Townsend, Leonard Cecil v General Motors Holdens Ltd Tumbers, Michael Frederick Hugh v General Motors Holdens Ltd [1983] FCA 212

Federal Court of Australia|1983-08-26|Before: Morling J

Industrial law - breach of award - "stand-down" clause - strike - "employees who cannot be usefully employed" - meaning of "usefully" - whether employer's economic position relevant consideration - large industrial undertaking - employer bona fide - onus of proof - breach of award in minor respects

General Motors-Holden's Limited (Part 1) General Award 1978

LEONARD CECIL TOWNSEND v. GENERAL MOTORS-HOLDEN'S LIMITED

IN THE MATTER of the Conciliation and Arbitration Act 1904

V No. 20 of 1981 MICHAEL FREDERICK HUGH TUMBERS Applicant

ll March 1981 committed a breach of the General Motors-Holden's Limited (Part 1) General Award 1978 in that it failed to pay to some of its employees the wages tc which they were entitled under the Award. The Matters are stood cver to a date to be fixed for the purposes of determining the question of penalty and making formal orders.

IN THE MATTER of the Conciliation and Arbitration Act 1904

In these applications, which were heard together by consent, the applicants seek the imposition by the court of penalties upon the respondent General Motors-Holden's Limited ("G.MeH.") for alleged' breaches of the General Motors-Holden's Limited (Part I) General Award 1978 ("the Award"). The proceedings are brought pursuant to s.119 of

the Conciliation and Arbitration Act 1904, as amended ("the

Act"). The applicants also seek orders pursuant to- s.119(3) of the Act that G.M.H. pay to a great number of its employees amounts to which it is alleged they are entitled

The applicant Townsend is the Secretary of the Vehicle Builders Employees Federation of Australia, an organization of employees registered pursuant to the Act.

The applicant Tumbers is the Secretary of the South Australian branch of the Amalgamated Metal Workers and

Shipwrights Union another organisation of employees

The basis of the allegations made against G.M.H. is

that on 10 and 11 March 1981 it wrongly stood down the

employees in purported compliance with the terms of the Award. Because of the size and variety of G.M.H's industrial operations and the great number of employees stood-down complex questions of fact and matters of

GENERAL-MOTORS HOLDEN'S SOUTH AUSTRALIAN OPERATIONS

G.M.H. is a substantial manufacturer of motor vehicles. It has plants in several States of the Commonwealth. Two of its plants are located in South Australia, one at Elizabeth and the other at Woodville. In March 1981 G.M.H. employed approximately 7500 workers in

The Elizabeth plant covers some 306 acres. As might be expected in such a large-scale enterprise, a number of individual but inter-related activities are carried out within the plant. There is a motor vehicle assembly plant where motor vehicles are assembled on a moving assembly line. There is a hardware plant housing, inter alia, a press shop where small parts for motor vehicles are stamped out. Another part of the hardware plant is given over to the assembly of locks, and yet another to minor pressings.

There is a trim fabrication plant where the trim components

for the Holden range of vehicles are fabricated. Trim components include items such as door trims, seat pads and roof linings. The trim components manufactured at the plant

are despatched to G.M.H's vehicle assembly plants at

Danderiong, Victoria, and Acacia Ridge, Queensland, as well as to the assembly plant at Elizabeth. There is a press shop where components such as engine hocds, fenders, and car panels are pressed. The components manufactured in this shop are welded together and then stored in a large warehouse on the site. The press shop makes components not only for G.M.H's own assembly plants, but also for other vehicle manufacturers. Many other manufacturing activities are carried out at Elizabeth. The above brief description. does not by any means give a complete picture of all of the

The Woodville plant occupies a 50 acre site. Included within it is a large tool room where dies are manufactured. There is a large press shop where the company presses Major components such as roof and floor panels for almost the entire range of G.M.H. vehicles. There is a plating plant where bumper bars are plated. There is also an automatic transmission plant in which transmissions are manufactured, not only for the complete range of G.M.H. vehicles, but also for vehicles manufactured by other

Woodville. In this division manufactured parts are treated before being despatched to the company's motor spare parts division headquarters in Victoria. This description of the activities at Woodville, like the description of the

activities at Elizabeth, is by no means comprehensive.

