The Queen v The Industrial Commission of South Australia; Ex Parte Adelaide Milk Supply Co-Operative Limited and Others

[1977] 16 SASR 6

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(Judgment by: Mitchell J)

The Queen
vThe Industrial Commission of South Australia; Ex Parte Adelaide Milk Supply Co-Operative Limited and Others

Court:

Judges: Bray J
Bright J
Mitchell J

Subject References:
Industrial law
Award
Redundancy
Jurisdiction of Industrial Commission to include provisions as to redundancy in award
'Industrial matter'
Industrial Conciliation and Arbitration Act, 1972-1975 (No. 125 of 1972-No. 85 of 1975), ss 6, 25, 82

Hearing date: 14, 15, 19, 20 April 1977
Judgment date: 18 May 1977

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Judgment by:
Mitchell J

This motion seeks to make absolute a rule nisi directed to the Industrial Commission of South Australia prohibiting it from hearing and determining an application by the Federated Miscellaneous Workers Union of Australia (South Australian Branch) to insert in an award a proposed clause entitled "Job Security Redundancy", upon the ground that the Industrial Commission does not have jurisdiction, under the provisions of the Industrial Conciliation and Arbitration Act, 1972, as amended, to hear and determine the subject matter of the application for the reasons set forth in the rule nisi namely:

"

(i)

The matters the subject of the said application and in particular the awarding of payments and other benefits to employees dismissed by reason of redundancy as defined in the said application are not industrial matters as defined in the said Act.

(ii)

Such matters are not matters or things arising from or relating to any industrial matter as defined in the said Act.

(iii)

Section 82 of the said Act provides an exclusive code specifying and limiting the circumstances under which such matters may be within the jurisdiction of the Industrial Commission, and the Industrial Commission has no jurisdiction to act in respect of such matters otherwise and (sic) in accordance with the provisions of the said s 82.

(iv)

Such matters are not matters which by any provision of the said Act (other than s 82 thereof) are placed within the jurisdiction of the Industrial Commission.

(v)

It is beyond the jurisdiction of the Industrial Commission to award in terms of the said application or in like terms in such manner as to apply to every employer bound by the said award in respect of every factory in which the said award operates without first taking into account the individual facts and circumstances pertaining to each dismissal or proposed dismissal by reason of redundancy (as defined in the said application) as they occur."

Mr.Commissioner Stevens, before whom the application came, referred to the Industrial Court, pursuant to s 102 of the Industrial Conciliation and Arbitration Act, several questions of law, including the questions whether the Commission has jurisdiction or power to award generally in terms of the proposed clause, and whether the Commission has jurisdiction or power in respect of the redundancy of employees other than in accordance with the provisions of s 82 of the Act. The Court in answering the questions said:

"The Commission has jurisdiction and power to make prescriptions dealing generally with the rights and obligations of employers and employees in the industry in question if employment is terminated by virtue of redundancy, as defined in the claim before the Commission, so that no prescription may be made in relation to any redundancy arising by virtue of the introduction of automation or like technological changes otherwise than within the ambit of the provisions of s 82 of the Industrial Conciliation and Arbitration Act, 1972-1975."

The limitation placed upon the power in that decision has not been challenged by Mr. Quick. The application defines "dismissal by reason of redundancy" as follows:

"An employee dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or partly to:

(i)

The fact that his employer has ceased or intends to cease, to carry on the business for the purposes for which the employee was employed by him, or has ceased, or intends to cease, to carry on that business in the place where the employee was so employed; or

(ii)

The fact that the requirements of that business for the employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where he was so employed, have ceased or diminished or are expected to cease or diminish. This includes: technological automation, mechanization change, re-organization, rationalization or centralization in the processing industry; fall in demand of products for whatever reason; or retrenchment of employees or an employee for any reason whatsoever."

The proposed new clause contains a number of provisions including notice to be given, cessation of recruitment of new employees during the period of notice, retraining of employees, the order in which employees are to be retrenched due to redundancy, the cessation of overtime and the transfer of jobs.

