Poulos, Peter Anthony v Waltons Stores (Interstate) Ltd [1986] FCA 159

The Constitution (63 and 64 Vic, Chap.12) s.51 (xxxv), 3.122

PETER ANTHONY POULOS v. WALTONS STORES (INTERSTATE) LIMITED

2. Judgment be entered for the appellant in the sum of

$6,208.30. 3. Costs be reserved. NOTE: Settlement and entry of orders 18 dealt with by

Smithers J.: The appellant has been employed by the respondent as a store representative since 20 November 1978, y proceedings in this court he sought to recover trom the ceespondent the difrerence between the remuneration actually paid to Alm and that wnich would have been paid to him at the tate applicable to work in the classification of fFhat

percormed by him under the Fetail and wholesale Shep Smplovees

'Austcalian Vapital Territory: Award 1odé 'the Award).

There was an issue as to the proper classirication for

the surposes or the Award of the work performed ov tha appellant, Thak 1asue was determined at farst instance in FRis Court on iv Pabruarcy L984 in tavour of the tespondent.

The Vourt decided that the claztsirication was not that

designated in category 4¢ in clause 5 ot the Award with the result that the apnpellant s claim under that clause was not sustainable. However, Upon appeal Oo this Court ut was

t decided that the work perrormed by the appellant was work within that classification or the ecelevant award, namely

"order person and outdoor order person, namely employees

cotlecting orders and/or soliciting business and/or selling away trom the employer 5 place or business",

Accordingly, 1£ the applicant was a person entitled to the

But 1t was a critical u3sue between the parties, whether, even it the appellant were covered by clause 5 oat the

Award he was a person entitled to the benerit thereor. ([t was

Q fe) tended by the respondent that the apreliant was not so entitled because he was not perscnally a party to the Award and was not a member ot any organization or employees which was a party to the relevant Award or of any organization ofr employees. The respondent was a party to and bound by the Award. The appellant s reply to this contention was that at ail material times there was in torce a declaration ct the Conciliation & Arbitration Commission "that the whole of the terms ot the Crelevant] Award shall, in the Australian Capital

Territocy, subject to the specitied exclusions, be a common

vulc or the industry in respect of which the dispute arose

which Lea tc othe working of tuca Award", or & declaration to

"The Vommissicn may, 1f 1t appears to be necessary or expedient for the purpose ot preventing or settling an industrial dispute with which it 1s dealing oc or preventing further industrial disputes, declare that any term of an award shall, in a Territory, be a common rule or any industry LM cannection with which the dispute arose.

The Award was made in and only ror the ACT. Under the Award the wage payable to an empioyee tor the relevant period was in excess or that pald to the appellant. lt the appellant 1s entitled to the crenefit of the Award within the meaning aor

s.123 of the Act he 1s entitled to recover the amount ort that

xcess. The respondent contends that, notwithstanding the declarations that the terms or the Award should be a common rule in the industry, the appellant 15 not so entitled. The contention made 1s, in substance, that just as in relation to an award not extended by a common rule declaration, an employee who 1s not himself a party to the award or a member or an organization ot employees which is a party to it, 1s not antitled to the benefit of the award, so, 1m relation to an award in respect otf which a common rule declaration has been

It 28 said that 1t 1:3 established by the decision in

Leontiades v. F.T. Manfield Fry. Gtd. (1980) 43 PLR 193 that

where an employee works in an industry to which an award 15

applicable, nab ne is not a party to the award or a member ct an Seganization which 15, then, although that award binas Als amployer to pay £2 nim the awari rate, then that emplcyee 12 mot legauly entitied co the senetitc eonrerred cupen an employee by the award. I[f 13 ao established. The decision

had its yoobts in The Australian Boot Trade employe? 3

Federation v. Whybrcow « Uo. w urs. (1910) Ll CLR 311 in which

those provisions of the Act purporting to authorise 'he Commonwealth Court of Conciliation and Arbitration to declace

a common rule in a particular industry and direct that a

common rule so declared should be binding upon the persons engaged in that undustry, were ultra vires the Commonwealth and invalid. I[t as pointed out by O'Conner J. at p.329 that the making of the common rule 13 not an exercise of the power to settle industrial disputes py arbitration and 1s in no way

a settlement or an industrial disputes. He added that:

"Qne can have no mental conception of arbitration without parties in ditference over some matter capable of judicial adjustment by an arbitrator. The exercise or an authority to impose conditions or employment upon employers and employes between whom ther2® exist no such differences, even though 1t may be exercised by a standing arbitral tribunal, 18 not and cannot be an application of arbitral power. No fair reading of sub-sec. xxxv. of sec.S51 of The Constitution can justify the Parliament ot the Commonwealth in conferring such an authority on the Federal arbitration Court."

cope or the award under examination in Geontiades' Case was of course not extended by any common rule declaration. I[t was clear therefore, that, as concluded by Keely J., in respect or an award to which the employee 1S inno sense a

party, he could not be said to ke entitled to any benefit

thereunder. Under Tne Canstitution o3 and é4 Vie, Chan. 12,

the conc1liation and arbitration power contained in 35.51ixxev) provides the only legislative power under which the Commonwealth coula provide ror the rights and cbliyations cf employers and employees in relation fo the terms of employment. It 15 of Fhe essence of arbitration that ut proceeded between parties. Accordingly, an award being the eroduct ot arbitration imposes obligations and conrers rights only Upon parties. An employee neither a party himselr nor a member of an organisation which was, 1s not a party and has no

entitlements under the award. Under Flacitum (x=xv? or 2,1

of the Constitution no rights against an employer can arise

But, un a Territory, the Commonwealth Parliament, in relation to ths mutual rights and obligations between employers and employees, finds 1ts legislative power not only under s.Sl(xzxv) but also under s.122. ft is not suggested that the constitutional limits ot the powers conferred upon farlirament by $.51(xxxv) operate with respect to the legislative powers of the Parliament under 3.122 when 1t legislates for a Territory. Under 5.122 the Parliament may make laws tor the government or any Territory, and that power

Accordingly, the reasons which wnduced the High Court to hold that the intent of Parliament to authorise the Arbitration Court to declare a common rule was invalid do not

apply to laws made tor a Territory. And the substance ot the

Law made roc trae AVT under s.d2'62) of the Act 1s that the TomMlsslan may deciare that the terms of an award shail in a arcitory fe a commen Yue of any industry in connection with whith the digpute in which che awacd was made, arose. "6 to legislate was obvicusly within the law making power or the

It 15 necessary then to ascertain the legal effect of a declaration that the terms or an award are to be a common rule un an industry. To my mind there 1s only one answer to the question. fMathout a common rule the award creates rights and liabilities between the sarties ro tne award. In the absence or a common rule members or organizations which are parties to the award ace themselves considered by law to be farties. As parties they are entitled tc the benetits conrerred by the

terms or the award cn parties, in the capacity in which th

v are parties. Thus they may sus tos payments due to them under the award (section 123 ot the Act). Similarly, they are bound fo observe the obligations imposed on parties by the terms ofr the award, in the capacity in which they are parties. Accordingly, an employee who 1s a party has the benerit or the rights conrerred by the terms or the award upon employees and an employer who 1s a party 1s bound to perform the obligations imposed upon him in his capacity as an employer. And where there 1s a relationship otf employer ana employee between individual employees and individual employers the rights and obligations created by the terms or the award where that relationship exists, are enlorceable as between those two

parties. ln the absence or a common rule none of these

tne cancept cr a common cule 13s that the rights and duties

created by an award in respect or the relationship of emelover

and employes between barties theret> shall apply in respect of

that relationsnip wherever 1t oax1sts in the relevant industry whether or nct the persons in that relationship are parties to the award or members of an organization, The "rule" which ex1sts under the award, and cinds persons who are part1les t¢ 1t by reason af membership of an organization, extendc to persons in the relevant employervemployee relationshis who are not parties. It 1s that rule which the common rule brings into

operation between persons in the relevant relationship of

employer and employee who are not parties to the award.

