H.C. or A. Industrial Arbitration (Cth.}—State tramway employees—Award—Variation—Pre 1935. Ww Sypney, Mar. 19, 20; April 8. Rich, Dixon 'Evatt and McTiernan JJ. THE AUSTRALIAN TRAMWAY EMPLOYEES THE COMMISSIONER FOR ROAD TRANSPORT } HIGH COURT (193i [HIGH COURT OF AUSTRALIA.] 'ASSOCIATIONS Se en '} ABPLICAN AND AND TRAMWAYS (NEW SOUTH WALES) { P*S?NP> scribed rates of wage—Employer authorized to deduct reductions imposed State statute—Discrimination between married and unmarried emplo Validity—Industrial dispute—Ambit—Matters not in dispute—Method of 13 of 1904—No. 43 of 1930), secs. 2144, 28 (2), (3), 38 (0), (oa), 388, 380 (1 (c), 39. By an order made in September 1932 by the Commonwealth Cou Conciliation and Arbitration the wage rates prescribed by an award of adjustment of wage rates should be made according to the purch power of money index numbers contained in the "all houses " tables of thi Commonwealth Statistician. In 1933 the Court ordered that a new metho of wage adjustment be adopted. The award and orders were successi expressed to continue in force until otherwise ordered by the Court. Meanwhil in 1931, the Legislature of New South Wales enacted that, subject to # Commonwealth Constitution, the wages of all employees of that State, included members of the association, should be reduced by specified centages. Concessions made in favour of married men and widowers dependent children were not extended to unmarried men. Upon an cation made in 1934 by the association for the rescission of the order m in September 1932, the Court ordered that the award be further variet so far as it affected New South Wales members of the association, (a) the termination of the operation of the ten per cent reduction of } C.L.R.] OF AUSTRALIA. generally ; (b) the setting aside of the method of wage adjustment adopted in 1933, and the substitution therefor of a new method of wage adjustment by means of the "all items" retail price index number of the Commonwealth Statistician and a new base rate of wage calculated according to a prescribed formula ; and (c) inserting in the award a new clause, numbered 35, which provided that the respondent " may in or from the rates of pay prescribed herein . . . tobe paid to employees of the " respondent " make reductions or deductions not greater than a statute of the State now or at any time requires to be made generally in or from substantially similar rates of pay of employees of the State or of State instrumentalities." Under this order the wages which would have been payable had the award remained untouched were reduced ; in a few instances the wages were reduced to an amount slightly less than the lowest amount conceded in the employers' log of demands. Held :— . (1) That clause 35 was outside the ambit of the original industrial dispute, and was therefore invalid. (2) That the provision relating to clause 35 was severable from the other terms of the order of variation. (3) That for the purpose of determining the dispute the Commonwealth Court of Conciliation and Arbitration had power to introduce a method of adjusting the basic wage which differed from the rival methods of the parties. Summons under sec. 214a of the Commonwealth Conciliation and Arbitration Act. Tn a summons taken out by the Australian Tramway Employees Association under sec. 2144 of the Commonwealth Conciliation and Arbitration Act 1904-1930, and directed to the Commissioner for Road Transport and Tramways (N.S.W.), the questions for decision were (a) whether clause 4 of an order made by the Full Court of the Commonwealth Court of Conciliation and Arbitration on 17th April 1934, purporting to vary an award (1), by which both the yplicant and the respondent were bound, made on 14th September 1927, was validly made ; (b) whether the Full Court of the Common- Ith Court of Conciliation and Arbitration had jurisdiction to : that clause ; and (c) whether the clause was within the area _ or scope of the industrial disputes determined by the award. — On 24th January 1934 a summons was issued on behalf of the applicant association in which it sought an order from the Common- Ith Court of Conciliation and Arbitration, rescinding certain orders previously made by that Court whereby the wage rates (1) (1927) 25 C.A.R. 597. H. C. or A. 1935. Ww AUSTRALIAN TRAMWAY EMPLOYEES AssocraTIox ve Commis- SIONER FOR Roap 'TRANSPORT AND 'Tramways (NS.W.). H.C. or A. 1935. es AUSTRALIAN: TRAMWAY Empioyers ASSOCIATION v. Comas- SIONER FOR Roap TRANSPORT AND TRAMWAYS (N.S.W.). HIGH COURT (1935, prescribed by the award were reduced by ten per cent. The Court, : on 17th April 1934, ordered and prescribed, by clause 1 of its order, that, except in certain cases not material to this report, the _ ten per cent reduction should no longer operate ; by clause 2, that an order made by the Court on 5th May 1933 as to adjustment should no longer operate; by clause 3, that for clause 2 of the award there should be substituted a new clause 2 which provided that certain downward adjustments of wages in specified amounts should be made, that the amounts of the rates of wages prescribed _ in the award for adult employees should be adjusted by the following method according to the position and fluctuation (if any) of the " all items " retail price index numbers of the Commonwealth Statistician. Adjustment was to be based upon the equating of index number 1,000 with 81s. per week, the amount assessed upon that number of | the Court's declared ordinary basic wage, and with a wage of 13s. 6d. per day ; by clause 4, that there be added to the award a new clause | as follows :—'' 35. Notwithstanding anything in this award, or in any undertaking given in connection therewith, any State of the Commonwealth, or any Commissioner or Commissioners of State Railways, or the Commissioner for Road Transport and Tramways (New South Wales), may in or from the rates of pay prescribed herein or undertaken to be paid to employees of such State, Commissioner or Commissioners, make reductions or deductions not greater than a statute of the State now or at any time requires to be made generally in or from substantially similar rates of pay of employees" of the State or of State instrumentalities." ; The applicant association claimed that the effect of clause 35, (a) in conjunction with the alteration of the basic wage of the award and the method of adjustment thereof as prescribed in the order of 17th April 1934, was to reduce the minimum rates of wages of certain employees below the minimum rates specified by the employers in the disputes within the cognizance of the Commonwealth