R v Foster; Ex parte Commonwealth Life

High Court of Australia|1952-07-01|Before: Kitto JJ

High Court of Australia Dixon, McTiernan, Williams, Fullagar and Kitto JJ. R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurances Ltd [1952] HCA 10

This is an order nisi for a writ of prohibition directed to the judges who formed the Court of Conciliation and Arbitration which made, on 5th June 1951, an award called the Industrial Life Assurance Agents (Commonwealth Life (Amalgamated) Assurances Limited) Basic Wage Award, 1951. The purpose of the writ sought by the prosecutor is to prohibit further proceedings upon the award. The jurisdiction to make the award is denied on the ground that the supposed dispute in respect of which it was made was not an industrial dispute within the meaning of the Conciliation and Arbitration Act 1904-1951 inasmuch as it was not a dispute in relation to employment or as to any industrial matter pertaining to the relations of employers and employees and that it was not an industrial dispute within s. 51 (xxxv.) of the Constitution.

The use of the word "employed" should be noticed. It is in keeping with the definition of "industrial dispute" as contained in s. 4. That definition limits the conception of an industrial dispute to a dispute as to industrial matters and the expression "industrial matters" is in turn defined so that, no material part of the definition goes beyond the relations of employers and employees. "Industrial matters" means, says s. 4, all matters pertaining to the relations of employers and employees and, without limiting the generality of the foregoing, includes (among other matters the relevant matter of) (c) wages, allowances and remuneration of persons employed. Until the passing of the Commonwealth Conciliation and Arbitration Act 1947, the Act had not limited the conception of industrial disputes to matters pertaining to the relations of employer and employee. The prosecutor company alleges that the persons whose services it uses in canvassing for industrial and ordinary life assurance policies or in collecting the premiums payable by insured persons are not employees. The company maintains that they render these services as independent contractors, so that there is no relation of employer and employee between the company and them. On this ground the company impugns the validity of the award as made without jurisdiction.

It appears that all the persons whom the company engages for this work enter into a contract in writing in a common form. Such a person is described by the agreement as "an agent". The document begins by a statement that the company appoints him as its agent and he accepts the agency on terms it proceeds to enumerate. The terms are contained in twenty-eight clauses and these provide a full and detailed account of the duties of the agent. His remuneration is fixed by schedules on the basis of percentage commissions. None of the clauses subjects the agent to the will of the company as to the manner of carrying out the duties thus specified and the twenty-seventh clause goes out of its way to exclude the relationship of employer and employee, which no doubt the agreement treats as that of master and servant. The clause says that the document contains the whole of the terms of the agency and that it is intended thereby that the relationship between the company and the agent will be strictly that of principal and agent and not in any way whatever that of employer and employee. It goes on to say that the agent is to be under no obligation to perform any duties other than those contracted for in the instrument and that no communication from the company or its officers inconsistent with the agreement or varying or adding to it is to bind the agent and he may regard it as in the nature of guidance and advice which he is to be under no obligation to accept.

Provisions of this character are perhaps more likely to arouse misgivings as to what the practical situation of the agent may be in fact than to prevent a relation of master and servant being formed.

For, if in practice the company assumes the detailed direction and control of the agents in the daily performance of their work and the agents tacitly accept a position of subordination to authority and to orders and instructions as to the manner in which they carry out their duties, a clause designed to prevent the relation receiving the legal complexion which it truly wears would be ineffectual. But there is a more important clause. Clause 27 provides that the duties of the agent under the agreement may be performed by his clerks or servants or by himself personally and that nothing in the agreement is to prevent him from engaging in any other business or employment while the agency continues. If this clause is in fact allowed any operation it goes a long way to exclude the relation of master and servant. It was not contended for the respondent union that the document considered alone amounted to anything but an independent contract for services: it was readily conceded that its provisions contained no contract of service.