Tf it were the situation that a common rule meant no more than that the "rule" in an award which obliges an employer to pay to an employee, whether a party or not, the rate prescribed in the award, a provision declaring a common cule would not have contravened the Constitution in the way it was held to do in Whybrow's Case. Such @ provision does not offend the Constitution. That 28 clear from, inter alia,

Leontiades Vase. [t 15 only when a common rule 15 treated as

having 1t5 natural meaning, namely, that the rule for those who are parties to the award 15 extended to those who are not parties that the constitutional restrictions apply. They do

not apply to a law made for the Australian Capital Territory.

Membershir cf an organization may be the avenue through

whith the status cr belng a party to an award 15 reached. but, once that thatus has been acquired the rights and liabilities created by the award, where the relationship of employer and employes 15 present, exist as between the parties to that relationship, tundividually. When the common rule 1s introduced it 1s the terms of the award, applicable hetween persons in the ralevant relationship, that become the common

rule. Those terms apply "commonly" throughout the industry to

ens in the relationship. The concept of a common rule

t the terms of the award are to apply in respect of a relationship ovetween parties who, might, by reason of mempership oF an crganicsation, have been parties toa an award depending on the constitutional power under $s.5lixzxv) of the Constitution, The concept is that persons in the relationship of employer and employee on whom the award would have imposed obligations and conrerred rights 1f they were parties, but who are not parties. shall have the obligations and the rights as between each other wnich they would have, if they were

parties, Thus, as was said by Latham CJ, Dixon, McTiernan,

Williams, Webb and Fullagar JJ. in Rv. Kelly & Ors; ex Parte

"The award does not atfect any non-disputant. tt does not create, (as the common rule would create)

actual rights and duties as between persons who are non-disputants."

If 16 183 said that this was obiter, 1t 1s certainly obiter of

It 1s clear that when the Commonwealth Legislates to

Ww c cr oe a) bey H ua m a re) rs wy FE 1b ry 5s a er a re

appropriately may be adopted by the Commission ror all other

persons in the Territory who, in the relevant industry, are in

the relationship of employer and employee, {f ait 1

convenient ta adopt those terms and conditions and a

declaration 15 made then those terms and conditions apply

i persons relevant celationship in the undustry. [t

rule the exastence ar non-existence organization ofr

employees registered under the Act to which, uf it had

existed, an employee might have been a member had he chosen to

Join 15 an irrelevant matter. Where a common rule has been declared the only relevant question 1s whether there 1s as between him and his employer a relationship ot employer ana

{It 15 not to be doubted that a common rule does etfecta

result which 1s foreign to arbitration. As Isaacs J. (as he

then was) speaking ot the breadth of the power conrerred by

s.Sltxxxv) said un Burwood Cinema Limited x» Urs oo. The

cr te] A Ko)

fe) ks iD iB (Oy io] (a (a) m a pe) TT my D 41925) 25 VLR 528 at p.Sd41: "That 1s to sav, while the 7zommon cule AS One extreme 1s excluded, ¢o ai limitation to individual contract as the other extreme 15s also excluded". But in and tor the Territory, that which 1s foreign to arbitration or otherwise excluded from the scone ot $.51(xxexv} may be validly enacted. And that 1s what has happened in s.49(1) ane the declarations making tne terms ot the Award a common cule in tne Territory throughout the relevant industry

Tt vas argued that before the declarations could te

treated as validly made, there should be evidence that when made sv the Commissioner making the same it appeared to him to be necessary or expedient to do so for the purvose of settling an industrial dispute with which he was dealing or or preventing turther industrial disputes. £ would regard the

avidence of ths making or the declarations as sufficient

proot. It appears to me to be a case of omnia praesumuntur

During the pericd or the appellant': employment the Award was varied trom time to time and rates were increased From time to time. [t 18 an attractive view that a declaration that the terme or an award shall be a common rule cefers to the terms of the award as they may be from time to time. But [ think that it 1s unlikely that Parliament would

intend to impose obligations on persons without providing tor

ons to have an opportunity tc bre heara. It appears to me theretore that the petter view 13 that tne terms of an award as the date ot a relevant declaration are those which apply to persons to whom they apply by virtua of a common rule declaration until that declaration is superseded by a subsequent declaration, notwithstanding that in the meantime

In the statement of claim herein, there 13 a claim for judgment ror remuneration alleged to be recoverable in respect of work perrormed between the date of commencement of the proceedings, nameiy ¢1 January i983, and the date of hearing thereot. Doubtless the principles discussed above would apply to remuneration claimed in respect of work performed at any time arter 21 January 1983 during the course of the appellant's employment with the respondent. But that work 1s not the subject of this judgment. No doubt on the ground that the cause of action which would support such a claim had not arisen at the date or action brought, argument was not submitted to this Court that remuneration in respect of work pertormed after the commencement of these proceedings was recoverable in sucn proceedings even up to the date of hearing. Reflecting this situation the judgment entered pursuant to this judgment 1s tor remuneration accrued due at the date ot commencement of these proceedings and does not

relate to remuneration in respect of any later period.

Having regard to the toregoing the appellant is entitled

to recover the total of the difterence as at 21 January 1983,

the date of the application herein, between the amount actually paid to him as remuneration and the amount which he would have been paid under the Award operating under the common rule declarations which were made from time to time.

That sum according to material supplied by the parties by

The respondent sought to set off against this amount certain sums paid to the appellant as commission 1n addition to wages actually paid. There was no evidence before the

Court as to the actual terms in which the commission was paid.

I would order that the appeal be allowed, that the decision of the trial judge be set aside and that judgment be

entered for the appellant for $6,208.30. Costs be reserved.

I ecutily that this and the 4 prewiag pages are a true copy of the Rew « for Judgment heicm of the

KEELY J.: In this matter I have had the benefit of reading, in draft form, the reasons for judgment prepared by Smithers J. and Gray J.. Those reasons set out the curial history of the appeal, including the terms of the unanimous opinion of this Court, published on 28 March, 1985 which afforded the parties an opportunity to consider their position in the light of that opinion. It 15 unnecessary to repeat the

statutory provisions, the award clauses or the terms of the

declarations that all of the terms of the award should operate as a common rule; nor to repeat the various matters

During the hearing I had some doubts as to whether the applicant, as a person who had not been shown by the evidence to have been a member of a registered organization of employees bound by the award, was "an employee entitled to the benefit of (the) award" within the meaning of s. 123 of

the Conciliation and Arbitration Act 1904 (the Act),

notwithstanding that the Conciliation and Arbitration Commission (the Commission) had declared under s. 49 of the Act that the whole of the terms of the award should "be a common rule of the retail industry in the Australian Capital Territory". In the absence of such a declaration the applicant would not be "an employee entitled to the henefit of an award" - see the reasons given in Leontiades v F.T. Manfieid Pty. Ltd. (1980) 43 F.L.R. 193 at 195-197. It appeared to me to he arguable that a declaration of the award as a common rule might not result in a non-member becoming "entitled to the benefit of (the) award" immediately upon,

and by reason of, the making of the declaration under s. 49.

