Re Australasian Meat Industry Employees Union And Alice Springs Abattoirs Pty Limited [1987] FCA 319; 21 IR 294 (18 September 1987)

FEDERAL COURT OF AUSTRALIA

Re: THE AUSTRALASIAN MEAT INDUSTRY EMPLOYEES UNION
And. ALICE SPRINGS ABATTOIRS PTY. LIMITED
No. I 12 of 1987
Industrial Law
21 IR 294

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Keely J.(1)

CATCHWORDS

Industrial Law - alleged breaches of award - failure to file "agreement" - meaning of "agreement" - failure to keep records.

Conciliation and Arbitration Act 1904 s. 119

HEARING

MELBOURNE
18:9:1987

Counsel for the applicant: Ms C. Simpson

Solicitors for the applicant: Maurice May & Co.

Counsel for the respondent: Mr. B. C. Hungerford

Solicitors for the respondent: Mallesons Stephen Jaques.

ORDER

The respondent, Alice Springs Abattoirs Pty. Limited, pay the whole of the said penalty to the Australasian Meat Industry Employees Union.

A penalty of $500 be imposed on the respondent in respect of a breach of the terms of clause 23(a)(i) of the Northern Territory Meat Processing Award 1984.

(Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.)

DECISION

This is an application under s. 119 of the Conciliation and Arbitration Act (1904) (the Act) for the imposition of penalties upon the respondent in respect of alleged breaches of the Northern Territory Meat Processing Award 1984 (the award) by the respondent.

2. On the evidence and the admissions made by the respondent I find that at all material times:-

(1) the respondent company was incorporated
(2) the respondent was a member of the Meat and Allied
Trades Federation of Australia and was bound by the

award

(3) the respondent operated a meat processing

establishment at Alice Springs

(4) the respondent was the employer of persons employed at

that establishment under a system of payment by
results

(5) the applicant was an organization of employees

registered under the Act

(6) the applicant was a party to the award.

3. The number of applications made by the applicant for leave to amend its application make it desirable that some details be given of the proceedings. The application was filed on 19 February 1987 and directions hearings were held on 12 March 1987 and 26 March 1987. The hearing commenced on 26 May 1987, on which date the respondent company was represented by its managing director, Mr. G. P. Whitaker, by leave of the court, granted without objection by the applicant. The applicant's case, including evidence on affidavit by leave of the court, was completed on that day and the respondent's case was then opened by Mr. Whitaker. On the following day, Mr. R. J. Weber, solicitor, appeared for the respondent and applied for an adjournment of the matter to enable him to brief counsel for the respondent. The respondent having agreed to pay the costs of the applicant resulting from the adjournment, the application for an adjournment was not opposed by the applicant and the matter was adjourned until 14 July 1987.

4. Mr. Weber had referred to the likelihood of affidavit material being filed by the respondent and Miss Simpson, of counsel, who appeared for the applicant, had given notice that it might seek to amend the application. The affidavit of Mr. Whitaker was not filed and served by the respondent until 9 July 1987 - apparently because the respondent had been waiting to receive notice of any amendment proposed by the applicant. The applicant, on the other hand, was apparently waiting to receive the respondent's affidavit material before formulating any proposed amendment. As a result the proposed amendment was not served on the respondent until 14 July 1987 - although notice of it had been given by letter during the previous week.

5. On 14 July 1987 (the first day of the resumed hearing) leave to amend the application was given, there being no objection. On 15 July a further amended application was proposed by the applicant but was not pursued on that day as it became apparent that a further amendment to that proposed amendment would be necessary. On 16 July 1987 (the last day of the hearing), after the commencement of its final address, the applicant sought leave to amend its application by substituting a "further amended application" but it was then found that that document itself required further amendment. The grant of leave for those amendments was objected to by Mr. Hungerford, of counsel, for the respondent, whose succinct submission was that "enough is enough". However, he agreed that the respondent was not prejudiced by the proposed further amendments and stated that he would not seek an adjournment if leave were granted. Having regard to those statements, to the indulgence of an adjournment which had been granted to the respondent without objection on 27 May 1987 and to the public interest element in compliance with awards made under the Act, leave to make those amendments was granted to the applicant.