Court of Conciliation and Arbitration; (b) was to allow discrimination between married and unmarried employe by applying different rates of wages to married and unma employees doing the same class and grade of work ; and, also, th the clause delegated the power of fixing minimum rates of wages for OLR] OF AUSTRALIA. members of the association employed by the respondent otherwise 4 : , than in accordance with the provisions of the Commonwealth Concilia- td ; tion and Arbitration Act 1904-1930. AUSTRALIAN : 'The summons under sec. 214 was referred by Evatt J. into the Peel - Full Court of the High Court, and it now came on for hearing. aaa is Further material facts appear in the judgments hereunder. Parse Roap J. A. Ferguson (with him De Baun and Gee), for the applicant. Traxsronr AND The variations, particularly the variation as contained in clause 35, 'Tramways : _ takes the pay of certain employees covered by the award below the ambit of the industrial dispute which existed between the parties. By introducing a discrimination between married men and single men, and by making deductions according to variations in State law _ from time to time, clause 35 exceeds the limits of the dispute. Clause 85 is unconstitutional as not being an exercise of arbitral power, -and also as amounting to a delegation of the arbitral power not authorized by the Commonwealth Conciliation and Arbitration Act orthe Constitution. Although here the employees and the employers each presented a separate set of logs and both sets of logs were _ referred into Court, they were dealt with at the same time and _ together constitute one dispute (Federated Engine-Drivers and Firemen's Association of Australasia vy. Adelaide Chemical and Fertilizer Co. (1); Australian Insurance Staffs' Federation v. Atlas Assurance Co. (2)). By its decision on the application made to it in 1934, the Commonwealth Court of Conciliation and Arbitration deliberately departed from the "Harvester Standard" and the 'method of the "all houses " tables in favour of a new and different 'standard, and a new method of computation, the all-items tables, which gave no result. In the future the " all houses " table will not part of the " Harvester Standard." Calculated according to new method, the basic wage was decreased by two shillings. It is not competent for the Court to go outside the ambit of dispute, d Arbitration Act and the Constitution (R. v. Commonwealth Court Conciliation and Arbitration; Ex parte Whybrow & Co. (3) ; (1920) 28 C.L.R. 1. (8) (1910) 11 C.L.R. 1, at pp. 32, 46, (1981) 45 C.L.R. 409. 61, 62. (NS.W.). H.C. of A. 1935. Ww AUSTRALIAN TRAMWAY EMPLOYEES Assocration v. Commis- SIONER FOR Roap TRANSPORT AND Tramways (N.S.W.). HIGH COURT (19) Australian Insurance Staffs' Federation v. Atlas Assurance Co (1)). With reference to the number of matters in dispute, s Federated Engine-Drivers and Piremen's Association of Australas y. Adelaide Chemical and Fertilizer Co. (2), Australian Worl Union v. Graziers' Association of New South Wales (3) and Fi ated Millers and Mill Employees' Association of Australasia vy Butcher (4). The power of the Court to make provision in an awa for reference to outside authorities, persons, or sources was dea with in Federated Engine-Drivers and Firemen's Association 0 Australasia v. Broken Hill Pty. Co. (5). Clause 35, in its operation conflicts with the essential right of parties to be heard on all aspects of a dispute (Australian Railways Union v. Victorian Railwa Commissioners (6) ). On the question of arbitral power and proper exercise, see Little v. Newton (7), and Redman's Law o Arbitrations and Awards, 3rd ed. (1897), p. 115. Clause 35 ii outside the ambit of the dispute. It introduces a distinction between married men and single men not asked for, and also introduces an application of State law (that is, the Public Servic (Salaries Reduction) Act 1930 (N.S.W.), the Public Service (Salaries Reduction) Amendment Act 1931 (N.S.W.), and the Public Servic Salaries Act (No. 2) 1931 (N.S.W.) ), not requested at any time. Russell K.C. (with him Chambers), for the respondent. Upon the disputes raised by the rejection by the applicant associatio the employers' log, and by the employers' rejection of the association' log, the wages respectively proposed were not comparable grade by grade, or class by class, as they were in Australian Insurance Staffs Federation v. Atlas Assurance Co. (8). The only lower limit wages conceded by the employers was a basic wage equivalent from time to time to the " Harvester Standard" adjusted to acco with changes in the purchasing power of money. Clause 2 of the award of September 1927 was valid and left it open to the Court vary the mode of adjustment. The order of April 1934 as to (1) (1931) 45 C.L.R., at pp. 421, 423, (5) (1911) 12 C.L.R. 398, at pp. 427, 433, 435, 438, 448. 430, 445, 4: (2) (1920) 28°C.L.R., at p. 11. (6) (1930) 44 C.L-R. 319, at p. 384. (3) (1932) 47 C.L.R. 22. (7) (1841) 2 Man. & G. 351; (4) (1932) 47 C.L.R. 246. E.R. 781. (8) (1931) 45 C.L.R. 409. }C.L.R.] OF AUSTRALIA. 95 basic wage and the method of computation was not in H.C. oF A. 'itself beyond the powers of the Court. The "' Harvester Standard" oes will still be applied, computed in accordance with the " all Avsrratiay TRAMWAY items" tables. The addition, by clause 4 of that order, of clause 35 to the award was not of itself beyond the jurisdiction * of the Court either as a delegation of its authority in New South Phere st Wales (Whybrow's Case (1) ), or on the ground that differentia-~ Roan tion of pay to married and single men followed as a consequ- carr sa ence. Clause 35 is, therefore, bad or ineffective only if and soy ; far as it brings any wage below a point offered by the employers = —— asa minimum. The application by summons by the applicant association for a rescission of the order relating to the ten per cent reduction was within the jurisdiction of the Court; therefore secs. 28 (2), (3), 38 (0), (0a), 388, 38D (1) (c) and 39 of the Commonwealth Conciliation and Arbitration Act applied and empowered the Court to rescind, either wholly or in part, that order conditionally. The it of an industrial dispute is created by each log. The Court iation of Bieiare. v. Adelaide Chemical and Fertilizer Co, The Court may, in the public interest, for the purpose of an industrial dispute, go beyond any agreement ; if it does obtain an agreement it may go beyond any ambit laid down by parties. When it is realized that of the 4,000 employees of the ondent there are only four or five single men who, as a result the Public Service Salaries Act 1931, are in receipt of less than basic wage and to an extent only of fourpence per week, this It of clause 35 may be thought too trivial to warrant a declaration invalidity. It is competent for the Court to improve, and for party before it to suggest the improvement of, the method of puting the standard wage (Federated Gas Employees' Industrial v. Metropolitan Gas Co. (4); Re the " Harvester Judgment " (5)). The award now carried on by the " all items" fry 11G.LR,, at p. 6 (4) (1922) 16 C.A.R. 4, at pp. 12, 13. 