Since the decision was reserved, I have given the question considerable thought and researched the decisions of both Federal and State courts and arbitral tribunals but,

with one exception (referred to later), I have been unable to

find any authority which decides the question i.e. decides whether a non-member of a union bound by an award is "an employee entitled to the benefit of (the) award" in

circumstances where the terms of the award have been declared by the Commission to be a common rule. That research has not revealed judgments dealing in any detail with the meaning of the words a "common rule" or with the legal effect of a common rule e.g. whether it confers rights upon the employers and employees as well as imposing duties. The decisions of State courts and tribunals which have been examined by me have related to State legislation in terms different from

those of the Act and have not been of direct assistance in

of Ellicott J. in Willis v Chew (unreported - delivered 9 October, 1981 in Canberra). In that decision his Honour said (p. 10) ¢:-~

"Iam satisfied that as a result of the common rule, if not otherwise, the award became binding on the defendant as an employer in the Chemist industry in the A.C.T. and onall employees as described in the common rule. Those employees included the informant. The award conferred benefits on those employees and I am therefore satisfied beyond reasonable doubt that she was, whilst employed by the defendant, entitled to the benefit of an award."

His Honour did not express any reasons for that conclusion.

Despite the absence of any authoritative decision on the question, there are several passages in the reasons for judgment of justices of the High Court which suggest that an award which has been declared to be a common rule confers rights upon all the persons employed by employers upon whom the award is binding as a common rule. In particular there is a statement of the Full High Court in R. v Kelly; ex parte State of Victoria (1950) 81 C.L.R. 64 at 82 which reads as

"The award does not affect any non-disputant. It does not create (as the common rule would create) actual rights and duties as between persons who are non-disputants."

The words which I have emphasised in that passage are an express acknowledgment by Latham C.J., Dixon, McTiernan, Williams, Webb and Fullagar JJ. that the common rule would create rights as well as impose duties. Although that statement does not constitute an extensive examination of the mature of the rights and duties created by a common rule declaration, it 1s a clear, unambiguous and unanimous expression of opinion by six justices of the High Court and, in my respectful opinion, it should be accepted and applied by this Court in the absence of compelling reasons to the contrary. In my opinion there are no considerations to the

In my opinion the general scheme of the Act does not support the view that a common rule only imposes duties and does not confer rights upon non-members; nor is that scheme dependent upon the extent of the membership of organizations registered under its provisions. Although organizations of employees (irrespective of the extent of their membership) play an important part in the functioning of the arbitration system, the existence of such organizations is not essential to the creation or to the

settlement of industrial disputes ~ see R. v Portus and

Further, in my opinion the Act does not aim at encouraging employees to become members of organizations although it does encourage the registration of organizations which are representative bodies of employees (and of employers). The chief objects of the Act, set out in s. 2, include "(e) to encourage the organization of representative bodies of employers and employees and their registration under this Act". In my opinion that object should not be construed as positively encouraging any increase in the membership of organizations of employers or of employees. Section 144 of the Act deals with the entitlement of employees to be admitted as members of the appropriate organization but plainly that entitlement does not conflict in any way with the right of the employees to refuse to

become members. Further, as Latham C.J. said in The King v

Findlay; ex parte Victorian Chamber of Manufactures (1950) 81

C.L.R. 537 at 542,:- ""...no valid award could be made prescribing compulsory unionism". I should perhaps add that in my opinion the common rule provisions apply to the employer respondents named in the original award (as well as to employers and employees not previously bound) in such a way as to confer, upon their non-member employees, the same rights as those conferred upon the employees of employers not

There are other statements which, in my opinion, are to the same effect as the passage in R. v Kelly, quoted earlier, as to the meaning and legal effect of a common rule. In Whybrow's case (1910) 11 C.L.R. 311, the High Court, in holding invalid the general power to make a common rule, placed some reliance upon the fact that persons who would be affected by the common rule "may be working in perfect harmony, and even desirous that their existing relations should not be disturbed. Yet the common rule may come in and disturb them" (per Griffith C.d. at 318 and see O'Connor J. at 326). Barton J. (at 323) referred to "a common rule binding the whole industry and all engaged in it, is plainly to extend the authority of the Court beyond the ambit of the dispute and to bind persons other than the disputants ...". O'Connor J. (at 325) referred to "a common rule of the

industry, binding upon all persons engaged in it, whether as

employers or employees, and whether members of an organization or not". A similar opinion was expressed by

"They were plainly intended to confer, and if validly enacted would confer, jurisdiction to establish by official pronouncement a binding rule

of conduct extending over the whole industry, not merely over the whole area of the dispute in that industry, and applying to every person engaged in it, although he was in no way involved in any dispute either by personal activity, or as a member of an organization, or as a working unit of one of two opposing classes in actual contest though not

In my opinion in Whybrow's case their Honours, in speaking of a common rule binding upon all persons, whether employers or employees and whether members or not, were expressing the same opinion as that expressed (40 years later) in the passage in R. v Kelly; the members of the High Court in Whybrow's case considered that the common rule would create "actual rights and duties as between persons who are non-disputants" (R. v Kelly, supra, at 82) although they did not use those words. In my opinion those passages from the judgments in Whybrow's case show that the nature of a common rule - in contrast to an award arbitrated in a dispute between parties - is that it is binding on all persons engaged in a specified industry, whether as employers or employees and whether they are members of a registered

organization or not. If employees who are non-members are

bound by the terms of the award declared to be a common rule,

in the sense of having duties imposed on them, then it is very difficult to imagine any reason why they would not also have rights conferred upon them. For example, if an award, the subject of a common rule declaration, imposed upon an employee, who was not a member of the organization, a duty to work overtime in certain circumstances, it is difficult to imagine any reason why that employee would not be ""entitled" to be paid at the overtime rate prescribed by the award for performing that duty and have an enforceable right to such Payment. Such a non-member employee would commit a breach of the award if he refused to work such overtime and would be liable to the imposition of a penalty under s. 119 of the

The situation is different where there is no common rule; there the employer's duty to pay wages prescribed by an award to a non-member is a duty owed to the union and 1s not a duty owed to the non-member. Such a duty, with no right in the non-member to enforce it, is itself at first sight surprising. There is nothing, however, to suggest that that result stems from any policy under the Act. It stems from the constitutional limits upon the Federal industrial power in relation to the settlement of interstate industrial disputes. No such constitutional limits apply in relation to the declaration under s. 49 that the "terms of an award

shall, in a Territory, be a common rule of" an industry.

In addition to the foregoing matters, there are some indications in the Act itself which, although not individually significant, when taken together tend to give some support to the opinion that the words "an employee entitled to the benefit of an award" within the meaning of s. 123 are intended to include a non-member where a term of an award has been declared to be a common rule. First, it will be noted that s. 123 does use the word "employee" and not the word "member" although, if the conclusion which I have expressed is wrong, only a member is "entitled". It may be that the word "employee" was deliberately chosen so as to permit a non-member employee to sue where a common rule declaration has been made. Second, where an employer is unable to pay an amount to which an employee is entitled under an award because the whereabouts of the employee are unknown to him, s. 124 permits the employer to pay the amount to the Commonwealth. The provision applies only where "the whereabouts of the employee are unknown" and there does not appear to be any reason why such a provision should be limited to employees who, as members, are "entitled" to an amount under an award. Section 124(2) requires the Commonwealth to hold the amount paid "in trust for the employee" and appears to assume that an employee may be "entitled" to the amount, whether he is a member or not. Third, paragraphs (a), (b) and (c) of s. 61 all use the words "all parties" and paragraph (f) reads "all members of

organizations bound by the award". It will be noted, by way

of contrast, that paragraph (e) refers to "all organizations and persons on whom the award is binding as a common rule"; the word "persons" does not appear in any of the paragraphs of s. 61 other than (e), which is the paragraph dealing with

