be dismissed or alternatively perpetually stayed. A Declaration that the Court has no jurisdiction to make Orders 2, 3(a), 3(b) and 4 of the orders sought." and The notice of motion is directed to an application brought in the name of The Corporation of the City of Burnside (the council) under s. (the Act). 2. 110 of the Conciliation and Arbitration Act The material part of that application, as amended by leave during the hearing, is in the following terms : "1. Pursuant to section 110 of the Conciliation and Arbitration Act 1904 (as amended) an interpretation of The Municipal Officers' (South Australia) General Conditions Award 1981 (as amended). (A) That the provisions of clause 31 and clause (B) 33 of the Award should he interpreted as follows : A Board of Reference appointed pursuant to the provisions of sub-clause 1 of clause 31 has no jurisdiction to determine an application made to it by a party to the award as to whether an employee : (1) has been given a reasonable opportunity to establish his suitability for particular duties and (ii) as suitable for the performance of the particular duties concerned, as referred to in clause 33(4)(a). That upon the proper construction of the said award the applicant is the only body that can determine whether an employee and in this case Brian Frederick Caller is sultable for promotion or appointment to a 3. position with the applicant and in particular as Town Clerk." The notice of motion filed by the union raised three matters for consideration. The third matter should be dealt with first as it sought a declaration that the Court has no jurisdiction to make three of the four orders sought by the council's application, before it was amended to the form set out above. Mr Kenzie 9.C., who appeared with Mr Hannon for the union, sought to rely upon the observations of Evatt and Northrop JJ. ain Master Builders' Association of Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1981) 54 F.L.R. 358 at 360-362, (cf. Crawford Productions Pty. Ltd. & Anor v. Film and Television Production Association of Australia and Ors.(1983) 5 I.R. 413 at p.429-430 where Jenkinson J. referred to those observations "without expressing any opinion concerning those aspects of the jurisdiction conferred by s.110"). In my opinion the observations of Evatt and Northrop JJ. do not support a contention that the Court lacks jurisdiction to deal with Part A. of the amended application, although Part B of the application in its amended form is certainly open to criticism and was criticised by Mr Kenzie. The first matter under the notice of motion involved a contention that the application for an interpretation had not been authorized by the council. By the resolution of 4 December 1984, the council had requested 4, "the Local Government Association to withhold further action to the Federal Court in relation to the interpretation of the award until after the decision of the Board of Reference and/or Commission". It was contended that the council's resolutions of 15 January and 19 March, 1985, which purported to authorize its solicitors to issue proceedings in its name in the Court, were resolutions which "amended" the resolution carried by the council at its meeting on 4 December 1984, and did sa without any written notice of the motion for amendment having been previously given. The Local Government (Proceedings of Councils) Regulations, 1984 were made under the Local Government Act 1934. Regulation 43(1) of those regulations was in the following terms : "43.(1) A motion, the effect of which, if carried, would be to revoke or amend any resolution passed at any time since the last periodical election shall not be accepted by the chairman, unless the member intending to move the motion gives notice in the form of a written notice of motion to the chief executive officer at least six clear days prior to the meeting at which the motion is to be moved." Mr Hayes, of Counsel, on behalf of the applicant council, advanced a sophisticated submission as to the meaning of the council's resolutions, but in my opinion the resolution of 15 January 1985 and that of 19 March 1985 did 'amend' the council's resolution of 4 December 1984 within the meaning of that word in regulation 43. In my opinion the requirements of regulation 43 are mandatory and it was common ground that no "written notice of (either) motion to the chief executive officer" had been given. Accordingly, 5. 1f regulation 43 applied at the material times, non-compliance with that requirement had the effect of invalidating the resolutions carried on15 January and 19 March 1985 which purportedly authorised the institution of the council's application to the Court. The applicant council's submission that, at the material time, regulation 43 had no application to the procedures to be adopted at the council's meetings is rejected. That submission was based upon the use, in regulation 43, of the words 'since the last periodical election'. The term 'periodical election', introduced by Act No. 58 of 1984 which amended the Local Government Act in August 1984, is defined in s.5(1) of the amended Local Government Act as meaning "an election to fill an office or offices of a council held ona date fixed by section 94(1)" (which provision was also inserted by the amending Act). It was urged by the council that regulation 43 had no application because the resolutions, carried in January and March 1985, could not have amended, on any view, a resolution "passed at any time since the last periodical election" . The basis of this submission was that there had been no 'periodical election' pursuant to that section because the first periodical election after the 1984 amending Act was to be held on the first Saturday in May 1985. Although the applicant's submission was presented persuasively, I am not prepared to hold that in regulation 43 the words "since the last periodical election" have the 6. "effect that regulation 43 does not apply to council meetings held after the regulations came into force, but before the first "periodical election" was held. It was common ground that the amending Act had the effect of repealing any by-laws or regulations which had previously been made or adopted by individual councils regulating the procedures to be observed at council meetings. The legislative intent was that those by-laws or regulations were to be supplanted by a uniform set of regulations (including regulation 43) 'regulating the procedure to be observed at meetings of councils'; they were to be made by the Governor in pursuance of the power conferred by s.691(1)(f) of the Local Government Act which provision was enacted by Act No. 58 of 1984. The Proceedings of Council regulations made by the Governor were to take effect on 16 August 1984 (see regulation 54). It is of some significance that those regulations, as one would expect having regard to their title, deal in great detail with the "conduct of proceedings" of councils (regulations 5-17 inclusive in Part II) and with the subject of "motions, debating and voting" at meetings of councils (regulations 18-43 inclusive in Part III). As those regulations governed the procedure to be observed at council meetings after 16 August 1984, in my opinion the Court should adopt the interpretation that would avoid the absurd result that would follow if regulation 43 , by reason of its use of the words "since the last periodical election", did not apply to council meetings held during the eight months before the elections in May 1985. In my opinion the words "since the 7. last periodical election" ain regulation 43 refer to the regular elections to be held. Conformably with the intention evinced by the amending Act, the words are intended to refer to the period since the election at which the council was elected 1.e. including, where appropriate, the period since the election, before August 1984, of a council which, after August 1984, 1s considering a motion to amend an earlier resolution carried by that council. The conclusion I have reached on this part of the council's submission regarding the first matter in the union's notice of motion makes it unnecessary for me to express any view on the detailed submissions advanced by the council upon the question of what procedures, if any, would govern amending motions if regulation 43 did not apply to the motions under consideration. The applicant council made two other submissions in response to the union's contention as to the first matter in the notice of motion. Firstly, it was submitted that, if there were any invalidating defect in the resolutions purportedly authorising the institution of the application before the Court, that defect had been cured or alternatively that steps had been taken to ratify it and therefore validate that authority. The council based these submissions on a resolution by the council, carried on 16 April 1985, whereby the council's 'instructions to its solicitors to prosecute that action (in this Court) expeditiousiy'..... were confirmed. In my opinion those submissions cannot be upheld. 8, The difficulty confronting the applicant in respect of its resolutions of 15 January and 19 March 1985 is' that yeguiation 43 required that written notice of those motions be given to the chief executive officer. However, the resolution of 16 April 1985 is in no different position from the resolutions of January and March 1985. There is no evidence that the requisite written notice of it was given to the chief executive officer; accordingly it likewise offends regulation 43 and therefore cannot found an argument that the defects in the earlier resolutions have been cured or that the council's action in instituting the proceedings has been ratified. Secondly it was submitted by Mr Hayes, on hehalf of the council,that if the Court were not persuaded that the aunstitution of the proceedings had been ratified, it was an appropriate case in which the Court should adjourn the proceedings in order to give the council an opportunity to do 50. In support of that proposition he referred to the decision in Omega Estates Pty. itd. v. Ganke and Ors. (1963) 80 N.S.W. (W.N.) 1218, where, in addressing an argument that once lack of authority was established, the moving party was entitled as of fright to have an action struck out as a nullity, Else-Mitchell J. said (at p. 1225): "In my view the basic steps in this argument are without foundation and there is no warrant for saying that the only proper order which can be made is to strike out the statement of claim, errr other authorities ...... make it clear that where absence of a retainer is capable of being remedied by a proper authority being given the institution of the proceedings 15 not a nullity but is capable of ratification and that such ratification relates back to the institution of the proceeding (John 9. Shaw & Sons (Salford) Ltd. v. Shaw £19351 2 K.B. 113, at pp. 144, 145, Danish Mercantile Co. Ltd. v. Beaumont £19513 1 Ch. 680, Halsbury's Laws of England, 3rd ed., vol. 36, pp. 75-76. This is peculiarly the position where, as in this case, the lack of proper retainer stems from the absence of a valid resolution of a validly appointed board of directors of a company and there is reason to believe that a proper authority can be procured..." Mr Hayes also referred to the judgment of Jenkins L.J. in Danish Mercantile Co. Ltd. vw Beaumont £1951] 1 Ch. 680 at 6B7. On a consideration of all the circumstances, including matters which will be referred to in dealing with the question of the Court's discretionary power to refuse to give an interpretation, I have decided to uphold the council's submission that the proceedings should be adjourned in order to give the council the opportunity sought. The resolutions of 15 January and 19 March 1985, are in my opinion capable of ratification. Furthermore, the council, by its resolution of 16 April 1985, albeit invalidly, has reiterated its approval of the institution of 5.110 proceedings in this Court. Although, as Mr Hannon on behalf of the union pointed out, the council elected on 4 May 1985 may decide to refuse to ratify the institution of the proceedings, the Court cannot assume that it will refuse to do so, having regard to the fact that the council has on three occasions expressed its approval of the taking of the proceedings. The second matter raised by the union's notice of 10. motion was an application that the Court, in the exercise of its discretion, should dismiss the application for interpretation or alternatively should order that the proceedings be perpetually stayed. The Court has a discretion - which, of course, must be exercised judicially - as to whether to determine an application for interpretation (see Morgan J. in Re Graphic Arts Award (1957) 1 F.L.R. 22 and also in Re Food Preservers Award (1959) 3 F.L.R. 425 at 430-431 and see Spicer C.dJ., Dunphy and Eggleston JJ. in Re Rubber, Plastic and Cable Making Industry Award (1963) & F.L.R. 395 at 397). Mr Kenzie's submissions as to discretion were based partly upon six matters set out 1n paragraph 9 of the affidavit of Mr Theo Marks, the Branch Secretary of the South Australian and Northern Territory Branch of the union. They may be dealt with quite briefly. There is no substance in item (i), namely, that the council had submitted itself to the processes of the Conciliation and Arbitration Commission. Clause 31(3)of the award is a sufficient answer to that contention. Item (ii) related to the failure of the council to apply to this Court at an earlier time for an interpretation and, in particular, the failure to apply before the "decision adverse to it". That is a factor to be taken into account, but I do not attach great weight to it. Item (iii) was the failure to ask Mr Deputy President Isaac to refer to this Court a question of law under 5.107. I do not attach any real significance to that item. As to Item (iv), it may be "undesirable to permit 11. relitigation of the same issue in different forums" but 5.110 of the Act expressly empowers this Court "to give an interpretation of an award"; it may be noted, in passing, that the "relitigation" to which this item refers would not have occurred had the union applied to this Court for an interpretation instead of appealing to the Arbitration Commission against the decision of the Board of Reference. The scheme of the Act 1s that the arbitral function of making awards and variations should be performed by the Arbitration Commission, and that the judicial function of interpreting those awards and variations should be performed by this Court. Neither the decision of the Board of Reference nor the decision of Mr Deputy President Isaac could bind the parties as to the interpretation of the award. In The Queen v Hegarty and Ors; ex parte City of Salisbury (1981) 147 C.L.R. 617 at p.627, Mason J. (with whose reasons for judgment Gibbs C.J., Stephen and Wilson JJ., agreed) said : ",..The preservation of the parties' right to apply to the Australian Industrial Court for an interpretation of the Award also suggests that the Board is not exercising judicial power, that Court having authority to give a conclusive and binding interpretation of the Award. I accept that the decision of the Board binds the parties, except as to the interpretation of the Award..." In the circumstances I attach no significance to item (vi). Nor do I attach any significance to item (v). It would be reasonable to assume that the Board of Reference would take into account any decision of this Court in the light of the fact that on 3 April 1985 the Board of Reference (by majority) granted an application by the council's 12. representative that the proceedings before the Board be adjourned because of the application for interpretation that had been lodged in the Court. Item (vi) raises a matter of some weight, namely, that the material clauses in the award "may shortly be varied (and) render any decision in these proceedings of little or no practical effect." That item relates to the fact that the union has filed in the Arbitration Commission an application to vary the award; the Court was told from the Bar table that that application 1s likely to be heard at the end of May 1985 or early in June 1985. At an earlier time in the hearing I was disposed to attach considerable weight to this aspect. However for three reasons I have come ta the conclusion that I should not exercise my discretion