1920) 28 C.L.R. 209, a pp. 216- (5) (1922) 16 C.A.R. 829, at pp. 830, 834, 835, 839. HIGH COURT [1935 v Commis: SIONER FOR Roap TRANSPORT AND TRAMW (N.S.W rs one method to another, or from effecting an improvement in method ; even if there were it was still within the ambit. Sec. 38 (0 shows that awards are tentative and provisional only (Whybrow Case (1)). The ambit of a dispute is greater than the diff between two amounts. " Ambit" should be given a wide me as in R. v. Commonwealth Court of Conciliation and Arbitration Ex parte Broken Hill Pty. Co. (2). The award was made to operate "until further order or award." In granting the association's application relating to the ten per cent reduction it was compet for the Court. to provide that reductions or deductions in amounts ascertained by reference to State legislation might be made from the rates of pay prescribed by the award. There is nothing in the Commonwealth Conciliation and Arbitration Act which prevents the Court from differentiating between married and single men. Australian Workers' Union y. Graziers' Association of New Soul Wales (3) and Federated Millers and Mull Employees' Associa of Australasia v. Butcher (4) are clearly distinguishable fron Australian Insurance Staffs' Federation v. Atlas Assurance Co. (5), which is the only case in which it has been held that the ten per cent reduction was invalid as taking the award outside the amb of the dispute. If the changes (a) in the basic wage made or to b made by the operation of the order of April 1934, and (b) by clause of that order, which provides for the inserting of clause 35 in th award, are, or if either of them is, beyond the powers of the Comm on wealth Court of Conciliation and Arbitration, the whole order is bi If the change (a) is bad in relation to the whole range of wages i the award, then the whole of the order of April 1934 is bad (Au tralian Insurance Staffs' Federation v. Atlas Assurance Co. (5) ). the change (a), or (b), is bad only in particular cases where the amb of the disputes is exceeded, then, subject to Australian Insu a ance Staffs' Federation vy. Atlas Assurance Co. (5), that order (1) (1910) 11 C.L.R., at p. 27. (3) (1932) 47 C.L.R. 22. (2) (1909) 8 C.L.R. 419, (4) (1932) 47 CLLR. 246. (5) (1931) 45 C.L.R. 409. OF AUSTRALIA. 97 invalid only in those cases and to the extent of the defect, that is, H. sete A. 'as to basic wage employees who are single men. If the invalidity as) of the clause is not limited to the few cases which may be outside ese ' ; RAMWAY the ambit of dispute then, because the offending clause is not sever- Emrtoyers able, the order is bad as a whole. In that case the order should be "*S°C47™08 set aside and the position which prevailed prior to the application Comans- SIONER FOR restored. The subject matter of the clause and its general intention Ba Roap 'RANSPORT are within the powers of the Court. J. A. Ferguson, in reply. The matter should be considered just as if in the first instance minimum rates had been established by the award at amounts lower than the employers proposed in the disagree- ment which caused the dispute and as if a different basic wage standard than the " Harvester Standard" as proposed had been introduced. Clause 35 was neither requested nor contemplated by the parties (Australian Insurance Staffs' Federation v. Atlas Assur- ance Co. (1)). The logs of demand did not indicate an intention to discriminate between married men and single men, nor did liberty to reduce rates of wage by reference to State legislation, actual or future, designed for that purpose, form part of the dispute. Legis- lation of that nature was unknown at the date when the original award was made. The Court's action in 1934 was really legislation, and was apart from any dispute. The Court considered it desirable to have (a) a new standard generally, (b) a new calculus, and (ce) a possible substitution of unascertained rates of wage for the awarded rates by the conjoint action of two outside authorities. Those matters were never the subject of a dispute between the parties. The Court has abandoned the "Harvester Standard." _ Clause 35 presents difficulties of construction and application. One effect of the clause is that variations may, from time to time, be _ made in a Federal award by State legislation, without the parties to the dispute having an opportunity of being heard upon the matter. Clause 35 cannot be read as an exemption clause. It cannot be inserted so as to reduce rates of wages below the ambit. If desired that its terms should be introduced, the matter should form the Es subject of a new dispute. There is no connection between the Sn (1) (1931) 45 C.L.R., at pp. 427, 428. vou. Lut. "1 FA. AUSTRALIAN 'TRAMW EMPLOYEES ASSOCIATION v Commis- SIONER FOR Roap 'TRANSPORT AND TRAMWAYS April 8. HIGH COURT (1935, restoration of the ten per cent reduction and either (4) the new standard of basic wage, or (b) the new calculus, or (c) clause 35 as to State law in certain cases. The clauses in the order made in April 1934 are severable. Clauses 1, 2 and 3 can operate indepen: dently of clause 4, which inserted clause 35 into the award, and of each other. The various sections of the Commonwealth Conciliation and Arbitration Act referred to on behalf of the respondent are applicable only in respect of matters within the ambit of dispute. — Cur. adv. vult, The following written judgments were delivered :— Ricu J. The order of variation, dated 17th April 1934, opal to add clause 35 to the awards. In my opinion that clause is invalid and should be so declared. i The separate judgments of my brothers Dixon, Evatt and McTiernan have dealt with the matter so fully in arriving at the same conclusion that it is unnecessary for me to traverse the same ground. % It is unnecessary to answer the questions asked in the summons, as a declaration that the clause in question is invalid and inoperative will suffice. There should be no order as to costs. « Dixon J. The question for decision on this application is whether the Full Court of the Commonwealth