Those provisions in the Act are in my opinion at least consistent with an intention that, where a common rule applies to the employment of a non-member employee, that person is "an employee entitled to the benefit of the award". In my opinion, having regard to the passages quoted from the judgments of the High Court, the Court should hold that the applicant is "an employee entitled to the benefit of an

I agree with the opinions expressed by Gray J. as to the following matters, in rejecting submissions made by the respondent, and with the reasons given by him for those

1. There is nothing in the form of the declarations made by Mr. Commissioner Brack that in any way suggests that the Commissioner was not performing these functions under s. 49 or that he misconstrued his power to make a

2. The common rule did not have to be made as part of a process of arbitration and accordingly the respondent's submission that

3. Upon the coming into operation of each of the common rule declarations, the respondent became obliged to pay to the appellant the amounts specified in each preceding variation to the wage rate for the relevant classification in cl. 5 of the Award. In the period between each such variation, and the next common rule declaration, the wage rate which the respondent was obliged to pay to the

Lastly, in my opinion there is mo substance in the respondent's contention that it is entitled to set off commission payments to the appellant against any entitlement

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAI, COURT OF AUSTRALIA

Appellant AND: WALTONS STORES (INTERSTATE) LIMITED Respondent CORAM: Smithers, Keely and Gray Ju. DATE: 22nd April 1986

REASONS FOR JUDGMENT Gray J.: This appeal is brought from the judgment of a_ single judge of the Federal Court of Australia, given on 10th February

1984. The appellant claims, pursuant to s. 123 of the

Conciliation and Arbitration Act 1904 ("the Act"), wages alleged

to be due to him pursuant to the Retail and Wholesale Shop Employees (Australian Capital Territory) Award 1968 ("the

Award"). The claim is based on an allegation that the appellant fell within the classification "orderperson and outdoor orderperson, namely employees engaged in collecting orders and/or

soliciting business and/or selling away from the employer's place

of business", in ci. S cf che Awasd, which deais with wages.

Tne learned trial judge neld that the appellant did not fall within that classification. Aithougn he recognized that 1t was unnecessary to do so, his Honcur went on to consider other questions which had been argued. He expressed the view that the appellant had, in any event, no right of action in respect of the

The appeal first came before this Court on 28th March 1985. On the following day, the Court expressed 1ts conclusion that the learned trial judge had erred on the first issue, im the

"This is an appeal against an order by tne trial judge dismissing a claim by the appeliant undér s. 123 of the Conciliation & Arbitration Act 19504 for a sum said to be due to him as wages pursuant to the provisions of the Retail & Wholesale Shop Employees (Australian Capital Territory) Award 1968. Subject to questions of law the critical question is whether the work proved to have been performed by the appellant for the respondent was work which falls within classification number 4 1n clause 5 of the Award. The terms of that classification are

""orderperson and outdoor orderperson, namely employees engaged in collecting orders and/or

soliciting business and/or selling away from the employer's place of business"

The finding of the learned Judge was that the work performed by the appellant was not work within this classification. He said: "What he is employed to do is to go to houses and measure and quote for floor covering. 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 15 acting asa salesman behind the counter), that is the exceptional rather than the normal course of events."

required to establish that the dominant feature of his duties answer the description in the classification. [t 1s cur view that the question is noc to be resolved by reference to what features of the work performed were the dominant ones out rather whether the work performed was work of the nature ana quality Fulfilling the terms of the classification. The avidence of the appellant was uncontradicted and no reason was suggested py the learned Judge nor submitted to us by counsel why that evidence should not be accepted. From that avidence 1t is in our view established that the work of the appellant included the following operations, namely:

(a) attending the homes of potential carpet purchasers to measure the amount of carpet required for the customers' purposes;

(Bb) offering advice as to the types of floor coverings available from the respondent and most suitable for the customer;

(c) calculating and quoting the prices of the various options open to the customer;

(d) advising the customer as to the credit and terms of credit available;

Ce) obtaining the signature of the customer to an order if the transaction was concluded.

The evidence does not disclose the proportion of visits of the appellant to customers' homes on which an order was actually signed. But it 1s clear that this was always an object which it was the appellant's duty to pursue and that ne was successful in this on occasions. The evidence was that in some cases an order rasulted straight away and in others an order never resulted in further cases 1t resulted after some delay. It was not suggested that the number of cases in which the appellant obtained an actual order on the spot was insignificant. But the important factor 15 that it was his duty to obtain one if he could but, in any event to promote an ultimate sale. The argument put to us on this appeal by the respondent was that accepted by the learned judge, namely, that in the great majority of cases, the initial approach on behalf of the respondent to a potential customer was by what is called a "traveller caller" or some other member of the respondent's staff. The conclusion from this was that the work performed by the appellant was not in the nature of collecting orders or soliciting business or selling. In truth, however, the fact that the first contact was by another member of staff has no bearing on the question of whether what was done by the appellant fitted the classification. Clearly in most cases after the initiating action of the traveller caller the real process of inducing a sale had yet to be performed. But for the follow up by the appellant with all the advice and information which he gave to the customer, with a view to causing her or him to purchase carpet, it may be that a sale would not have eventuated. The work of the

• 4 - appellant was inevitably that of collecting orders, soliciting business or selling. It 1s also clear of

course that 1t was carried on away from the employer's place of business.

Having regard to the above it 1s our view that the work performed by the appellant falls within the relevant classification.

Accordingly, questions of law remain to be decided. The principal of such questions concerned the effect of the making of a declaration that the terms of the award be a common rule in the Australian Capital Territory. For reasons which were valid, counsel for the respondent is unable at this stage to deal with this 1ssue satisfactorily. In the circumstances we publish the foregoing conclusion and adjourn the appeal to a day

to be fixed on the application of either party on notice to the other."

The remaining questions were argued on 10th and (jith

September 1985. Mr. She1ls 9.C. appeared with Mr. Dodson for the

Appellant and Mr. McKeand appeared with Mr. Hatcher for the

The appeal is dealt with on the footing that the Appellant was not at any relevant time a member of the Shop, Distributive and Allied Employees' Association, the only organization of employees on which the Award is expressed to be binding. Counsel for the Appellant made a formal application for leave to call fresh evidence on this point on the appeal, but did not support the application, which was refused. The Court also acts on the footing that the Respondent was not at any relevant time a member of The Australian Capital Territory Employers Federation, or The Retail Traders Association of N.S.W. Those Organizations were the only respondents which the evidence discloses as having been expressed to be bound by the Award. It

was conceded at the trial that the respondent was then a member

t un of the iatter organization, but no admission was made as ta

The appellant was employed by the respondent from 20th

November 1978. On 31st October 1378, the Award had been issued by the Australian Conciliation and Arbitration Commission in a consolidated form, as applicable from that date (print number D8725). Clause 4(a) of the Award provided as follows:

"(a) 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

members of the Shop, Distributive and Allied Employees'

Association and upon the said Association and the members thereof."

"Employees of the classifications mentioned herein (other than an employee in respect of whom a certificate

under section 48 of the Act is in force) shall be paid

the wages set out opposite each such classification." There is then set out a table of classifications, each of which is numbered. The classification numbered 4 1s that which has already been quoted, into which the appellant fell. Beside each

classification, a weekly wage rate 1s specified. The first

"All wages shall be paid weekly in addition to any commission, bonus or premium to which the employee is entitled."

