R v Holmes ex parte Public Service Association of New South Wales

Friday 9 March 2001 Matter No IRC 1384 OF 2000

STOREWORKERS - CAMPBELLS CASH & CARRY PTY LIMITED (NSW), NUW (NSW BRANCH) AWARD 2000 Application by the National Union of Workers, New South Wales Branch, for an award DECISION (extempore) [2001] NSWIRComm 53

1 The substantive proceedings in this matter were heard by Maidment J last year and on 4 December 2000 his Honour handed down his decision as to the application made by the National Union of Workers, New South Wales Branch ("the NUW"), and also in relation to the cross-application filed in the proceedings by the relevant employers, Campbells Cash & Carry Pty Limited and M C International Pty Ltd: see Storeworkers - Campbells Cash & Carry Pty Limited (NSW), NUW (NSW Branch) Award 2000 [2000] NSWIRComm 244. His Honour held, at paragraph [40] of his decision, that:

[40] Neither party has made out a special case for departure from the existing conditions of employment. They each have put a conventional case, that of the NUW on the basis that improvements are desirable, that of Campbells on the basis that it would meet its customers' demands more economically if the changes sought by it were granted.

and also held at paragraph [42] of the decision: [42] I reach the view that it might be preferable to allow the agreement to continue to regulate the situation in the hope that the parties can negotiate a replacement, however, should the NUW upon consideration of this decision so desire, an award will be made in terms reflective of the terms of the 1997 Agreement with any departures agreed between the parties which do not offend against principle and test case provisions. 2 Correspondence then occurred between the parties and his Honour's associate, the effect of which may be summarised as follows. The NUW advised by reference to paragraph [42] of his Honour's judgment that it requested that his Honour make such an award and that, if his Honour required the matter to be brought back before the Commission for this purpose, it was requested that occur as soon as possible. 3 The solicitors for the respondent employers advised his Honour's associate that there were some jurisdictional barriers to making an award in identical terms to the 1997 enterprise agreement. Examples of these matters were referred to. It was also indicated that a number of consequential amendments were necessary to transform the agreement into an award. A request was made for an opportunity to be heard as to these matters before any award was made. His Honour then proceeded upon pre-retirement leave and the matter was referred for re-allocation pursuant to section 176(1) of the Industrial Relations Act 1996 as his Honour was "unavailable", in terms of that provision, to conclude the proceedings. 4 The proceedings were then re-allocated and called on before the Commission as now constituted on 31 January 2001. The parties accepted, correctly in my view, that the role of the Commission was now limited to implementing his Honour's decision. That is, the Commission's present role is to make an award in terms of the express intention of his Honour, although the parties also accepted that there may be some limitations implicit in his Honour's decision; for example, possible jurisdictional limitations in some areas and particular matters specifically dealt with in his Honour's decision which would require that those matters be dealt with in accordance with the way his Honour had dealt with them in the decision of 4 December 2000. 5 After a number of directions hearings, the NUW advised by letter of 1 March 2001 that the following issues remained in contention: 1. Sub-clause 23(f)-(h) - Payout of sick leave; 2. Sub-clause 9(vi) - Application of State Wage Case; 3. Clause 35 - Union recognition and the ability to enforce payroll deductions of union fees in an award; 4. Clause 37 - Redundancy 5. Clause 39 - Area, Incidence and duration.

When the matter came before the Commission today, the parties advised that discussions had continued and the issues had been further narrowed. 6 The remaining issue is that described in the above letter as "Clause 35 - Union recognition and the ability to enforce payroll deductions of union fees in an award". Prior to hearing argument as to that issue, the Commission was provided with a draft award document prepared by the applicant which became Ex 19. The Commission was also advised of alterations to that document which were required by way of typographical correction and to include the matters now agreed. The document also contains the union's claim in respect of the still disputed matter which after amendment is clause 37, in the following terms: The company undertakes, upon authorisation, to deduct union membership dues, as levied by the union in accordance with its rules, from the pay of employees who are members thereof. Such moneys will be forwarded to the union at the end of each accounting period with all necessary information to enable the reconciliation and crediting of subscription to members' accounts.

