United Firefighters Union of Australia v Country Fire Authority [1996] IRCA 178

DECISION NO: 178/96 IN THE INDUSTRIAL RELATIONS COURT ) OF AUSTRALIA ) No VI 4277 of 1995 VICTORIA DISTRICT REGISTRY ) BETWEEN: United Firefighters Union of Australia (Applicant) AND: Country Fire Authority (Respondent) CORAM: Ryan J DATE: 29 April 1996 PLACE: Melbourne REASONS FOR JUDGMENT RYAN J: This is an application pursuant to s. 178(1) of the Industrial Relations Act 1988 for the imposition of a penalty for breach of the Victorian Firefighting Industry Employees Interim Award 1993 ("the Award"). The respondent Country Fire Authority ("the CFA") has been at all material times bound by the Award and has since before 25 November 1993 when the Award came into effect employed Messrs Lee, McNaughton and Myers in one or other of the classifications of Practical Area Drill Operator and Practical Area Drill Supervisor. Wages or salaries for those employees are prescribed by Clause 3(f) of the Award as varied. That paragraph is to be found in Section II under the prefatory indication: Conditions covering Firefighters, Senior Firefighter, Leading Firefighter, Fire Officer, Nominated Employees, Operations Centre Operator, Operations Centre Supervisor, Fire Safety Services Manager, Communications Technician, Senior Communications Technician, Assistant Communications Officer, Deputy Communications Officer, Communications Officer, Practical Area Drill Operator and Practical Area Drill Supervisor Clause 3(f) prescribes salaries under the heading, "Practical area drill operator and supervisor": _____________________________________________________________________ Classification Weekly Rate _____________________________________________________________________ (i) Practical Area Drill Operator 1st Year $396.10 2nd Year $404.10 3rd Year $415.60 4th Year $440.00 (ii) Practical Area Drill Supervisor $509.30 _____________________________________________________________________ Clause 4 of the Award provides under the heading, Authority Allowance: Where not prescribed in clause 3 Wages/Salaries, the following amounts should be added to the weekly wage (except for Firefighter, Qualified Firefighter, Senior Firefighter, Leading Firefighter, Fire Officer Grade 1, Fire Officer Grade 2, Nominated Employees, Trainee Operator, Operator, Senior Operator, Fire Safety Services Manager, Communications Officer, and shall be regarded as part of the ordinary wage for all purposes: During the 1st Year's service $57.20 During the 2nd Year's service $62.40 During the 3rd Year's service and thereafter $66.60 It can readily be seen that neither Practical Area Drill ("PAD") operator, nor PAD supervisor is among the classifications excepted from the obligation to add the Authority allowance to the weekly wage. Indeed, Mr McDonald of Counsel for the CFA did not submit to the contrary. Rather, Mr McDonald contended that it would be an appropriate exercise of the Court's discretion in the light of the history of industrial regulation of wages and conditions for PAD personnel to impose no penalty for the conceded breaches of the Award. It was similarly argued that the Court in the exercise of its discretion under s. 178(6) of the Act should refrain from ordering the CFA to pay the amount of the relevant under-payment. The history of Award regulation of PAD employees of the CFA discloses that they were first covered by an Award on 7 May 1992 when the Country Fire Authority Operational and Operational Support Award (No 2 of 1992) ("the State Award") was made under Victorian legislation by the Country Fire Authority Operational and Operational Support Conciliation and Arbitration Board ("the State Board"). The preface to the State Award expressly recited that it: ... inserts wages and conditions of employment for Practical Area Drill Operator and Supervisor. The State Award contained a prescription of wage rates in Clause 1, sub-clause 1.10 of which was in turn substantially identical to Clause 3(f) of the Award. Clause 2 of the State Award, headed "AUTHORITY ALLOWANCE", similarly corresponded with Clause 4 of the Award and no variation to it had been made or was made at the time when the State Award was varied by consent to extend to PAD Operator and PAD Supervisor. The question of whether those PAD personnel should be entitled to the Authority allowance had been raised in negotiations between the CFA and the United Firefighters Union ("the UFU") before the meeting of the State Board on 7 May 1992. The UFU was seeking to extend the allowance to PAD personnel who had not been paid it while they remained Award free. At all events, it seems to be common ground that no agreement had been reached on that issue by 7 May 1992. Nevertheless, the UFU prepared a draft of the amendments to the State Award which it regarded as necessary to be adopted by the State Board in order to extend its application to the PAD classifications. The minutes of the meeting of the State Board of 7 May 1992 disclose that the Award variation was treated as "a consent arrangement". The Chairman of the meeting, Commissioner Williams, is recorded as saying: I am satisfied that the award made is a consent arrangement between the parties that seeks to provide a first award to employees identified as Practical Area Drill Operator and Practical Area Drill Supervisor. The first award of the Board for these people is