in either of the two ways sought (in the alternative) in the union's notice of motion. The first reason is that the union's submission as to the Court's discretion, put in support of its notice of motion, has raised the question of the correct interpretation of the award. In his opening address Mr Kenzie submitted that the decision of Mr Deputy President Isaac, dated 22 November 1984 (which allowed an appeal from the Board of Reference decision that it had no jurisdiction to deal with the matter), was correct or, at least, "not manifestly incorrect". That submission required the Court to give consideration to the question of the correct interpretation of the award. The second reason 1s that, on the last day of the hearing, Mr Hayes asked the Court to hear argument on all matters, including full argument by both parties as to the interpretation of the award and Mr Hannon, on behalf of the union, agreed (transcript p.135), saying that that question had been discussed between counsel for the two parties. In these circumstances I have had the benefit of submissions from both parties and I have come to the conclusion that the Board of Reference is not empowered under clause 31 of the award to make the determination sought by the union. Having reached that conclusion, a consideration of the arguments as to discretion has led me to conclude that it would not be a proper exercise of the Court's discretion to dismiss the Council's application for an interpretation, or to order that those proceedings be perpetually stayed. The third reason is that, upon reflection, there 1s much to be said for the view that, the matter of the interpretation of clause 31 having been fully argued before the Court, it would not be a proper course to refuse to give an interpretation; such a course would deprive the Arbitration Commission of the opinion of this Court as to the correct interpretation of the award ata time when the Commission, in deciding whether to vary the award, has to consider the meaning of the award in its present form. (cf. observations by Mason J. in Hegarty's case quoted earlier). 14. In the circumstances I shall express my opinion on the question of interpretation, although the application for interpretation will be adjourned, for the reasons given earlier, and no formal interpretation of the award under s.110 of the Act will be given at this time. Clause 31 of the award reads as follows : " 31 - Board of Reference (1) A Board of Reference for the purpose of this award shall be constituted and shall consist of two persons to be from time to time appointed by a respondent Council and two persons appointed from time to time by The Municipal Officers' Association of Australia or where appropriate one each by The Municipal Officers' Association of Australia and the Association of Draughting Supervisory and Technical Employees with the Deputy Industrial Registrar for South Australia, or his nominee, as Chairman. Three members shall form a quorum. The Board shall sit at such time and place as the parties may agree, or in default of agreement as the Chairman may fix. The functions of the Board shall be : (a) to consider any matters pertaining to this award brought before it from time to time by a respondent Council or by The Municipal Officers' Association of Australia or by the Association of Draughting, Supervisory and Technical Employees. (b) to aunquire into and if possible settle differences between the Association and any respondent Council including differences arising out of the application of clause 30 of this award; and (c)} to decide by a majority decision any matter which by this part of this award is assigned to the Board of Reference for determination. (2) The Board of Reference shall not be empowered to determine or fix the salary of an officer. (3) Nothing in this clause shall prevent any party from applying to the Federal Court of Australia, Industrial Division for an interpretation of any Clause of this award. 15. (4) There shall be an appeal from any decision of the Board of Reference to the Australian Conciliation and Arbitration Commission. Such appeal shall be lodged within 21 days of the decision of the Board." It will be noted that Clause 31 provides that a Board of Reference shall have three functions: (a) "to consider" certain matters, (b) to "inquire into and if possible settle differences" between parties and (c) "to decide ... any matter which by this part of this award is assigned to (it) for determination." Mr Hannon, on behalf of the union, submitted that those three functions are to be read together and that, in relation to any matters pertaining to this award brought before it by a party under sub-clause 31(1)(a), the Board of Reference deals with the matter "in a progressive sort of way" by first considering the matter, then by inquiring into it and, if possible, settling differences between the parties and finally, if necessary, by deciding the matter by majority decision. On that submission the Board of Reference is empowered "to decide" not only the matters "assigned to" it but also all those matters brought before the Board under sub-clause 31(1)(a) and (hb). In my opinion that is not the natural meaning of the words. Such a construction of clause 31 fails to give any weight to the words "which ... is assigned to the Board of Reference for determination", appearing in paragraph (c), - and, in particular, to the words "assigned" and "for determination". In addition I am