Court of Conciliation and Arbitration had power to make an order of variation dated 17 April 1934. The award that it varied governs the tramway industry. It came into operation on Ist October 1927 and the specified period of its duration expired on Ist October 1930. It continues in force by virtue of sec. 28 (2) of the Act. The aw: subject to some increases, prescribed as minimum wages already payable under a prior award the fixed period of whi expired on 31st March 1925. The prior award contained a clause, usual at the time when it was made, to the effect that the rates wage to be paid should be proportionately reduced or in according to the differences in the purchasing power of money ii numbers published by the Commonwealth Statistician. The i 7 53CLR.] OF AUSTRALIA. numbers intended to be referred to were those contained in tables commonly called the "all houses" tables. The award of Ist October 1927 provided that the adjustment of wages in this manner should continue until further order ; its words were : " Such adjust- 'ments as now arrived at shall continue until further award or order." On 22nd January 1931, the Commonwealth Court of Concilia- tion and Arbitration, after holding an inquiry at which the parties to many awards were heard, including that governing the tramway industry, announced a decision or determination to the effect that a list of awards, including the tramway award, should be varied by the reduction of all wages rates therein prescribed by ten per cent _ for twelve months and thereafter until further order. In the ase of employees of the New South Wales Commissioner for Road Transport and Tramways this variation appears not to have taken effect until 16th September 1932, when the Court made an actual order reducing wages payable under the award by ten per cent, subject to a minimum of £3 10s. a week. The order was 'expressed to continue in force until otherwise ordered by the Court. On 5th May 1933, the Court of Conciliation and Arbitration made a further variation, the object of which was to discontinue the use of the "all houses" tables of the statistician and to adopt another method of adjustment. In the meantime legislation had been enacted in various States _ for the reduction of wages of employees whether in the service of - the State itself, or of corporate agencies of the State. In particular, the Legislature of New South Wales passed, first, the Public Service (Salaries Reduction) Act 1930 (No. 21, 1930) extended by the Public _ Service (Salaries Reduction) Amendment Act 1931 (No. 24, 1931), and then the Public Service Salaries Act (No. 2) 1931 (No. 29, 1931). Tn this reduction the New South Wales tramway service was included. 'The last Act contained a covering clause of the kind now so familiar ; Tequiring that its provisions should be construed subject to the Commonwealth Constitution. Subject to this clause, it enacted _ that the salary of every officer employed in the service of the Government of New South Wales or of certain of its agencies should be reduced by percentages which it set out. The reductions went from 8} per cent upwards. But in the application of the percentages H. C. or A. 1935. Ww AUSTRALIAN Tramway Emrtovees Assoctatios rt. Commis: SIONER FOR Roap TRransront AND 'Tramways H. C. or A. Ww AUSTRALIAN AMWaY pPLOYEES SSOCTATION v Commus- SIONER FOR Roav 'TRANSPORT AND TRAMWAYS: V.S.W.). Dixon J. HIGH COURT (1935. married men and widowers with dependent children received concessions in which unmarried men did not share. These provisions could not, as the award stood, apply to wages which it prescribed, For it was expressed in the customary way and amounted, according to the decisions of this Court, to an exhaustive statement of the minimum wage which by virtue of the Commonwealth Conciliation and Arbitration Act 1904-1930 excluded any inconsistent operation of State law. (See Clyde Engineering Co. v. Cowburn (1); H. V. McKay Pty. Lid. v. Hunt (2); Ex parte McLean (3).) Early in 1934, the Australian Tramways Employees' Association applied to the Court of Conciliation and Arbitration for an order rescinding the various orders by which the ten per cent wages reduction had been applied to the award, including the order of variation of 16th September 1932 which had reduced by ten per cent the wages of New South Wales tramway employees subject to the proviso that the wages were not brought below £3 10s. a week. Upon this application the Full Court of the Court of Conciliation and Arbitration made the order of 17th April 1934, the validity a which we are now called upon to decide. The order, so far as it afiects New South Wales employees, aia three things. First, it put an end to the operation of the te per cent reduction of wages generally of tramway employees. Second, it set aside the new method of wages adjustment adopted on 5th May 1933 in substitution for the use of the " all houses" tables of the statistician; in lieu of that method, it introduced a method of adjusting wages by means of the "all items" re' | price index numbers of the Commonwealth statistician and it es lished a rate or rates of basic wage as a fresh starting point, a ra on the same day were given in a large number of, matters hear together under the description " Basic Wage Inquiry 1934." the order inserted the following clause in the award: "35, Not withstanding anything in this award, or in any undertaking given in connection therewith, any State of the Commonwealth or any Commissioner of State Railways, or the Commissioner fo (1) (1926) 37 C.L.R. 466. (2) (1926) 38 C.L.R. 308. (3) (1930) 43 C.L.R. 472. CLR] OF AUSTRALIA. Road Transport and Tramways (New South Wales), may in or from the rates of pay prescribed herein or undertaken to be paid to employees of such State, Commissioner or Commissioners, make reductions or deductions not greater than a statute of the State now or at any time requires to be made generally in or from substan- tially similar rates of pay of employees of the State or of State instrumentalities." The base rate adopted as a fresh starting point was for Sydney _ £378. a week. It was fixed by reference to a number of considera- tions which are referred to in the reasons of their Honors Chief Judge Dethridge and Judge Drake-Brockman, who formed the majority of _ the Court. His Honor Judge Beeby, who dissented from the actual method followed, discusses some of the same matters. Among the considerations upon which the majority of the Court acted, it appears that weight was given to the amounts of wage which would result from using as theretofore the rate fixed in the Harvester