The Industrial Conciliation and Arbitration Act does not contain any reference to redundancy. The United Kingdom made provision for redundancy payment to employees dismissed by reason of redundancy in the Redundancy Payments Act, 1965, and the Employment Protection Act, 1975 (UK) in Part IV set out procedure to be applied when an employer proposes to dismiss an employee for redundancy. In commenting upon the 1975 Act Lord Denning M.R. said in Lloyd v. Brassey ^[15] :

"As I read the Act, a worker of long standing is now recognized as having an accrued right in his job; and his right gains in value with the years. So much so that, if the job is shut down, he is entitled to compensation for loss of the job-just as a director gets compensation for loss of office. It is not unemployment pay. Even if he gets another job straight away, he nevertheless is entitled to full redundancy payment. It is, in a real sense, compensation for long service."

In Re Clerks (State) Award ^[16] the New South Wales Industrial Commission considered an application for a variation of an award to include redundancy payments in circumstances where redundancy was defined in similar manner to the definition with which we are concerned in the proposed amendment to the Milk Processing Cheese Manufacturing & c. Award. The Commission discussed the concept of redundancy payments, as it was interpreted by the Commonwealth Conciliation and Arbitration Commission and under the United Kingdom statutes, and said that at the time of the application before it, namely 2nd July, 1976:

"It can fairly be said that in industrial circles the term redundancy payment has come to mean compensation for losses of various kinds suffered by employees who have given substantial service to an employer and whose services are terminated because, for one reason or another, the employer no longer needs them. A claim for compensation for losses suffered by an employee arising from the termination of his employment because of redundancy is, in our view, completely different from a claim for wages. The principal reason is that there is a fundamental difference in the two concepts. A further reason is that a claim for compensation by way of a redundancy payment is a claim for a once only lump sum, whereas a claim for wages is a claim for regular payments to be made at stated periodic intervals."

I respectfully accept the meaning of redundancy payments as being that adopted by the New South Wales Industrial Commission. In that matter the Commission held that the claim concerned an industrial matter in that it related to "the privileges, rights and duties of employers and employees" holding that that phrase was "wide enough to include the right of an employee to receive at the time of the termination of his employment for reasons of redundancy a sum of money by way of compensation for the loss of benefits which, having regard to the service which he has given, he might reasonably have expected to accrue from his employment had it remained on foot, and wide enough also to include the duty of an employer to pay the sum of money by way of such compensation."

The reasons for the decision continue:

"Without attempting to exhaust the contents of the jurisdictional barrel we believe, too, that an award which conferred such a right and imposed such a duty would be an award determining an industrial matter, namely, a matter relating to "the mode, terms, and conditions of employment" within the meaning of paragraph (b) of the definition of "industrial matter". If at the time when a clerk was negotiating terms and conditions of employment with a potential employer, the clerk sought to have included in the terms and conditions relating to termination of employment a provision that compensation be paid by the employer if the employment were terminated for redundancy reasons after the clerk had given a stated minimum period of service, surely it could not be successfully asserted that such provision did not pertain to the respective rights and duties of the employer and the employee in their capacity as such. (pp. 175-176)."

The definition of "industrial matter" in the South Australian Act is, in many respects, similar to the definition of "industrial matters" in the Industrial Arbitration Act, 1940 (NSW), as amended. In particular it includes as an industrial matter "the privileges rights and duties of employers and employees" and "the mode, terms and conditions of employment." The definition of industrial matters under the Conciliation and Arbitration Act, 1904 (Cth), as amended, also includes those phrases. Mr. Bleby submitted that the reasoning of the New South Wales Commission in the Clerks case, to which I have just referred, was erroneous and should not be followed by this Court. He referred to R. v. Industrial Appeals Court; Ex parte Frieze ^[17] in which the Full Court of Victoria discussed the limitations upon a Wages Board which had power (inter alia) to determine matters relating to privileges, rights and duties of employers and employees. I do not find anything in the judgments in that case inconsistent with the reasoning of the New South Wales Commission in the Clerks case ^[18] . Nor do I agree with Mr. Bleby's contention that, because redundancy pay has a relationship with a particular reason for dismissal of employees, it is thereby not related to the employment.