From time to time, the wage rates specified in the table

• 6 - Conciliation and Arbitration Commission. In most cases, the variation was by way of an order deleting the whole of cl. 5 and inserting a clause in the same form, save for changes to the wage rates. In some cases, only the figures in the table were deleted, and other figures substituted. In one case, the order is expressed ain the form of additions to the amounts of wage yates. It 25 unnecessary for present purposes to set out the

From time Co time also there were made by the Austrailan Conciliation and Arbitration Commission declarations that all of the terms of the Award should operate as a common rule. These declarations were substantially in two forms. The form of declaration made hy Mr. Commissioner Brack on 2nd April 1982 and

"The Commission, as 1t appears to be necessary or expedient for the purpose of preventing or settling aundustrial disputes or of preventing further industrial disputes DECLARES that the whole of the terms of each of the following awards shall, in the Australian Capital Territory, subject to the specified exclusions, be a common rule of the industry in respect of which the dispute or disputes arose which led to the making of each such award."

There then followed a list of awards, including the Award. The

declarations made by Mr. Commissioner Stanton on 26th September 1979 and 26th September 1980, by Coldham J. on 26th May 1980 and

by Mr. Commissioner Bain on 20th April 1983 were in the following

"That the whole of the terms of the Retail and Wholesale Shop Employees (Australian Capital Territory) Award 1968 be a common rule of the retail industry in the Australian Capital Territory and shall be binding on all employers in the said industry 1n respect of the

amployment by them of employees in the classifications for which provision 15 made in the said award and shall be binding on all such employees.

The dates of operation expressed in these declarations do not coincide with the dates of operation of the variations to the Award, nor do the dates of operation of the declarations appear to bear any relationship to the dates of operation of the variations. All that can be said is that, from time to time, declarations have been made after one or more variations to the

"123 An employee entitled to the benefit of an award May, at any time within 6 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."

In the ordinary course, an employee who is not a member of an organization of employees party to an award, is unable to sue for wages in reliance on that award and s. 123. It was held in Leontiades v. F.T. Manfield Pty. Ltd. (1980) 43 F.L.R. 193 that such a non-member employee was not "entitled to the benefit of...an award" within the meaning of s. 5(1)(b) of the Act. It should be noted that the words used in s. 123 are identical with those used ain s. 5(1)(b). A similar conclusion has been reached, that s. 119(3) does not permit the Court to order payment to a non-member employee of any arrears of pay, because such arrears 1s not an amount to which the non-member employee is "entitled"

within the meaning of that sub-section. See Industrial Relations

Bureau v. Hassan (1982) 62 F.L.R. 169, Australian Insurance

Employees Union v. W.P. Insurance Services Pty. Ltd. (19982) 42

A.L~L.R. 598, and Seymour v. Stawell Timber Industries Pty. Ltd.

(Recéiver and Manager Appointed) (Full Court of the Federal Court

of Australia, Northrop, Keely and Gray Jd., Sth July 1585,

The reasoning which leads to this apparently unusual conclusion derives from the limits of the legislative power in 5s. 5Sl(xxxv) of the Constitution. The relevant limits are that laws can only be made by the Parliament with respect to conciliation and arbitration, and for the prevention and settlement of

From its earliest days, the Act has contained some provision for the application of awards as common rules. In its original form, as s. 38(f) of the Act, such provision empowered the then Court of Conciliation and Arbitration:

"to declare, by any award or order, that any practice, regulation, rule, custom, term of agreement, condition of employment or dealing whatsoever determined by an award in relation to any industrial matter shall be a common rule of

any industry in connexion with which the daspute arises:

Provision was made for notification by advertisement of the proposal to declare a common rule, and for the hearing of

interested persons and organizations. In Australian Boot Trade

Employees' Federation v. Whybrow & Co. (1910) 11 C.L.R. 311, the

High Court of Australia held that such a provision was not a valid exercise of the legislative power contained in s. 51l(xxxv)

of the Constitution. The reasoning of the Court was based on the

-a. view that, because a common rule extended the application of an award beyond the parties to a dispute, a common rule could not be characterized as the process of conciliation or the process of arbitration. Notwithstanding this decision, the provision remained, and as the Act stood after Act No. 10 of 1947, it contained what was then s. 43B. Sub-section (1} of that section contained a general power to declare any term of an order or award to be a common rule sf any industry in connection with which the relevant dispute arose. Sub-section (2) contained a power to declare a common rule in a territory of the Commonwealth. This last-mentioned power was in terms similar toa

that given by the present 5s. 49(1). In R. ve. Kelliv; ex parte

State of Victoria (1950) 81 C.L.R. 64, an attempt was made toa

argue that Whvybrow's case should be overruled, and that the general power to make a cerm of an award a common rule in an industry should be regarded as validly granted to the Court of Conciliation and Arbitration. This attempt failed, and the High Court of Australia again held that the general power was

It has been recognized in a number of decisions that an organization of employees 15 able to create a dispute, in Settlement of which an award can be made, concerning the terms and conditions of employment of persons who are not members of that organization. The reason for thas conclusion lies in the interest which such an organization has ain protecting the Standards of wages and other terms and conditions of employment of 1ts members, by preventing those standards from being undercut

by non-member employees contracting with employers on inferior

• io - terms. It 15 well recognized that an award made in this fasnion obliges an employer bound by it to pay the wages and afford the terms and conditions prescribed by the award to employees wno are not members of Che relevant organization. Such an obligation is enforceable pursuant to s. 119 of the Act, by a proceading for a pecuniary penalty, commenced by one or other of the persons or organizations listed in sub-s. (2) of that section. No right, however, lies in a non-member employee to enforce the award by elaim for pecuniary penalty, or to claim the payment of wages or other sums in accordance with the award. The authorities on which these conclusions are based are collected conveniently in

the judgment of the Court in Leontiades v. F.T. Manfield Ftv.

Ltd., referred to above, at pages 194-197. These authorities

give rise to a situation which is most unfamiliar to lavwvers, namely that of ths existence of a legal obligation without any corresponding right in the person to whom the obligation is owed

Clause 4(a) of the Award has already been set out. Apart from the effect of any common rule declaration, that clause would have been operative to oblige an employer bound by the Award to apply to all its employees, whether members of the Shop, Distributive and Allied Employees' Association or not, the terms and conditions of employment laid down by the Award. An employee who was not a member of the organization would have had no right to sue under s. 123 for an amount which his or her employer was bound to pay to him or her. The principal question which arises in this appeal 15 whether the various common rule declarations

give to an employee, who 15 not a member of any relevant

• ll - organization, any greater entitlement than he would have had if

his employer had been named in the Award as a respondent, rather

than being bound to observe it by virtue of a common rule

'49(1) The Commission may, if it appears to be necessary or expedient for the purpose of preventing or settling an industrial dispute with which 1t is dealing or of preventing further industrial disputes, declare that any term of an award shall, in a Territory, bea common rule of any industry in comnection with which the

49(2) Before a common rule is declared under sub-section (1), the Commission shall, by notification published in the Gazette and in such other publications (1f any) as the Commission thinks fit, specifying the industry and the industrial matter in relation to which it is proposed to declare a common rule, make known that all persons and organizations interested and desiring ta be heard may, on or before a specified date, appear or be represented before the Commission and the Commission shall hear all interested persons and organizations 50 appearing or represented."

By s. 12 of Act No. 115 of 1983, there was inserted into the Act

"49A(1) Subject to this section, where the Commission varies a term of an award, being a term that is a common rule of an industry ina Territory, the variation is, by force of this sub-section, a common rule of that industry in that Territory with effect from the date of

(2) Before the Commission varies a term of a kind referred to in sub-section (1), the Registrar shall, in

accordance with the regulations, give notice of the Place where, and the time when, it 18 proposed to hear

(3) Where the Commission varies a term of a kind referred to in sub-section (1), the Registrar shall forthwith, in accordance with the regulations, publish a notice inviting any person or organization interested

and desiring to be heard to lodge, within 28 days after the date of the decision of the Commission, notice of objection to the variation binding that person or organization.