In addition to the motor vehicle assembly plant at Dandenong in Victoria G.M.H. has a large plant at Fishermen's Bend in that State. At this plant the company manufactures engines, rear axles, automatic transmissions, steering columns and other items. These are supplied to all

The Acacia Ridge plant 1s an assembly plant cnly at

which vehicles are assembled from components manufactured at

the Fishermen's Bend, Woodville and Elizabeth plants and

On 10 and 11 March 1981 G.M.H. stood-dewn about 3000 of its employees at Elizabeth and Woodville. It is

G.M.E's case that the Award gave it the right to stand-dcwn

the employees on the days in question. Clause 6(qg) of the

Notwithstanding anything elsewhere contained in this clause -

deduct payment for any day an employee cannot be usefully employed because of a strike or through a breakdown in

Machinery or a stoppage of work by any eause for which the Company cannot reasonably be held responsible."

It will be convenient hereafter to refer to cl.6(g)(i) as

THE NIPPONDENSO STRIKE AND THE SHCRTAGE OF HEATER BOXES

In order to understand why the employees were stood-down it is necessary to have regard to two circumstances that had an important bearing on G.M.H's production schedules at the time. The first of these circumstances arose out of an industrial dispute at the works of one of G.M.H's suppliers. In March 1981 G.M.H. was Manufacturing Commodore VC mcdel vehicles. An integral part of these vehicle was a heater box. A heater box is a

plastic box with a coil in it which 1s fixed in the centre

of and behind the dashboard of a mctor vehicle. It performs the task of providing heated air which serves the purpose, anter alia, of demisting the windscreen of the vehicle. It is connected with the motor and is a requirement of the

G.M.H. does not manufacture heater boxes itself but acquires them from Nippondenso Limited, whose factory premises are in Victoria. On ll February 1981 a strike commenced at Nippondenso's factory. The strikers included members of the Amalgamated Metal Workers and Shipwrights Union and of the Storemen and Packers Union. The strike completely shut down Nippondenso's operations. At the time of the strike Nippondensc had about 100 heater boxes in stock but it was unable to deliver these to G.M.H. because of the strike by the members of the Storemen and Packers Union. When the Storemen and Packers returned to work on 20 February Nippondenso was able to deliver the heater boxes which it had on hand and thus G.M.H. was able to replenish its dwindling stock of boxes. However, the strikers who were members of the Amalgamated Metal Workers and Shipwrights Union remained on strike until 18 March 1981 and an consequence Nippondenso was unable to continue

G.M.H. learned of the strike at Nippondenso on 23 February and immediately set about taking steps to arrange for alternative supplies of heater bexes. A number of boxes that had been packed ready for delivery to G.M.H's New Zealand plant were brought back from the wharves and added to the stock available in Australia. Urgent steps were taken to ascertain whether suitable boxes were available from the Opel company, G.M.H's German affiliate. Unsuccessful attempts were made to obtain heater boxes from the Vauxhall company (another G.M.H. affiliate) in the United Kingdom and also from South Africa. Evidence was given, which I accept, that every source of possible supply

As a result of these efforts suitable boxes were eventually located in Germany. At the time, a G.M.H. executive happened to be at the Opel works in Germany. His services were enlisted to ensure that boxes 'were obtained without delay. But, due to circumstances beyond G.M.H's control, there were delays in obtaining delivery of the boxes in Australia. Arrangements were made for them to be carried by Qantas from Frankfurt airport. However, a strike by Qantas employees made it necessary to make alternative arrangements. It was decided to airfreight them from Stuttgart on a Lufthansa flight but a bomb scare at that

airport led to a temporary delay in the loading of the

alreraft. Eventually supplies of the boxes arrived in Australia, but G.M.H's efforts were further bedevilled by a strike by Australian customs officers, who declined to clear

available to G.M.H. and it allocated these between the vehicle assembly plants at Elizabeth, Dandenong and Acacia Ridge. G.M.H. spent some $43,000 in airfreight charges on the boxes.

I am satisfied that as soon as the strike at Nippondenso interrupted the supply of heater boxes G.M.H. took every step reasonably open to 1t to obtain alternative supplies. I am further satisfied that although there were delays in obtaining alternative supplies, those delays were not the fault of the company and could not have been avoided by it. Indeed, I did not understand counsel for the applicants to assert the contrary. This being so, it is unnecessary to refer in any further detail to the consider-

able body of evidence led by G.M.H. to establish that it

acted prudently and expeditiously in finding an alternative

However, Mr Ryan Q.C., senior counsel for the applicants, submitted that even if G.M.H. could not te criticized for its efforts in obtaining an alternative