6. For completeness it should be added that an even later application to further amend the application, by deleting the word "weekly" from paragraph (iii) of the particulars, was refused.

7. I accept Ms. Simpson's contention that not "all these amendments have been brought about by the default of the applicant"; however, the matters leading to the need for some of the amendments, at least, showed a regrettable degree of carelessness on the part of one or more of the applicant's legal advisers.

8. The applicant was asked to file an amended application incorporating all the amendments made by leave. The amended application, forwarded to my associate by facsimile, was in the following terms:

"Further Amended Application

On the grounds appearing in the
accompanying affidavits the applicant
claims:-

1. A declaration that the respondent
committed a breach or breaches or
alternatively failed to observe the
Northern Territory Meat Processing
Award 1984 in the respects
particularised below (see particulars
(i), (ii), (iv)).

2. A declaration that on and from 28.4.86
the respondent committed a breach or
breaches or alternatively failed to
observe the Northern Territory Meat
Processing Award 1984 in the respects
particularised below (see particular
(iii)).

3. A declaration that between 22.10.86 and
24.10.86 the respondent committed a
breach or breaches or alternatively
failed to observe the N.T. Meat
Processing Award 1984 in the respect
particularised below.

Particulars

(i) Breaches of clause 23(a)(i) in that
the respondent, not being an
employer using mechanical timing
devices for the purpose of
recording starting times and
finishing times of employees or an
employer maintaining time and wages
records on a computer or microfilm
system, failed to provide a
timebook or timesheet in which was
entered the names of employees,
their classification, failed to
cause to be entered each day in the
said timebook or timesheet each
day's starting and finishing times,
the times allowed for meals, each
day's hours of work of each
employee and the wages received
each week.

(ii) Breach of clause 23(a)(ii) in that
the respondent, being an employer
using mechanical timing devices for
the purposes of recording starting
and finishing times of emloyees,
failed to keep a record from which
could readily be ascertained the
name and classification of each
employee, the hours worked each day
and the wages received each week.

(iii)Breach of clause 33(e)(v) of the
said award in that, the respondent
being an employer remunerating his
weekly employees under a system of
payment by results failed within 14
days of the commencement of
operation or at all to file with
the Deputy Industrial Registrar in
Darwin the agreement pursuant to
clause 33(c) and (d) thereof.

(iv) Breach of clause 7 of the said
award in that in the week ended
2.7.86 employees R. Kennedy, J. Mu,
G. Frank and T. Wilson were not
paid in accordance with the said
clause.

(v) Alternatively to (i) above, breach
of clause 23(c) of the said award
in that between 22.10.86 and
24.10.86 the respondent failed on
demand upon reasonable notice to
produce for inspection at the place
where the respondent carried on
business and employed employees to
an official of the Australasian
Meat Industry Employees' Union
authorised in writing to inspect
the said records by the Federal
Secretary thereof.

4. An order that a penalty be imposed upon
the respondent in respect of the said
breaches on (sic) non-observances
pursuant to section 119 of the
Conciliation and Arbitration Act 1904.

5. Such further or other orders as the
Court thinks fit."

That document, forwarded after the decision of the court had been reserved, should have set out the application as amended in the terms authorized by the grant of leave. As a result of further carelessness by one or more of the applicant's legal advisers, it did not correctly set out the terms of those amendments.

9. As the final submissions of both parties were conducted on the basis of the application, as amended by leave, including the leave granted on 16 July 1987, in considering my decision in this matter I have treated the "further amended application" set out above as if it were altered by:-

(a) inserting in the first line of paragraph 1, after the

words "A declaration that" the words "between 26.6.86
and 2.7.86". Those words had appeared in paragraph 1 of
the original application and in the amended application
before the last amendment.

(b) adding the words "in (v)" to the end of paragraph 3.
(c) substituting the figure "8" for the figure "7" appearing

in paragraph (iv) of the "Particulars".

