R v Graziers' Association

R v Graziers' Association - [1956] HCA 31 - HCA 1956 case summary — Zoe

[5]

It appears that the Australian Workers' Union sought and obtained an award under the Industrial Arbitration Act 1940-1954 N.S.W. prescribing minimum rates of pay and conditions of employment for employees in the pastoral industry in New South Wales. The union took steps to obtain a determination under the Labour and Industry Act 1953 Vict. for that State but apparently an order was made under s. 27 of the Conciliation and Arbitration Act 1904-1955 restraining the Victorian industrial authority from dealing with the matter. The State award applied to all employees in New South Wales, engaged in the work with which it dealt, entirely independently of membership of the Australian Workers' Union. In like manner a determination in Victoria would apply independently of membership of the Australian Workers' Union. This is the result of the provisions of the law of the two States in question. The log of demands delivered by and on behalf of the employers sought to secure the operation of minimum rates of pay below those prescribed by the New South Wales award. In the commissioner's interim award which it is sought partially to prohibit minimum rates of pay are prescribed which no doubt are lower than the rates of the New South Wales award. If neither the federal award already made ad interim nor any other award made in settlement of the dispute can extend to employees who are not members of the Australian Workers' Union employers would be bound to pay them the higher minimum rate prescribed under the law of the State. If, however, such a federal award extends to employees not members of the Australian Workers' Union then the employers would claim that, because of the paramountcy of federal law under s. 109 of the Constitution, it would exclude the application of the State award to such employees as well as to employees who are members of that body. To effect the purpose of creating an industrial dispute sufficiently wide in its ambit to enable the commissioner to make an award of the desired extent the employers included in the log by which they sought to secure the operation of lower minimum rates of pay a demand upon the Australian Workers' Union that the employers should be bound in respect of all employees whether members of the union or not. A demand was included that employees should be bound only when employed by employers so bound. The failure or refusal of the Australian Workers' Union to accede to the demand so framed is relied upon for the employers as creating a dispute by reason of which the conciliation commissioner obtained constitutional and statutory authority to determine by award what shall be the minimum rates of pay of employees who are not members of the union, if employed by the employers by or on behalf of whom the log was delivered. The exercise of that authority will, so it is claimed, destroy the operation of the instruments by which another minimum rate has been fixed under State law.

[6]

In our opinion the demand upon the Australian Workers' Union by the employers that they should be bound in respect of employees not members of that union by terms as to minimum rates of pay and conditions cannot, on the ground that the union does not accede to it, result in a dispute giving rise to such an authority in the conciliation commissioner. The reason is that the assent or dissent of the Australian Workers' Union is completely irrelevant to the thing demanded, namely the minimum which the employer is to be obliged to pay his employees who are not members of the Australian Workers' Union and the conditions of employment he is to afford them. It is a thing which that body cannot affect. If it assents to the demand the employers' position with reference to the subject of the demand is completely unchanged. So is the position of the employee who is not a member. So is that of the Australian Workers' Union itself. If it dissents from the demand, its dissent may disclose a contrariety of opinion, but the opinion is about nothing which the union or its members can do or forbear from doing. Whether it dissents or assents the employer remains as much or as little bound with respect to the minimum rates he pays to his employees who are not members and with respect to the conditions he gives them. The Australian Workers' Union as a registered organisation does not "represent" persons who are not and do not become members. They "represent" those who are members from time to time, present and future members. The essential basis of the decision in Burwood Cinema Ltd. v. Australian Theatrical and Amusement Employees' Association [1] , is to be found in two passages of the judgment of Starke J. "Such organizations, to my mind, "represent and stand in the place of their members" and must, to be effective, have "right and authority to act on their account" " [2] . "An organization registered under the Arbitration Act is not a mere agent of its members: it stands in their place, and acts on their account and is a representative of the class associated together in the organization" [3] . But if the class which an organisation represented did not depend on membership, it would not matter. For it would still be true that the assent or dissent of the union had no bearing on the thing demanded.

[9]

The conciliation commissioner can have no authority to make an award unless the constitutional condition is fulfilled that there must be an industrial dispute extending beyond the limits of any one State. No doubt the course of judicial decision has made it possible to fulfil the condition by an artificial procedure for the production of an industrial disagreement. But although disagreement may amount to an industrial dispute the disagreement surely must be about what one or other of the parties to the dispute (or members of the class which one or other of them represents) is to do or not to do in some relevant respect. To treat a demand upon an organisation for a concurrence of opinion concerning a matter which it cannot affect as enough, if not conceded, to amount to an industrial dispute within s. 51 (xxxv.) is, in our opinion, to misunderstand what is meant by the doctrine that an industrial dispute may be constituted by a disagreement about industrial matters. That doctrine has no doubt been pushed very far but after all it has been done by refinements of logic. We fail to see how any refinement of the logical conception of an industrial dispute will bring within its range the failure or refusal of an organisation to say yes to a proposition made by employers that the minimum rates of pay at which they may employ strangers to the organisation shall be of specified amounts. Had the Australian Workers' Union said yes to that part of the demand made upon that organisation the basis would have been wanting for the argument that an industrial dispute arose as to the minimum rates of non-members. No award could have been made with respect to the minimum rates for non-members and no agreement on that subject could have been lawfully certified under s. 37 of the Act so as to have the effect of an award. It would be a strange paradox if, although to agree in the demand gives the employers nothing, yet to refuse the demand were to give them the power of obtaining so much.