(4) If a notice of objection in relation toa variation is lodged by a person or organization in accordance with sub-section (3), the Commission shall hear the objection and, if 1t thinks fit, may declare that the variation is not binding on that person or organization.

(5) Where the Commission makes a declaration under sub-section (4), the Registrar shall give notice of that fact in accordance with the regulations.

(6) A variation that is a common rule under this section-

(a) is not enforceable before the expiration of the period of 28 days referred to in sho-sectron (3);and (6b) af a notice of objection in relation to the variation is lodged Dy a person or organization in accordance with that sub-section - 15 not enforceable against that person or organization before the hearing of the objectian is finally disposed of." This section came into operation on 27th February 1984. Tts operation was, therefore, too late to affect any of the matters directly the subject of this appeal. As will be seen, however, both parties relied upon s. 49A in support of their arguments as

The other relevant provision of the Act is s. 6l1(e).

"61 An award determining an industrial dispute is binding on-

(e) all organizations and persons on whom the award 1s binding as a common rule; and

• 13- Nowhere in the Act is the term "common rule" defined.

Its precise meaning 15 not easy to ascertain. It 15 not defined

as an expression by the Oxford Dictionary. The most appropriate

Meaning of the word ""common" given by that dictionary is "of general application". This suggests that a common rule is a rule of general application. The phrase 15 defined by the Macquarie Dictionary in the following terms:

"a provision of an award of an industrial tribunal which

has general application throughout the whole of the

Beatrice Webb, Industrial Democracy, first published in 1897. That work was a study of trade unionism in the United Kingdom. Instances of the use of the phrase "Common Rule", which always appears with initial capitals, follow. At page 179 it is said:

"Without a Trade Union in the industry, it would he

almost impossible to get a Common Rule extending over a

whole district, and hopeless to attempt a national agreement."

"Yet arbitration has one characteristic feature in common with the higgling of employers and workmen which it supersedes. The arbitrator's award is a general ordinance, which, in so far as it is accepted, puts an end to Individual Bargaining between man and man, and thus excludes, from influence on the terms of employment, the exigencies of particular firms. It establishes, in short, like Collective Bargaining, a Common Rule for the industry concerned."

At page 554, when speaking of industries controlled by monopoly

"Against the unlimited resources, the secured monopoly of custom, and the absolute unity of will enjoyed by

• 14 - these modern industrial leviathans, the quarter of a million accumulated funds of the richest Trade Union, and the clamor of even one or two hundred thousand obstinate and embittered workmen, are as arrows against ironclads. In such cases the only available method of securing a Common Rule is Legal Enactment--difficult, in

the face of interests 50 powerful, for the Trade Unions to obtain, but once obtained, in so highly organised an

It may be seen from these references that a Common Rule is intended to be a rule of general application in the industry concerned. This conclusion, however, does not answer some important questions about the declaration of an award as a common rule. Does such a declaration only extend the award by imposing obligations on employers, as if they had been made respondents to it? Does 1t ain addition give rights to members of any organization of employees originally party to the award, or to

members of any other organization of employees? Or, does it give

The passages quoted from the Webbs may well be instructive as to the meaning of the phrase 'common rule" generally understood in 1904, when the Act was passed. Those passages suggest that what was contemplated by the Webbs as a common rule was something which imposed an obligation on employers, but did not give an enforceable right to empicyees. Unless the relationsnip of principal and agent existed between a trade union and each of aits members, no member would have acquired any right to sue upon a common rule established by

collective bargaining between the union and employers.

• 15 - Similarly, 1f arbitration of the kind contemplated by the Webbs occurred, a resulting common rule would not have given rise to a right in any employee to sue for its benefits. Of course, the common rule might have become part of each individual's contract of employment, in which case the employee could have enforced it. The right to enforce, however, would have arisen from an event Separate from the common rule itself. Similarly, if a common rule were to have been embodied in legislation, as the Webbs contemplated it might, the legislation itself would have provided the means of enforcement. Again, the means of enforcement may be

The term "common rule" was also current in the industrial arbitration legislation of New South Wales in 1904.

Section 37 of the Industrial Arbitration Act 1901 (N.S.W.)

"37. In any proceeding before it the court may do ail or any of the following things with a view to the enforcement of its award, order, or direction-

(1) declare that any practice, regulation, rule, custom, term of agreement, condition of employment, or dealing whatsoever in relation ta an industrial matter, shall be a common rule of

an industry affected by the proceeding; (2) direct within what limits of area and subject to

what conditions and exceptions such common rule shall be binding upon persons engaged in the Said industry, whether as employer or as employee, and whether members of an industrial

union or not;" The presence of specific powers to extend the binding effect of a common rule to employees, aincluding non-member employees, 15 Significant. The term is still used in s. 94 of the Industrial

Conciliation and Arbitration Act 1961 (Qld.), which provides as

"The Commission may declare that any industrial agreement shall have the effect of an award and be a common rule of any calling or callings to which it relates, and the agreement shall thereupon, subject as hereinafter provided, become binding on all employers and employees, whether members of an industrial union or not, engaged at any time during 1ts currency in any such calling within the locality specified in the agreement, but before acting under this section the Commission shall give all parties, likely in its opinion to he affected, notice by advertisement or otherwise of its intention to extend the operation of such agreement, and Shall hear any parties desiring to be heard in opposition thereto."

It will be noted that this section contains its own provision as to the binding effect of ai common rule. Apart from Queensland, the States appear to have abandoned the use of the term "common rule" in their industrial legislation. Each State act contains specific provisions as toa the binding effect of awards and

It would have been open to the Parliament, in enacting common rule provisions for territories, to make such specific provision as to their binding effect on employees. Section 6l(e), for anstance, could have provided specifically for such effect. Comparison may be made with s. 61(f), under which an award is made binding on "all members of organizations bound by the award". The form of s. 61(e) really begs the question, upon which persons 15 the award binding as a common rule? Nor does s. 123 of the Act assist in answering this question, when it refers to an "employee entitled to the benefit of an award". The general scheme of the Act does support the view that a common

rule only imposes obligations, without giving rights to

• 17 - non-member employees. Among the chief objects, set cut ins. 2

"(@) to encourage the organization of representative bodies of employers and employees and their registration under this Act; and

(f) to encourage the democratic control of organizations so registered and the full

participation by members of such an organization an the affairs of the Organization."

