Blackley v Devondale Cream

Blackley v Devondale Cream - [1968] HCA 2 - HCA 1968 case summary — Zoe

[7]

The appellant bases his whole argument on the proposition that the question to which the federal provisions gave their answer was, what should be the minimum rates of wages for the employees of the employers bound by the award. But this is ambiguous, and it is of critical importance to perceive and resolve the ambiguity. The question may mean, what should be the minimum rates of wages to which any employee, whether unionist or not, should be entitled as against his employer; but on the other hand it may mean, what should be the minimum rates of wages which the members of the union shall be entitled both to receive from the employers for their own services and also to have the employers pay to non-union employees for theirs. These questions are in completely different fields. The first is a question as to the rights and obligations inter se of each employee, whether unionist or non-unionist, and his employer. The second is the same in respect of unionist employees, but in respect of non-unionists it is a question as to the rights and obligations inter se of the union and its members on the one hand and each of the employers on the other. That is to say that as regards non-unionists it is a question as to the extent to which the employers' freedom to engage non-union employees on such terms and conditions as they may be willing to accept shall be curtailed so that the members of the union shall not be at a disadvantage in the labour market. It is true that this latter question relates to the wages which the employers shall pay to their non-union employees, but it has nothing whatever to do with the legal situation between them. Consequently a federal law which, while intending to provide the exclusive answer to this question, does not exhibit any intention to confer rights upon the non-union employees and correlative obligations upon their employers leaves the subject of the non-unionist employees' minimum rights outside its operation, and therefore wide open to be governed by State laws which are capable of being simultaneously observed.

[9]

That the federal law with which we are here concerned did not intend to deal at all, let alone exhaustively, with the subject of the lowest rates of wages which non-unionist employees should have a right to receive from employers in the industry is, it seems to me, a necessary conclusion from the language of the award, from the terms of the Act and from the limited character of the authority which the arbitral body was exercising when it made the award. The language of the award is plain enough: the employers who are bound are bound, not in favour of all their employees whether members of the union or not, but "in respect of" all such employees. There is an eloquent abstention from any form of words which might suggest that the award is conferring rights on employees who, being non-members of the union, were strangers to the dispute and the settlement of it. The Act likewise refrains from conferring any rights to the benefit of an award upon employees who are not bound by the award; and the specification in s. 61 of the persons bound by an award does not include an employee who was neither a party to the dispute which the award settled nor represented by an organization which was a party to it. The provisions as to enforcement of awards, ss. 109, 119, 123, show plainly that such an employee cannot recover wages by virtue of the award. So far as he is concerned the award is res inter alios acta. The authority to make it was conferred as an exercise of the Parliament's power under s. 51 (xxxv.) of the Constitution to make laws with respect to arbitration for the settlement of industrial disputes extending beyond the limits of any one State; and it would obviously be foreign to the whole concept of the settlement of a dispute, and to the whole concept of an arbitration for that purpose, to give the arbitrator authority to regulate the rights and obligations of persons who, not being parties to the dispute, could not in the nature of things be parties to the arbitration for its settlement.

[10]

This is not only recognized by but is the foundation of the judgments in this Court which establish that a federal award may validly contain provisions protecting members of a disputing union by forbidding the disputing employers to give to non-members of the union less advantageous terms or conditions of employment than the award prescribes for members of the union (provided, of course, that the ambit of the dispute is wide enough for the purpose). Indeed, before the principle was established, Isaacs J., in contending for it, put the matter squarely upon its correct basis. In Amalgamated Engineering Union v. Alderdice Pty. Ltd.; In re Metropolitan Gas Co. [1] his Honour said: "The Act necessarily contemplates a dispute between given disputants. The Court, of course, cannot go beyond the dispute of those parties. It can only grant something for their benefit and in relation to them. But that is not the point here. The point is: What can they dispute about as an industrial matter affecting their relations?" The italics are his Honour's, and I adopt their emphasis. Only "their" relations are within federal competence. The general question was settled in 1935 in the Metal Trades Case [2] , from which it will suffice to make two quotations. Latham C.J. said: "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" [1] . And Dixon J. was no less specific: "The reason for the award would be to compose the difference between the disputants, and it would be an award "with respect to reciprocal duties and obligations of the parties appearing or represented in that dispute". But one of the reciprocal duties would be to employ strangers only on the same terms as those parties" [2] .

