Poulos v Waltons Stores Interstate Ltd

(1984) 6 IR 428

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(Judgment by: Neaves J)

Re: Peter Anthony Poulos
And: Waltons Stores Interstate Ltd

Court:

Judge:
Neaves J

Subject References:
Industrial Law

Judgment date: 10 February 1984

Canberra

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Judgment by:
Neaves J

This is an application by Peter Anthony Poulos ("the applicant") against his employer, Waltons Stores Interstate Limited ("the respondent"). The application is made under section 123 of the Conciliation and Arbitration Act 1904 ("the Act") which provides -

"An employee entitled to the benefit of an award may, at any time within six years from any payment becoming due to him under the award, but not later, sue for the amount of the payment in the Court, or in any other court of competent jurisdiction."

The reference in that section to "the Court" is, by virtue of section 118A of the Act, to be read as a reference to the Federal Court of Australia in its Industrial Division.

The applicant claims the sum of $9,031.40 alleged to be the amount underpaid between 20 November 1978 and 3 December 1982 and, in addition, an unspecified amount in respect of the period between 3 December 1982 and the date of the hearing of the action.

It is common ground that the applicant has been employed by the respondent since 20 November 1978. Prior to that time he was employed by Waltons Credits Limited as a home service representative (sometimes called a traveller caller). As such representative he was assigned a particular geographic area and he was required to call periodically at the houses within that area of persons who had an account with the company in order to collect monies owing and to endeavour to interest those persons in the purchase of other goods. He was paid a base amount weekly plus commissions.

During 1978 the applicant saw a newspaper advertisement for a store representative in the carpet department of the respondent and he was successful in obtaining a transfer to that position. He was informed by the operations manager of the respondent that in his new position he would be paid at the same rate as he received as a home service representative with Waltons Credits Limited with commission at one per cent.

There is in evidence a printed form of application for employment. On its face, which bears the date of 29 November 1978, the applicant's name and address appear, the position applied for being described as "store representative". The back of the form bears the applicant's signature and the date 20 November 1978 described as the date of signing. Immediately above the signature appear the printed words "I accept all terms of engagement and agree to abide with all rules and regulations of Waltons Limited". Above those words are the words in print "Name of award" and "Award classification" and in the spaces provided have been inserted in ink printing the words "Home Service Representatives Industrial Agreement" and "store representative" respectively. The applicant is unable to recall whether those words appeared on the document when he appended his signature but an examination of the writing on the document strongly supports the inference that those words had been written prior to signature. The evidence does not establish what it was that was referred to as the "Home Service Representatives Industrial Agreement".

The applicant's duties involve him in going to houses of potential customers who have requested the respondent to send someone to measure the house, or part of the house, for floor coverings (including carpet) and to give a quotation for the supply and laying of that floor covering.

The evidence establishes that potential customers for the purchase of floor coverings which must be measured and cut to suit the customer's individual requirements are identified in a variety of ways. A person on whom a home service representative employed by Waltons Credits Limited calls in the course of his duties may, either by virtue of the activities of that representative or otherwise, express interest in considering the purchase of floor coverings. Other potential customers will make enquiries of the respondent's employees at its retail store at Monaro Mall, Canberra City either personally or by telephone.

The next step is for the applicant to call at the customer's house to measure the area to be covered and to prepare a quotation. In some cases the customer has at the time of measurement tentatively chosen a particular floor covering. In other cases the customer requires to see in his house samples of different floor coverings and in those cases the applicant will take samples with him and give advice as to the suitability and price of particular floor coverings.

After measuring the area to be covered the applicant prepares a quotation and informs the customer of the price. He may also be called upon to inform the customer of the terms of payment offered, credit facilities and the procedures for opening a customer account.

If the customer wishes to proceed with the purchase an order will be placed. Sometimes the order will be placed forthwith but in many cases some time (up to 6 months) will elapse before an order is placed. In some cases an order does not eventuate. Sometimes the order is taken by the applicant but frequently the customer will make contact with an employee at the respondent's retail store, either personally or by telephone, to place the order.

Generally speaking the applicant attends at the respondent's retail store each working day to bring in details of the measurements taken the previous working day and to receive details of the premises where measurements are to be taken and the potential customers' requirements. There have, however, been periods (up to 2 years ago) when business was buoyant (particularly when the respondent held spring or autumn sales of floor coverings) and there were many premises to be measured. During those periods arrangements were made for the applicant to deliver details of measurements taken to, and to receive details of measurements to be taken from, the homes of other employees of the respondent. This obviated the need for the applicant to go to the retail store.

When there is not sufficient work to keep the applicant fully employed going to customer's houses for the purpose of measuring for floor coverings, he works in the carpet department at the respondent's retail store. At those times he attends to customers' needs in the store, taking orders and selling goods.