[22]

In my opinion prohibition would not lie if the conciliation commissioner had jurisdiction to include in his award the same terms of employment for both unionists and non-unionists, even if it appeared from his reasons for his award that he had provided the same terms for both for an invalid reason. The validity of the terms would be determined simply by considering the ambit of the dispute arising from the employers' association's rejection of the claim and whether those terms could validly have been awarded in settlement of the dispute, without regard to the reasons given by the commissioner for awarding them. His error would not have deprived him of jurisdiction, and a writ of prohibition does not issue unless a court is acting without or in excess of its jurisdiction: R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte Kirsch [1] per Starke J. But I think the commissioner did not have that jurisdiction. It is true that in Kirsch's Case [2] Dixon J. (as he then was) expressed the view that a claim for compulsory unionism might be settled by an award of the same pay and conditions for non-unionists and unionists alike, when the purpose of the claim would be to safeguard wages and conditions. It is also true that the union's claim in this case, in cl. 7a, was really for compulsory unionism. That clause reads, omitting immaterial parts: "Preference of employment shall be given to financial members of the Australian Workers' Union, or to persons who give the employer an undertaking in writing to make application to become a financial member within seven days. No person who is not a financial member shall continue or be continued in employment under the award unless he makes application to become a financial member within seven days No person shall continue or be continued in employment for more than seven days after the employer has been notified by an official of the union that such person has ceased to be a financial member ". However in R. v. Findlay; Ex parte Victorian Chamber of Manufactures [3] , this Court held that compulsory unionism was not an "industrial matter" as defined in s. 4 of the Conciliation and Arbitration Act Cth., and so that a claim for compulsory unionism could not give rise to an industrial dispute capable of being settled by an award under the Act. Meanwhile there has been no attempt at an amendment of s. 4 or s. 56 that is material on this point. But assuming that cl. 7a was a valid claim so far as it was, or could be read as, confined to preference to unionists in the sense intended by s. 56 of the Act, still the sole purpose of preference is to safeguard employment for unionists. Unlike compulsory unionism it has not, as I understand its implications, the further purpose of safeguarding wages and conditions. If non-unionists are employed where unionists are not available, preference has no bearing on the terms of their employment. If, contrary to my understanding, preference has both purposes there is no ground for prohibition because the commissioner has awarded both preference for unionists and the same terms of employment for unionists and non-unionists: each was then within the ambit of the dispute arising from the rejection of the claim by the employers' association and so both have been validly awarded.

[29]

The pre-existing federal award in the pastoral industry governed only the employment of members of the union. It had not, of course, the force of a "common rule". A number of employees in the industry are not members of the union. The union had taken action in New South Wales and Victoria to obtain awards from State tribunals. Those tribunals, not being limited by s. 51 (xxxv.) of the Constitution, could make awards having the effect of a common rule. Such awards could not, by reason of s. 109 of the Constitution, operate within the field covered by the federal award, but they could operate in relation to all employees not covered by the federal award - that is to say, in relation to all employees who were not members of the union. An employer bound by the federal award would thus be likely, as Mr. Donovan observed, to find himself "in the position of having unionists and non-unionists, employed on the same property and doing the same work, subject to differing rates of pay and working conditions, because the unionists are under the federal award and the non-unionists are under a State award". If (as is no doubt the case, though I do not think it actually appears) the rates of pay under the State award were higher than those under the federal award, the practical result would most probably be that the employer would have to pay the higher rates to both unionists and non-unionists, although, so far as the federal award was concerned, he was at liberty to pay the lower rates. Because differences between the federal award and State awards would in any case cause embarrassment to employers, Mr. Donovan thought it right to extend the scope of the federal award so as to cover employees who were not members of the union. The purpose of the employers' organisations in asking for the provision in question was, no doubt, by making the federal award applicable to the employment of all employees in the industry, whether members of the union or not, to deprive State awards of all effect by force of s. 109 of the Constitution: cf. H. V. McKay Pty. Ltd. v. Hunt [1] . It is not clear to me that that result would actually follow, because State awards give rights to individual non-unionists, whereas a federal award, to which they would not be parties, could not give such rights. But, however this may be, there is no doubt that the purpose was to achieve that result. The provision in cl. 7 for preference to unionists was made by the commissioner consequentially upon the extension of the award to cover the terms of employment of non-unionists.

