Australian Liquor Hospitality and Miscellaneous Workers Union v Groote Eylandt Mining Company [1996] IRCA 230

DECISION NO: 230/96 C A T C H W O R D S INDUSTRIAL LAW - BREACH OF AWARD - "Stand down clause" - Whether the clause imposes an obligation capable of being breached - Whether employer acted under the stand down clause - Whether employee refused to do work in pursuance of a resolution of the union Industrial Relations Act 1988 s.178 Groote Eylandt Mining Company Award 1986 Townsend & Anor v General Motors-Holden's Ltd (1933) 4 IR 358 AUSTRALIAN LIQUOR HOSPITALITY AND MISCELLANEOUS WORKERS UNION -v- GROOTE EYLANDT MINING COMPANY No DI 95/1116 Before: North J Place: Melbourne (heard in Darwin) Date: 31 May 1996 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NORTHERN TERRITORY REGISTRY No DI 95/1116 B E T W E E N : THE AUSTRALIAN LIQUOR HOSPITALITY AND MISCELLANEOUS WORKERS UNION Applicant AND GROOTE EYLANDT MINING COMPANY PTY LTD Respondent JUDGE: North J PLACE: Melbourne (heard in Darwin) DATE: 31 May 1996 REASONS FOR JUDGMENT The applicant, the Australian Liquor Hospitality and Miscellaneous Workers Union, is an organisation of employees registered under the Industrial Relations Act 1988 ("the Act"). It is party to the Groote Eylandt Mining Company Award 1986 ("the award"). The respondent, Groote Eylandt Mining Company Pty Ltd, operates a manganese mine on Groote Eylandt in the Gulf of Carpentaria, and is also a party to the award. Kerry O'Shannessy is a production operator employed by the respondent under the award. The applicant seeks the imposition of a penalty under s.178 of the Act on the respondent for breach of clause 31(e) of the award. Clause 31(e) of the award is in the following terms: "(e) Subject to the conditions set out in this subclause the employer may deduct payment for any day or portion thereof during which the employee is stood down by the employer as the result of refusal of duty, malingering, neglect of duty, or misconduct on the part of the employee. The conditions referred to in this subclause are: (i) No employee shall be stood down before an adequate investigation of the circumstances of the alleged offence has been made, or before the employee has had an opportunity to state the employee's case and to adduce witnesses to the facts. (ii) The only officers authorised to suspend or stand down shall be the manager of the Groote Eylandt Mining Co. Pty Limited or the manager's designated nominees. Where nominees are designated - the Unions, respondents to this Award, shall be notified of their names and their company titles. The number of such designated officers shall not exceed two. (iii) Where a Foreman reasonably is of the opinion that the continued presence of an employee would be likely to: (1) constitute a hazard either to the employee or to other employees or to any equipment; or (2) interfere with the normal and orderly functioning of the employer's operations; or (3) be prejudicial to discipline; the Foreman may stand down such employee for a period not exceeding the balance of the shift. (iv) An employee shall be entitled to appeal to the manager of the Groote Eylandt Mining Co. Pty Limited on the island against any decision of a Foreman or a nominated officer but the original decision shall take effect pending the determination of the appeal. (v) Standing down is not permitted where the employee refuses to do work in pursuance of a resolution of the employee's fellow employees or union. (vi) A standing down shall not break the continuity of service of an employee or have any effect upon the employee's annual leave entitlements. (vii) An employee who is informed that the employee is to be stood down shall have the right to require the employer to dismiss the employee immediately instead of being stood down. (viii) The maximum period of stand down shall be one week. In this context a week means a maximum period of five consecutive normal working days, calculated from the end of the day on which the stand down occurs; provided that if less than five hours of work have been completed on the day of stand down, that day shall count as one of the five consecutive normal working days. (ix) An employee can only be stood down by verbal and subsequent written notice to the employee individually. The employee cannot be stood down by a general notice standing down a group of employees. (x) A union party to this Award may refer to the Board of Reference any dispute concerning the standing down of an employee who is a member of or who is eligible for membership of the union." The particulars of the breach set out in the application are: ".... the respondent purported to stand down Kerry O'Shannessy, a member of the LHMU on February 24th, 1995, and, as a consequence, failed to pay to Kerry O'Shannessy a member of the LHMU, wages for the period of the stand down contrary to the provisions of clause 31 of the award." The circumstances giving rise to the alleged breach of award commenced in late October 1994 when the respondent started negotiations with the applicant and three other unions with members working for the respondent on Groote Eylandt. The negotiations