The applicant estimates that, on average, he spends one to one and a half hours a day in the store though in more recent times that has extended to 2 to 3 hours per day. The applicant also estimates that, of his time in the store, 20 per cent is concerned with work connected with his duties of measuring and quoting for floor coverings and 80 per cent is spent behind the counter as a salesman.

In addition to the wages he has been receiving the applicant is paid a commission when he sells floor covering or floor covering is sold to a customer whose house he has measured. Where the customer is a current customer of a home service representative of Waltons Credits Limited the commission is one half of one per cent. In other cases it is one per cent. Since a date which is not identified in evidence the applicant has received a minimum commission of $32 per week though an examination of the pay slips to which reference will be made indicates that there have been instances, albeit isolated, when no commission has been paid. The applicant also receives an allowance towards the expenses of operating a motor vehicle.

The applicant claims to be entitled to the benefit of the Retail and Wholesale Shop Employees (Australian Capital Territory) Award 1968 as varied from time to time ("the award"). That award was made on 15 November 1968 in settlement of a dispute, notified pursuant to section 28 of the Conciliation and Arbitration Act 1904-1968, between The Shop Assistants and Warehouse Employees' Federation of Australia on the one hand and The Australian Capital Territory Employers Federation and The Retail Traders Association of New South Wales on the other. The award has been varied from time to time but it is unnecessary to refer to any variations made prior to 31 October 1978. On that date the Concilation and Arbitration Commission, on its own motion, made an order with immediate effect varying and consolidating the award. The relevant provision of the award is clause 5 which prescribes the rate of wages per week payable to employees (other than employees in respect of whom a certificate under section 48 of the Act is in force) of the classifications mentioned in that clause. From 31 October 1978 there were twelve classifications: by an order made on 14 October 1981 a further classification was added. The classifications are -

"1.

Shop assistant (including warehouse employees.

2.

Shop walkers or floor supervisors, namely employees engaged in walking floors, directing customers, supervising sales and/or checking bills.

2A.

Section heads, namely employees appointed as such in a section of a shop where there are four or more employees.

3.

Window dressers namely employees principally engaged in dressing windows.

4.

Order person and outdoor order person, namely employees engaged in collecting orders and/or soliciting business and/or selling away from the employer's place of business.

5.

Ticketwriters, namely employees employed on designing and/or lettering price tickets and/ or show cards.

6.

Demonstrators, namely employees engaged in demonstrating goods.

7.

Office assistants.

8.

Cashier.

9.

Telephone attendants.

10.

Stenographer, namely an adult typist required to have shorthand qualifications.

11.

Machine operators.

12.

Shop assistants in charge of a shop or department in a shop. ..."

Sub-clause 4(a) of the Award provides -

"This award shall be binding upon the employers named in the Schedule of Respondents attached hereto, who are engaged in or in connection with the retail and/or wholesale shop industry in the Australian Capital Territory, in respect of and upon each and every employee as defined in this award, whether or not members of the Shop, Distributive and Allied Employees' Association and upon the said Association and the members thereof."

The respondent in these proceedings is not named as a respondent to the award. The only respondents are the two organisations of employers to which reference has already been made. The respondent is a member of The Retail Traders Association of New South Wales but the date on which it became a member is not in evidence.

Clause 28 of the award provides, inter alia, that all wages are to be paid weekly in addition to any commission, bonus or premium to which the employee is entitled.

Declarations have been made from time to time pursuant to section 49 of the Act that the whole of the terms of the award "be a common rule of the retail industry in the Australian Capital Territory and shall be binding on all employers in the said industry in respect of the employment by them of employees in the classifications for which provision is made in the said award and shall be binding on all such employees". Such declarations, with the date of operation of each shown in brackets, were made on 26 September 1979 (1 November 1979), 26 May 1980 (26 May 1980), 26 September 1980 (26 September 1980), 2 April 1982 (8 February 1982) and 15 March 1983 (7 March 1983). The declarations made on 2 April 1982 and 15 March 1983 took a different form from the earlier declarations but were to the same effect. There may have been such declarations earlier than 26 September 1979 but no reference was made to them during the course of the hearing.

The applicant contends that the relevant classification in clause 5 of the award is the fourth classification, namely -

"4.

Order person and outdoor order person namely employees engaged in collecting orders and/or soliciting business and/or selling away from the employer's place of business."

It is submitted on his behalf that that classification is apt to describe the kind of activities in which the applicant is engaged, that is, he works generally outside the store, he is engaged in the business of collecting orders, measuring up houses for floor coverings and soliciting business, for example, by advising customers as to type and suitability of the floor covering that they might order and offering them alternatives. The fact that the applicant spends time in the respondent's retail store performing the duties of a shop assistant does not, so it is argued, render the classification inappropriate as its application is to be judged by reference to the dominant or main activity in which the applicant is engaged.