The case for the respondent union simply is that it does not represent the reality of the relation in practice of the agents and the prosecutor company. For the Commonwealth intervening an argument was presented to the effect that the relation of employer and employee to which the definition of industrial matters in s. 4 refers does not require a contract of service, a relation of master and servant. A similar question seems to have been raised upon the Industrial Arbitration Act 1901 N.S.W. in the case of Ex parte Haberfield Pty. Ltd. [1] . The Supreme Court of New South Wales assumed that the relation must be, in effect, that of master and servant and decided that in the particular case such a relation did not exist in fact. In this Court it was held that the existence of the particular relation was a question upon which the Arbitration Court might, in the proceedings there under attack, decide finally. Accordingly the correctness or incorrectness of their decision was not a matter arising in prohibition, which was the remedy sought. But Griffith C.J. said that he was strongly disposed to think that it was a correct view that the question whether the relationship of employer and employee existed was substantially the same question as whether the relationship of master and servant existed [1] . O'Connor J. expressed his concurrence in the view of the Supreme Court that no relationship of employer and employee existed in that case, and this view necessarily implied the substantial identity of the relationship with that of master and servant. The legislation of New South Wales, although in pari materia with the Commonwealth Conciliation and Arbitration Act may conceivably be distinguished on the ground that it possessed a definition of "employee" which contained indications that the draftsman had so understood the expression. But not much importance appears to have been attached to them and both in New South Wales and in Queensland the view seems to have been adopted that there must be a contract of service, or a relation of service, if a man was to be an employee: see, for instance, Yellow Cabs of Australia Ltd. v. Colgan [2] ; Gaskin Bros. v. McGowan [3] ; Thiel v. Mutual Life & Citizens' Assurance Co. Ltd.; Ex parte Thiel [4] .

(1907) 7 S.R. (N.S.W.) 247; 24 W.N. 26; 5 C.L.R. 33. 2. (1907) 5 C.L.R., at p. 39. 3. (1930) 29 A.R. (N.S.W.) 137. 4. (1941) 40 A.R. (N.S.W.) 645. 5. (1919) 14 Q.J.P. 5, particularly per Macnaughton J. at pp. 17, 18.

In Austine v. Retchless [5] the conception was slightly extended on the authority of Addar Khan v. Mullins [6] , which the Court said indicated that the definition of employee in The Industrial Conciliation and Arbitration Act 1932 to 1941 Q. covered a wider class than servants because it extended to persons employed under contracts for labour only or substantially for labour only.

(1941) 35 Q.J.P. 117. 2. (1920) A.C. 391, at pp. 394, 395.

The view that there is no material distinction between what is described as the relation of employer and employee and that of master and servant accords with the interpretation which this Court placed on the expressions in the Pay-roll Tax Assessment Act 1941-1942; Federal Commissioner of Taxation v. J. Walter Thompson (Aust.) Pty. Ltd. [7] ; Queensland Stations Pty. Ltd. v. Federal Commissioner of Taxation [8] .

(1944) 69 C.L.R. 227, at p. 229. 2. (1945) 70 C.L.R. 539.

We think that the kind of relationship to which the definition in s. 4 of "industrial matters" refers by the expressions "employer" and "employee" is, under another name, in substance the relation called at common law master and servant. But this only means that in the interpretation of the Act the prosecutor company has a sound commencing point from which to proceed in its contention that the Arbitration Court acted without jurisdiction. It by no means establishes that contention.

In the first place the award on its face is restricted to employees. It does not purport to operate outside the Act. If in truth the prosecutor's agents are not employees within the meaning of the Conciliation and Arbitration Act, then we do not think the award will apply to them. To give it a construction which does not make the character of employee essential to its operation in the case of an agent would be to overlook the purpose of the expressions in the award, which, clearly enough, was to follow the requirements of the Act.

On its face therefore the award wears the appearance of being within jurisdiction. Moreover, when you go back to the industrial dispute for the settlement of which the award was made, you find that it is the result of a log of claims seeking a minimum rate of wages for adult employees wholly or mainly employed or engaged by the prosecutor in canvassing for industrial and ordinary life assurance policies and in collecting the premiums payable by or on behalf of insured persons.

The log of claims, the dispute itself and the award of the Arbitration Court are therefore all concerned with a relation that is strictly within the Act. The prosecutor's only case for attacking the jurisdiction to make the award must be that, notwithstanding the log of claims, there could be no industrial dispute because no members of the respondent union in fact were or could be employees of the prosecutor company, so that the paper demand was necessarily without any practical basis. To obtain a prohibition on this ground it is incumbent upon the prosecutor to exclude the possibility of the log having any subject matter by clear proof leading unmistakably to that conclusion. The burden of establishing clearly the facts which show absence of jurisdiction always rests upon a prosecutor seeking a writ of prohibition. But here there is a number of considerations increasing the difficulty of discharging the burden. To begin with the allegation that the contract between insurance canvassers or agents and the company for whom they act does not represent the true relation and is nothing but an attempt, by means of a form, to escape industrial regulation is no new thing. This conflict between form and reality in reference to the status of insurance canvassers or agents appears to go back over a considerable period of time. It is the subject of the decision in Re Life Assurance Canvassers' Submission [1] ; Thiel v. Mutual Life & Citizens' Assurance Co. Ltd. [2] ; and Austine v. Retchless [3] .