10. As to the declaration sought in particular (i), the evidence included the following passage from that of Mr. Whitaker:

"The bundy cards ... can be used as a wage
record but it is principally a back-up
document or a confirmation to the
supervisor's sheet. The people bundy on,
your Honour, when they enter the plant and
it is not necessarily the - well, it is not
the starting time because they are clocking
on from 5.30 onwards and then they
congregate in the lunch-room and make
themselves a cup of coffee and have
something to eat. The official starting
time for the slaughter floor was originally
6.30 and the calculations are made on the
wages on the basis of a 6.30 start."

11. Clause 23(a)(i) of the award read as follows:-

"23 - Time and wages record

(a)(i) Except where mechanical timing
devices are used for the purpose of
recording starting times and
finishing times of employees, or
where time and wages records are
maintained on a computer or
microfilm system, each employer
shall provide a time-book or
time-sheet in which shall be entered
the employees (sic) name and
classification. The employer shall
cause to be entered each day in the
time-book or time-sheet each days
(sic) starting and finishing times,
the times allowed for meals, each
days (sic) hours of work of each
employee and the wages received each
week (including overtime and other
payments). Such entries shall at
least once a week be certified by
the employee as a true record of the
time worked if he is so satisfied
and shall be vouched for by the
signature of the employer or his
representative or manager.

It shall be a breach of this Award
if any person knowingly makes,
certifies or vouches for a false
entry in such time-book or
time-sheet."

12. On behalf of the respondent Mr. Hungerford submitted that the words "each days starting and finishing times ... of each employee", appearing in clause 23(a)(i) of the award, do not mean each employee's times of starting and finishing actual work but the times of starting and finishing the attendance by the employee at the employer's establishment. In my opinion such a construction of the sub-clause would be quite inconsistent with the use of the words "time worked" in the same sub-clause, in providing that such "entries shall at least once a week be certified by the employee as a true record of the time worked ...".

13. Mr. Hungerford also sought to rely upon a specimen "time-sheet" contained in the award (see sub-clause 23(b)), which provides for the recording of certain items including "starting time", "finishing time", "time allowed for meals", and "ordinary hours worked". He submitted that the making of provision for both starting and finishing times, on the one hand, and also for ordinary hours worked, on the other, supported his contention that starting and finishing times referred to something other than the times of starting and finishing work. However, in my opinion, the specimen time-sheet supports the conclusion that the purpose of sub-clause 23(a)(i) is to require the employer to keep a record, among other things, of starting and finishing times of work. It is intended to achieve the result that, after it has been filled in by someone acting on behalf of the employer, the employee can check the accuracy of the entries as to the "ordinary hours worked" and "overtime hours worked" by referring to the entries as to his times of starting and finishing work and the times "allowed for meals" (as well as any information of his own) before signing the sheet as "a true record of the time worked by (him)".

14. Various records were put in evidence by the respondent. The cross-examination of Mr. Whitaker included the following passages:-

"If you could turn to the individual pay
record relating to Raymond Kennedy?---Yes.

And the week ending 2 July 1986?---Yes.

Do you say that is only a part of the pay
record that is kept in respect of that
individual?---Yes.

Does that document disclose the starting
and finishing time of that employee?---No.

Does it disclose the times allowed for
meals?---No.

Does it disclose the hours of work for that
employee?---No.

....

Do the same answers apply in respect of the
other three employees in exhibit 7 and the
two in exhibit 9?---Yes.

....

Are the starting and finishing times
recorded in any other of the documents that
you have claimed to be the pay records
maintained by the abattoir?---No.

Are his meal times recorded anywhere?---No.

Are his hours of work recorded anywhere?
---No.

....

There are employees apart from the four who
have been named in these proceedings who
from time to time take part in tasks such
as a washdown?---Yes.

And they are paid for that?---Yes.

Is the time that they engage in the
washdown recorded in any documents?---No.

Is the payment that they receive recorded
in any document?---Only the supervisor's
sheet.

....

He does not record how long it takes to do
the washdown?---That is correct.

And he does not always record the payment
made for the washdown?---That is correct.

....

Is there a regular amount of pay for the
washdown?---Yes.

Is it $80 a day?---That is correct.

And it is divided between the number of
employees who take part in the
washdown?---Yes.