Counsel for the applicant, referring to the circumstance that no evidence has been led to prove that the applicant was at any material time a member of the Shop, Distributive and Allied Employees' Association, submits that this circumstance is irrelevant to the question whether the applicant is entitled to the benefit of the award because of the express provision contained in sub-clause 4(a) thereof to the text of which I have already referred. It is also asserted that the award is binding on the respondent.

The only evidence as to the amounts paid by the respondent to the applicant (or to the Commissioner of Taxation on his behalf) in respect of his employment is that contained in the pay slips received by the applicant from the respondent. Each pay slip gives details of the earnings of the applicant during the pay period to which it relates. The pay slips in evidence cover only the period from and including the pay period ended 10 December 1981 to and including the pay period ended 5 May 1983. An examination of the pay slips discloses that over the whole of the period mentioned the respondent paid an amount of $155.40 per week, that amount being described as "wages". In respect of three pay periods amounts totalling $58.76 are shown as having been paid by way of overtime. Those amounts are also described as "wages". The pay slips also disclose payments described as "commission" and as "car allowance". The payments described as commission vary from nothing in respect of some pay periods to $283.36 in respect of the pay period ended 10 December 1981. The total amount paid by way of commission during the period covered by the pay slips is $5,422.69. Car allowance was paid at the rate of $58.50 per week for the period from the pay period ended 10 December 1981 to and including the pay period ended 5 August 1982 and at the rate of $64.50 per week thereafter.

Counsel for the applicant submits that in respect of each pay period a comparison should be made between the amount of $155.40 per week shown as "wages" and the weekly rate of wages prescribed for classification 4 in clause 5 of the award. That award rate varied from $202.10 per week as at 1 December 1981 to $212.10 from the first pay period to commence on or after 7 December 1981, $222.10 per week from the first pay period to commence on or after 15 March 1982 and $231.10 per week from the first pay period to commence on or after 1 July 1982. It is argued that this is the correct comparison to make as the amounts paid by way of commission and car allowance do not have the character of wages. Reference is made to clause 28 of the award.

The respondent denies that the applicant properly falls within category 4 in clause 5 of the award. It further says that, if that classification is apt to include the applicant, his claim fails on one of two grounds. First, it is said that the applicant has not established that he is entitled to the benefit of the award in the sense in which that expression is used in section 123 of the Act as he has not shown that he is, or has at any relevant time been, a member of the registered organisation of employees mentioned in the award. Secondly, it is said that the applicant has not established that the respondent has at all relevant times been bound by the award. As I have said, the respondent is not named as a party respondent to the award and, although the respondent concedes that at the present time it is a member of The Retail Traders Association of New South Wales, the respondent relies on the failure of the applicant to prove that it was a member thereof at all times relevant to the applicant's claim.

The respondent also draws attention to the declarations made from time to time under section 49 of the Act to the effect that the award in the form in which it stood at the time each such declaration was made was to be a common rule operating in the Australian Capital Territory. It is argued that, even if the applicant is properly regarded as being within the classification in the award on which he relies, his entitlement to the benefit of that award arises by virtue of the declarations made under section 49 and not otherwise.

The final submission on behalf of the respondent is that the applicant can only succeed to the extent to which the amount to which he is entitled under the award exceeds the total of the amounts paid by the respondent by way of wages and commission during the relevant period. In this regard reliance is placed on the decision of the Industrial Commission of New South Wales in Ray v. Radano (1967) A.R. (N.S.W.) 471.

At the conclusion of oral argument counsel expressed an intention to make written submissions upon some of the questions that had been raised. I agreed to defer giving judgment until those written submissions had been received and considered. The last of the submissions was received on 6 January 1984.

In my opinion the applicant does not fall within classification 4 in clause 5 of the award. To come within that classification, read as it must be in its context, the applicant must establish that the dominant features of his duties answer the description of "collecting orders and/or soliciting business and/or selling away from the employer's place of business".

I am satisfied, on the evidence, that the applicant is employed not to collect orders or to solicit business or to sell floor coverings, though there may be occasions on which he engages in each of those activities. What he is employed to do is to go to houses and measure and quote for floor coverings. Although he may in some instances be the first point of contact with a potential customer (as, for example, when he attends to a person who comes to the respondent's retail store enquiring about floor coverings at a time when the applicant is acting as a salesman behind the counter), that is the exceptional rather than the normal course of events. The applicant in most cases goes to a customer's house to measure and quote for floor coverings because of an interest evinced by the customer independently of any action on the part of the applicant. Similarly, the applicant may from time to time take an order for floor coverings in respect of which he has performed the operations of measuring and quoting, and in that way be engaged in selling, but that is not the essence of the duties that he is employed to perform. I have no doubt that the applicant's duties require skill in, for example, determining the minimum quantity of a floor covering necessary having regard to the shape and size of the area to be covered and the characteristics of the floor covering to be used, particularly its width and, in the case of a patterned floor covering that requires matching, the intervals at which the pattern recurs. In that sense his duties may be described as specialised but that, of itself, is not sufficient to bring him within the classification under which he claims to be paid. Again, from time to time he gives advice as to the suitability of particular floor coverings but I do not regard that circumstance as warranting the conclusion that his duties are properly described as "soliciting business" within the meaning of that expression in the classification.