(1916) Q.W.N. 25. 2. (1919) 14 Q.J.P. 5. 3. (1941) 35 Q.J.P. 117.

In Federated Clerks Union of Australia v. Industrial Life Assurance Agents Association [4] Chief Judge Piper decided almost the very question of fact in issue here. The form or forms of agreement were similar though the matter arose in another way. His Honour held that industrial life assurance agents employed by life assurance companies for the purpose of canvassing and collecting are "employees" within the meaning of the Commonwealth Conciliation and Arbitration Act 1904-1934. In this Court Webb J. tried the same issue between the Associated Dominions Assurance Society Pty. Ltd. and the Industrial Life Assurance Agents' Union, the form of agreement being almost identical. His Honour found that the agents were employees of the company [5] .

(1942) 46 C.A.R. 578. 2. Unreported 9/2/50.

In the present case the question was raised before the Conciliation and Arbitration Court and that Court passed upon it before making the award. It is true that there appears to have been no independent investigation of the matter and that the Court merely acted upon the information that Webb J. had so decided. At the same time, in the circumstances, the prosecutor, before resorting to prohibition ought in all reason to have made clear to the Court to whose jurisdiction he objected that he sought from it an opportunity of establishing on evidence the absence of its jurisdiction.

Section 32 (2) of the Conciliation and Arbitration Act 1904-1951 provides that a determination or finding of the Court upon any question as to the existence of an industrial dispute shall, in all courts and for all purposes, be conclusive and binding on all persons affected by that question.

It is therefore clear that the policy of the legislature was to leave questions such as that in issue to the Arbitration Court. There are constitutional difficulties about the provision. Section 51 (xxxv.) of the Constitution would not enable the Parliament to confer upon the Court authority to determine its own jurisdiction in so far as it depended on the limitations upon that very legislative power. Possibly Chapter III. of the Constitution contains a legislative power sufficient for the purpose, but In re Judiciary and Navigation Acts [1] decides that power may not be conferred upon a Federal Court to decide a question in the abstract so as to bind all the world; it must be the determination of some right, duty, or liability inter partes. Section 32 (2) is expressed in a way which may possibly go beyond this.

Whether and how far judicial and arbitral functions may be mixed up is another question, one which fortunately the Court has never been called upon to examine. In the present instance we doubt whether the Arbitration Court proceeded in the purported exercise of judicial power. At all events there is no curial order. But in any case the presence of the provision in the Act did not lessen the practical responsibility of the prosecutor in pressing his objection before the Court of Conciliation and Arbitration and seeking to prove before it the facts upon which the objection was founded.

The materials laid before this Court are by no means full or exact or satisfactory and they fail to satisfy us that there was no "industrial dispute". In saying this we mean that they fail to exclude to our satisfaction the possibility that the real relation between some or all of the agents and the prosecutor company in their actual work, week in week out, is in fact that of employer and employee, whatever the agreement may say. It would, of course, be possible for us to settle an issue for trial upon oral evidence and await the finding of a single justice before disposing of the order nisi. But we do not think that we should do that. After all, the question whether a given agent is or is not an employee is not foreclosed by the award.

We think that the proper course is to discharge the order nisi.

The award which is challenged by the prosecutor deals only with wages. Clause 5 prescribes that "an adult male employee covered by this award shall be paid at the rate of £8 per week, as a basic wage". The wage is prescribed "for work done". It appears from cl. 2, which prescribes the scope of the award, that the award "relates to the employment of adult employees, wholly or mainly employed or engaged in the industrial life assurance industry in canvassing for industrial and ordinary life assurance policies and/or in collecting the premiums payable by or on behalf of insured persons". These, then, were the classes of persons covered by the award and the classes of work for which the rates of wages are prescribed.

The parties to the award are the Industrial Life Assurance Agents' Union, a registered organization of employees, and the Commonwealth Life (Amalgamated) Assurances Ltd. The organization represents its members and the award covers only the adult members who are employees of the company and are employed in the work mentioned above. The award is based upon "industrial matters", namely, "the wages of persons employed or to be employed". See Commonwealth Conciliation and Arbitration Act 1904-1951, s. 4 (c). The "industrial matters" dealt with by the award are the wages of the members of the organization, employed or to be employed by the company, in this "industry".