made as a result of the decision of the Full Bench of this Commission in Decision D91/0041 where the Commission varied the jurisdiction of the Award of this Board to provide for the classifications of PAD Operator and PAD Supervisor. I am satisfied that the Principles of Wage Fixation have been complied with and that those Principles as they apply to first awards and extensions of awards have been properly taken into account. I note that the salary rates provided in the application are the current salary rates being paid to the employees and that the variations to hours of work, overtime and call-back, public holidays, higher duties, meal break and uniforms are consequential variations that go with the making of a first award. For all of the foregoing reasons, I approve of the award made. The need to make a consequential amendment to Clause 2 was said by Mr Symons who was then Chief Superintendent, Industrials Relations, for the CFA, to have been overlooked by the CFA. Mr Eberhard, the Industrial Officer of the UFU similarly regarded the draft variation as reflecting the agreement which had been reached with the CFA. While the CFA remained bound by the State Award, the UFU made no complaint about the non-payment to the PAD personnel of the Authority allowance. Before the Award was made, Mr Eberhard deposed in an affidavit filed in the Australian Industrial Relations Commission: 1. At the request of Michael John Doyle, National Secretary of the United Firefighters Union of Australia, I drafted a document in which is reproduced, in a fashion suitable to their expression as provisions of an award of the Australian Industrial Relations Commission, all of the existing substantive rights and duties of employers and employees that are applied by virtue of the "Fire Brigades Operational Staff Award (Vic)"; "Fire Brigades Service Staff Award (Vic)"; "Country Fire Authority Operational and Operational Support Award (Vic)"; "Vehicle Building Industry Award (Vic)"; and "Storemen, Packers and Sorters Award (Vic)". A copy of each of the aforesaid Awards are annexed to this affidavit and marked Attachment A. 2. That document drafted by me I hereinafter refer to as "Firefighting Industry Employees Award 1993". ... Division B of the Award which was made by consent covering employees of the CFA mirrored the draft which had been prepared by Mr Eberhard and effectively incorporated as Clauses 3 and 4, Clauses 1 and 2 of the State Award. There was no discussion at that time about whether PAD employees had an existing entitlement or should have an entitlement to the Authority allowance. It was apparently not until shortly before 9 June 1995 that the contention was ever advanced, which the UFU maintains in these proceedings, that PAD employees were entitled to the Authority allowance. On that date Mr Watson, Manager Employee Relations, for the CFA wrote to one of the PAD employees, Mr Lee, in these terms: I refer to your enquiry regarding pay rates applicable for PAD employees. The rates of pay are those laid out in Clause 3(f) of the Victorian Firefighting Industry Employees Interim Award 1993. To achieve the actual rate of pay a further $16 should be added which represents the arbitrated safety net adjustments of the September 1994 Review. These rates were rolled over from the previous State Award titled the CFA Operational and Operational Support Award. The wage fixing principle covering the making of a first award requires that the wage rates inserted into the award be those in operation at the time of the making of the award. The Authority Allowance was never paid to PAD personnel and therefore at the time of the PAD classifications being inserted into the award the relevant clause should have been amended to exclude the PAD positions. It is the CFA's intention to amend the award's authority allowance clause to remove any possible confusion as to the wage rates of PAD personnel. Should you have any questions relating to the above please contact myself on the above phone number. In about July 1995, Mr Marshall, the newly elected State Secretary of the UFU, orally asserted to Mr Watson that PAD employees had become entitled to payment of the Authority allowance. That contention was denied by Mr Watson but, on 12 July 1995, Mr Marshall wrote him the following letter: RE: PRACTICAL AREA DRILL OPERATOR It has been brought to the attention of the Union that the classification of Practical Drill Area Operators and Supervisors are not receiving payment of the authority Allowance as prescribed in the Victorian Firefighting Industry Employees Interim Award 1993. Therefore in order to overcome the problem of the Country Fire Authority being in breach of the Award, payment including back payment of the Authority Allowance should occur immediately. I await your response. On 3 October 1995 the CFA applied to the Australian Industrial Relations Commission for a variation of the Award to insert in Clause 4 of Part B Schedule 1 Division B Section II of the Award the words "Practical Area Drill Operator, Practical Area Drill Supervisor". The grounds of that application were recited to be: 1. On 14 February 1991, a Full Bench of the Victorian Industrial Relations Commission approved an extension of the jurisdiction of the Victorian State Award known as the CFA Operational and Operational Support Award ("State award") to include the occupations of Practical Area Drill (PAD) Operator and PAD Supervisor (see decision attached as Annexure A). 