In the view I have taken it is, in strictness, unnecessary for me to express an opinion on the other matters argued. However, it is desirable, I think, that I say something concerning the argument put on behalf of the applicant that, putting to one side the declarations made under section 49 of the Act, he would be entitled to the benefit of the award (assuming he could bring himself within one of the classifications in clause 5) notwithstanding that he has not established that he is, or has at any relevant time been, a member of a registered organisation of employees party to the award. In my opinion this submission has no foundation and I should express shortly my reasons for so concluding.

For the purposes of his argument counsel for the applicant accepts that the expression in section 123 of the Act "entitled to the benefit of an award" means entitled as a matter of legal right: see Leontiades v. F.T. Mansfield Pty. Ltd. (1980) 43 F.L.R. 193 . Counsel also accepts that in a series of decisions of the High Court of Australia there are statements that a Federal award made in exercise of the powers conferred by the Act cannot impose duties or confer legal rights on a person who is neither a party to nor represented in the dispute or the arbitration proceedings which gave rise to the award. It is argued that this view reflects the limited nature of the power conferred upon the Parliament by section 51 (xxxv) of the Constitution, a power which does not extend to permit the Parliament to legislate, directly or indirectly, to confer rights and obligations upon persons insufficiently connected with the relevant industrial dispute.

Counsel relies upon that part of sub-clause 4(a) of the award which provides that the award is to be binding on each and every employee as defined in the award, whether or not members of the Shop Distributive and Allied Employees' Association. He submits that "the award in the present case can be treated as delegated legislation properly characterised as a law for the government of a territory within the meaning of section 122 of the Constitution" and as such "need not be read down in the same manner as Federal awards operating in the States of the Commonwealth by reason of the constitutional limitation identified in the judgments of the High Court referred to" in Leontiades v. F.T. Mansfield Pty. Ltd. (supra).

There are, I think, a number of points at which this argument cannot be sustained. First, it is not correct to describe the award as a law: see T.A. Robinson & Sons Pty. Ltd. v. Haylor (1957) 97 C.L.R. 177 at p. 182. It may be said to have a legislative character in that it prescribes rules of conduct for the future in respect of the disputing parties but it is not the award itself but the provisions of the Act that carry its provisions into effect and operate to give to its terms the "character of a legal right or obligation": The King v. Kelly; Ex parte the State of Victoria (1950) 81 C.L.R. 64 at p. 81.

Secondly, while it may be accepted that the Act operates in relation to the Australian Capital Territory as an exercise of the legislative power conferred upon the Parliament by section 122 of the Constitution, the Act, as modified in its application to the Territory by section 5 of the Seat of Government (Administration) Act 1910, authorises the settlement of industrial disputes only by conciliation or by arbitration. As Latham C.J. said in Metal Trades Employers Association v. Amalgamated Engineering Union (1935) 54 C.L.R. 387 at p. 403:

"Conciliation may bring about an agreement: arbitration may result in an award. An agreement between two persons may produce an effect upon third persons, but it can impose duties or confer rights only upon those who make the agreement. Similarly an award may produce an effect upon third persons, but it can directly affect the legal relations only of those who were parties to the arbitration proceedings of which it is the result. In industrial arbitration the conception of 'parties' is extended by a doctrine of representation which is in itself associated with the idea of 'industrial disputes'."

Thus it is contrary to the nature of an award made as a result of a process of arbitration that, in the absence of express statutory authority, the award should be read as conferring legal rights on strangers to it.

Thirdly, the Act itself provides in section 61 who is to be bound by an award. For present purposes the relevant provisions are those contained in paragraphs (e) and (f). Paragraph (e) refers to all organisations and persons on whom the award is binding as a common rule (a reference to the provisions of section 49) while paragraph (f) refers to all members of organisations bound by the award. Read in the light of those provisions sub-clause 4(a) of the award must be taken to mean only that an employer bound by the award has obligations towards an employee who is not a member of the registered organisation named. The sub-clause does not have the effect of conferring legal rights on such an employee. As the Act stands, if a right is to be found in a person not a party (in the extended sense mentioned) to the dispute to enforce an award made in settlement of that dispute, it must be found, if at all, in a relevant declaration under section 49 of the Act.

In the result the application is dismissed. In accordance with section 197A of the Act I make no order for costs.