The ground of this application for prohibition is that the relations between the company and the persons whom it engages in the abovementioned work, are governed by an agreement of which Exhibit A is a copy, and the relations so created are principal and agent (the term used in the agreement), not employer and employee. If the true construction of the agreement is that the company's canvassers and collectors, engaged according to its terms, are agents in the strict sense, I should require to hear further argument before deciding that by the device of such an agreement the company could drive a coach and four through the Act. The award in the present case does not in form travel beyond the terms of s. 4 of the Act: indeed the award pursues the terms of the section, so far as it defines an industrial dispute and an industrial matter. The Court has not exceeded or presumed to exceed its jurisdiction. If a canvasser or collector, by reason of his special relation with the company is not an employee within the meaning of the Act, the award does not "cover" him (to use the terms of the award), and the company could resist claims by him, based on this award, for the basic wage, if it thought fit to do so. The award applies to every adult "employee" of the company who is a member of the respondent organization, employed or to be employed, at the work mentioned in the award. If the "agency" agreement creates a relation beyond the scope of the jurisdiction of the Court, no presumption can be made by this Court upon this application that departures resulting in the relationship of employer and employee have not been made or will not be made or, that during the currency of the award, no person will be engaged and kept in the post of canvasser or collector otherwise than strictly upon the basis of the agency agreement. The award is upon its face within the jurisdiction of the Court. The prosecutor has not shown that the Court has attempted to exercise jurisdiction over any subject matter which the Act does not place within its province.

The award of the Commonwealth Court of Conciliation and Arbitration which it is sought to prohibit, No. 844 of 1950, is entitled the Industrial Life Assurance Agents (Commonwealth Life (Amalgamated) Assurances Limited) Basic Wage Award, 1951. Clause 2 states that the award relates to the employment of adult employees, wholly or mainly employed or engaged in the industrial life assurance industry in canvassing for industrial and ordinary life assurance policies and/or in collecting the premiums payable by or on behalf of insured persons. It binds (a) the Industrial Life Assurance Agents' Union and the members thereof; and (b) Commonwealth Life (Amalgamated) Assurances Ltd. as to the employment by it of any person employed on a class of work mentioned in cl. 2 of this award whether members of the said Industrial Life Assurance Agents' Union or not.

The Commonwealth Life (Amalgamated) Assurances Ltd. seeks to prohibit this award on the ground that it was made without jurisdiction because the dispute in respect of which the same was made was not an industrial dispute within the meaning of the Commonwealth Conciliation and Arbitration Act 1904-1950 (and by amendment within s. 51 (xxxv.) of the Constitution) inasmuch as it was not a dispute in relation to employment or to any industrial matter, namely, any matter pertaining to the relations of employers and employees. The Arbitration Act, so far as material, defines industrial dispute to mean "a dispute as to industrial matters which extends beyond the limits of any one State". It defines industrial matters to mean "all matters pertaining to the relations of employers and employees". It was contended for the prosecutor company that there was no evidence of any industrial dispute before the Arbitration Court because the canvassers of the company were not its employees but its agents and no relationship of employer and employee existed between them. A form of agreement in writing entered into between the company and its canvassers was tendered in evidence, which, it is common ground, does not create a contract of service but a contract for services. But the Arbitration Court allowed the solicitor for the Industrial Life Assurance Agents' Union to supplement this evidence by certain material which the Court accepted as evidence showing that the document was colourable and that the real relationship between the company and its canvassers was that of employer and employee.

This material was not proper evidence of anything according to the ordinary rules of evidence, but s. 39 (b) of the Arbitration Act provides that in the hearing and determination of an industrial dispute the Court or commissioner shall not be bound to act in a formal manner and shall not be bound by any rules of evidence, but may inform its or his mind on any matter in such manner as it or he thinks just. Then there is s. 32 (2) of the Act, which provides that a determination or finding of the Court upon any question as to the existence of an industrial dispute shall, in all Courts and for all purposes, be conclusive and binding on all persons affected by that question. Section 32 (2) plainly intends, it seems to me, to give the Arbitration Court authority to decide the question of fact whether there is before it a dispute as to industrial matters which extends beyond the limits of any one State and for that purpose to decide whether the dispute is as to a matter pertaining to the relations of employer and employee. This authority is sufficient to empower the Court to decide the question rightly or wrongly. In R. v. Blakeley; Ex parte Association of Architects, Engineers, Surveyors and Draughtsmen of Australia [1] , I formed a similar opinion with respect to conciliation commissioners, but I was in a minority. But s. 32 (2) appears to me to place the matter beyond doubt in the case of the Court. In the present case the Court, on the material before it, was satisfied that an industrial dispute existed and it had jurisdiction to make the award. The award is in terms limited to employees. It does not include canvassers who are not employees. Accordingly the award does not travel beyond the Arbitration Act or beyond s. 51 (xxxv.) of the Constitution. If the canvassers of the prosecutor are not its employees, the company will be able to raise this defence in proceedings to enforce the award.

At a glance

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Before

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Judgment (32 paragraphs)

Parties