unable to accept the 16. union's submission that the words "by this part" in paragraph {c) are intended to confer upon the Soard the function of Geciding "any matters pertaining to this award" which under Paragraph (a) have been brought before the Board for it "to consider". The meaning of the words "by this part" is not clear. It may be that the words owe their origin to an earlier award which was in two parts. However, in my opinion the words do not mean "by this clause". Had this been the intention 1t would surely have used those words - as it did in clause 31(3). The functions conferred upon the Board by Paragraphs (a) and (b) of clause 31 (1) are different functions, in my opinion, from those conferred by paragraph (c). They are narrower, in that they do not include the power "to decide", but they are wider, in that they apply to a wider area of problems which may arise under the award. The absence of a power to "decide" those matters in that wider area, is however, quite consistent with the Board's important but informal role of settling disputes by conciliation; that role was referred to in Hegarty's case (supra at p.631) by Murphy J., who said : "Boards of Reference are a necessity of industrial relations for avoidance of disruption arising from Minor differences. As Mr Hegarty the Chairman of the Board of Reference said : "It is generally accepted that Boards of Reference perform a worthwhile function in providing a ready and effective means of settling certain types of industrial disputes arising out of the operation of awards and that the informal nature of the proceedings are conducive to the settlement of disputes by conciliation." 17. In my opinion paragraph (c) of clause 31 15s intended to confer upon a Board of Reference the power "to decide" matters within a limited class only, namely, any Matter which 1s "assigned to" it by the award "for determination". Certain clauses of the award clearly assign Matters to a board of reference for determination, e.g. clause 7(3), clause 14(3) and clause 24(5) (see also clause 25(c)(iv)). In the award under consideration in these proceedings,the clauses which assign matters toa Board of Reference, may be compared - and contrasted - with clause 33 of the award which does not assign any matters to the Board of Reference for determination. So far as 18S material, clause 33 reads as follows : "33 - Preference in Engagement And Promotion On Engagement (1) In the selection of persons for employment in its service, a Council shall give preference to members of a registered organisation party to this award. in Promotion (2) (a) In the selection of persons for promotion in its service, a Council shall give preference to members of a registered organisation party to this award who are already in its employ. (b) Should there be in the Council's service no member of such an organisation who 15 5sUitable for promotion to the position ain question, that vacancy shall be advertised, or may be advertised in the case of Professional Engineers employed under the Professional Engineers (Local Governing Authorities, South Australia) Salaries and Specific Conditions Award, 1981 in the appropriate public media throughout the State of South Australia. 18. For the Performance of Higher Duties (3) In the selection of persons for the performance of higher duties under this award, a Council shall give preference to members of a registered organisation party to this award. General Suitability for employment, promotion or higher duties (4)(a) (i) No member of a registered organisation party to this award shall be considered unsuitable for employment, promotion, or the performance of higher duties unless that member, should he or she 50 request, has first been given a reasonable opportunity to establish his or her suitability. (i1) In the selection of persons for employment, promotion or the performance of higher duties, no Council shall be obliged by this clause to choose a person who is unsu1ttable for the position for the performance of the duties concerned. (1ii) Preference in employment, promotion or the performance of higher duties shall operate in favour of members of a registered organisation party to this award whether or not a person not being such a member 15 considered by a Council to be more suitable for the employment, promotion or performance of hagher duties in question. It will be noted that clause 33 does not state that the question of the suitability of a member of the union "for employment, promotion, or the performance of higher duties" is a matter which "shall be determined by a Board of Reference" (cf. clause 7(3)). Its failure to "assign" that matter (cf. clause 31(1)(c)) ""to the Board of Reference for determination" is to be contrasted with the provisions in 19. clauses 7(3), 14(3), and 24(5) and must be assumed to be a deliberate omission (see also clause 25(c)(iv)). Nor 1s any such provision to be implied from the terms of clause 33. Sub-clause 33(4)(a) (11) rather suggests the contrary, by expressly providing that : "... mo council shall be obliged by this clause to choose a person who is unsuitable for the position for the performance of the duties concerned." Tt may be added that the Court was informed that that sub-clause resulted from a concession made by the union in proceedings before Mr Commissioner Gough. In addition, sub-clause 33(1), sub-clause 33(2)(a) and sub-clause 33(3) each make it clear that 1t ais the council which is to make "the