Can you show me on the individual pay
records whereabouts the payment for the
washdown is down?---No, it has not been
shown.

Is it never shown on the individual pay
records?---No, it has not been.

So, assuming, for example, that Kennedy
took part in a washdown, it simply would
not show on his individual pay record?
---That is correct.

So if, hypothetically, in the week ending 2
July Kennedy had taken part in a washdown
there would be a payment of either
one-third or one-quarter of $80 which does
not show up on the pay records?---That is
correct.

And there would be hours of work which he
had worked which were not shown on any
document?---That is correct.

....

If in the week ending 2 July 1986 Kennedy
had engaged in the washdown, the record
showing payment of $180 would not be a
complete picture of his wages received?
---That is correct."

15. On the evidence, including the evidence that between 26 June 1986 and 2 July 1986 the bundy cards were not used for the purpose of recording the starting and finishing times of employees, I find that the respondent, at the material times, was not an employer using "mechanical timing devices ... for the purpose of recording starting times and finishing times of employees". I also find that it was not "an employer maintaining time and wages records ... on a computer or microfilm system" within the meaning of sub-clause 23(a)(i) of the award.

16. There was evidence, in the supervisor's notes, of three "washdowns" during the relevant period. It was accepted by Mr. Whitaker that any payment for a washdown was not shown on the individual pay records - although it should be added that the supervisor's notes refer to payment for a washdown on 27 June 1986. Mr. Whitaker's statement supports the conclusion that there was a failure to record the wages received during the relevant period. In addition, the supervisor's notes of 2 July 1986 show that J. Loxton was one of the employees doing washdown work, but there is no record of any extra payment in the individual pay record for him.

17. The amended application sought a "declaration" in respect of each of the alleged breaches of the award. Although no submissions were heard as to whether it is appropriate to make a "declaration that the respondent committed a breach ..." (as distinct from making a finding to that effect), in my opinion the court should not make declarations as to the alleged breaches; it should only make findings before considering any question of penalty.

18. On the evidence, I find that between 26 June 1986 and 2 July 1986, the respondent committed a breach of clause 23(a)(i) of the award in failing to cause to be entered each day in a timebook or timesheet each day's starting and finishing times, the times allowed for meals, each day's hours of work of each employee and the wages received each week".

19. Having found that the respondent was, at the material times, not an employer using "mechanical timing devices ... for the purpose of recording starting and finishing times of employees", I am unable to find that there was a breach of clause 23(a)(ii) (i.e. particular (ii) of the amended application). Nor is it necessary to deal with particular (v) as it was expressed to be an alternative to the breach alleged in particular (i).

20. As to the breach alleged in particular (iii), clause 33 of the award, as varied by an order, dated 28 April 1986, reads as follows:-

"33 - Payment by results

(a) An employee (sic) may remunerate any of his
weekly employees under a system of payment by
results provided that:

....

(c) If an employer intends to remunerate any of
his employees under a system of payment by
results pursuant to subclauses (a) and (b) of
this clause, he shall notify the Federal
Secretary of the union of his intention in
writing. The Federal Secretary of the union
or his nominated delegate may thereafter
consult with the employees concerned within
seven days of such notification. Subsequently
the terms of any system of payment by results
to be applied shall be established by
negotiation and agreement between the employer
and the majority of employees concerned, or
their nominated representatives.

(d) An agreement for the application of any system
of payment by results, pursuant to subclause
(c) of this clause shall operate as an
addendum to this Award on and from the date of
operation of that agreement.

(e) An agreement pursuant to subclauses (c) and
(d) of this clause shall:

(i) be committed to writing;

(ii) be signed as a true and correct
record of the terms of the
agreement by the employer and an
employee representative of the
employees bound by the
agreement, or their nominated
representatives;

(iii) detail the remuneration for the
work actually to be performed by
the employees;

(iv) bear the date when the agreement
was reached and its specific
period of operation;

(v) be filed with the Deputy
Industrial Registrar in Darwin
within fourteen days of the
commencement of its operation."