Case (1) _ of seven shillings a day in Melbourne in 1907 and applying the statistician's tables, both the "all houses " as was long the practice, and the "all items'? which seemed a better practice. But the _" Harvester wage" was by no means the sole or decisive considera- tion. It is not correct, I think, to treat the majority judgment as - doing no more than prescribing a new means of applying the " Harvester " wage. It established an independent base rate, not tate produced by a method of calculation from the " Harvester" . Their Honors the Chief Judge and Judge Drake-Brockman 'say in their joint judgment: " Having regard to the economic position of the Commonwealth, to the principles that have been cated as accepted by the Court for the assessment of its basic and to the information gained in connection with the deter- -minations of itself and of State authorities in respect of a basic wage, have concluded that the basic wage for the metropolitan districts sh be of the following amounts." There are then set out the respective base rates for the six capitals with the corresponding number in a table of " all items " price index numbers. The ly rate given for Sydney is that already stated, £3 7s. This meant a reduction of the base rate which would have prevailed (1) (1908) 6 C.L.R. 41. H.C. ¢ 193: sa AUSTRALIAN 'TRAMWAY EmpiovEes ASSOCIATION Commts- SIONER FOR Roap TRaxsrort AND TRAMWaYs (NS.W.). H.C. or A. 1935. cae AUSTRALIAN TRaMway EMPLOYEES ASSOCIATION . Commas- SIONER FOR Roan 'TRANsPoRT AND 'Tramways (N.S.W.). Dixon J. HIGH COURT (19 but for the deduction of ten per cent. The Court was, of course, fully alive to this consequence and took it into account in removing the ten per cent reduction. In introducing the new clause relating to the reduction of wages by or under State law, the Court waull guided by the consideration that the employees in the industry were, in effect, in the employment of the States, which had, in the exercise of their legislative powers, reduced the remuneration of all employed in the State services. After referring to the fairness of the majority proceed :— But should the State legislature fit to reduce or make a deduction from the remuneration genera of the employees of the State, those engaged in its transport serv have no moral claim to escape a reduction or deduction equal i degree to that imposed generally upon other employees of the State in similar grades. All that they are entitled to is that they be treated no worse. The Court does not think that, so far as Government trans- port services are concerned, it should refrain from making variation similar to those made in other industries. But it thinks i assume that State Legislatures will not make deductions from th wages of employees of the State greater than are needed to enable the country to meet its difficulties. It has therefore decided to relax such restrictions of the legislative power of the State in of employees in its transport services as may arise from the exis! of a Federal award covering such employees. At the same time it will protect those employees from any greater levy than that imposed upon other State employees of similar grade not covered by Feder awards." c Each of three things done by the variation order of 17th Apri 1934, which is attacked in these proceedings, operated to reduc the wages which would have been payable had the award of October 1927 remained untouched. In combination, the establish- ment of the new basic wage, the adoption of the " all items " tab and the permission to make deductions authorized by State produced a very considerable reduction of the old award But the award of Ist October 1927, prescribing those rates, founded upon an industrial dispute which arose or was raised at OF AUSTRALIA. _ time when the Court habitually fixed base rates by reference to the "Harvester " standard and by means of the "all houses" tables. Sir Charles Powers, as President of the Court, had added to the base rate a sum of three shillings which, in default of anything more which was not invariably made, employer and employee had come _ to regard it as a matter of course that the base rate would be calcu- lated from the " Harvester" standard. Accordingly, the Australian _ Tramways Employees Association now asserts that the standard for fixing the basic wage and the statistician's tables or mechanism for applying it were never in dispute between it and the various Commis- sioners. The award of 1927 was based in part at least upon claims formulated by the Commissioners, and in these claims basic wage and margins were put forward. An adjustment from them by the old means would produce wages for the relevant period in 1934 above many of the rates paid under the variation. Upon these : grounds, it is contended that the order of variation travels outside the dispute. In any event it is said that the new clause permitting deductions by reference to State law is neither within the dispute nor the authority of the industrial arbitrator. The jurisdiction of the Court of Conciliation and Arbitration to award rates of pay and industrial conditions arises only when an industrial dispute extending beyond the limits of any one State is _ brought within its cognizance. It can make no award except in the - course of or for the purpose of settling such a dispute. The terms of - the award must, therefore, be relevant to the dispute or its settlement. What the Court can award must depend upon the nature and the _ subject matter of the dispute. In a dispute about wages the parties by their demands or otherwise may define the greatest amount claimed, _ on the one hand, or, on the other hand, the amount conceded. In _ such a case the award cannot be of an amount outside these limits. Te must be relevant, and it is relevant neither to the dispute nor to its settlement to prescribe a wage lower than that conceded or higher 'than that demanded. This principle applies not merely to the initial award but also to its subsequent variation, whether during the specified period of its duration or afterwards while it continues vin force under sec. 28 (2). All this appears to me to be settled by descriptive, came to bear his name. But, except for this addition " H.C. or A. 1935. Gea AUSTRALIAN TRAMWAY Empcovers ASSOCIATION v Comsas- SIONER FOR RoaD TRANSPORT AND Tr. (N Dixon J. H.C. or A. 1935. Ww AUSTRALIAN TRAMWAY EmpLoyrrs ASSOCIATION v Commis- SIONER FOR Roap 'TRANSPORT AND TRAMWAYS HIGH COURT [1935. the decisions of this Court, Australian Insurance Staffs' Federa- tion v. Atlas Assurance Co. (1), Australian Workers' Union