selection of persons for employment in its service" and "for promotion" and "for the performance of higher duties". It would be a breach of the award if, in making its selection, the council failed to "give preference" as required by clause 33. However, that is an entirely different concept from that of taking away the employer's right to select the person for employment, for promotion or for the performance of higher duties. Although the matter which led to the present proceedings related to the "Suitability" of a person for appointment as Town Clerk, the award governs the employment of a wide range of employees, including Town Clerks and Assistant Town Clerks, Municipal Engineers and their Deputies, Swimming-pool Officers, Library Officers, Planning 20. Officers, Word-processor Operators, Tourist Officers, Public Access Officers, Accountants, Clerical Officers, Steno-secretaries, Cashiers, Computer Operators, Paymasters, Administrative Officers, Overseers, Foremen, Building Surveyors, Health Surveyors, Technical Officers and Traffic Officers. - Mr Hannon, on behalf of the union, agreed (transcript p.168-169) that the union's submission if correct, means that a Board of Reference has the power to decide the question of "Suitability" for (a) employment, (b) promotion and (c) the performance of higher duties and that it has that power in respect of every person who is employed OF 158 under consideration for employment in any of the occupations to which the award applies. At the conclusion of his submission on this aspect, Mr Hannon said "Clearly, our argument would result in a wide range of matters concerning employment and promotion having the capability of going to the board, but we simply say that that is a fair interpretation of what the award provides for and, accordingly, the parties are bound by that." However, in my opinion that is not the correct interpretation of the award. Mr Kenzie submitted on behalf of the union that, in construing the award, it is not relevant to consider whether the construction advanced by the union would "infringe on Management's prerogative"; in this connexion he cited a passage from the reasons for decision of Mr Deputy President Tsaac. That submission is correct if the meaning of the 21. award is unambiguous; in my opinion it 1S unambiguous but, contrary to the union's submission, does not confer upon a Board of Reference the power to make the determination sought by the union. If, however, that view is not correct, and the meaning of the award is ambiguous,then it would be permissible, in my opinion, to consider its meaning in the light of the well-established arbitral principle, that Arbitration Tribunals will not deprive an employer of his right to choose his own employees unless "a clear case of industrial injustice exists". The employer's right may be affected by an award clause which requires him to give preference to members of a union and thereby limits the class of persons from whom the employer may choose, but the employer nonetheless retains the right of selection of the particular employee for appointment ory promotion. Under awards giving "preference", neither the selection of the employee nor the decision as to whether a potential employee is "suitable", is a matter assigned to a Board of Reference for "determining" as "a matter ... which, under the award, may from time to time require tobe ... determined ... by the Board" (s.50 of the Act). The principle of not interfering with the employer's right to select his employees has often been enunciated by the Commonwealth Court of Conciliation and Arbitration, by Conciliation Commissioners and by members of the Arbitration Commission in making awards and giving decisions under the Act. An early application of the 22. principle is recorded in the Merchant Service Guild case (1916) 10 C.A.R 214 at p.228 where Higgins d., in his reasons for judgment under the heading of "Promotions and Vacancies", Said : "T need not repeat what I have said in previous cases as to the practice of this Court to avoid aunterference with the discretion of the employers in the choice of employees ... I want to leave the employers' hands free in the selection of the suitable men for positions to be filled ..." Beeby d. in the Australian Tramway Employees Association case (1925) 25 C.A.R 597 at 5.605 applied the same general principle. The principle has had quite general acceptance and has been applied in State Tribunals. A Full Bench of the NSW Industrial Commission, constituted by Piddington, Street and Cantor JJ., in Wimsor's case (1929) 28 A.R. (N.S.W.) 235 at p.236, said : "To deprive an employer of his right to choose his own employees and appoint them to the positions in his employment which he regards as proper is, of course a serious matter, and the mere fact that the Commission might disagree as to the wisdom or propriety of any particular appointment or dismissal by an employer is not in itself sufficient to justify intervention on the part of the Commission." That passage was quoted by Mr Commissioner Tonkin in The Federated Gas Employees Industrial Union v The Australian Gas Light Co. (1955) 81 C.A.R 628 at p.629. Although the principle was first expressed in the early years of arbitration, it has been repeatedly applied in 23. the years since World War II. The principle was succinctly stated by Mr Commissioner Chambers (as he then was) in Utah Construction Ltd. v The Transport Workers Union of Australia (1954) 78 