21. It was common ground that in clause 33(a) of the copy of the award received in evidence the words "an employee may remunerate" were intended to read "an employer may remunerate". Sub-clauses 33(a) and (b) conferred upon an employer bound by the award a right to remunerate both his weekly employees and his casual employees, "under a system of payment by results provided that" certain conditions were fulfilled. It was conceded by the respondent that at the material times it was remunerating its weekly employees under a system of payment by results and that it had not filed with the Deputy Industrial Registrar in Darwin any agreement establishing the terms of that system of payment by results.

22. Mr. Hungerford relied upon evidence contained in paragraphs 24 and 32 of Mr. Whitaker's affidavit, which read:

24. As a result of this conversation no
formal agreement was drawn up at this stage
between the company and the boning room
staff as it was clear that the men would
not sign.

....

32. Accordingly because the respondent was
unable to convince the men to sign a
written agreement, no formal written
contracts were in existence in relation to
either the slaughter floor staff or the
boning room as a result of the fact that
the men had refused to sign the contract
(words not admitted in evidence) the
respondent by itself was unable to file
such agreements with the Deputy Industrial
Registrar in Darwin."

23. I accept that evidence as being correct and find that at all material times no written agreement had been signed by the employer or by the employees' nominated representatives.

24. Mr. Hungerford advanced, as a defence to the alleged breach of clause 33(e)(v), three submissions:

1. Clause 33(e) did not expressly place an obligation upon the employer alone to file the agreement; if it had so intended it would have said so expressly. At the most clause 33(e) imposed a joint obligation on both the employer and the employees.
2. Clause 33(e) did not impose strict liability on the employer and/or employee - the provision was directory and not mandatory.
3. Because the respondent could not obtain a signature from the weekly employees in the boning room there was therefore "nothing to file" and there could not be a failure to file the agreement.

25. In support of his first submission Mr. Hungerford submitted that it would be surprising if the award imposed a duty on one side only. However it would not be surprising (if that be relevant) because many award obligations are imposed on one party only. I accept his submission that the award could not impose an award obligation upon non-members of the applicant union - a submission which does not rest easily with his submission that it would be surprising to impose an obligation on only one side.

26. In considering the construction of the sub-clause regard should be had to the following matters; (a) clause 33 did not confer upon the employees the right to insist that the employer remunerate them "under a system of payment by results"; the clause gave their employer the right, exercisable purely at his discretion, to decide to so remunerate them. (b) The award contemplated that the agreement would be made with "the majority of employees concerned, or their nominated representatives" - rather than an agreement with the union. (c) As correctly submitted on behalf of the respondent, the obligation to file the agreement could not, as a matter of law, be imposed upon employees who were not members of the applicant union.

27. In my opinion clause 33(e)(v) did impose upon an employer bound by the award a duty to file an "agreement" within the meaning of the sub-clause. However the question of the meaning of the word "agreement" must be considered and it may be more conveniently dealt with under Mr. Hungerford's third submission.

28. I am unable to accept Mr. Hungerford's second submission that any duty imposed on the respondent by the sub-clause was directory and not mandatory. Even if the distinction between mandatory and directory requirements were an appropriate one, and even if the requirement under the sub-clause was directory, I would accept Ms. Simpson's submission that there has not been substantial compliance with the provision (subject to Mr. Hungerford's third submission).

29. I turn to the respondent's third submission, namely, that there was "nothing to file" because a written agreement had not been signed by the employees' representative and accordingly there could be no failure to file the "agreement".

30. That submission raised the question of whether sub-clause 33(e)(v) of the award required the filing with the Deputy Industrial Registrar in Darwin of a document setting out the terms of an agreement in circumstances where no written agreement had been signed by the employer or by the employees' "nominated representatives" (see sub-clause 33(e)(ii)).

31. Although there was evidence that a document existed setting out the terms of the agreement, with the weekly employees, that document was not received in evidence (cp. exhibit re slaughter floor employees). There was no evidence that the "agreement" ever contained a term as to "its specific period of operation" (see sub-clause 33(e)(iv)).