y. Graziers' Association of New South Wales (2) and Federated Millers and Mill Employees' Association of Australasia v. Butcher (3). But, as the last two cases show, a downward limit upon the wages which may be prescribed by an award is not imposed in the absence of a definite and unconditional concession of a rate of pay. In the present case a paper dispute was raised at or near the expiration of the specified period of the prior award. On 16th March 1925, the Commissioners addressed a demand to the Australian | Tramways Employees Association for alterations in wages and conditions then existing. They asked that their log should take the place of existing awards, agreements and practices. The log set out a list of wages expressed as basic wage plus an addition or margin, sc., for skill. But the list was preceded by the formulation of a demand as to the basic wage. No doubt the primary object of this term was to exclude the " Powers 3s." It was expressed as_ follows : " They " (the Commissioners) " desire that all wages should be based on the equivalent from time to time of the ' Harvester Standard '"—such equivalent to be ascertained according to the pur- chasing power of money figures of the Commonwealth Statistician without any addition thereto, and they are desirous that such wages should be based on the figures of the Commonwealth Statitician for the respective places where their employees are respecti employed, and that all wages should be adjusted quarterly accord- ing to the increase or decrease in the purchasing power money." To this demand the employees' association replied that the executive was not prepared to accept the terms but was ready to meet the Commissioners, and, further, that the association serve a log of wages and conditions. Its log of demands was served on 3rd April 1925. The minimum wages which the log sou were not expressed in terms of basic wage and margin or additi like those specified in the employers' log. For each class or grade of employee a weekly wage rate was claimed in a single money sum. Nothing was said about a method of adjustment with changes ii (1) (1931) 45 CLLR. 409. (2) (1932) 47 CLLR, (3) (1932) 47 CLLR. 246, R yl peed, SO ere oe SP Ry 53 C.L.R.) OF AUSTRALIA. the cost of living. But the rates claimed were very much in excess of those prescribed by the expiring award and it is quite obvious that they were not consistent with the adoption of the "' Harvester Standard" without the addition of some further sum. The " Powers 3s." and a liberal enlargement of the margins if added to the prevailing equivalent of the "Harvester Standard" would hardly suffice to make up the amount claimed. What then is the nature or character of the dispute as affecting the fixation of the base rate and,the adoption of a method of adjusting " wages with changes in the cost of living? The two demands or logs do not, in my opinion, supply a foundation for two industrial disputes. 'They are the formulations of rival claims about the same matter of controversy—the rates of pay and conditions to govern the parties in their existing industrial relations. It is from these rival claims that the nature and extent of the dispute between them must be ascertained. But, in using the documents for that purpose, care must be taken to read them as the parties at the time would them- selves have done. The situation in which they stood must be remembered and the practice then prevailing must be taken into account. The log of the employers did not specify definite money sums as the minimum wage rates proposed. It recognizes that adjustable rates must be adopted. It accordingly contained a demand for a mode of computation. The point of the employers' demand was evidently to exclude from the computation of a base rate any addition to the amount produced by the " Harvester Standard." The log specified in money margins to be added for skill in the various grades or classes. The ' Harvester Standard " meant, of course, a rate of £2 2s. a week in 1907 in Melbourne and involved the use of statistical tables of changes in the cost of living to bring that standard to the required time and place. The tables are not named but the log may be taken to contemplate the use of those then habitually applied, the '' all houses " tables. The answering log of the employees throws into dispute the results which such a system of computation would produce. It seeks much higher results and implies, therefore, a departure from the system of computation. But, although it is silent upon the actual point of departure, it does not follow that at that time it H.C. or A. 1935. = AUSTRALIAN TRAMWAY Emp ES AssoctaTIoN Commis- SIONER FOR Roap TRANSPORT AND 106 HIGH COURT (19. H.C. oF A. would be understood to mean to abandon completely the "* Harvester er Standard" or the "all houses" tables. It might be treated as Avsrrauias implying that an addition should be made to the wage calculated Tray ; from that standard in order to produce the base rate to which Av°% margins would be added. But, whether this explanation would ba! Comms. given to the log or not, the two logs combine to throw into dispute Roan the base rate and at least some factors in its calculation. It is not api a dispute in which employees demand a rate specified in money 'and the employers concede a lower rate specified in money. It is a dispute about the manner of calculating a rate. It may be assumed that in the calculation both parties are prepared to adopt two factors; that they treat as common to both methods the " Harvester Standard"' and the "all houses" statistical tables. But one confines the calculation to these factors and so produces results that the other will not have. To produce more favourable result 7 the other at least introduces an additional factor. To see whether the order of variation is within the limits of the dispute, I think it should be considered as if part of the original award. If, in ti first instance, the award had adopted the "all items" statistic table for the purpose of adjusting wages and had fixed an index number for Sydney in 1927 with a correspondence to that a taken by the order, its validity would, in my opinion, have depend ed simply on its relevance to the settlement of such a dispute. Putting on one side the clause relating to reductions under State law, would have amounted to the adoption of another method of comput- ing the base rate about which the parties were in disagreen The parties being in difference about the mode of producing base rate, why should not the arbitrator establish a third metho as a relevant and appropriate means of settling the difference The answer that the parties may be assumed to be in agreement about two factors in the computation both of which the arbitrator abandons, does not seem sufficient. The one party is content wit these factors only if they comprise the whole formula. The othe ; is not content with such a formula. No doubt the reason for respective attitudes of the parties lies in their views of the monetary consequences produced by the formula. But it is nevertheless dispute not about the money sums but the means of produci 53 C.L.R.] OF AUSTRALIA. 