The proposed new clause does, of course, go much further than merely to provide for payment for dismissal for redundancy. For example, it provides that there must be not less than three months notice of dismissal by reason of redundancy, that such notice is to be given to the employee or employees made redundant and also to the Union Shop steward at the Union Offices. After such notice has been given no new employees are to be taken on by the employer, until negotiations have been completed, to ensure that all employees affected by the notice have been given the opportunity of remaining in employment within the business or within the industry. A proposed provision in an award prohibiting employers from having work done by independent contractors outside their factory or workshop was held not to be an industrial matter within the definition contained in the Conciliation and Arbitration Act 1904-1967 (Cth): The Queen v. Commonwealth Industrial Court Judges; Ex parte Cocks ^[19] . The basis of that decision was that, where the definition of industrial matters contains a reference to employer and to employee, it speaks of the relationship which at common law is known as that of master and servant, and therefore that any question of the employment of independent contractors is outside the purview of the Commonwealth Conciliation and Arbitration Commission. I do not think that the same objection can be made to a provision disentitling an employer from taking on new employees to the disadvantage of present employees, but the application, in so far as that provision is concerned, needs to be considered in the light of s 25(1)(b) of the Act. I shall revert to this later.

Mr.Bleby contended further that the question of redundancy was a social problem and not a problem which directly concerned the employer relationship and he referred to the dictum of Stephen J. in Reg. v. Portus; Ex parte A.N.Z. Banking Group ^[20] :

"Not every demand for reward for work performed will render the subject matter of the demand an industrial matter. The matter demanded must always pertain to the employer-employee relationship so that the subject matter of demands by either party which are, for example, of a political or social or managerial nature will not be industrial matters."

It is, of course, clear that matters which pertain to the employer relationship may also have a social significance. Some provisions in awards which relate to conditions of employment have very great social significance in relation to the health and welfare of employees. Further the benefits sought in the application before the Commission, unlike the benefit sought in Reg. v. Portus; Ex parte A.N.Z. Banking Group Ltd. ^[21] , do have a "relevant connection with the relationship of employer-employee" (per Walsh J. at p. 365). The application does not seek to "range over the whole field of industry" or to "promulgate general principles" and therefore it does not fall within the error proscribed in R. v. The President of the Industrial Court; Ex parte Hume Pipe Company (Australia) Limited ^[22] .

Mr.Bleby submitted that the right to compensation upon dismissal for redundancy was not a right recognized by the common law or by statute and that it had never formed a part of the law of employment in this country. It has certainly not been recognized by statute as it has been in the United Kingdom. It seems to me, however, that there is no reason to say that a master and servant could not at common law have made a contract to enable the servant to receive the like benefits to those which the proposed clause would give him. There is no prohibition at common law against such benefits. Mr. Bleby referred to certain sections of the Act under which he said Parliament had legislated to create and regulate some rights and duties between employers and employees not hitherto recognized by common law, and claimed that this supported his argument that rights and duties not hitherto recognized do not come within the general regulatory powers of the Commission. I have already rejected the argument that the common law excluded an agreement between employer and employee in the terms of the proposed new clause but, in deference to Mr. Bleby's careful argument, I turn to those sections which he referred us in support of this argument.

Section 15 deals with the jurisdiction of the Court. Sub-section (1)(d) gives the Court power (inter alia) to hear and determine claims for amounts due under an award. Of course it was necessary to give the Courts specific power to deal with such claims which otherwise would have been justiciable only in the Courts having jurisdiction to hear monetary claims up to the limits of such claims. Section 29(1)(c) enables the Commission by award to authorize preference in employment to members of a registered association of employees. It seems to me clear that it was necessary for such a power to be given specifically. Whether a person is a member of a registered association of employees is not of itself a matter "within the sphere of the relations of the businessman as employer with a person as employee" (Reg. v. Portus; Ex parte A.N.Z. Banking Group Ltd. ^[23] , per Menzies J. at p. 357). Section 79 provides:

"

(1)

The Commission or a Committee may include in any award a provision that the contract of hiring of every person employed in a particular industry shall be a hiring by the hour, day, week or any other period specified in such award.

(2)

The contract of hiring of every person employed in an industry covered by an award but in which no provision has been made under subsection (1) of this section, shall be, in the absence of an express contract for some other specified period, a contract of hiring by the week.