32. In my opinion the "agreement", the filing of which is required by sub-clause 33(e)(v), is a written agreement which at least complies with sub-clause 33(e)(ii) and I incline to the opinion that it must also comply with sub-clause 33(e)(iv) i.e. as to both date and period of operation. In reaching that conclusion I have been influenced by the use of the word "agreement" in the introductory words to sub-clause 33(e). The draftsman did not there use the words "terms of the agreement" although he used those words in sub-clause 33(e)(ii). The draftsman was doubtless aware that s. 28(1) of the Act refers to "a memorandum of the terms agreed on" and could have used similar words in sub-clause 33(e) if he wished. I have not overlooked the submissions advanced by Ms. Simpson as to the overall purpose of sub-clause 33(e) of the award and it may be that a breach of some other provision in that sub-clause has occurred; however, in my opinion the evidence does not disclose a breach of sub-clause 33(e)(v).

33. Particular (iv) alleged a breach of clause 8 of the award, consisting of the failure to pay four employees in accordance with that clause in respect of the week ended 2 July 1986. Ms. Simpson sought to rely on the calculations of Mr. Roughan (contained in Exhibit C) as showing that there had been underpayments in respect of the relevant four employees. Mr. Hungerford submitted that there was no evidence that any of the four employees had worked more than 8 hours on any of the days in question and that, on the assumption that they had worked an 8 hour day, the employees were not in fact paid less than the amounts due under the award.

34. Mr. Roughan's evidence on this aspect was based upon an assumption that the bundy cards accurately recorded the times of starting and finishing work. On the evidence I am not satisfied that the bundy cards did accurately record the starting and finishing times in respect of the four employees. I do not accept Ms. Simpson's submission that:

"... having kept records in that fashion,
although they do not disclose proper
starting or finishing times or accurate
starting and finishing times, nevertheless
the employer is bound by those records at
least for the purpose of calculating the
payment of wages."

35. In my opinion the applicant has not established, on the balance of probabilities, that any of the four employees worked more than 8 hours on any of the material dates. It follows that the breach alleged in particular (iv) has not been established.

36. I should add that I do not accept Mr. Hungerford's submission that, even if there were underpayments, when a payment by results agreement comes into force it operates in lieu of clause 8 by reason of the provision in sub-clause 33(d) that it "shall operate as an addendum to (the award)". In my opinion that submission overlooks the express words in clause 33(b) that "no casual employee so engaged shall earn less than he or she would be entitled to receive for work actually performed, calculated in accordance with the relevant provisions of this Award."

37. Mr. Hungerford urged in mitigation of penalty that on the evidence the respondent was generally willing to enter into discussions with the union, noting the attendance at the works of union officials, Mr. Roughan and Mr. Surplice, during 1986. He submitted that there was no evidence of any intention to breach the award, citing North v Television Corporation Ltd. (1976) 11 ALR 599 at 612 and 616 in support of the proposition that the absence of an intention to breach the award was relevant to penalty. He also referred to the fact that there was no evidence of any previous breaches of the award by the respondent.

38. I accept Mr. Hungerford's submission that much detailed information had been provided by the respondent to Mr. Roughan, which resulted in the calculations contained in Exhibit C and that that conduct by the respondent should be taken into account in mitigation of the penalty in respect of particular (i) (i.e. the failure to keep records). I also note that, although Ms. Simpson cross-examined Mr. Whitaker with a view to establishing that the respondent did not intend to comply with clause 23(a)(i) of the award, she did not succeed. In this connexion the following extract from the cross-examination is relevant:

"And at no time did you issue any direction
to any of the pay office staff to ensure
that what was being done complied with the
provisions of the award?---That is not
correct.

Did you issue such a direction?---Yes, that
is to the works manager, and this was the
purpose of that first meeting and why the
union and the delegates sat down and spent
an entire morning with the pay office staff
for that very purpose.

... the intention was that everything would
be set up and done properly in respect of
what the award requirements were ... the
works manager (said) ... that he had a very
good working relationship with the union
and that they were satisfied with the
contents of that meeting."

39. The maximum penalty for a breach of the award is $1,000 (s. 119(1D) of the Act). In all the circumstances in my opinion a penalty of $500 in respect of particular (i) is appropriate. In my opinion it is appropriate to order that the amount of that penalty be paid to the applicant (s. 120) as sought by Ms. Simpson.