'them. The conception of a basic wage, as it had developed in Australia, involved variation according to place as well as variation according to time. A dispute upon the subject of its ascertainment cannot be reduced to a mere difference between two fixed sums. It is a dispute about a process, not a product. In my opinion, it follows that the arbitrator may settle it by fashioning a new process if he thinks it will settle the dispute. The limits of his action are not determined by the amount which in the event may be produced by the rival processes. The clause relating to the reduction of wages by State law presents independent difficulties. Apparently its object was to remove the barrier which upon this subject the existence of the award presented to the operation of State law. According to the doctrine established by the decisions of this Court an award, as an industrial regulation of the matters with which it deals, obtains from the Commonwealth Conciliation and Arbitration Act a complete and exclusive operation. Accordingly no State law can consistently with the statute regulate the same subject matter. (See Ex parte McLean (1).) But, if an _ award means to regulate the conduct of the parties only in so far as State law does not control them, it appears to me that there can _ be no inconsistency between Federal and State law. I do not think there is anything in the Commonwealth Conciliation and Arbitration Act which prevents the Arbitration Court confining its awards to _ the area left free by State law. Accordingly, if clause 35 of the 'award, the clause introduced by the challenged order of variation, did no more than express an intention that the award should be subject to State law, I should see no objection to it. But clause 35 'is framed in language which is said to have a very different effect. "Inthe first place, it is expressed in permissive form : " Any Commis- - sioner + + + may . . . make reductions or deductions." "This is said to confer a discretion. Next, it is said it refers not to the identical wages which State law of its own force affects but to "substantially similar rates of pay of employees of the State or of instrumentalities."" Lastly, the qualification contained in the OY "generally" is emphasized. On all three grounds, it is contended that the provision does not simply make way for the :7 : ; F : (1) (1980) 43 C.L.R. 472. H. C. or A. 1935. ae AUSTRALIAN TRAMWAY Ei 'EES ASSOCIATION SIONER FOR Roa 'TRANSPORT AND TRAMWAYS (NS.W.). Dixon J. 108 HIGH COURT to make discretionary reductions analogous to those authorized by ' the general provisions of State law. The language of the provision v Comms: as doing more than allowing State law to operate of its own for SIONER FOR Roan That consideration is that the reductions or deductions, accordi NSPORT TN 'AND to the terms of the provision, are to be made from the rates of pay \'), prescribed in the award as varied. Now, as I read the provisions of the New South Wales statute, No. 29 of 1931, it operated on the salaries payable on 7th August 1931, the date of its commencement and effected a reduction of the prescribed percentages of those salaries. This does not mean that the percentage is not reflected in all the variations of those salaries brought about by adjustme) provisions or otherwise. But it does mean that the statute of its for the first time by the order of the Court of Conciliation and Arbitration made on 17th April 1934. The language of the clat therefore, operates not to allow the direct application of State law, but to apply it by analogy and by force of the clause itself. Unfortu- nately for the validity of the provision this involves a discriminati between married and unmarried men that is outside the scope of the original industrial dispute. Yet the discrimination is made by force of the clause itself. As the clause is drawn, therefore, it is invalid. Having regard to the history of the variations, I do not think its invalidity destroys the whole order. I think a declaration should be made that clause 4 of the order of variation, dated 17th April 1934, which purports to add to awards a clause numbered 35 is invalid and inoperative. Evarr anp McTiernan JJ. The applicant and respondent a bound by an award which was made on 1th September 1927 by the Commonwealth Court of Conciliation and Arbitra ion. The award was varied by an order made by that Court on 17tl April 1934. The appellant proceeds by summons under sec. 2 C.L.R.J OF AUSTRALIA. of the Commonwealth Conciliation and Arbitration Act 1904-1930 for a determination of the question whether the latter order is valid. The main question is whether the order challenged is within the ambit of the industrial dispute which was settled by the award, because the Insurance Case (1) decides that no award or order can be validly made unless in settlement of the industrial dispute. The _ many discussions of this subject have been crystallized in the follow- _ ing observations of Rich J. in Australian Insurance Staffs' Federation y. Atlas Assurance Co. (2) :— " But at no time had there been any doubt that the existence and the ambit of a dispute determine the power of the Court of Conciliation and Arbitration to embody its will in an award, To go outside matters in a dispute and to regulate wages or conditions otherwise than by a decree which is fairly incident to composing the difference between the parties is neither to arbitrate nor to settle an industrial dispute." _ The ambit of the dispute is to be ascertained by reference to the logs or claims of the disputants which were exchanged by them at the time of the original dispute. The employers' log set out that _ they desired that the pre-existing award should be determined, and that the rates and conditions now specified should apply. The applicant association refused to agree to these rates and conditions, and, in their counter log set out the wages and conditions which they desired. Now, as Rich J. has said, "where employers and employees exchanged logs, whatever might be the a precise order of time in which the respective logs were delivered it does not : seem to me to be possible to take the artificial course adopted by the Court of Conciliation and Arbitration when the alleged disputes were referred into Court and treat each log as creating a separate dispute consisting of a disagree- ment arising from failure to answer the demands or requests it contained. 