concerned a new enterprise agreement to replace the existing certified agreement which was due to expire on 1 February 1995. Between late October 1994 and February 1995, the applicant and the other unions on site gave various notices under s.170PD of the Act initiating bargaining periods, and under s.170PH of their intention to take industrial action. At various times throughout the period, there were negotiations between the respondent and the unions and, on occasions, members of some or all of the unions went on strike in support of their claims. Some proceedings were conducted in the Australian Industrial Relations Commission over the dispute. On 16 February 1995, the applicant and the three other unions on site held a stop work meeting attended by their members. The meeting resolved: "This meeting condems [sic] Gemco's negotiating team for continuing with its delaying actions. This meeting demands Gemco to negotiate in a meaningful way and in good faith. This meeting instructs the combined Union Officials and Delegates, to continue negotiations with Gemco. This combined meeting resolves to return to work, awaiting a further report back from the Officals [sic]. This combined meeting resolves that industrial action will take place in the event that a fair agreement cannot be negotiated." On 20 February 1995, the applicant wrote to the respondent as follows: "In accordance with Section 170PH of the Australian Industrial Relations Act, the LHMU advises GEMCO that it will initiate industrial action more than 72 hours following the receipt of this letter. The action taken by members of the LHMU will include the following: 1. Ban of the operation of the shiploader head and the stacker. 2. Ban of all overtime and callouts which do not affect the continuity and supply of power. 3. Ban of the operations of service trucks. This action will commence at 0001 hours on Friday 24th February 1995. If you require further information in respect to this matter, please don't hesitate to contact Doug Heath on 815611." On the following day, the respondent advised the unions that Peter Priestley, the acting Maintenance and Services Manager, and Doug Turnbull, the Production Superintendent, had been designated as nominees for the purposes of clause 31(e)(ii) of the award. In anticipation of the commencement of the industrial action notified on 20 February 1995, the Manager of Operations, William August Scheel, gave instructions to senior employees of the respondent on 23 February 1995 as to the process to be followed if employees refused to perform work on the following day. In accordance with this process, Mick Regan, the Shift Supervisor, asked Kerry O'Shannessy, at about 6.40 am on 24 February 1995, whether he would operate the ship loader head. He replied, in substance, that he would not do so because there was a union resolution banning work on the ship loader as a result of the failure to conclude an enterprise agreement. Mick Regan then said to Kerry O'Shannessy that he was stood aside with pay "pending an investigation by Doug Turnbull". Kerry O'Shannessy was then referred to Peter Priestley and Doug Turnbull, who went through a question and answer procedure to verify the refusal of duty and the reason for it. They followed a printed form which set out the questions to be asked and provided for a "yes" or "no" answer to be circled, and further provided a blank space for elaboration of any answer. It is significant that the series of questions were listed under a heading "Investigation Details". At the end of the interview, Kerry O'Shannessy was told that he was stood down and given a letter in the following terms: "Effective at 6.45 AM on 24 February 1995 you are stood down for refusal of duty. During the term of the stand down you will not be paid and certain benefits will be unavailable. The period of stand down may be ended by any of the following actions: 1. your union submits in writing that it's member are [sic] able and willing to carry out their duty under the terms and conditions of the GEMCO Award and Certified Agreement and Contract of Employment 2. you submit in writing that you are able and willing to carry out your duty 3. your union is notified by the Company that all stand downs have been rescinded and work may resume, or 4. a lockout is put in place by the Company which shall be deemed to override any stand downs. The action that you and your union have chosen to take is very serious and will have a negative impact on GEMCO and it's employees. The impact in the short term will be lost profits, lost wages and reduced customer confidence. The action you are taking now may also have the longer term effect of reducing GEMCO's share of the manganese market. Reduced market share will result in additional lost profits for GEMCO but at the same time is likely to result in lost jobs. Please consider the ramifications of your action and be sure the benefits you may achieve will outweigh the cost. GEMCO remains committed to developing a new Certified Agreement which allows all parties to benefit and will stand the test of time." Kerry O'Shannessy replied that the company could not do this. At about 