Re Patrick Mcgarry v Boonah Clothing Pty Ltd [1988] FCA 159 (17 May 1988)

FEDERAL COURT OF AUSTRALIA

Re: PATRICK McGARRY
And: BOONAH CLOTHING PTY. LTD.
No. Q4 of 1987
Industrial Law - Evidence - Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRAIA
QUEENSLAND DISTRICT REGISTRY
INDUSTRIAL DIVISION
Gray J.(1)

CATCHWORDS

Industrial Law - award - breach - whether employees dismissed because "employer no longer wishes the job the employee has been doing done by anyone" - whether dismissal "as a consequence of conduct that justifies instant dismissal including.....inefficiency" - reduction of capacity of factory.

Evidence - hearsay - statement in writing of person now deceased - whether admissible under state law - whether Commonwealth legislation covers the field.

Practice and Procedure - adjournment - whether proper to grant to one party to enable it to alter respective rights of parties.

Conciliation and Arbitration Act 1904 ss. 119, 120

Judiciary Act 1903 s. 79

Evidence Act 1905 Part IIIA

Evidence Act 1977-1979 (Qld.) s. 92

Clothing Trades Award 1982 Clauses 5(a), 17, 51

Clothing Trades (Roping-in No.1) Award 1984

Federal Court Rules O.33 r. 3

HEARING

MELBOURNE
17:5:1988

Counsel for the applicants: Mr. O'Regan Q.C. with Mr. Reid

Solicitor for the applicants: Gabriel Ruddy & Garrett

Counsel for the respondents: Mr. K. Watson

Solicitor for the respondents: Stephens & Tozer

ORDER

The respondent pay a penalty in the sum of $750.00 for breach of cl.51(c) of the Clothing Trades Award 1982.

The respondent pay the said penalty to the Clothing & Allied Trades Union of Australia.

The respondent pay to each of the following persons the amount set out opposite to her name:

Lorraine Armstrong $1992.00

Sharon Andrew $ 846.80
Margaret Bumstead $1743.00
Ann Brown $1992.00
Sheree Browning $1075.80
Lynda Evans $ 687.40
Sandra Fox $1481.90
Madonna Goan $1481.90
Daphne Gordon $1743.00
Kim Geiger $1992.00
Beverly Harvey $1992.00
Maree Hanh $1992.00
Deborah Harvey $1992.00
Julie Norwood $1743.00
Susan Parcell $ 597.80
Elaine Podlich $1992.00
Leisa Stephen $ 687.40
Jocelyn Slatter $1743.00
Gail Surawski $1992.00
Denise Venzke $1992.00
Doreen Voss $ 996.00
Margaret Wagner $1992.00
Dorothy Wall $1992.00
Lyn Wilson $ 996.00
Pearl Zimmerman $1992.00
Carolyn Zurvas $1992.00.

(NOTE: Settlement and entry of orders is dealt with by O.36
of the Federal Court Rules.)

DECISION

The applicant in this proceeding claims a penalty for breach or non-observance of an award, and the payment of alleged entitlements to former employees of the respondent, pursuant to s.119 of the Conciliation and Arbitration Act 1904 ("the Act"). The relevant parts of s.119 are as follows:

"(1) Where any organization or person bound by
an order or award has committed a breach
or non-observance of a term of the order
or award, a penalty may be imposed by the
Court...

(1A) Subject to sub-sections (1B) and (1C),
where a Court finds that 2 or more
breaches by the same organization or
person of a term of an order or award
have been committed and those breaches
appear to that Court to have arisen out
of a course of conduct by that
organization or person, those breaches
shall, for the purposes of this section,
be treated as constituting a single
breach of that term.

....

(1D) The maximum penalty that may be imposed
under sub-section (1) in respect of a
breach of a term of an order or award is -

(a) where the penalty is imposed by the
Court -

(i) in a case to which
sub-paragraph (ii) does not
apply - $1,000

(2) Any such penalty may be sued for and
recovered by -

...

(e) any officer of any organization
which is affected, or any of whose
members are affected, by the breach,
who is authorized under the rules of
the organization to sue on behalf of
the organization.

(3) Where, in any proceedings against an
employer before a Court specified in
sub-section (1), it appears to the Court
that an employee of that employer has not
been paid an amount to which he is
entitled under an order or award, that
Court may order that the employer shall
pay to the employee the amount of the
underpayment but no order shall be made
in respect of so much of the underpayment
as relates to any period more than 6
years prior to the commencement of the
proceedings.

...".

2. The applicant is the secretary of the Queensland branch of the Clothing and Allied Trades Union of Australia ("the Union"), an organization of employees registered pursuant to the Act. He is therefore an officer of the Union. He is authorized under the rules of the Union to sue to enforce an award.