The whole scheme of the Act is heavily dependent upon membership of organizations registered under its provisions. Such organizations may create disputes, by the service of logs of Claims; they then participate in the processes sf conciliation and arbitration with respect to those claims. They and their members are bound by the resulting agreements (see 5s. 28) or awards (see s. 61). An employer upon whom an award 1s made binding as a common rule would mot he expected to have the same rights to seek a variation of the award as would an employer

bound as a result of being a party to the dispute, or a member of

an organization which was such a party. It is hardly consistent with the aim of encouraging membership of organizations to give to non-member employees rights against employers, which those amployees would not have had if their employers had been parties to the award. Indeed, such a result would be anomalous; non-member employees of respondents named in the award would have no rights, whereas non-member employees of employers bound by the

award as a common rule would. This last~mentioned anomaly miqnht

be thought to be overcome if the common rule were s@#ean a applying to the original parties tc the award (so far as they

Carry on their operations within the territory concerned), sa

• 18 - that employees of the original employer respondents would acquire rights against their employers, on the making of a common rule declaration. This approach, however, would lead toa result which 1s difficult to justify logically. Each such respondent would be bound by the award by virtue of s. 6l1lla), (Bb) or (c) of the Act, as a party to the dispute settled by the award. Additionalliv, each such respondent would be bound by the award as a common rule. Different consequences, with respect to non-member employees, would attach to the two methods of binding. In a case such as the present, where variations have been made to the Award, and common rule declarations have been made subsequently, an employee might, at one point in time, have rights against an employer with respect to some award matters, but not with respect to others. There seems to underlie the common rule provisions of the Act the notion that a common rule declaration extends an award to participants in an industry who would not otherwise be bound. Section 49(2) makes provision for notification by advertisement of the intention to make a common rule declaration; it does not provide expressly for notification to the existing parties to the award of that intention. Parliament seems to have assumed that existing parties would not have an interest in resisting the making of a declaration. The preferable view, therefore, 18 that a common rule declaration extends the operation of an award to those not already parties to

employees who are members of a relevant organization, and whose

employers are not parties to the award. Is the position of such

~ 19 - member employees any different from that of non-member employees? The answer to this question lies ins. 61(f) of the Act. That provision extends the binding force of an award to members of organizations, that is to persons who have never themselves been parties to a dispute, but whose connection with the dispute arises from their membership of an organization which itself is a party. When the binding effect of an award is extended by s. 61(e8) to an employer not party to the dispute, the binding force of the award with respect to a member of an organization which is bound by the award 1s not taken away. No difficulty is caused by

Regard should also be given to the terms of s. 49(1). A declaration under that provision may only be made if it appears to be necessary or expedient for one of the purposes referred to, namely the purpose of preventing or settling an industrial dispute, or the purpose of preventing further industrial disputes. Higgins J., as President of the Court of Conciliation

and Arbitration, in The Merchant Service Guild of Australasia _v.

The Commonwealth Steam-Ship Owners' Association (No. 2) (1907) 1

C.A.R. 53, at p. 57, saw the purpose of a common rule in the

"The object of the Common Rule is to insure that the employer who is compelled under an Award to incur increased expenditure in relation to his employees shall not be at a disadvantage with his trade competitors.

Its aim is, as far as possible, to place all competitors on comparatively the same level of expenditure in relation to their employees."

A common rule may aid the settlement of an existing

dispute by preventing employees of employers who are not parties

-~ 20 - to the dispute from contracting on terms less favourable than the award. Such undercutting is thought to lead to the risk that employers who are parties to the award will be driven to attempt to angage employees at rates ar on conditions less than the award rates and conditions, and thereby to attempt to re-open the award. New disputes may be prevented from arising if other employers are bound to observe the standards laid down in the award; it will then be unnecessary for any organization of employees to make claims on those employers, and to create disputes with them. Each of these purposes may be accomplished without giving to non-member employees of non-party employers any rights to sue to recover wages, or in respect of other Conditions, in an award. It is true that the meaning of a term in a statute is not necessarily governed by the purpose for which that term may be brought into play. In this case, however, the

purposes for which a common rule deciaration may he made do

appear to throw light on the meaning sof the phrase "common rule".

The traditional meaning of "common rule", the objects of the Act, the general policy of the Act, and the immediate context of s. 49, all tend to suggest that a common rule declaration imposes obligations on employers in the relevant industry, but does not give rights to employees who are not members of organizations. It remains to be seen whether there 1s any

It is difficult to find any examination of the nature of a commen rule in any decision of the Australian Conciliation and

Arbitration Commission, or its predecessor, the Court of

Conciliation and Arbitration. Nothing in the Merchant Service

Guild of Australasia v. The Commonwealth Steam-Ship Owners'

Association (No. 2) (referred to above) indicates that Higgins J. turned his mind to the question whether a declaration of an award to be a common rule gave rights to non-member employees. In The

North Australian Workers Union v. The Northern Territory Pastoral

Lessees Association (1933) 32 C.A.R. 5, Dethridge C.J. declared

that an award should be a common rule of the cattle station industry in the Northern Territory. His Honour expressly limited the operation of the declaration as far as employees were concerned to employees who were members of the applicant union. The express purpose of this limit was to promote membership of that union. Nothing in the decision suggests that any attention was directed to the question whether, if the declaration had extended to all employees, non-member employees would have a

Nor do the judgments of the High Court of Australia which have discussed common rules cast much light on this

aifficult question. There 1s one short passage in the judgment

of the High Court in R. v. Kelly; ex parte State of Vactoria, referred to above, at page 82. That passage 15 as follows:

"The award does not affect any non-disputant. It does

not create (as the common rule would create) actual

rights and duties as between persons who are non-disputants."

This brief passage 1s all the High Court authority which can he

found to suggest that an award declared to be a common rule may

create rights and duties as between employers and their

employees. Although entitled to very great weight, the passage 18 not binding on this Court. The question of the entitlement of a non-member employee was not before the court in that case. No argument appears to have been addressed to it. The comment is a passing one, not essential to the reasoning of the High Court, and certainly does not constitute an extensive examination of the nature of rights and duties created by a common rule declaration. Against the weight of such a remark must be set all of the matters referred to above, which suggest that a common rule does not create rights in non-member employees. The view expressed by

the High Court does not outweigh those considerations.

In Willis v. Chew (Federal Court of Australia, Ellicott 3., 9th October 1981, unreported), a question arose wheather an employer was guilty of an offence, under s. 5(1)(b) of the Act, in dismissing an employee by reason of the circumstance that = she was entitled to the benefit of an award. The relevant employment was in a shop conducted by the employer, in the Australian Capital Territory. There was in force a declaration that the relevant award was aocommon rule in that territory. At pages 10-11 of the print of the judgment, Ellicott d. said:

"TIT have already referred to the Chemists (Australian Capital Territory) Award 1968 and to the common rule made by Mr. Commissioner Stanton. The award was made under the Act and the common rule pursuant to 5s. 49 thereof. TI am satisfied that as a result of the common rule, 1f not otherwise, the award became binding on the defendant as an employer in the Chemist andustry in the A.C.T. and on all employees as described in the common rule. Those employees included the ainformant. The award conferred benefits on those emplovees and I am therefore satisfied beyond reasonable doubt that she was, Whilst employed by the defendant, entitled to the benefit of an award.

Tam therefore satisfied beyond reasonable doubt that on s& December 15980 the defendant dismissed

the informant, his employee, that at the time she was a member of the union, that 1t was an organization registered pursuant to the Act and that whilst she was an empoyee of the defendant, the informant was entitled to the benefit of an award."