2. The insertion of wage rates and conditions for PAD Operators and PAD Supervisors was approved by Commissioner Ken Williams, sitting as Chairperson of the Country Fire Authority Operational and Operational Support Conciliation and Arbitration Board, in a hearing on 7 May 1992. In the hearing the United Firefighters Union (UFU) advised that "in discussing the salaries and conditions the State Wage Case Principles had been taken into account and the application reflected the conditions of employment the PAD Operators and Supervisors currently enjoyed." (see minutes attached as Annexure B). 3. Commissioner Williams required the UFU to provide a draft order to provide for wages and conditions for PAD personnel to be inserted in the State award. The order was made in terms of the draft prepared by the UFU (see letter and order attached as Annexure C). 4. On 25 November 1993 as a consequence of a UFU application for a federal award, the terms and conditions of PAD personnel then contained in the State award were included in the Award. 5. The payment of the Authority Allowance was not part of the existing wages and conditions that PAD Operators and Supervisors enjoyed at the time that they became award covered. However, it was not expressly stated as part of the variation of the State award, nor when the Award was made, that PAD personnel would not receive the Authority Allowance. The necessary exclusion of PAD personnel from clause 4 of Part B Schedule 1 Division B Section II of the Award was not inserted. 6. The CFA contends that it was and at all materials has remained the intention of the parties to the Award that PAD employees would not be paid the Authority Allowance as a consequence of becoming award covered. This is evidenced by the matters set out in paragraphs 2 and 4 above, and by the fact that shortly after the PAD classifications went into the Award the CFA wrote to the UFU (on 3 June 1992) concerning its proposal to consider travel payments and Authority Allowance as part of enterprise bargaining (see letter attached as Annexure D). This proposal was not dissented from by the UFU nor did the UFU then, or at any time prior to 12 July 1995, suggest that the Authority allowance was payable to PAD personnel. 7. The variation now sought would therefore reflect the original intentions of the parties to the Award. 8. Further, the variation sought would constitute the variation which should properly have been made to the State Award and the proper content of the Award, in accordance with first award principles under State and National Wage Case Principles. 9. It is necessary for the variation to be made with retrospective operation (from 25 November 1993, the date of commencement of the award) in order to correct an anomaly in the Award which confers a benefit on employees not intended by the parties to the Award. 10. Such other grounds as may be advanced at the hearing of this matter. In the meantime the application to this Court had been made on 14 August 1995 and the CFA on 3 October 1995 filed contentions of fact and law to the effect that the Award should be interpreted as if Clause 4 contained an express exception of PAD classifications from entitlement to the Authority allowance. It is accepted on both sides that the Court has a discretion to refrain from imposing a penalty for a proven breach of an Award (See, for example, Bell v Gillen Motors Pty Ltd (1989) 27 IR 324 where Wilcox J observed at 334): In the ordinary case of breach of an award it will be appropriate to impose a penalty. But this is not an ordinary case. The evidence shows that, in taking the course which he did, Mr Barry acted upon the advice of an industrial officer of the Motor Traders' Association, the relevant employer organisation. In the view I have expressed, that advice was erroneous. But there is no reason to doubt that it was given, received and acted upon in good faith and in the belief that it represented the intent of the award. Having regard to the novelty of the provision and the submission which had been put in the Termination, Change and Redundancy case on behalf of the employers, it is not difficult to understand how the Association came to give its erroneous advice. It was reasonable, under the circumstances, for Mr Barry to rely upon that advice. There is no suggestion either of a lack of care of any representative of the company upon this occasion or of any previous breach of an award by the company. Notwithstanding that a breach or non-observance of an award is established, the court has a discretion as to the imposition of a penalty. In the present case the appropriate course is to make a declaration as to the fact of non-observance of the award, but to refrain from imposing any monetary penalty. I propose to take that course. Mr Staindl of Counsel for the UFU, as I understood him, did not press for the imposition of a penalty but did urge that an order should be made here and now for payment of the Authority allowance which none of the three PAD employees has received. He referred to Bowling v General Motors Holdens Ltd (1980) 33 ALR 297 where a Full Court of the Federal Court said at 304: We are of the opinion that the sub-section confers a power in the nature of a discretion upon the court which has convicted the employer of an