supply of heater boxes, 1t was at fault in sending some of

them to Acacia Ridge. It was argued that the assembling of Commcedore vehicles at Acacia Ridge could have temporarily stopped in March 1981 and that the heater boxes should have been sent to the Elizabeth plant, thus avoiding all, or some, of the stand-downs. 1 do not think this criticism of G.M.H's actions is justified on the evidence. In the light of the trouble and expense to which the company went to obtain urgent supplies of the heater boxes, 1t would have been extraordinary if it had not utilized the boxes, when they eventually arrived, in the most efficient way. Mr Vincent McDonald, who was G.M.H's supervisor of materials control at the time, took a leading part in obtaining supplies of the heater boxes. He was well aware of the number of Commodore vehicles produced on a daily basis in G.M.H's assembly plants. He gave evidence that he considered whether heater boxes should be sent to Acacia Ridge. He said that at the time G.M.H. was assembling both Commedore and Gemini vehicles at Acacia Ridge. Apparently consideration was given to operating the Acacia Ridge plant sO as to assemble only Gemini vehicles. But a decision was taken to continue assembling Commodore vehicles as well. It was not put to Mr McDonald in cross-examination that the decision was unreasonable, and I do not think there is any

A decision to change the mix of vehicles on the Acacia Ridge assembly line would have involved a consideration of a number of commercial and technical factors of some complexity. There is no basis in the evidence for a finding that G.M.H. did not efficiently handle the problems thrown up by the shortage of heater boxes. I am satisfied that it acted reasonably in allocating some of the heater boxes to the Acacia Ridge plant and that it made a proper allocation of boxes to the assembly plant

FALLING SALES OF VEHICLES AND BUILD-UP OF INVENTORY

Another circumstance that affected G.M.H's production schedules at the time of the stand-downs was a reduced level of vehicle sales. During 1979 G.M.H. had set

preduction levels on a fairly optimistic basis. But there was a downturn in the market towards the end of that year

and this necessitated adjustments to prceduction schedules.

The affects of these adjustments were widespread. The reduction in the number of vehicles produced inevitably

led to fewer workers being required in the assembly plants.

It also led to reduced demand for parts made or assembled in

other G.M.He plants. The reduced demand for parts also led to a reduced demand for labour. The turnover of employees in G.M.H's operations in South Australia was very low compared with that in other States. The plants in the eastern States had very high labour turncvers. Whereas in South Australia turnover of employees was typically under 20% per annum, ut reached 50% per annum elsewhere. The turnover of labour as at May 1979 in some of G.M.H's South

Australian operations was as low as 10% per annum or even

When there is a high turnover of labour it is not always necessary to retrench staff consequent upon a fall in production. This is because natural attrition of the work force may reduce the number of workers so as to match the reduced demand for labour. But when there 1s a small labour turnover, a reduced demand for vehicles makes it necessary to take positive steps to reduce the work force. This was the position that existed in South Australia for at least twelve months prior to March 1981. In an effort to reduce the labour force in that State at that time, G.M.H. asked employees to take outstanding accrued long service leave. Other employees were asked to undertake training programmes which took them away from their regular work. By taking such steps, the company avoided retrenching employees at

G.M.H. 1s by far the largest employer of labour in Elizabeth. Elizabeth was described by one of the witnesses as a "company town". Indeed, G.M.H. is one of the largest employers of labour in South Australia and it took this matter into account when deciding to avoid, so far as

Because of falling sales of vehicles G.M.H's production schedules were adjusted downwarcs on a monthly basis. This led to a particular problem in South Australia. On the one hand fewer vehicles were being produced and sold, but on the other hand production levels of parts fabricated in the company's plants were not reduced to the same extent. This in turn led to an increase in the inventory of parts held in stock. G.M.H's terminology for inventory 1s "pre-build". Mc Barlow, the company's manager for industrial and employee relations, described the problem in

«1... it meant that the company was maintaining a pre-build of fabricated inventory at a higher than desired level - much higher than desired level - but it-meant, when we first looked at the problem late in 1979, we anticipated that a small pre-build would exist, but we would be able to reduce that quickly with the initiatives that we took in taking production out of the system. Unfortunately, the way the market continued to decline, the pre-build did not come down in the way we expected it to and the way it should have and it meant that the excess inventory remained over 18 months or so."