(3)

Except where the contract of hiring is for a period less than by the day, wages shall accrue from day to day."

The nub of that provision seems to me to lie in sub-s (2) which gives to a contract of hiring in an industry covered by an award, in which no provision to the contrary appears, the status of a contract of hiring by the week. Sub-section (1) reserves the right of the Commission or a Committee to provide that the contract of hiring shall be for a period other than for a week. Sections 156 and 157 are sections which create offences and clearly required specific legislation.

I turn to s 82 which seems to me to be of considerably more significance to the argument. That section provides:

"Notwithstanding any other provisions of this Act the Commission or a Committee may, upon an appropriate application to it, insert in an award, whether by variation of an existing award or in a new award, provisions relating to the following matters-

(a)

the obligations, duties and responsibilities of any employer upon the introduction or proposed introduction by that employer of automation or other like technological changes in the industry in relation to which he is an employer;

(b)

the employees to whom notices of termination of service (being not less than three months) are to be given on account of such introduction or proposed introduction and the form and effect of such notices and the consequences of failure to give such notices, including, without limiting the generality of the foregoing, requirements that the ordinary rate of pay shall be paid for a period being the difference between the notice given and that required to be given under the provisions inserted in the award pursuant to this section and the period of notice to be given shall be deemed to be service with the employer for the purposes of the Long Service Leave Act, 1967, as amended;

(c)

the notification to be given by the employer to the permanent head of such notices of termination of services;and

(d)

such other matters as the Commission or a Committee deems relevant to or consequential upon the matters referred to in paragraphs (a), (b) or (c) of this section."

That section clearly covers the field in relation to redundancy by reason of automation or "other like technological changes", and the Commission has no power to make an award the terms of which conflict with the provisions of s 82. Does the maxim expressio unius exclusio alterius apply to limit the powers of the Commission to insert provisions in an award in relation to loss of employment or employment opportunity through redundancy, to cases of redundancy through the introduction or proposed introduction of automation or other like technological changes? In the Clerks (State) Award case ^[24] the New South Wales Industrial Commission considered the effect of s 88G of the Industrial Arbitration Act (NSW) which contains similar provisions to s 82 of the South Australian Act, but which provides that, in the circumstances set forth in the section, the Commission shall, upon application, make the appropriate provisions, so that the New South Wales section is mandatory whereas the South Australian section is permissive. The New South Wales Commission decided that:

"In enacting sec 88G, the legislature's intention was not to confer a jurisdiction on the Industrial Tribunals but to direct those Tribunals to exercise, on application being made, a jurisdiction which they already possessed and, in exercising that jurisdiction, to award certain minimum provisions."

The South Australia Industrial Court decided, in relation to the present matter, that s 82 was to be regarded as "an expression of the attitude of the legislature that where a deliberate decision is taken by employers to introduce new methods which have the inevitable effect of causing retrenchment of employees due to the introduction of automated or labour-saving equipment, then a significant minimum period of notice should be an essential feature of what is done."

In other circumstances of retrenchment through redundancy the Industrial Court commented that a period of three months notice may not be warranted, and concluded that the legislature left it to the Commission to deal with cases of redundancy brought about by causes other than those set out in s 82.

It is necessary to turn back to s 25(1) of the Act which provides:

"In addition to and not in derogation from the jurisdiction elsewhere conferred on the Commission by this Act the Commission shall, subject to this Act, have jurisdiction to hear and determine-

(a)

any matter or thing arising from or relating to any industrial matter;and

(b)

any question as to the rights of employees in a specified occupation or calling or in specified occupations or callings to do certain work or a certain kind of work to the exclusion of all other employees or to the exclusion of employees in all or some specified occupations or callings,but except as provided in this Act the Commission shall not have jurisdiction over any matter or thing that is within the jurisdiction of a Committee."