11 am on 24 February 1995, the respondent received a letter from the applicant in which the applicant asserted that the respondent's actions had been in breach of clause 31(e) of the award and asked the respondent to advise the applicant of its position regarding the interpretation favoured by the applicant. The respondent replied by facsimile to the Branch Secretary as follows: "I refer to your letter of 24 February 1995. (Copy attached) The situation you raise is not governed by sub-clause 31 (e) of the Award. No action has been taken by GEMCO under that sub-clause. Each employee involved has been advised that the current situation will end at any time they are willing to carry out their duties. Rather, the situation is governed by sub-clause 31 (b) of the Award. That is, employees who do not perform their work disentitle themselves to pay. Employees who fail to perform work will not be paid during the period of that non-performance. We will attempt to make this position clear to employees if the refusals continue." Apparently, in an effort to clarify the position, the respondent produced a different form of letter, the relevant opening paragraphs of which are as follows: "Dear ­­_____________ Effective at ______ AM / PM on ______ February 1995 you are off pay as a result of your refusal of duty. This action is taken pursuant to Clause 31 (b) of the Groote Eylandt Mining Company Award. You will be eligible to receive pay when you satisfy the Company that you are ready willing and able to perform all duties as directed. Your entitlement to resume pay is subject to any lockout which the Company may initiate." It is not very clear from the evidence whether the respondent gave Kerry O'Shannessy a letter in the amended form. I am, however, able to determine the application without making a finding on this issue. The respondent relied on the following arguments to contend that it was not liable to a penalty under s.178 of the Act: 1. There was no breach of clause 31(e) because that clause does not impose any obligation on the employer which is capable of being breached. 2. The respondent did not stand down Kerry O'Shannessy under clause 31(e), but had merely refused to pay him while he refused to perform the work reasonably required of him. This course was justified by clause 31(b)(i) and (ii). 3. If the respondent acted under clause 31(e), the standing down was not prohibited by clause 31(e)(v) because Kerry O'Shannessy did not refuse to do work "in pursuance" of a resolution of his fellow employees or union. I will deal with each argument in turn. 1. Does clause 31(e) impose any obligation on the respondent which is capable of being breached? The respondent argued that clause 31(e) was directed to allowing the employer to deduct payment for the time during which an employee is stood down. The clause operates as an exception to the obligation to pay wages contained in clause 6 of the award. If the conditions which bring the exception into operation are not satisfied and the employer does withhold wages from an employee in respect of a period of stand down, the employer will have breached the obligation to pay wages. But, the respondent contended, the employer would not have breached clause 31(e). The issue is of importance in this case because the applicant has asserted the claim to a penalty on the basis of a breach of clause 31(e) alone. The Court invited the applicant, on several occasions, to apply for an amendment to its application by adding a breach of clause 6 as an alternative basis. The respondent indicated that it would not oppose an amendment to add a breach of clause 6. The applicant did not take up the invitation. The respondent relied on Townsend & Anor v General Motors-Holden's Ltd (1983) 4 IR 358 to support its contention that clause 31(e) did not contain an obligation to pay wages. In that case, the applicant applied for the imposition of a penalty on the respondent for breach of the obligation to pay wages under clause 8(a)(i) of the General Motors-Holden's Ltd (Part 1) General Award 1978 ("the GMH award"), which fixed the weekly rate of pay. The respondent had not paid employees for certain days in reliance on clause 6(g)(i) of the GMH award, which provided: "(g) Standing down of employee. Notwithstanding anything elsewhere contained in this clause - (i) The Company shall have the right to deduct payment for any day an employee cannot be usefully employed because of a strike or through a breakdown in machinery or a stoppage of work by any cause for which the Company cannot reasonably be held responsible." First, Morling J rejected an argument put by the respondent that there was no obligation to pay wages imposed by the award at all and, consequently, the only liability to pay wages was at common law. As part of its argument, the respondent submitted that, if there was any breach of award at all, it was a breach of clause 6(g)(i). As to this proposition, his Honour said, at 364: ".... it seems inappropriate to construe cl. 6(g)(i) so as to render an employer who does not observe its terms liable to a penalty under s. 119(1) of the Act. Clause 6(g)(i) gives GMH the right to make