As 1980 pregressed G.M.H. monitored the financial impact of its falling sales and the maintenance of its labour force. Mr Barlow said that the problem in South

Australia engaged the attention of the company's senior Management. He said that "the company, in fact, was running at a quite substantial loss right throughout 1980, and we were aware to finance that inventory position we had to borrow money at the prevailing interest rates; in fact, we

were borrowing money to keep the company going in those

G.M.H. made a loss in 1980 of some $130 million. Mr Barlow said that interest, holding and storage charges on pre-build was of the order of 21% per annum. The increase in unventory in South Australia was much greater than in other States. According to Mr Barlow "the excess was in the

vicinity of $15,000,000 to $20,000,000". (Transcript

The adverse consequences to G.M.H. of an excessive level of pre-build were not limited to the financial impact of interest and holding charges. In addition, there were storage problems and there was a risk that stock would deteriorate or be damaged. These problems were recognised well before March 1981. Mr Barlow said that it had been

decided that if the assembly plant was not operating, then

employees in other plants would be stood-down. Because Mr

Barlow's evidence gives an indication of the attitude adopted by the company to the stand-down of its employees it

1s useful to refer to the following extract from it:

"HIS HONOUR: When was it you said senior management took this decision to stand down if the ass'embly lines were brought to a halt?---It would have been -in October or

MR BARNARD: What was the view as to whether it was economic or uneconomic to carry on with fabrication if assembly lines were stood down?---It was considered that 1t was uneconomic to carry on with fabrication in those circumstances.

could be a stand down of course was the provisions of the award?~---That 1s correct.

You yourself had a knowledge of the experience of the industry in that regard; is that correct?---Yes, I had discussed the position with Mr Ellison, the director of personnel, on a number of occasions. This industry has had a long history in which stand-downs have occurred for varying reasons, either due to internal undustrial disputes or external disputes. I was also aware of, and have been involved in, matters (that) have either been litigated in the then industrial court or have been subject to the jurisdiction of the Conciliation and Arbitration Commission by agreement of the parties involved. Tt could be said that some custom and practice had evolved in the industry based on the precedents that we were aware of.

What precedents were you aware of that you were talking about?---I was aware of a number of stand-down cases that had been dealt with by the Conciliation and Arebitration Commission by agreement in the late 40s and early 50s when those types of clauses first came into

awards. They mainly turned around the post-war power restrictions and things like that where the commissioners dealing with these matters tended to look at the stand-down clause in terms of an. employer having the right to stand down people if they could not be usefully employed because it was not an economic benefit of the employer to keep them on. Then, in the 1960s there were one or two cases in this industry that went to the industrial court. One involved the Ford Motor Company at Geelong and one involved the British Motor Corporation. Those cases did not turn much on the question of useful employment, but they gave some reinforcement to the stand-down provisions in the awards. In the early 1970s there was one case involving this company that was dealt with by Commissioner Hood in the Conciliation and Arbitration Commission.

Is that the one that involved the automatic transmission section?---Yes, that is correct. The concept of the economic benefit of the employer was raised in that issue and commented upon by the commissioner in his decision. There was one, I think in the same year, involving Mr Commissioner Portus at Chrysler where he referred to similar concepts. We were also aware of many instances of stand-downs that had occurred in the industry which have not been challenged in any form. One that I can recall that affected the fabrication side of operations involved the Ford company when the supply of axles to that company was stopped following a strike at Borg Warner in Sydney. Ford stood down their assembly operations and subsequently stood down their fabrication operations. We were aware that that had happened and there were similar exercises in other companies. Apart from that, we have had a number of internal disputes where stand-downs had occurred in the assembly plants and had not been challenged, if you like, by the unions.

Ford had the same, too?---Yes. In fact, all the companies did, for one reason or the other.

Was your knowledge of the history of this contributed at this meeting which you attended?---Yes. I should also say we had

some legal opinions in the early stages of the 1970s, which we did again refer to at that time, but there was extensive discussion on the subject at the time. It was our general conclusion that, based on our understanding of the legal requirements, we were required to fulfil, that we could stand down in those circumstances, because to continue production in the fabrication areas would not be to the economic benefit of the employer."

G.M.H's point of view it was preferable to continue production if that were possible. He said:

stand-down ... we knew the material was there to build vehicles, apart from the

heater boxes; all other materials were there to continue production; we had the labour there. There are costs involved in

standing down because we still have to carry overheads and any fixed burden in the business -~- the staff people are not involved in standing down - and there is the cost of maintaining the business while there is no production going on. While we can produce and sell some vehicles, a cash flow is being generated and it is preferable to continue the production than to stand down.