The application which we are considering is one which the Commission has jurisdiction to hear and determine only if it comes within s 25(1)(a) and, therefore, it is an industrial matter. An application for payment to employees dismissed for redundancy, which also contains provisions for retraining of employees for other positions, for compensation for expenses incurred in connection with the undertaking of other work and for the like matters, appears to me on the face of it to relate to an industrial matter as defined under the Act in that it relates to the privileges, rights or duties of employers and employees respectively and to the conditions of employment of employees. I find more difficulty with the provisions of the application which inhibit the right of the employer to recruit new employees after a notice of dismissal for redundancy has been given. The enactment of s 25(1)(b) of the Act indicates that the legislature did not regard the privileges and rights of employees as including the rights of employees in a specified occupation to do certain work to the exclusion of other employees. That being so, it is difficult to regard the privileges or rights of employees as extending to the right to continue in employment to the exclusion of any person later recruited. But, even if that part of the application and other parts to which I shall refer later in these reasons are not within the jurisdiction of the Commission to grant, the application can stand if it contains a claim in relation to an industrial matter as defined in the Act.

A question which remains is whether s 82 requires more limited meaning to be given to the words "privileges rights or duties of employers or employees" or to the words "conditions of employment" appearing in the definition of industrial matter than would have been accorded to them had s 82 not been enacted. The words "notwithstanding any other provisions of the Act" at the beginning of s 82 are puzzling. There appear to be no provisions in the Act in direct conflict with s 82 and those words are not apt to describe a mere enlargement of the powers of the Commission and Committee to deal with something which is not an industrial matter. But this leaves the question why was it necessary to enact s 82 of the Act if the Commission already had power to provide for redundancy payments and other benefits for employees dismissed or adversely affected by automation or other technological changes? As to this it is to be noted that s 82(c) certainly provides for a matter which would probably otherwise be outside the jurisdiction of the Commission, and that part of sub-s (b) which relates to the Long Service Leave Act clarifies the status of the period of notice in relation to the Long Service Leave Act as could not have been done in an award, and I doubt whether, apart from sub-s (b), it would be within the jurisdiction of the Commission to order that failure to give a notice of the requisite length in relation to the termination of services should have the consequence provided in that sub-section. There are therefore good reasons for the enactment of s 82(b) and (c), upon the assumption that the Commission already had jurisdiction to make some provisions in an award for the duties of the employer upon the introduction of automation or other technological changes. Sub-section (a), which refers to "obligations, duties and responsibilities" of an employer, is wider than the definition of industrial matter which refers to the "duties" of an employer and may enable the Commission to include in an award, which deals with the matters referred to in that sub-section, provisions which it could not include under s 25(1)(a) of the Act.

During argument reference was made to industrial agreements which are authorized under Part VIII of the Act and to the fact that an industrial agreement remains in force for two years, subject to the power of the Commission to rescind or confirm the terms of the agreement upon an application by one or more of the parties (ss 108(1) and 110). In my opinion s 82 can have no application to an industrial agreement unless such agreement has been varied or confirmed by an order under s 110(2), which order itself becomes an award under the Act (s 6(1)). Unless such an order has been made there is in existence no award into which provisions pursuant to s 82 can be inserted.

I find nothing in s 82 which deprives the Commission of jurisdiction to include in an award provisions for payment to employees dismissed for redundancy.

I have referred to the clause in the application relating to cessation of recruitment of new employees after notice of dismissal has been given. There are other aspects of the application which seem to me to cover matters which may exceed jurisdiction. For example I refer to the provisions which are referred to as "cost of relocation". These costs will not be incurred and cannot be estimated until after the employment has ceased. The provision that an employee who has been retrenched shall be given absolute preference for employment in vacancies within the company and the industry relates to a time after retrenchment. In both instances it seems to me difficult, if not impossible, to say that those proposed provisions relate to either the privileges or rights of employees or to the terms and conditions of employment. However, it is not appropriate in the matter before this Court to attempt to mark a dividing line between those claims in the application which it is within the jurisdiction of the Commission to grant and those which it is not. If necessary they may fall for decision at a later date and in other proceedings. In so far as they relate to redundancy caused by automation or other like technological changes they may be cognizable by the Commission pursuant to s 82(a).

In my view, the Industrial Commission does have jurisdiction to hear and determine an application for benefits to employees upon retrenchment for redundancy. There are matters in the application which do relate to an industrial matter as defined in the Act and therefore the Commission does have jurisdiction to hear and determine the subject matter of the application.