a deduction from an employee's wages in certain specified circumstances. If those circumstances do not exist, then GMH does not have the right to make the deduction. But the non-existence of the right is hardly the basis for the imposition of a penalty. The basis for the imposition of a penalty is a failure to pay wages, i.e., a failure to comply with the obligations found in cl. 8(a)(i)." Having found that the award imposed an obligation to pay wages in clause 8(a)(i), his Honour had to consider which party carried the onus of proof of the matters arising under clause 6(g)(i). He considered the relationship between clause 6(g)(i) and 8(a)(i) of the GMH award, and referred to the judgment of Dixon J in Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen (1945) 70 CLR 635 as stating the appropriate test to determine the relationship between the two clauses. He continued, at 366: "Applying the test adopted by Dixon J in Jacobsen's Case I do not think it can be said that GMH's right under cl. 6(g)(i) to deduct payment in the circumstances therein referred to is in any sense part of the condition upon which an employee's right to payment of wages depends. The true nature of cl. 6(g)(i) is (as Dixon J said of the words with which he was concerned) 'to introduce new matter, not as part of the primary grounds of liability, but as a special exception or condition defeating or answering liability otherwise existing ....'. This being so, the onus lies on GMH to establish facts giving it the right to make deductions from its employee's wages." The characterisation of clause 6(g)(i) as a "special exception or condition defeating or answering liability otherwise existing" provided a basis for the conclusion that clause 6(g)(i) did not itself give rise to an obligation which could be the subject of proceedings for a breach under the predecessor of s.178. The sole express concern of clause 6(g)(i) was with a power to withhold payment of wages. Morling J found that the obligation to pay wages was provided for separately in the award by an express positive obligation on the employer to pay wages. Hence, there was an obligation to pay established by clause 8(a)(i) and a failure to pay could not constitute a breach of clause 6(g)(i). This conclusion depended on the view that the subject matter of the clause was dealt with by way of a positive obligation established elsewhere in the award. Clause 31(e) of the award has a superficial similarity to clause 6(g)(i) of the GMH award in that it refers to the power of the employer to withhold payment of wages. But the differences are greater than the similarities. The opening words of clause 31(e) refer to certain conditions which are later set out in the clause. The conditions provide a detailed code governing the standing down of employees. Not only is this clear from the content of the conditions, but the focus of the clause on the power of the employer to stand down is emphasised by the reference in the opening sentence of the clause to the employee being "stood down" by the employer. There was no reference in the text of clause 6(g)(i) of the GMH award to a power to stand down. Its only concern was with the power to withhold wages. By contrast, clause 31(e)(i) requires the employer to conduct an adequate investigation of the circumstances of the alleged offence giving rise to the stand down, and to give the employee an opportunity to defend against the allegations before the employee is stood down. Subclause (ii) prohibits the employer from standing down employees except through the agency of designated officers, and obliges the employer to notify the union respondents to the award of the names of the designated officers. It also prohibits the employer from nominating more than two designated officers. Subclause (iii) imposes an obligation on the foreman to form a particular opinion about specified matters before standing down an employee for a period not exceeding the balance of his shift. Subclause (iv) obliges the employer to accord an employee a right of appeal to the manager against a decision of the designated officer or the foreman. Subclause (v) prohibits the employer from standing down an employee where the employee's refusal to work is pursuant to a resolution of fellow employees or the union. Subclause (vi) preserves the employee's continuity of service and annual leave entitlements. Subclause (vii) obliges the employer to dismiss the employee rather than stand down the employee if the employee requires the employer to do so. Subclause (viii) prohibits the employer from standing down an employee for more than a week. Subclause (ix) obliges the employer to effect a stand down on an individual basis both verbally and in writing. Each of the subclauses referred to in the previous paragraph establishes an obligation or expresses a prohibition in relation to the standing down of an employee. The subject matter of each obligation or prohibition is not dealt with elsewhere in the award. Thus, the obligations and prohibitions are not ancillary to obligations otherwise provided for, or qualifications or exceptions to obligations elsewhere specified. The