C.A.R 733 at p.735 : "This 15 perhaps an occasion upon which it 15 desirable to restate the principle, well established and followed by Judges of Commonwealth and State Arbitration Courts and Conciliation Commissioners, that management's right to "hire and fire" should not be interfered with unless a clear case of industrial injustice exists." (See also the Five-Day Working Week case (1945) 54 C.A.R 34 at 35 for an application of the same general principle by a Full Court, consisting of Piper C.J., Drake-Brockman, O'Mara and Kelly JJ.) It may be noted that the principle was applied even during the war years when the Court, in addition to its normal powers under the Act, exercised wider powers under the National Security (Industrial Peace) Regulations. Those regulations were based upon the view that it was necessary for the efficient prosecution of the war that peace in industry should be preserved in the Commonwealth. Reference to two cases will show that even the need for"peace un industry" in war-time did not lead to interference with the employer's right to choose his employees and to select those for promotion. In Minister of State for the Navy v Federated Ship Painters and Dockers Union of Australia (1943) 51 C.A.R 31 at p.36 O'Mara J. said : "...those who are responsible for the conduct and Management of the Naval Establishments must have the right to select their supervisors and must be maintained in that right. It is for them to apply their own standards in selecting supervisors ... The Court 1s not entitled to give effect to its own 24. opinion as to what it considers desirable in supervisors." In Minister of State for Munitions v The Arms Explosives and Munition Workers Federation of Australia (1943) 50 C.A.R 66 Mr Commissioner Mooney said : "This Court has frequently laid it down as a principle that it will not interfere with the internal administration of an employer's business, ... (a matter) that should clearly be left to the discretion of the employer is the selection of employees for promotion. The Management has the right to select a person for promotion from the employees of the undertaking wherever employed." The judgment of a Full Court in The Municipal Tramways Trust, Adelaide v_ The Australian Tramway and Motor Omnibus Employees Association (1955) 85 C.A.R 312 related specifically to the question whether a Board of Reference should be given the power to interfere with the rights of managment. A Commissioner's decision had conferred "a right of appeal to a Board of Reference from any decision by the Management by virtue of which an employee loses two days pay or more or has been demoted or dismissed". In allowing an appeal against that provision Kirby, Dunphy and Wright JJ., in a unanimous judgment, said (at p.329) that : "... it is a matter of principle that the right of an employer to manage his own business should not be encroached upon by an award of an industrial authority unless there is clear proof of injustice in his dealings with his employees." The principle that Arbitration Tribunals will not interfere with an employer's right to "hire and fire" his own employees unless a clear case of industrial injustice exists 25, - applied by so many distinguished judges and arbitrators over sO Many years - was not cut down or impinged upon in any way Material to the present proceedings by the decision of a Full Bench in 1973 in inserting a preference clause in the Clerks (01) Industry) Award. The Commission (Moore and Aird Jdd., and Mr Commmissioner Holmes) pointed out (150 C.A.R 387 at p.391) that the section in the Act dealing with preference had been amended since the earlier cases which awarded preference to union members only on the basis of "other things being equal". It said that, because of that change in the Act, great care had to be used in applying what had been said in those earlier cases granting preference on that limited basis, There was nothing in the Full Bench decision which was inconsistent with the general principle of non-interference with an employer's right to "hire and fire". On the contrary, 1t will be noted that the Full Bench plainly left the selection of employees to the employer, by referring in its preference clause, to an employer who "does believe" that the member is "unsuitable for" the work and does sa on "yeasonable grounds". By the Full Bench decision an employer holding such a belief was deliberately "excused from the obligation to give preference." I have underlined the words "unsuitable for"; they were expressly inserted (see p.394) by the Full Bench in the preference clause instead of the words "incapable of" which appeared in the union's claim. Had the clause been granted in the form of the union's clain, the employers would have been obliged to give preference toa 27. Deputy President Isaac, dated 22 November 1984, which allowed an appeal from the Board of Reference and referred the matter back to the Board for resolution. For the foregoing reasons, the union's application for the order and the declaration set out in paragraphs 2 and 3 of its notice of motion are refused; the further hearing of its application for the declaration set ocut in paragraph 1 of that notice, and the further hearing of the council's application under 5.110 of the Act, are both adjourned ta a date to be fixed, in order to enable the council to consider the matter of an authority for the institution of the proceedings. Liberty to apply is reserved to both parties.