offence against s. 5 of the Conciliation and Arbitration Act but, as we said earlier, it is a power with peculiar attributes. As in all cases, the discretion must be exercised bona fide having regard to the policy and purpose of the Act conferring the power, in this case s 5 of the Conciliation and Arbitration Act. That policy and purpose is clear..." Their Honours then give references to a number of authorities concluding with General-Motors Holden's Pty Ltd v Bowling in the High Court (51 ALJR 235) and they quote from the judgment of Mason J in that case to this effect: The two sub-sections [s 5(1) and (4)] are, broadly speaking, designed to protect an officer, delegate or member of an organization against discrimination by his employer. Then their Honours continued: The policy and purpose of sub-sections (1) and (4) of s 5 is to protect organizations of employees and their representatives from discrimination and victimization by employers. Sub-section (5) gives effect to an essential feature of that policy and purpose of s 5. It is essential that an employer convicted of an offence against the section should not benefit from that offence by ridding itself of an employee by reason of any one or more of the circumstances specified. Accordingly, once the condition precedent has occurred, the court should give a direction to reinstate the employee unless there are good reasons why the employee should not be reinstated, for example if the employee does not desire to be reinstated. In most cases reasons which were relied upon to justify the dismissal of the employee are not really relevant to the exercise of the discretion conferred by s 5(5), since the conviction of the employer overrides those reasons. What are good reasons will vary from case to case. We have already indicated some, but it is impossible to give any exhaustive list. That authority has recently been applied by Marshall J in this Court in Jamie Klingenberg and The Transport Workers' Union of Australia v I.R. Cootes Pty Ltd (unreported 24 August 1995) where his Honour also referred to a judgment of Northrop J in Johns v Gunns Ltd (1995) 60 IR 258 and concluded: ... that the opening words of section 170EE(3) confer a discretion upon the Court and it is open to the Court to refuse to make any order for remuneration lost. It is clear, however, from the emphasised passage in the last paragraph of the above extract from Johns that "remuneration lost" should ordinarily flow from an order for re-instatement. In the present case, I am persuaded that there are special circumstances which operate to make it inappropriate here and now to make an order for payment of the amount of the Authority allowance claimed to have been unpaid. Those special circumstances primarily revolve around the pending application to the Industrial Relations Commission, which I am told has been accorded a preliminary hearing by Commissioner Nolan but which was adjourned by the Commissioner on his being apprised that the present proceedings were pending in this Court. The Commission's discretion to vary the Award in the manner sought by the CFA appears to be unfettered otherwise than by ordinary industrial principles. Section 113(1) of the Industrial Relations Act simply provides: The Commission may set aside an award or any of the terms of an award. I have also been referred by Counsel to s. 146 of the same Act which provides: (1) An award shall be expressed to come into force on a specified day. (2) Unless the Commission is satisfied that there are exceptional circumstances, the day specified in an award for the purposes of subsection (1) shall not be earlier than the date of the award. By the continued operation of the definition of "award" in s. 4(1) and s. 143(1) of the Act an order varying an award is an award for the purposes of s. 146. In my view, it would unacceptably fetter the Commission's discretion, if not take it away all together, if I were to make an order enforceable as an order of this Court for payment of the amount of the Authority allowance from 23 November 1993, when the Award came into operation. In all of the circumstances, I consider that the appropriate course is to adjourn the present application until after the hearing and determination of the application for variation of the Award, so that Commissioner Nolan, or any other member of the Commission, may approach the matter without any restrictions or inhibitions as a result of some pronouncement of this Court. I am particularly influenced to take that course by the reflection that one of the matters which will have to be taken into account on the application for variation is the application of what have been described as first award principles. In my view, the Commission is in a much better position to understand and apply that concept than is this Court. Accordingly, although my tentative view is that any penalty which I might be minded to impose would be no more than a nominal one in all of the circumstances, I simply adjourn this application to a date to be fixed. I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment of his Honour Justice Ryan. Associate: Date: Counsel for Applicant : Mr D.J. Staindl Solicitors for Applicant : Maurice Blackburn & Co Counsel for Respondent : Mr M. McDonald Solicitors for Respondent : Freehill Hollingdale & Page Date of Hearing : 29 April 1996 Date of Judgment : 29 April 1996