3. The respondent is a company incorporated in Queensland. It operates a factory at Boonah, a small town approximately fifty kilometres south west of Brisbane. At the factory, the respondent employs people to manufacture garments, mostly shorts and "beach pants".

4. The Union is a party to and bound by the Clothing Trades Award 1982 ("the Award"), an award made under the Act. The respondent is also bound by the Award, by virtue of the Clothing Trades (Roping-in No. 1) Award 1984. It is so bound in respect of each person employed by it "in the clothing industry"; see clause 5(a) of the Award.

5. For the purposes of this proceeding, the relevant term of the Award is clause 51. The relevant parts of that clause are as follows:

Consultation and provision of
information

"(a) (i) Where an employer has made a
definite decision that the employer
no longer wishes the job the
employee has been doing done by
anyone and this is not due to the
ordinary and customary turnover of
labour and that decision may lead to
termination of employment, the
employer shall hold discussions with
the employees directly affected and
with their union.

...

Severance pay

(c) In addition to the period of notice
prescribed for ordinary termination in
subclause 17(b), and subject to further order
of the commission, an employee whose
employment is terminated for reasons set out
in paragraph (a)(i) hereof shall be entitled
to the following amount of severance pay in
respect of a continuous period of service:

Period of continuous service Severance pay

1 year or less NIL

Over 1 year and up to completion
of 2 years 4 weeks' pay

Over 2 years and up to the
completion of 3 years 6 weeks' pay

Over 3 years and up to the
completion of 4 years 7 weeks' pay

Over 4 years 8 weeks' pay

"Weeks' pay" shall mean the ordinary time
rate of pay for the employee concerned.

Provided that the severance payments
shall not exceed the amount which the employee
would have earned if employment with the
employer had proceeded to the employee's
normal retirement date.

....

Employees exempted

(k) This clause shall not apply where
employment is terminated as a consequence of
conduct that justifies instant dismissal
including malingering, inefficiency or neglect
of duty, or in the case of casual employees,
apprentices, or employees engaged for a
specific period of time or for a specified
task or tasks.

....

Incapacity to pay

(m) An employer, in a particular redundancy
case, may make application to the Commission
to have the general severance pay prescription
varied on the basis of the employer's
incapacity to pay."

6. The applicant alleges that the respondent dismissed some thirty-five employees between 18th September 1986 and 16th October 1986, because it no longer wanted the jobs those employees had been doing to be done by anyone. In breach of clause 51(c), it is said, the respondent failed to pay the amounts required to those employees, in accordance with the length of each employee's continuous service. The respondent's case is that the employees were dismissed for inefficiency that would have justified instant dismissal, and not for the reason that the respondent no longer wanted their jobs to be done by anyone.

7. The respondent's defence was hampered by the fact that a Mr. Clyde Hopkins, who was manager of the factory at the time of the relevant dismissals, and who announced to the employeesconcerned that they would be dismissed, has died before the trial of the proceeding began. Mr. Watson of counsel, who appeared for the respondent did seek to tender a written statement of Mr. Hopkins, in reliance on s.92(1)(a) and (2)(a) of the Evidence Act 1977-1979 (Qld.) and s.79 of the Judiciary Act 1903. The relevant provisions of s.92 of the Evidence Act 1977-1979 (Qld.) are as follows:

"(1)In any proceeding (not being a criminal
proceeding) where direct oral evidence of a
fact would be admissible, any statement
contained in a document and tendng to
establish that fact shall, subject to this
Part, be admissible as evidence of that fact
if -

(a) the maker of the statement had
personal knowledge of the matters
dealt with by the statement, and is
called as a witness in the
proceeding; or

(b) the document is or forms part of a
record relating to any undertaking
and made in the course of that
undertaking from information
supplied (whether directly or
indirectly) by persons who had, or
may reasonably be supposed to have
had, personal knowledge of the
matters dealt with in the
information they supplied, and the
person who supplied the information
recorded in the statement in
question is called as a witness in
the proceeding.

(2) The condition in subsection (1) that the
maker of the statement or the person who
Supplied the information, as the case may be,
be called as a witness need not be satisfied
where -

(a) he is dead...".

Section 79 of the Judiciary Act 1903 provides:

"The laws of each State or Territory,
including the laws relating to procedure,
evidence, and the competency of witnesses,
shall, except as otherwise provided by the
Constitution or the laws of the Commonwealth,
be binding on all Courts exercising federal
jurisdiction in that State or Territory in all
cases to which they are applicable."