[32]

The argument was put by saying that a dispute can only be created between two parties as a consequence of the one party demanding that the other shall do, or refrain from doing, some specified thing. If the other party refuses or neglects to comply with that demand, then a dispute arises. If an organisation of employees demands that employers shall pay specified minimum rates of pay to employees, it is demanding that the employers shall do something, and, if the employers refuse, or fail to accept, that demand, then there is a dispute between the organisation on the one side and the employers on the other side. The organisation may (as the union did by its log in the present case) have claimed the minimum rates of pay only for its own members. Or it may (as the Amalgamated Engineering Union did in the Metal Trades' Case [2] ) have claimed that those rates be paid to all employees, whether members of the organisation or not. In the latter case the dispute which arises is not, qua non-unionists, a dispute between employers and non-unionists. It is merely, as in the former case, a dispute between employers and the organisation, though the subject matter includes rates payable to non-unionists. All this, it is said, is quite intelligible, but, when we come to consider what purports to be a demand by employers against the organisation with regard to the minimum rates payable to non-unionists, the position, it is said, is wholly different. Such a "demand" does not require the organisation or its members to do or refrain from doing anything. Here we have the employers addressing an organisation, which does not represent non-unionists, and saying: - "We demand that we be bound, as between ourselves and you, the organisation, to pay such and such minimum rates of pay, to all our non-unionist employees in the industry." The organisation may answer by saying: - "We have no objection whatever to your paying to non-unionists the rates of pay which you mention, or any other rates of pay." It might go on to add: "If we proposed to concern ourselves with non-unionists, we might be disposed to demand that you pay higher rates to non-unionists than those which you mention. As it is, we do not propose to concern ourselves with the rates of pay of non-unionists." How can it be said that such an interchange of communications creates an industrial dispute?

[42]

Its position with regard to persons who are not members is entirely different. It does not represent such persons, whether they are employed in the relevant industry or in any other industry, in any way or for any purpose. It may form the opinion that the interests of its members require that employers in the industry with which it is concerned shall not employ non-unionists at lower rates than are paid to its members. In that event it may address a demand to employers that they shall not employ non-unionists at lower rates. If that demand is refused, a dispute arises, which may be settled by award under the Act. But it cannot be forced into the position of making such a demand. It is perfectly entitled, if employers make to it a proposal relating to the rates of pay of non-members, to take up a position of neutrality, and, if it does, no dispute arises. If employers make such a proposal to it, a "dispute" may follow, but it can only follow if the union's response is: "No: we demand that you pay to non-unionists higher rates than you propose," and the employers refuse to pay those higher rates. It arises then not because the union has refused a demand by the employers, but because the employers have refused a demand by the union. If the union says: "We don't care what you do about it", no inference of acceptance can be drawn. If it maintains complete silence, no inference of rejection can be drawn. The reason is that the subject matter of the proposal made is no concern of the union unless the union chooses to concern itself with it. It cannot be compelled to concern itself with it, and the only relevant way in which it can concern itself with it is by making a demand with regard to it. What the respondents in this case have tried to do is to force the union into a dispute on a matter with which the union is entitled to refuse to concern itself. For the reasons which I have given this cannot, in my opinion, be done. The union has not chosen to make any claim or demand on employers with respect to non-unionist employees, and, unless and until it does so, no "dispute" can exist with respect to that subject matter.

[43]

The matter may be approached from another point of view. Of the four factors, which I have mentioned as tending to obscure the real position in this case, the most deceptive is, I think, the practice of framing a "log" of claims in the form of a proposed "award". The practice is natural enough. It is founded on an assimilation of the process of industrial arbitration to the process of an action in an ordinary court of law. But, because the two processes are fundamentally different in nature, the assimilation is necessarily imperfect, and what we really have is an attempt to do two radically different things uno ictu. The "log" is conceived as doing, so to speak, double duty: it is to perform the functions both of a letter of demand before action and of a declaration or statement of claim in an action which has been commenced. Logically, of course, this cannot be done, because the refusal of a demand is a condition precedent to the actual jurisdiction of the "court" to entertain the "action" at all. The demand, refusal of which creates a "dispute" and gives to the appointed tribunal authority to "settle" it, is one thing. The invocation of the jurisdiction by the claiming of an award is an entirely different, and logically subsequent, thing. It may be that in the generality of cases no harm is done by framing the "log" in the form of an award. But it does disguise the essential fact that a dispute about an "industrial matter" must exist before there is any right to claim an award, and a dispute does not exist unless and until there is genuine disagreement about an industrial matter. This tendency to disguise the reality of the situation is well illustrated by the present case. Here what the employers wanted when they made their demand with respect to non-unionists, and the only thing they wanted, was an award: only a federal award could have given them what they desired - the supersession of State awards. The only real disagreement between the parties, if any can be said to have existed, lay in this, that the employers wanted, and the union did not want, the rates of pay of non-unionists to be governed by a federal award. And that is not a disagreement about an "industrial matter". In order that Mr. Donovan should have jurisdiction to make an award, it was necessary that there should be a dispute anterior to, and capable of being expressed independently of, any invocation of his jurisdiction to make an award. But in truth the employers' real demand in this case could not have been expressed otherwise than in the terms of an award or by reference to the making of an award.