[14]

Finally, in Reg. v. Graziers' Association of N.S.W.; Ex parte Australian Workers' Union [6] , the Court dealt specifically with the effect of a prescription in an award of the minimum rates to be paid to employees as read with a provision that the award should be binding on certain employers "in respect of their employees whether members of the union or not". In a joint judgment Dixon C.J., McTiernan J. and I said: "We are concerned only with its operation under the words "or not". By those words it purports to impose a duty upon the employers not to pay less than a stated minimum " (my italics) "to employees not members of the organization. To whom is this duty owed? Certainly not to such employees themselves. They are not parties to the dispute." Then we went on to point out that the inclusion of the provision in the award had in that case been sought by the employers, with the purpose of destroying the rights of the employees who were not members of the disputing organization to a higher minimum wage under a State award, and added: "It has no purpose except to exclude the operation of the State law and it can have no effect unless it be that." We had no occasion to decide whether it could have that effect, for we thought that there was no such dispute as would enable the provision to be validly made. Fullagar J., however, said that it was not clear to him that the result (of inconsistency) would actually follow, "because State awards give rights to individual non-unionists, whereas a federal award, to which they would not be parties, could not give such rights" [1] . To my mind there is no valid answer to this. His Honour referred by way of contrast to the decision in H. V. McKay Pty. Ltd. v. Hunt [2] , where the Court held that a State determination which according to its terms as applied to the circumstances of the case bound a certain employer to pay a minimum wage to a certain employee was invalid for inconsistency with a federal award, also prescribing a minimum wage, which had been made in settlement of a dispute to which both the employer and an organization of which the employee was a member were parties. The contrast with such a case as the present, where the employee was not a member of the organization, is in my opinion of fundamental importance.

[23]

In this case, however, the rate prescribed by the determination was higher than that prescribed by the award and, upon the basis broadly outlined above, it was argued that the obligation upon the respondent to pay the rates prescribed by the award was an obligation imposed only qua the union and that Macdonald's right to the higher rate prescribed by the determination remained unaffected. We have not before us, however, the log of claims which originated the dispute in settlement of which the award was made. It may, of course, have demanded that non-unionists should be entitled to receive wages at not less than the rates prescribed for all employees. Or it may have demanded that the minimum rate for non-unionists should be the same as that prescribed for members of the union and whether higher or lower than the rate, if any, prescribed by or under any State law. But to have had the log before us would not have assisted the appellant for, in proceedings such as these, it would not be possible for him to impugn the award on the ground that it extended beyond the ambit of the dispute (Harrison v. Goodland [1] ). We must, therefore, take the award as we find it. In terms it provides (cl. 10) that the minimum rate of wages required to be paid by employers shall, in any area or place indicated in the annexed Table A, comprise the amount of the basic wage assigned to that area or place and in addition the amount assigned in the appended Table B for an employee or work of a class indicated therein. The award was made on 20th February 1959 and the determination on 2nd August 1964 and, by the latter instrument a higher rate of wages was prescribed for employees performing the work which Macdonald was engaged to perform and was, in fact, performing. In my view, it was not, by reason of s. 109 of the Constitution, operative, by virtue of the Labour and Industry Act, to impose upon the respondent an obligation to pay a higher minimum rate than that prescribed by the Award (cf. per Isaacs J. in Cowburn's Case [1] ). The fact that the determination was made after the award is, however, not of significance for the result would be the same if the determination had been made earlier.

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Judgment (34 paragraphs)

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