To continue full production?---To continue full production."

indication of the approach taken by G.M.H. to the standing

down of its employees on 10 and 11 March 1981. It would

have preferred to have worked the whole work force on those days. Being unable to do so, it decided to stand down those employees whe, in its opinion, could not be usefully employed in the sense that their work on those days would

It was contended by counsel for the applicants that this approach to the stand-down clause was impermissible and much of the argument in the case turned upon this issue. The parties called many witnesses to establish, or to refute, that those employees who were stcod down could not have been employed to carry out work of economic benefit to the company on 10 and 1l March 1981. I shall refer to some of this evidence later in these reasons but before doing so it is necessary to consider the question of the onus of

Mr Ryan Q.C. contended that the onus lay upon G.M.H. to prove that employees who were stocd down could not have been usefully employed on 10 and 11 March 1981 because

of one or other of the circumstances referred to in the

stand-down clause. Mr Barnard Q.C., senior counsel for G.M.H. contended that this was not so. To understand the

rival contentions it is necessary to refer to scme of the

Clause 6, which is headed "Contract of Employment" provides, inter alia, that except as provided in the Award, "employment shall be by the week" - vide cl. 6(a). Clause 7(a) provides that all wages are to be paid weekly, but provision is made for payment fortnightly if the company and the employee shall agree. Clause 8 provides, in part, as

"8 - WAGE RATES (a) (i) The actual wage to be paid to an employee of a classification specified in the table of classifications in sub-clause

juniors below the age of 18 years of age, shall be at the rate per week assigned to

A table of wage rates payable to employees 1s then set out in the Award. The rates vary according to the

employee's grade and years of service and to the State in

non-observance of a term of the Award in that it has failed to pay to each of (the persons named in an appendix to the Points of Claim) in respect of either or both of 10th and llth days of March 1981 or any of them remuneration payable to such person purstant to Clause 8 of the Award in respect

Thus the applicants found their case upon the alleged failure by G.M.H. to comply with cl.8(a)(i) of the Award. Mr Barnard contended that if his client was in breach of the Award at all, it was in breach of cl.6(g) (1) and not cl.8(a)(i). He submitted that whilst cl.8(a)(1) fixes the rate per week at which employees are to be paid, 1t does not, in terms, impose an obligation on G.M.H. to pay wages to employees. That obligation, so he argued, arose out of G.M.H's obligations at common law. rf G.M.H.

stood-down employees otherwise than in accordance with cl.6(g)({i) then, so it was argued, there was a breach of that clause only. An employee could sue for the wages wrongly deducted by G.M.H., but the wrongful deduction would

I think this approach to the construction of the Award 1s over technical. In my opinion, cl.8(a)(1) plainly imposes upon G.M.H. the obligation to pay a week's wages at

the appropriate rates to its employees if they are ready,

willing and able to work for each day of the week. It is common ground that all the employees who were stood down on 10 and 11 March were ready, willing and able to work on

those days. No doubt the engagement of each employee by

G:M.H. gave rise to a common law relationship of master and servant in each case. But I do not think this is inconsistent with the obligation to pay wages which, as I think, is contained by implication in cl.8(a)(i) of the

Moreover 1t seems inappropriate to construe c1.6(g)(i) so as to render an employer who does not observe its terms liable to a penalty under s.119(1) of the Act.

Clause 6(g)(i) gives G.M.H. the raght to make a .deduction from an employee's wages in certain specified circumstances. If those circumstances do not exist, then G.M.H. does not have the right to make the deduction. But the non-existence of the right is hardly the basis for the imposition of a

penalty. The basis for the imposition of a penalty is a failure to pay wages, i.e. a failure to comply with the

If Mr Barnard is correct in his submission that failure to pay an employee a wage at the rate specified in cl.8(a)(i) does not of itself constitute a breach of the

Award, the consequence would be that G.M.H. would not be in

breach of the Award if 1t failed to pay a full week's wages

to an employee who had performed a full week's work. Tf that were the true position preceedings could not be taken under s.119 of the Act. That would be a surprising result.

O£ course, in such circumstances, no question of a breach of cl.6(g)(i) would arise as the employee would not have been

"It seems to have been accepted in other cases in which employers have been proceeded against for failing to pay wages to employees who have been improperly stood-down, that it is the-breach of the relevant award provision dealing with payment of wages which gives rise to the

liability to a penalty under s.119. See, for example,

Jarrad v Melbourne and Metropolitan Tramways Board (1978)

On the assumption that a failure to pay wages in accordance with cl1.8(a)(1) of the Award may give rise to the imposition of a penalty under s.119 of the Act, the question arises whether the onus lies on G.M.H. to prove that it had the right to deduct payment in respect of days when employees were stood down, or whether it is incumbent upon the applicants to show that G.M.H. wrongly stcod-down the