obligations or prohibitions are independently established by clause 31(e) and, bearing that character, are capable of independent enforcement. It cannot have been intended, for instance, that the only recourse against a failure of the employer to accord the employee the right to an appeal as required by subclause (iv) would be an application for a penalty for a breach of the obligation to pay wages for the period of the stand down. The same can be said about a failure to give a right to be dismissed under subclause (vii), or a failure to limit the stand down to one week as is required by subclause (viii). If the only penalty for such breaches was for the breach of the obligation to pay wages, the employer would be able to buy its way out of the obligations, for instance, to give the employee the option of dismissal under subclause (vii). The obligations and prohibitions in clause 31(e) were intended to be observed and, as such, require compliance mechanisms directed to the very obligation they establish or the very prohibition they stipulate. Once it is determined that the subclauses do create obligations or prohibitions, there is no scope for an argument that s.178 is not available in respect of a breach or non-observance of those parts of the award. As well as establishing obligations and prohibitions in respect of a stand down of an employee, clause 31(e) also gives a power to the employer to withhold payment for any day or portion of a day during which an employee is stood down. This part of clause 31(e) is indistinguishable in principle from clause 6(g)(i) of the GMH award. I agree with Morling J that, in a clause such as clause 6(g)(i) of the GMH award, the withholding of wages without the power to withhold wages breaches the obligation to pay wages. There is no breach of the clause which permits withholding of wages because that clause does not contain an obligation to pay wages or a sanction for failure to pay wages. Consequently, clause 31(e) contains some provisions which create obligations or prohibitions capable of breach. It also provides for a power to withhold payment for the period of a stand down, but the withholding of payment without justification amounts to a breach of the obligation to pay wages contained in clause 6, not a breach of clause 31(e). When carefully examined, the particulars of breach in this application allege a general breach of clause 31(e) by virtue of a wrongful stand down, and a consequent breach constituted by a failure to pay wages for the period of the stand down. As I have said, the alleged consequent breach cannot constitute a breach of clause 31(e). The general breach alleged was further defined by the applicant in its amended contentions of fact and law by the allegation that the stand down was in breach of the prohibition contained in clause 31(e)(v). I have already held that clause 31(e)(v) is an independent provision and is not ancillary to the obligation to pay wages. In order to found a successful application for penalty under s.178 there must be a "breach" of the provision. Clause 31(e)(v) prohibits the standing down of employees in specified circumstances. Acting contrary to the prohibition is acting in breach of a negative obligation and is no less a breach of the provision than failing to act in accordance with a positive obligation imposed by an award. Breach is defined in s.4 of the Act to include "non observance". At the least, an action taken contrary to a prohibition in the award amounts to a non-observance of the award. Having held that clause 31(e)(v) is capable of being breached, the question now arises whether the respondent did act in breach of it. 2. Did the respondent act under clause 31(e)? The respondent argued that it withheld payment of wages for 24, 25, 26 and 27 February 1995 from Kerry O'Shannessy under clause 31(b)(i), which provides: "Employees shall perform such work as the employer shall from time to time reasonably required [sic] and an employee not attending for or not performing the employee's duty shall, except as provided by clause 24 of this Award, lose pay for the actual time of such non-attendance or non-performance." Clause 31(b)(i) and (e) address different circumstances. Clause 31(b)(i) applies when an employee does not attend or perform the employee's duty. The ability to resume duty remains with the employee. Clause 31(e) applies when the employer determines not to allow an employee to perform work. The right of the employee to resume work and the time of resumption is left for the determination of the employer. The action of the employer under clause 31(e) is described in the clause as a stand down. The nature of the respondent's action on 24 February 1995 was conveyed to Kerry O'Shannessy in the letter handed to him after the interview and which is reproduced earlier in these reasons. The letter advised that Kerry O'Shannessy was "stood down". This reference can only have been a reference to action under clause 31(e). The ground for the stand down is stated as "refusal of duty", which are the very words used in clause 31(e), and which are not used in clause 31(b)(i). Further, in my view, the terms of the