The title of the clause, as claimed, is "Union Recognition" but the union made it clear that it accepted that it may be appropriate to vary the title of any clause included in the award in the light of any decision of the Commission. 7 During the hearing today submissions were made by Mr A Joseph for the applicant and Mr G J Hatcher of counsel for the respondents and the Commission now deals with the single remaining issue that requires decision. 8 The union made submissions as to the effect of paragraph [42] of his Honour's decision, in a manner not inconsistent with the position agreed between the parties referred to earlier. Particular reference was made to the fact that the union did not press its earlier claim for inclusion in the new award of the provision in the enterprise agreement relating to pay out of sick leave because of the prohibition as to that subject matter in s 27 of the Act. Emphasis was placed upon the considerations which led the union to that position. For example, that it accepted that it was not his Honour's intention that matters, for example, beyond jurisdiction, were to be in the award contemplated by his Honour. Reference was also made to other parts of his Honour's decision (for example, paragraph [41] as to redundancy provisions) where his Honour evinced an intention to deal with the particular matter in a way different to the general approach set out in paragraph [42].

9 It was submitted that the issue of deduction of union fees was a matter argued before his Honour. Reference in that regard was made to the cross-examination of Mr Garvan, Human Resources Manager of Campbells Cash & Carry Pty Limited, and the fact that submissions were made by both advocates on that issue when the proceedings were before his Honour. These considerations, it was submitted, made clear that the issue of deduction of union fees was before his Honour and could be presumed to have been within his Honour's intention as expressed in paragraph [42] of the decision. 10 The respondents submit that there is no basis to grant the claim made by the union as to this issue. Their submissions are put on a number of bases. It was submitted that there is no power in the Commission to grant such a provision and that in enacting s 6(2)(i) of the Act, Parliament had not done so in a way which provided relevant power to the Commission. Reference was made in that respect to the judgment of the High Court in Re Alcan Australia Limited; ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96. It was submitted that in the light of the general definition of industrial matters in s 6(1) of the Act, which parallelled the provision considered by the High Court in the judgment in Re Alcan , there was no intention in s 6(2)(i) of the kind that would have been necessary to displace the requirement for the Commission to follow the judgment of the High Court. 11 Reference was also made to the opening words of s 6(2) which described the sub-paragraphs of sub-section (2) as "examples of industrial matters". This, it was submitted, did not provide the necessary intention to extend the general definition of industrial matters in a way which gave the Commission relevant jurisdiction. Reference was made to the fact that the status quo revealed in the evidence before his Honour was that no deductions were being made by the employers; it being submitted that his Honour was thus aware of that situation. 12 Emphasis was also placed upon the terms of the relevant provision in the enterprise agreement, which was clause 35, "Union Recognition", in the following terms: 35 UNION RECOGNITION (i) It is the recommendation of Campbells that all its employees subject to this Agreement join the National Union of Workers, NSW Branch. Accordingly, the Company undertakes to positively promote union membership at the point of recruitment by strongly recommending that all employees join the National Union of Workers. (ii) All employees shall be given an application form to join the Union at the point of recruitment. (iii) Campbells undertakes upon authorisation to deduct Union membership dues, as levied by the Union in accordance with its rules, from the pay of employees who are members thereof. Such monies will be forwarded to the Union at the end of each accounting period with all necessary information to enable the reconciliation and crediting of subscription to members accounts.