In my opinion the onus of proof lies on G.M.FB. The question can, I think, be best resolved by considering the position of an employee if he were to sue the company for unpaid wages. If he sued at law for his wages, would it be sufficient for him to lead evidence that he had been ready and willing to work for a full week but had been paid for part only of the week? Or would he have to go further and show that G.M.H. deducted some part of his weekly wage although there was useful work upon which he could have been usefully employed? I cannot think that it was the intention of the draftsman of the Award that an employee shouid be required to prove that there was useful work for him to perform on the days when he was stood-down, 1.e. that he was wrongly stood-down. The stand-down provision in the Award is not part of the prescription of the conditions under which employees become entitled to be paid their wages. Rather it is in the nature of an exception to G.M.H's prima facie liability to pay a week's wages to employees who are

In Darling Island Stevedoring and Lighterage Co. Lamited v Jacobsen (1945) 70 C.L.R. 635, the question for

determination was whether, in proceedings under s.7(1)(b) of the Workers' Compensation Act 1926-1942 (N.S.W.) the worker or his dependants must prove affirmatively that he received

an injury without his own act or default or whether it is

enough for him to prove that he received injury while on a periodic journey referred to in the section. Dixon J. said

"The answer depends upon the inter- pretation of the provision. For the burden of proof is a legal consequence of the nature of the qualifacation placed by the words 'without his own default or wilful act! upon the general conditions or liability stated in the clause. If these words are but part of the legislative attempt to define the conditions upon which the worker's right to compensation arises, then, like all other ingredients or elements in a cause of action or title to claim, proof of the fulfilment of the conditions they describe must lie with the claimant. But if the true nature of the qualification is to introduce new matter, not as part of the primary grounds of liability, but as a special exception or condition defeating or answering liability otherwise existing, then the onus of proof lies with the party setting up default or wilful act by way of answer."

In Vines v Djordjevitch (1955) 91 C.L.R. 512, the High Court considered where the onus of proof lies when there is an exception or proviso to an enacting provision.

"In the end, of course, it is a matter of the intention that ought, in the case of a particular enactment, to be ascribed to the legislature and therefore the manner in which the legislature has expressed its will must remain of importance. But whether the form is that of a proviso or of an exception, the intrinsic character of the

provision that the proviso makes and its real effect cannot be put out of consider- ation in determining where the burden of proof lies. When an enactment is stating the grounds of some liability that it is imposing cr the conditions giving rise to some right that it ius creating, it is possible that in defining the elements forming the title to the right or the basis of liability the provision may rely upon qualifications exceptions or provisos and it may employ negative as, well as positive expressions. Yet it may be sufficiently clear that the whole amounts to a statement of the complete factual situation which must be found to exist before anybody obtains a right or incurs a liability under the provision. In other words it may embody the principle which the legislature seeks to apply generally. On the other hand it may be the purpose of the enactment to lay down some principle of liability which it means to apply generally and then to provide for some special grounds of excuse, justific~ ation or exculpation depending upon new or additional facts. In the same way where conditions of general application giving rise to a right are laid down, additional facts of a'special nature may be made a ground for defeating or excluding the right. For such a purpose the use of a, proviso 1s natural. But in whatever form ttle enactment is cast, 1f it expresses an exculpation, justification, excuse, ground of defeasance or exclusion which assumes the existence of the general or primary grounds from which the liability or right arises but denies the right or liability in a particular case by reason of additional or special facts, then it is evident that such an enactment supplies considerations of substance for placing the burden of proof on the party seeking to rely upon the additional or special matter: see Morgan v. Babcock & Wilcox Ltd. (1929) 43 C.L.R. 163; Pye v. Metropolitan Coal Co. Ltd. (1934) 50 C.L.R. 614, (1936) 55 C.L.R. 138; Darling Island Stevedoring & Lighterage Co. Ltd. Vv. Jacobsen (1945) 70 C.L.R. 635; Barritt v Baker (1948) V.L.R. 491, at p. 495; Dowling v. Bowie (1952) 86 C.L.R. 136."