'The exchange of rival views between employers and employees on the same subject matter creates one and not two disputes or controversies " (3). 'This and the other judgments in the Insurance Case (1) make it clear that in the present case the subject matter of industrial dispute _ between the parties is to be gathered from the two logs, interpreting _ both as they would reasonably be understood by the parties to whom they were addressed. (Cf. Insurance Case [No. 2] (4).) _ The employers' log proposed that all wages should be constructed _ na common basic wage, and that marginal additions, varying with (1) (1931) 45 C.L.R. 409. (3) (1931) 45 C.L.R., at pp. 4 (2) (1981) 45 C.L. (4) (1934) Sheehan's Bulletin, 3. -» p83. H.C. or A. ages tenet AUSTRALIAN TRAMWAY Employers ASSOCIATION Coyans- SIONER FOR Roap TRANSPORT Evatt J McTiernan J. H.C. or A. 1935. Commis- SIONER FOR Roap 'TRANSPORT Evatt J. 'MeTiernan J. « should be fixed was not specified in the log. but it did state what * to be ascertained. The log stated HIGH COURT (193% the class of work performed, should be made to that base. actual figure at which they desired that this minimum or basic wage the employers meant by the basic wage, and how they required it "that all wages should be based on the equivalent from time to time of the 'Harvester Standard '—such equivalent to be ascertained according to the purchasing power of money figures of the Commonwealth Statistician without any addition thereto, and they are desirous that such wages should be b on the figures of the Commonwealth Statistician for the respective places where their employees are respectively employed, and that all wages should — be adjusted quarterly according to the increase or decrease in the purchasi power of money." A typical instance of the actual rate of wages which the employers said they desired is as follows: "Conductors at the rate of basic wage plus 6d. per shift of 8 hours." Therefore, the employers' log concedes the general principle that a minimum wage should prevail, and proposes a method for adjusting it from time to time so as to give all employees at least a livelihood equivalent to the "' Harvester Standard." On the other hand, t ' employees' log claims that "the minimum weekly rate of wages tc be paid to employees " should be the amount respectively allocat ed to various classifications of employees. 7 Whilst the dispute which arose as a result of the opposing wag claims of employer and employee did not extend to anything lowe than the " Harvester Standard," it does not follow that the Court could not alter the long accepted method of ascertaining standard. After a close consideration of the various judgment and orders, we reach the conclusion that the Court's resort to 1) "allitems " table was for the purpose of maintaining the " Harvester Standard" as an Australian standard and was not for the purpo of lowering it, although the Sydney standard, regarded separatel in the order now attacked. But clause 35 of the award, which is introduced into the aw by clause 4 of the order of variation, stands in a very differe r position. It authorizes the employer to make any deduction fi the wages otherwise payable under the award, so long as th C.L.R.] OF AUSTRALIA. amount of the deduction does not exceed a sum ascertainable solely by reference to State legislation. Although the employer's log conceded the principle that every employee should receive at least the amount necessary for the enjoyment of the " Harvester _ Standard " of living, clause 35 permits that standard to be lowered, : and in a number of instances it has been lowered. By engrafting _ upon the award the provisions of the legislation reducing the salaries _ of public servants in the State of New South Wales, clause 35 also : enables the employer to effect a discrimination upon the ground of : marriage, &c., between members of the union in a manner quite _ disconnected from the inter-State industrial dispute of which alone the Federal tribunal had cognizance. In our opinion, the inclusion of clause 35 was neither relevant to the industrial dispute, nor incidental or conducive to its settlement. We do not accept the argument that clause 35 is bad because it works a delegation of the arbitral power to the State Legislature. This is not a case of delega- 'tion at all. The sole measure of the authority committed to the : employers by clause 35 is that which a State Legislature has enacted or may enact, irrespective of the question whether the resulting wage has ever been, or is, a subject of dispute between employer and employee. Clause 35 is bad because it does not fall within the ambit of the dispute. The decision of Evatt J. in the Insurance Case [No. 2] (1) is quite distinguishable because there the right ven by the award to fix the salaries of higher paid employees was En definite part of the industrial dispute. tobe invalidity of clause 35 should not be regarded as destroying the order of variation for a number of reasons. The clause, by its terms, need not be operative in any State at all, or in more States than one. It is in no sense a general condition of the industry 'in which the inter-State dispute arose. Its form and the manner terms and the other clauses of the order of variation, for it is ible to believe that the Court considered that the wages of s in the industry should be lowered in relation to other yees, merely because the employer was a State or State (1) (1984) Sheehan's Bulletin, vol. vim, p. 83. H.C. or A. 1935. Seal AUSTRALIAN 'Tramway EMPLOYEES ASSOCIATION TRANSPORT AND Tramways (N.S.W,). Evatt J. MeTiernan J. 112 HIGH COURT ul H.C. ov A. instrumentality. The conclusion is that clause 35 is sev pe from all the other terms of the order of variation which apply Avsrrauian the industry generally. tiem It should therefore be declared that clause 4 of the order of variati ASSOCIATION of April 17, 1934, is invalid. Commis- { GSE s Declare that clause 4 of the order of variatic ae dated Vith April 1934 which purports NSW). add to the award a clause numbered 35 invalid and inoperative. No order as to. Solicitors for the applicant, McCoy, Grove & Atkinson. Solicitor for the respondent, F. W. Bretnall, Solicitor for Trai LB.