It does not appear from this passage, or from any other in the

judgment, that the earlier decision in Leontiades v. F.T Manfield

Pty. Ltd. (already referred to) was drawn to his Honour's attention. Nor does it seem that his Honour was made aware of the difficult issues of law surrounding the question whether a person is entitled to the benefit of an award. Indeed, the repeated statement that his Honour was satisfied beyond reasonable doubt that the anformant was entitled to the benefit of an award tends to suggest that his Honour saw the question as one of fact only. There is no discussion of the possible different effects of a common rule declaration. If the reasoning which I have set out earlier is correct, and if, as his Honour found, the informant had become a member of the relevant registered organization prior to her dismissal, she had thereby become entitled to the benefit of the relevant award, hy reason of s. 61(f) of the Act. A consideration of the effect of a common rule declaration would, therefore, have been unnecessary to his Honour's conclusion. I am unable to regard Willis v. Chew as authority for the proposition that an employee, not a member of a registered organization, is entitled to the benefit of an

Because, on the evidence before the Court in the present case, the appellant was not a member of the Shop Distributive and

Allied Employees Association at any relevant time, none of the

• 24 - common rule declarations with respect to the Award created any right enforceable by him. At no time was he a person entitled to the benefit of the Award, within the meaning of 5. 123 of the Act. From this conclusion, it follows that the appeal must be

In normal circumstances, it would be unnecessary to deal with other arguments which were put on behalf of the respondent. The present case, however, 15 unusual. Even though the appellant is unable to sue for any amount of arrears of wages under the Award, it must be recognized that the respondent, if it 15 bound by reason of the common rule déclarations, was and remains obliged to make payments to the appellant in accordance with the Award. It should not be assumed that the respondent will neglect its obligations; to the contrary, the appellant is entitled to expect that he will be paid any amounts which the respondent is obliged to pay him by the Award. There may be proceedings, brought by a competent person or organization, for recovery of a penalty pursuant to s. 119 of the Act, to enforce the payment of such amounts. For these reasons, it is appropriate to determine the extent of the respondent's obligation, if any, to the

Counsel for the respondent drew attention to the limitations on the power to declare a term of am award to be a common rule, which are expressed in s. 49(1) of the Act. Such a declaration can only be made with respect to an industry in connection with which a particular dispute arose. That dispute

must be one with which the Commission is dealing at the time when

• 25 - it makes the declaration. In addition, the Commission must be satisfied that it appears necessary or expedient for the purpose of preventing or settling the particular dispute, or preventing further industrial disputes, to make a declaration. Counsel did not contend that the declaration must show on its face that each of these requirements have been satisfied. Indeed, it is to ke expected that any party seeking to show that a common rule declaration was made without power would carry the onus of proving that the Commission was not performing its function in some relevant respect. It was contended, however, that the declarations made by Mr. Commissioner Brack, in the form which is set out above, showed that the Commissioner had not observed the requirements of s. 49(1). Attention was drawn to the identification in those declarations of the industry in which the common rule was to operate as being the industry in respect of which the dispute or disputes which led to tne making of the relevant award arose. It was said that those disputes were not disputes with which the Commission was then dealing, and that accordingly the Commissioner has misconceived his function and

This argument involves a fundamental misunderstanding of the manner in which the Australian Conciliation and Arbitration Commission deals with disputes. By far the great majority of disputes coming before that Commission are "paper disputes", which arise from the service of logs of claims on the one hand, and a failure to grant those claims on the other. It 1s rare for

such a dispute to be settled entirely by the making of an award;

the dispute is only partiy settled, and subsequent variations to

• 26 - the award are made within the ambit of the original dispute. it is, therefore, possible for the Commission to be dealing with a dispute when it has before it the question whether a term of an award should be made a common rule ina territory. As I have already pointed out, the making of a declaration that a term of an award shall be a common rule in a territory can be regarded as conducive to the settlement of the existing dispute. Nor should it be forgotten that the Commission may make a declaration if to do so would be necessary or expedient for the prevention of further disputes. There is nothing in the form of the declarations made by Mr. Commissioner Brack that in any way suggests that the Commissioner was not performing these functions, or that he misconstrued his power to make & common

It was further contended that the power given by s. 49(1) of the Act was no more than an aspect of the general powers of the Commission, which were limited to conciliation and arbitration for the settlement of actual disputes. In other words, counsel for the respondent argued that a common rule could only be made as part of the process of arbitration, and only with respect to identifiable parties to a dispute, or interveners in relation to that daspute. If this argument were correct, it is hard to see why s. 49 is to be found in the Act. The structure of the section makes obvious its intent. It pre-supposes that there is already in existence an award. It empowers the Commission to extend a term of that award to be a common rule in a particular industry. That power is a clear departure from the

process of conciliation and arbitration. This was recognized by

the High Court of Australia in both the Whybrow and Kelly cases,

an which it was held that the power to make a common rule did not

fall within the constitutional power with respect to conciliation

The respondent is, therefore, bound by the Award by virtue of each of the declarations of the terms of the Award as a common rule in the industry in which the respondent conducts its Business in the Australian Capital Territory. There remains a question as to the effect of variations to the Award upon its operation as a common rule, and of the successive common rule declarations in relation to the variations. Three alternative Propositions were raised in argument. In the first place, counsel for the appellant argued that any common rule declaration automatically picked up all subsequent variations to the Award, so that the respondent became obliged to pay to the appellant the amount of the wages specified in each variation, from the date on which that variation became operative. The primary contention of counsel for the respondent was that, upon the making of a variation to a term of the Award which was a common rule, the Original term ceased to exist altogether, and the respondent had no obligations towards the appellant at all until the next common rule declaration was made. If this primary submission were not accepted, the respondent argued that any variation to a term of the Award was not applicable to the respondent until the next subsequent common rule declaration became operative. Each side relied upon the provisions of s. 49A of the Act as showing what Parliament understood to have been the law with respect to

variations of common rule terms, before the passage of that

It would be surprising if Parliament had intended that variations to a term of an award should bind all employers in an industry, without those employers having any opportunity to make submissions om such variations. The provisions for advertisement and a right to be heard, which appear in 5s. 49(2) of the Act, indicate an intention of Parliament that employers should have a means of ascertaining what obligations it was proposed to place on them, and being heard with respect to such proposed obligations. If the argument of the appellant were correct, until s. 49A was enacted, it would be possible for variations to become obligations upon persons, without their having had any opportunity to be heard in relation to such variations. Counsel for the appellant argued that s. 49A's only function was to give such an opportunity, it being recognized that variations were already binding as soon as made. The better view, however, is that s. 49A was enacted to do away with the time lag between a variation and the next common rule declaration, and to resolve the questions which arise from the existence of such time gaps in

It would be equally surprising if an employer's obligations were to disappear entirely, simply because a variation was made to a term of an award binding on that employer by reason of a common rule declaration. A variation does not render null and void the pre-existing term, where no common rule exists. It is difficult to see why it should do so where a

There is nothing difficult about the continued operation of the original common rule term upon those bound by a common rule, even after a variation, operative between parties to the Award, has been made. Nor is there any difficulty in seeing that the next common rule declaration should make operative all variations to the relevant terms which have occurred since the last common rule declaration. Indeed, it is only this view which would explain the successive common rule declarations which have been made in relation to the Award. Upon the coming into operation of each of those common rule declarations, the respondent became obliged to pay to the appellant the amounts specified in each preceding variation to the wage rate for the relevant classification in cl. 5 of the Award. In the period between each such variation, and the next common rule declaration, the wage rate which the respondent was obliged to

One final argument was raised on behalf of the respondent. It was put that the respondent was entitled to set off against any wages it was bound to pay the appellant payments made by way of commission to him. In truth, the defence was one of satisfaction, rather than one of set-off; there was no

allegation of any debt owed by the appellant to the respondent.

This argument ran foul of cl. 28 of the Award, which required the payment of wages to be in addition to any commission. Even in the absence of this clause, it would have been doubtful whether an employer could plead satisfaction in

this way. It has been held that at is not open to an employer to

• 30 - claim that its obligations to an employee in respect of one period have been satisfied by over-award payments made in another

period. See Lynch v. Buckley Sawmills Pty. Ltd. (1984) 3 F.C.R.

503, at page 509. It may be that payments made expressly for one purpose cannot be relied upon as having satisfied obligations under another head altogether. It 1s not necessary finally to

decide this point, however, which should await full argument on

I certify tnces ths and the ad preceding p.. us a 6 a true copy of the Reasons for Jiugmeat herein of his Eonour