Applying the test adopted by Dixon J. in Jacobsen's

Case I do not think it can be said that G.M.H's right under

cl.6(g)(i) to deduct payment in the circumstances therein referred to 1s in any sense part of the condition upon which an employee's right to payment of wages depends. The true nature of cl.6(g)(i) is (as Dixon J. said of the words with which he was concerned) "to introduce new matter, not as part of the primary grounds of liability, but as a special exception or condition defeating or answering liability otherwise existing ...". This being so, the onus lies on G.M.H. to establish facts giving it the right to make

That the onus of proof in a case such as the present lies on the employer seems to have been accepted by the High Court in Pickard v John Heine & Son Limited (1924) 35 C.L.R. 1 = see per Gavan Duffy J. at p.il and per Starke

In Vehicle Builders Employees Federation of Australia v British Motor Corporation (Aust.) Pty. Limited

(1966) 8 F.L.R. 70, the Commonwealth Industrial Court

(Spicer C.J., Joske and Eggleston JJ.) considered the terms of the Vehicle Industrial Award 1953 which, by cl.7(a), provided for employment by the week and, by cl.7(b) gave the

employer a right to "deduct payment for any day an employee

cannot be usefully employed because of any strike or through any breakdown in machinery or any stoppage of work by any cause for which the employer cannot be held responsible".

"The award provides for engagement by the week, and in the absence of any express provision an employee is entitled to a week's wages for each week of his employment even if there is no work for ham to do. Clause 7(b). of the award provides, however, that the employer's right 'te deduct payment for any day the employee cannot be usefully employed because of any strike or through any breakdown in machinery or any stoppage of work by any cause for which the employer

cannot be held responsible' is not affected by the provision for weekly employment.

"We start, therefore, from the position that an employee who is on a weekly engagement is prima facie entitled to a week's wages. If, being ready and willing to work, he is told by his

' employer that he need not report for work the next day as there is no work for him to do, he is nevertheless entitled to be paid for that day, unless the employer can show that the employee cannot be usefully employed on that day for a reason falling within the clause abové quoted."

In my opinion cl.6(g)(1) assumes the existence of the right of an employee to the weekly wage rate applicable to his grade as specified in ¢c1.8(a)(i). What c¢cl.6(g) (1)

does is to deny that right in particular cases 1f G.M.H. can

show that the emplcyees cannot be usefully employed by

reason of one of the special circumstances referred to in the clause. In these circumstances, the Award should be construed as placing the burden of proof on G.M.H. if it

Considerations of fairness lead to the same result. To require an employee to assume the burden of proving that G.M.H. could usefully employ him on a given day might well make it virtually impossible for him to prove his case. Whether or not a particular employee could be usefully

employed by G.M.H. might well depend upon factors known only

to the company itself. It cannot have been intended by the draftsman of the Award that an employee should carry the

Dethridge C.J. in Harris Scarfe Limited v Federated Storemen

and Packers Union of Australia (1928) 26 C.A.R. 392. In

that case an award contained the following provision:

"Engagements of weekly employees shall only be terminable by notice of not less than a week, which notice shall be given so as to expire on a usual pay day; but nothing herein shall affect an employer's right to dismiss an employee for misconduct or incompetence. Any employer may deduct payment for any day on which an employee cannot be usefully employed because cf (a) any strike, (b) any breakdown of Machinery, or (c) any stoppage cf work unavoidable by the employer."

"The burden of showing that the employees could not be usefully employed is on the employer. If he fails to sustain that burden he has to pay."

The same view has been taken in the Federal Court - see

Poultney v 'Hydro-Electric Commission of Tasmania (1981) 52 F.L.R. 427 at 437 per Evatt J. And in the New South Wales Industrial Commission the same approach has been taken to broadly similar award provisions. See, for example, In re Steel Works Employees (Broken Hill Pty. Co. Limited) Award and Anor. (1949) A.R. 941 at 961; In re Electricians (State) Award 82 I1.G. 165 per Kinsella J. and In re Dispute

Australian Iron & Steel Pty. Limited re Stand-down of Bricklayers (No. 1) (1972) A.R. 285 per Sheppard J. at 286-287.

stand-down clause. Much debate ranged around the meaning of

the words "usefully employed". Mr Ryan argued that these words did not mean "economically employed" or "advantageously employed". He accepted that whether an

employee is usefully employed has te be determined from the

employer's point of view. But he contended that 1f no work was available to employees on 10 and 11 March 1981 because of the economic situation into which G.M.H. had progressive- ly drifted, it could not be said that such employees could not tave been "usefully employed" within the meaning of the clause. He submitted that it was not proper to have regard to the economic consequences to G.M.H. when deciding whether one of its employees could be usefully employed. What had to be looked at, so it was argued, was whether work was scheduled to be done by employees on 10 and 11 March. If work was so scheduled, then it must be assumed that it was

useful work. It was work which, under their contracts of

employment, the employees were obliged to carry out. G.M.H. having engaged employees to perform work, could not be heard to say that those employees could not have been usefully employed in performing that work. |

Clauses similar to cl. 6(g)(i) are to be found in many awards and the meaning and application of such clauses have been considered in several cases. The meaning which has been given to the words "usefully employed" in those cases has been attributed to them against the background of the special facts of each case. None of the cases have been concerned with facts as complex as those which arise for consideration in the present proceedings. Nevertheless it is instructive to consider what has been said about similar

In Re Carpenters and Joiners Award (1971) 17 F.L.R.