letter mean that Kerry O'Shannessy could not return to work without the consent of the respondent. This reading of the letter takes the first three numbered paragraphs of the letter as a series of cumulative conditions, so that the stand down could not be ended unless, inter alia, "your union is notified by the Company that all stand downs have been rescinded and work may resume". Mr Mueller, who appeared on behalf of the respondent, contended that each of the four numbered paragraphs referred to separate events, and the happening of one of them would end the stand down. He argued that paragraph numbered 2 allowed Kerry O'Shannessy to end the period of stand down without the consent of the respondent. In support of this construction he said that the use of the word "any" in the third sentence meant that each numbered paragraph was to be read as referring to a separate circumstance which would bring the stand down to an end. While there is some force in this argument, the better view is that the first three numbered paragraphs describe a cumulative set of conditions which need to be satisfied to end the stand down, and the fourth paragraph describes a further situation which would end the stand down. The four numbered paragraphs therefore refer to two circumstances which would end the stand down. The first three numbered paragraphs form a naturally related set of requirements. Read together they commit all those concerned with the industrial action to a cessation and return to work. Further, it is very unlikely that the paragraph numbered 3 was meant to be read alone. Having just issued a notice of stand down, there would have been no purpose in the respondent saying to Kerry O'Shannessy that the stand down may be rescinded by the respondent without his agreement to return to work. It is unlikely that the respondent would have intended to lift the stand down without Kerry O'Shannessy's agreement to return to work, and it is even less likely that it would have said as much in the very letter effecting the stand down. The meaning of the four paragraphs is determined by the sense of the contents rather than the perhaps somewhat inaccurate use of the word "any". This cumulative reading of paragraphs numbered 1-3 is consistent with the use of the word "or" at the end of paragraph numbered 3. It demonstrates that paragraphs numbered 1-3 are alternatives to paragraph numbered 4. However, the foregoing attention to the detail of the letter should not obscure the importance of the description of the action by the respondent in the letter as a stand down. That description given by the author of the letter justifies an interpretation of the letter as reserving to the respondent the final right to end the stand down. The circumstances surrounding the issuing of the letter confirm the view that the respondent was acting under clause 31(e) when it gave the letter to Kerry O'Shannessy. First, on 21 February 1995, the respondent advised the applicant that Peter Priestley and Doug Turnbull had been designated as nominees for the purpose of clause 31(e)(ii). This designation was in response to the notice of intention to take industrial action given by the applicant, and the two designated nominees did in fact stand down Kerry O'Shannessy on 24 February 1995 for taking the action that had been notified. Second, the checklist used by Peter Priestley and Doug Turnbull to put questions to Kerry O'Shannessy concerning the details of his refusal of duty provided a note and heading as follows: "NOTE: employee may be temporarily stood aside (with pay) at this point pending investigation Investigation Details" The process provided for by the checklist was a clear attempt to ensure that clause 31(e)(i) was observed. Third, after going through the checklist on the morning of 24 February 1995, Doug Turnbull told Kerry O'Shannessy that he was stood down for not utilising the skills he had available, and Doug Turnbull then handed Kerry O'Shannessy the letter giving notice of the stand down. This process conforms with the process set out in clause 31(e)(ix) which requires the employer, in standing down an employee, to give verbal and written notice to an employee individually. It is likely that the respondent followed the process by way of observance of clause 31(e)(ix). The respondent, thus, acted under clause 31(e) in standing down Kerry O'Shannessy on 24 February 1995. The evidence, however, does not permit me to find that, on the balance of probabilities, the respondent continued to act under clause 31(e) on 25, 26 or 27 February 1995 - the other dates on which Kerry O'Shannessy did not perform his duty. By late afternoon on 24 February 1995, the respondent had advised Mr Brodie, the Branch Secretary of the applicant, by facsimile, that it relied on clause 31(b) to withhold wages for the refusal of duty. Kerry O'Shannessy was the senior delegate of the applicant and was in touch with officials of the applicant throughout the dispute. He gave evidence that he became aware of the response of the applicant contained in the facsimile not long after it was sent. I am satisfied on the evidence that by the end of 24 February 1995 the respondent had made it clear that its employees, including Kerry O'Shannessy, could return to work if they decided to perform their duties. The next question, therefore, is whether Kerry O'Shannessy refused to do work on 24 February 1995 in pursuance of a resolution of his fellow employees or union, so that the stand down was prohibited under clause 31(e)(v). 