The admissibility of the statement depends upon whether the constitution or the laws of the Commonwealth have "otherwise provided", in such manner as to exclude s.92(1)(a) of the Queensland Act from the operation of s.79 of the Judiciary Act. There are statutory provisions similar to s.92(1)(a) of the Queensland Act in force in all or most of the States and Territories of Australia. Those provisions are based on the former Evidence Act 1938 (Eng.). In the various States and Territories, there are also provisions relating to the admissibility of business records of kinds which would have been excluded as hearsay evidence prior to such legislation. See Myers v. Director of Public Prosecutions (1965) AC 1001. Section 92(1)(b) of the Queensland Act is an example. In Part IIIA of the Evidence Act 1905, the Commonwealth Parliament has enacted provisions of the latter kind, relating to business records. It has not enacted provisions of the former kind, relating to statements in writing generally. Mr. Watson therefore argued that the Commonwealth had not "otherwise provided", within the meaning of s.79 of the Judiciary Act. Mr. O'Regan Q.C., who appeared with Mr. Reid of counsel for the applicant, argued that the Commonwealth Parliament had legislated to "cover the field" of the admission into evidence of statements in writing which would otherwise have been inadmissible as hearsay, by enacting Part IIIA of the Evidence Act 1905, and must be taken to have rejected the proposition that written statements other than business records should be admissible in courts exercising federal jurisdiction.

8. There can be no doubt that business records are admissible in courts exercising federal jurisdiction only by virtue of Part IIIA of the Evidence Act 1905. See Supetina Pty. Ltd. v. Lombok Pty. Ltd. [1984] FCA 376; (1984) 5 FCR 439. The Commonwealth has covered the field of the admissibility of business records. In my view, however, it has not entered on the field of the admissibility of other statements in writing. The absence of any provision concerning such statements is consistent with a desire to allow State laws to operate in courts exercising federal jurisdiction, pursuant to s.79 of the Judiciary Act.

9. Reference was also made to O.33 r.3 of the Federal Court Rules, which allows this Court to dispense with the rules of evidence in certain defined circumstances. That provision cannot be regarded as covering the field of the admissibility of statements in writing. Provisions such as s.92 of the Evidence Act 1977-1979 (Qld.) change the rules of evidence, rather than dispensing with them.

10. It follows that neither the Constitution nor the laws of the Commonwealth "otherwise provide", within the leaning of s.79 of the Judiciary Act, so that s.92(1)(a) of the Evidence Act 1977-1979 (Qld.) operates in this case. For these reasons, the written statement of Mr. Hopkins was admitted into evidence.

11. The circumstances of the dismissals were as follows. In September 1986, between sixty and seventy employees of the respondent were employed in the Boonah factory. On 18th September, Mr. Hopkins assembled them all and told them that some would be dismissed. After the lunch break, Mr. Ray Smith, another managerial employee of the respondent, handed out notices to those employees who were being dismissed. The length of notice varied according to the length of continuous service of the particular employee, as was required by cl.17(b)(i)(1) of the Award. Some employees therefore finished on 25th September, some on 2nd October, some on 9th October and some on 16th October. In all, there were 29 employees dismissed in this fashion, some others having been given notice earlier. In respect of twenty-six of the employees given notice on 18th September, claims are made for payments pursuant to cl. 51(c) of the Award.

12. Each employee was given what was described in evidence on behalf of the respondent as a "reference". The reference was given on or shortly prior to the actual termination of the employment of each employee, and was in the form of a letter. The terms of the letter were as follows:

"TO WHOM IT MAY CONCERN.

Please be advised that (name of employee) has
been employed by the firm Boonah Clothing Co
as a (occupation of employee) for the period
(commencing date of employment) up to
(termination date).

Due to the lack of orders received from our
customers owing to the state of the economy,
it is with regret that (first name of
employee) has had to be retrenched."

Each letter was signed by Mr. Smith, who was described in the
letter as "manager".

13. Five of the dismissed employees gave evidence in similar terms as to what Mr. Hopkins said at the meeting of 18th September. This was to the effect that, due to lack of orders received by the respondent, which in turn was due to a downturn in the economy, employees would have to be put off. It was also said that the managing director of the respondent, Mr. John Kinghorn, was overseas seeking orders, and that if he were successful, some of the employees would be re-employed.

14. In cross-examination of these five witnesses, Mr. Watson did not challenge the proposition that words to this effect were said. Some controversy was raised as to whether Mr. Hopkins had actually used the word "retrenched", and the evidence is inconclusive on that point. The cross-examination was on the basis that Mr. Hopkins said other things, which might have been regarded as inconsistent with the accounts given in chief by the five witnesses. It was put that Mr. Hopkins had said that because the industry was so competitive, and things within it were so bad, all employees would have to get in and put more effort into their individual jobs to help the company become more competitive, so that it could accept orders and know they could be fulfilled without a loss. It was also put that Mr. Hopkins had said that Mr. Kinghorn had been checking the export market to the United States, and that if he were successful the respondent had to make a consistent product with no mistakes. This cross-examination was based on the terms of Mr. Hopkins's written statement. An examination of the order of events referred to in that statement makes it clear that, if Mr. Hopkins did say these things to a meeting of employees, it was not to the meeting on 18th September. It is also extremely unlikely that Mr. Hopkins would have encouraged employees who were about to be dismissed to put more effort into their jobs.