330 the clause under consideration provided, inter alia,

"the employer may deduct payment for any day upon which an employee cannot be usefully employed because of any strike

The Commonwealth Industrial Court (Spicer C.J., Joske and

Smithers JJ.) was requested by counsel for the applicant to define the meaning of the expression "usefully employed" so that the obligations of an employer might be clear whatever circumstances might arise. The court not unnaturally declined this invitation and stated that its function in the case in hand was to say what rights and duties arose under the clause in the particular factual circumstances under consideration. In that case a strike by crane drivers and

other workers led to the standing-down of carpenters. In

their joint judgment, Spicer C.J. and Smithers J. said (at

necessarily connotes that by the employment in contemplation there will be a net benefit to the employer's business by reason of the performance of the particular work done. If the performance of the work done will prejudice the conduct of the employer's business then it is not useful to him although the work in 1tself would probably, to some extent, contribute to production."

This statement was made in the context of a situation in which the employment, of some only of a number of employees normally engaged on a class of work would have caused such

industrial trouble as to materially disrupt the conduct of the employer's business. But nevertheless the passage which I have quoted seems to me to be of general application. Their Honour's adoption of the notion of "net benefit" seems to indicate that they accepted that factors affecting the economics of the employer's business must be considered in deciding whether an employee can be usefully employed. That this is so seems to me to be basic to the meaning and operation of cl. 6(g)(i). The reason for the inclusion of the clause in the Award is to afford G.M.H. financial relief from the consequences of a strike or a breakdown in machinery or a stoppage of work for which it cannot reasonably be held responsible. In that context the words "usefully employed" must surely justify, indeed require,

consideration of the question whether employment of an

However, some of the dicta in the Carpenters and Joiners Case cannot be applied directly to the facts of the present case. The applicants contend that the strike at Nippondenso and the stoppage of work in the assembly plant at Elizabeth did not lead to an absence of useful work for employees working in the fabrication plant. In support of

this contention Mr Ryan relied upon the following passage in

"In circumstances where it is reasonable to anticipate that consequent upon the cessation, of the strike by reason of which (the stand-down clause) is brought into operation, or for some other reason,

production in the employer's business will be resumed within a time that will permit continuance of relevant production -

(d) Where work which may be usefully performed by an employee on a particular day can be performed on that day notwithstanding that other workers are on strike, it cannot be said that that employee. cannot be usefully employed on

that day by reason of the fact that if he does so perform it the amount of work

available to be performed on the day 'of resumption of work on the cessation of the strike will thereby be reduced."

(17 F.L.R. at pp. 333-4) It seems to me that the statement made by their Honours in paragraph (d) is intended by them to have application where the employer's business returns to its normal operations after cessation of the relevant strike. Their Honours were not concerned with one of the major factors relied upon by G.M.H. in the present case, namely, an excessive build-up in stock if employees in fabrication plants work while assembly lines are stopped. That their Honours did not intend that Matters affecting the profitability and viability of the employer's business should be excluded from consideration

when determining whether an employee can be usefully

employed also appears from the following passage in their

"Tt cannot be said that an employee cannot be usefully employed on a particular day if there is a day's work available to him which, if performed on that day, will, having regard to the probable course of employer's business, contribute

Re Technical Staff (TAA) Award 1974, 1978 L.B. Co., I.A.S. Current Review 141. In that case his Honour was asked to interpret a provision of an award which read, in part as

"The employer shall have the right to deduct payment for any day an employee cannot be usefully employed because of a strike or stoppage of work through any cause for which the employer cannot reasonably be held responsible."

The case arose out of the circumstance that a strike by air traffic controllers grounded all MTAA''s aircraft. TAA thereupon stood-down a number of employees whose work was primarily concerned with the operation and Maintenance of the aircraft. The men were stood-down

~ notwithstanding, as Keely J. found, that in respect of each

employee stood-down there was work which was proper to be

done by him, which would be done by him at some time, and which could have been done on the day of the stand-down. In

those circumstances Keely J. held that the men had been

wrongly stood-down. He held that when the men were informed

on the afternoon before the stand-down that they were

stood-down in respect of a definite period commencing the

At a glance

Court

Decision date

Before

Source

Judgment (424 paragraphs)

Cited By (1)