3. Did Kerry O'Shannessy refuse work in pursuance of a resolution of his fellow employees or union? On 16 February 1995 the combined union meeting resolved, inter alia, that: "Industrial action will take place in the event that a fair agreement cannot be negotiated." There was no argument that this resolution was not a resolution of fellow employees of Kerry O'Shannessy for the purposes of clause 31(e)(v). Mr Mueller argued that, on the facts, Kerry O'Shannessy did not refuse duty in pursuance of the resolution. He contended that the resolution required further negotiations with the applicant and the formation of an opinion that a fair agreement could not be negotiated, before industrial action would be taken. It was contended that because the resolution required certain prerequisites to be satisfied before industrial action would be taken, the industrial action could not be said to be taken pursuant to the resolution. After the resolution was passed, the negotiating team, which comprised delegates from each of the unions on site, met and determined the appropriate industrial action to be taken if necessary. Their decision resulted in the applicant notifying the respondent, on 20 February 1995, of four intended forms of industrial action. On 23 February 1995, the negotiating team called another combined meeting of members at the local oval. At this meeting, the negotiating team reported that no fair agreement could be negotiated with the respondent, and the negotiating team advised members of the form and timing of the industrial action which had become necessary. When asked in cross-examination whether he recalled a vote being taken on 23 February 1995 to put bans in place, Kerry O'Shannessy, who was a member of the negotiating team, said: "The actual - the vote to take industrial action was taken on the 16th and we were just informing them that between the 16th and the 23rd we'd be negotiating with the company and we were still no further advanced so industrial action would go ahead." As a practical matter, the resolution of the combined union meeting was the reason that Kerry O'Shannessy refused work on 24 February 1995. It was also the reason given by Kerry O'Shannessy and accepted without argument by Doug Turnbull when going through the checklist, and which appears on the answers to the checklist. Further, the letter of stand down given to Kerry O'Shannessy on the morning of 24 February referred to "the action that you and your union have chosen to take". Thus, the fulfilment of the conditions precedent to the taking of action did not render the action any the less linked to the resolution. The condition simply gave the parties a further opportunity to avoid the action agreed by the meeting. CLAIM FOR UNDERPAYMENT AND CONCLUSION I am thus satisfied that, on the balance of probabilities, the respondent acted in breach of clause 31(e)(v) on 24 February 1995 by standing down Kerry O'Shannessy. In my view, however, the breach did not continue on 25, 26 or 27 February 1995. The applicant also sought orders under s.178(6) for the payment of wages to Kerry O'Shannessy for 24-27 February 1995 inclusive. Section 178(6) provides: "Where, in a proceeding against an employer under this section, it appears to the court concerned that an employee of the employer has not been paid an amount that the employer was required to pay under an award or order, the court may order the employer to pay to the employee the amount of the underpayment." Section 178(6) allows the Court to make orders for payment where the breach found involves a failure to make a payment. There is no basis for the claim for wages for 25-27 February 1995 inclusive because no breach of award has been proved for those days and, in respect of 24 February 1995, I have found that the breach committed was a breach of clause 31(e)(v). This subclause does not create an obligation to pay wages. Hence, the Court cannot order payment of wages for 24 February 1995 in the present proceedings. Had the application included a claim in respect of a breach of the obligation to pay wages contained in clause 6, there would not appear to be any reason against making such an order. In the result, I will adjourn the proceedings to a date to be fixed in order to hear the parties on the question of the appropriate penalty to be imposed on the respondent, and whether any penalty should be paid to the applicant. I certify that this and the preceding twenty (20) pages are a true copy of the reasons for judgment of his Honour Justice North. Associate: Dated: 31 May 1996 Solicitor for the applicant: P. Tullgren, Australian Liquor Hospitality and Miscellaneous Workers Union Solicitor for the respondent: B. Mueller, Blake Dawson Waldron Date of hearing: 29 April - 1 May 1996 Date of judgment: 31 May 1996