[47]

The principle upon which the Metal Trades' Case (The Metal Trades Employers Association v. Amalgamated Engineering Union [1] ) was decided has been restated in a compendious form in R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte Kirsch [2] and R. v. Kelly; Ex parte State of Victoria [3] . In the former case Dixon J. (as he then was) said: "The principle upon which the decision rests is that the interest which an organization of employees possesses in the establishment or maintenance of industrial conditions for its members gives a foundation for an attempt on its part to prevent employers employing anyone on less favourable terms. As a result an industrial dispute may be raised by it with employers employing none of its members and an award may be made binding such employers and regulating the terms and conditions upon which they may employ unionists or non-unionists" [4] . This passage was adopted by the Court in 1950 in R. v. Kelly; Ex parte State of Victoria [3] to define the underlying principle. It was, of course, always clear that a dispute between an organisation of employers and an organisation of employees concerning matters of the description specified in the definition of industrial matters in s. 4 of the Conciliation and Arbitration Act 1904-1955 did not necessarily constitute an industrial dispute. Section 4 defines "industrial dispute" to mean "a dispute as to industrial matters which extends beyond the limits of any one State" and "industrial matters" means "all matters pertaining to the relations of employers and employees and, without limiting the generality of the foregoing", includes a great number of specified matters. But a dispute, or disagreement, between parties having no industrial interest whatever in the subject matter of the dispute can never constitute an industrial dispute in the sense in which that expression is used in the Act. Indeed it is impossible for an industrial dispute of the character requisite to invoke the jurisdiction of the Arbitration Court to arise unless each party to it has such an interest. To exclude the notion that each party must have such an interest would produce a completely artificial conception of what an industrial dispute is for the purpose of the Act is to make provision for the determination of such disputes by agreements or awards and there is no scope for such processes except in the case of industrial disputes which arise between parties who, to put it broadly, stand in an industrial relationship to one another and which in some measure affect that relationship. Now I understand the Metal Trades' Case [1] to decide that an organisation of employees has a sufficient industrial interest to raise a dispute with an organisation of employers in the industry with which the former is concerned with respect to the rates of wages which should be paid and the conditions of employment which should be observed by such employers. That is to say, it has a sufficient industrial interest in the question to dispute with such an organisation of employers the rates of pay and conditions of employment which should be prescribed by agreement or award to regulate the employment not only of its own members but, also, the employment of non-unionists. But if, as I think, an industrial dispute can arise only when both or all parties to a dispute have such an interest the decision must also mean that such an organisation of employers has a sufficient industrial interest to agree upon or to dispute these matters with a union of employees. It is, I should think, clear that if the employers' organisation concerned in the Metal Trades' Case [1] had acceded to the union's log of claims agreement might have been reached and steps taken pursuant to s. 24 of the Act as it then stood. (See now s. 37.) Such an agreement would not, of course, have been binding upon non-unionists but it would have created an obligation on the part of the employers' organisation to the union of employees to observe the specified rates and conditions when employing non-unionists. But the argument of the prosecutor in this case asserts that a log of claims served by an organisation of employers in an industry upon the union concerned in that industry which demands that specified rates and conditions should regulate the employment of both unionists and non-unionists can never lead to an industrial dispute with respect to the rates and conditions which should regulate the employment of non-unionists. For my part I confess that I am unable to see that the situation is any different from that which arises when a log of a similar character is served by a union of employees upon an organisation of employees in the same industry. The parties have the same industrial interest: if they agree they will agree on precisely the same things and if they fail to agree the dispute will be of precisely the same character. In any case where a union has such an interest and seeks to create obligations of this character and the attempt is resisted there will upon the authorities referred to, be an industrial dispute, that is to say a dispute as to an industrial matter in which each disputant has a legitimate interest. Those interests, it seems to me, remain unchanged when the dispute is originated by the service of a log containing claims of a similar character upon a union of employees and in either case there is room for agreement between them or, failing agreement, the making of an appropriate award.

At a glance

Court

Decision date

Before

Source

Judgment (49 paragraphs)

Parties