(It will be seen that the union claim now pressed parallels the provision in the former sub-clause 35(iii)). 13 Counsel emphasised that the operative word of the relevant provision was 'undertakes'; that it was therefore not intended to be a legally enforceable provision, but rather a provision dependent upon merely notions of "suasion"; that the limited scope of the provision as argued by the respondent, accords with the structure of clause 35 and is confirmed by comparison with the operative words in other parts of the provision; for example, the use of the word 'shall' in sub-clause 35(ii). 14 In response Mr Joseph sought to rebut the submissions of the respondents. It is sufficient for present purposes to refer to his submissions as to the use of the word 'undertakes' in clause 35(iii) of the 1997 enterprise agreement. He submitted that the use of that word demonstrated that clause 35(iii) was an agreed term. Emphasis was also placed on the use of the word 'will' in the latter part of that provision as indicating an intention to create an enforceable entitlement. 15 In the light of that summary of the background to the proceedings today and the summary of the submissions and the differences between the parties, it is possible to deal shortly with the issues requiring determination. 16 I should refer to the situation that, so far as I am aware, there is only one decision of the Commission in relation to the issue raised in this matter. It is the decision of Murphy C in Metalliferous Mining Industry (State) Award - Application by the Australian Workers' Union, New South Wales Branch, for variation re Clause 5 Contributions (unreported, 29 October 1999). It does not appear that the issues that are before me were determined in that case because of the way in which the matter was argued and the application, although successful, was decided in the light of the very particular facts of the case. Further, as earlier indicated, the role of the Commission as now constituted is to implement his Honour's decision and the issue to be determined does not necessarily raise matters of the kind considered by Murphy C. 17 It is nevertheless necessary to decide whether the Commission has jurisdiction to award the provision sought. I consider that the Commission does have the necessary jurisdiction. The effect of the submissions of the respondents would be to give no meaning to the words in s 6(2)(i) of the Act. That would be a remarkable and therefore entirely unlikely result. It is trite that 'words are not lightly discarded as unintended verbiage': see, for example, the judgment of Moore J sitting in the Industrial Relations Court of Australia in Western Newspapers Pty Limited v Warren (1994) 1 IRCR 393 at 410, (1994) 56 IR 340 at 356 - 357, and the decision of a Full Bench of this Commission in Re Hospital Employees Conditions of Employment (State) Award (1999) 96 IR 245 at 257. As the judgment of Moore J indicates, that approach is relevant, whether the verbiage is to be found in a statute or in a contract. His Honour also observed the role of a Court or tribunal in the construction of a document "involves a search for what the framers of the document meant by the words adopted". 18 I consider that it is clear that Parliament intended that the Commission was to have relevant power as to this subject matter. I also consider that the statement by Moore J represents a stronger presumption when a statute is being considered than when other documents such as contracts or deeds are in issue. Section 6 of the Industrial Relations Act 1996 is to be read with the conferral of power in the Commission by s 10 to make awards setting conditions of employment as defined by s 4 and the Dictionary to the Act as including "any provisions as to an industrial matter". Section 6 is in these terms: 6 Definition of industrial matters (1) General definition. In this Act, industrial matters means matters or things affecting or relating to work done or to be done in any industry, or the privileges, rights, duties or obligations of employers or employees in any industry. (2) Examples

Examples of industrial matters are as follows: (a) the employment of persons in any industry (including the employment of minors, trainees, apprentices and other classes of employees), (b) the remuneration (including rates of pay, rates for piece-work and allowances) for employees in any industry, (c) the conditions of employment in any industry (including hours of employment, qualifications of employees, manner of work and quantity of work to be done), (d) part-time or casual employment (including part-time work agreements), (e) the termination of employment of (or the refusal to employ) any person or class of persons in any industry, (f) discrimination in employment in any industry (including in remuneration or other conditions of employment) on a ground to which the Anti-Discrimination Act 1977 applies, (g) procedures for the resolution of industrial disputes, (h) the established customs in any industry, (i) the authorised remittance by employers of membership fees of industrial organisations of employees, (j) the surveillance of employees in the workplace. Note. The Industrial and Commercial Training Act 1989 deals with apprenticeships and traineeships. Section 5 of that Act provides that the Act (and regulations, orders and directions made under it) prevail over this Act (and regulations, awards, orders and agreements made under it) to the extent of any inconsistency. 19 I consider that the legislature in enacting s 6 intended, by the structure of the section, to provide a general definition in sub-section (1) but to include in sub-section (2), by reference to "examples of industrial matters", matters which fell within that description either by elaboration of the general words in sub-section (1) or by an extension of those words. That is, the legislature, although using the word 'examples', approached the matter in a way which might have earlier occurred by use of the word 'includes'. The usual construction of the word 'includes' or the word 'including' is that it is intended to be read as a word of extension (compare R v Holmes; Ex parte Public Service Association of New South Wales (1977) 140 CLR 63 at 72 - 73) but that does not necessarily mean that all of the areas or concepts following the use of the word 'includes' must involve an extension in meaning. Some of the relevant words may be mere examples. However, the usual approach adopted when the word 'includes', or one of its variants, is used, is that amongst the words following it are words which extend the meaning of the term or terms defined. 20 That is the way in which the sub-section 6(2) should be interpreted. The reliance upon the fact of the status quo before his Honour, that union deductions were not being made, raises two issues. The first is the relevance of that fact to the construction of the provision in the enterprise agreement and the second is as to his Honour's intention. 21 Mr Joseph for the NUW, without objection, advised the Commission that the union did not accept that it was legally open to the company not to deduct union dues; however, that when it had sought to enforce that situation there had been some procedural problems which prevented the proceedings commenced by the union dealing with the issue. 22 So far as the construction issue is concerned, I doubt that the factual circumstances relied upon by each advocate are relevant. It is clear that it is not appropriate in construing a legal document, including a term of an award or industrial agreement, to have regard to the conduct of the parties subsequent to the making of the document, award or agreement: Seamen's Union of Australia v Adelaide Steamship Co Ltd (1976) 46 FLR 444. It then becomes a question as to the construction of the provision, by reference to its terms and to other relevant terms of the enterprise agreement. 23 Reference was made by the respondents to clause 27(vii) of the agreement which provides "The parties to this Agreement acknowledge the present training provided by the Company to its employees is appropriate to meet the needs of the enterprise". I do not consider that provision casts any light on the task before the Commission. However, clause 34(i) does have some relevance. It is in the following terms:

34 BASIS OF AGREEMENT (i) (a) This agreement is entered into by the Company and its employees together with the Union without any duress. Further, all parties accept and will honour in full the terms of Agreement. (b) There will be no claims or alterations to any of the terms of the Agreement prior to 1 December 1999. 24 Although clause 35(iii) has as its operative word, 'undertakes' it is clear, as counsel for the respondents submitted, the undertaking is not to the Commission but to the other party to the agreement, that is, to the union. Although the construction of the provision is not without difficulty, I consider it does, however, clearly indicate the existence of an agreement and, when read in its context, demonstrates an intention to have a term agreed between the parties for the purpose of the agreement and also to provide enforceable rights. 25 Further, clause 34(i)(a) shows an intention that the document is to be seen as one the terms of which are agreed and that the parties were to approach the matter in terms of an instrument which would govern their relations with each other during its term and that the parties were to honour the agreement not only in its terms but also in its spirit. That conclusion indicates an intention by the parties that any doubt as to the legal effect of a term of the agreement should be resolved in favour of it having legal effect rather than against that situation. It is clear that some parts of the former clause 35 were not intended to give rise to legal rights. For example, the opening words of the provision refer to "the recommendation of Campbells". However, the recommendation was coupled with an undertaking, which was intended to be observed, to positively promote union membership, at least to the extent that the undertaking had particular identifiable elements which were capable of being enforced. Similarly, the closing words of clause 35(iii) which referred to 'such moneys will be forwarded to the union ..." also serve to show the sub-clause was intended to have legal effect. 26 The remaining issue, it appears, is whether the relevant and operative part of his Honour's decision was intended to include or preclude the awarding of this provision. I have approached this matter on the basis that his Honour dealt with the matter in a very considered way and one would not assume that his Honour dealt with the matter in a way which demonstrated any measure of inadvertence or the like. Rather, his Honour went in some detail to those areas where it was considered that the submissions of the parties required a particular approach, or that a particular provision should be dealt with in a specific way. 27 I consider that the intention derived not only from paragraph [42] itself but also from the way in which the whole decision was framed, is that the award contemplated by his Honour would be made in precisely the way his Honour specified in paragraph [42]. In making this observation it is not intended to limit the earlier references made to the parties' acceptance that his Honour's statement did not intend to preclude the raising of jurisdictional limitations. However, I consider that his Honour's intention otherwise emerges from the plain words of paragraph [42]. In those circumstances I consider that it is appropriate to include in the proposed award a provision along similar lines to that claimed by the union. 28 There are two matters of detail which need to be dealt with before concluding. The first is the title of the provision. The title included in the union document reflected the whole of the former clause 35, significant parts of which are not pressed, and therefore the provision, in the absence of agreement between the parties, should be entitled "Deduction of Union Membership Fees", having regard to the terms of s 6(2)(i) of the Act. 29 The second matter relates to the form of the provisions. I do not consider that a clause premised on the operative word 'undertakes' is appropriate for inclusion in an award although it might be included appropriately in an enterprise agreement. I therefore consider that the opening words of the provision should be altered to read "The company shall, upon authorisation, deduct union membership fees ... ". 30 I should note, in deference to the submissions of counsel for the respondents, that it was submitted that a change to the provision in that respect would depart from his Honour's decision because it would involve the making of a different provision to that contemplated by his Honour. I do not consider that an adjustment in detail of that kind is unavailable. 31 It is necessary to make formally the award agreed between the parties, to include the consent variations advised to the Commission today and also the issue the subject of this decision. Accordingly, the Commission makes an award in terms of exhibit 19, as amended today, which includes the agreed variations to that document, as initialled on the copy placed in the Commission's file. The award shall also include clause 37 in terms set out earlier in this decision. 32 The award shall operate from 9 March 2001 for one year, subject to the terms of clause 38(i) which provides "… but may be re-opened for re-negotiation not earlier than 3 months prior to expiry of this Award."

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