15. It was also put that Mr. Hopkins told the meeting that inefficient employees would be dismissed. Evidence to this effect came from Mr. Smith. He was not present for the whole of the meeting. He gave evidence that Mr. Hopkins had spoken of a downturn in the economy and told the meeting that the respondent was losing orders due to the inferior quality of garments produced, and needed to remain competitive. I am satisfied that Mr. Hopkins did not make reference to the dismissal of inefficient employees. I prefer the evidence of the five dismissed employees to that of Mr. Smith on this point. My preference is not based on a counting of heads amongst the witnesses, but on the fact that I find the evidence of the five dismissed employees more credible.

16. The case for the respondent was that talk by Mr. Hopkins of lack of orders, and the terms of the "references" were lies, and that the true situation was that the respondent was ridding itself of its inefficient employees. Mr. Kinghorn gave evidence that the respondent was not suffering any lack of orders. According to him, the cost per garment produced at Boonah had been rising because some employees were not giving enough attention to their work. He made reference to an incident in which large numbers of shorts had buttons sewn on them incorrectly, and had to be altered, and to instances of pockets having been sewn up. He also spoke of talking between employees, excessive use of toilet breaks, and employees walking on garments which were stacked on the floor. A percentage of faulty garments, said by Mr. Kinghorn to be excessive, was produced. It was found necessary to employ a machinist in the downstairs area of the factory, where garments were ironed, labelled and packed, to repair faulty garments.

17. Prior to July 1986, Mr. Smith was the manager of the factory at Boonah. In or about that month, Mr. Hopkins was sent to Boonah to take charge, apparently with authority over Mr. Smith. It was the practice at the factory for some time to keep a "score" of the number of garments produced each day, and to divide that by the number of employees working. In this way, some calculation could be made of the cost of production of each garment. This calculation cannot have been easy, because the numbers of garments produced depended on the stage reached in making a batch for a particular order. The factory was organized on an assembly line basis, with different employees performing different items of work on each garment. It was normal for a batch of garments to fulfil an order to be made over several days. On the early days of such a period, few garments were completed; on the later days, a smaller number of employees would be engaged in performing the small, quick, finishing tasks, while other employees might begin on another batch for another order. Despite these difficulties, averages were calculated for garments produced per employee.

18. At some stage, cards were introduced, on which each employee in the "upstairs" section of the factory, where machining was done, was required to mark the number of items of work she had done. According to Mr. Kinghorn, these scores were used to determine the average numbers of garments produced by individual employees, and thereby to determine which employees were efficient and which were not. Mr. Hopkins's statement tended to support this, although it also said that supervisors' opinions were relied on in assessing the relative efficiency of employees. Mr. Smith's evidence, however, was that individual score cards were used for quality control. A card accompanied each batch of garments down the assembly line; if a fault were found in a garment, it was possible to trace the person who had done the particular job. Once a batch of garments was completed, the card was destroyed, according to Mr. Smith. In the interlocutory stages of the proceeding, the respondent consented to give, and did give, discovery of documents. It did not give discovery of any individual score cards. No individual score card was tendered in evidence.

19. From time to time, employees at the Boonah factory were addressed by management or supervisors, who urged them to work harder and to make fewer mistakes. Apparently these exhortations had little or no effect. Mr. Kinghorn's evidence was that average production per employee did not improve sufficiently, so a decision was made to dismiss inefficient employees. He said that Mr. Hopkins made this recommendation to him when Mr. Kinghorn was at the airport, about to leave for overseas. Mr. Kinghorn said that he agreed with the recommendation, and instructed Mr. Hopkins to dismiss the inefficient employees. In the witness box, Mr. Kinghorn conceded that he made a decision to reduce the capacity of the factory, and left it to Mr. Hopkins to carry this out. There can be no doubt that capacity at the factory was reduced; no attempt was made to replace the employees dismissed, with the result that the workforce was cut by approximately half. Mr. Kinghorn maintained that this was not the result of lack of orders; the respondent still received and met the same number of orders, but no longer manufactured for stock, in the hope that it would sell all the garments it made. Manufacturing for stock had been carried on, according to him, prior to the dismissals.

20. After the dismissals, fewer garments were made in the factory, by fewer employees. It was said that average production per employee increased, but Mr. Kinghorn agreed in evidence that the remaining employees did not produce more garments than they had before the dismissals. Indeed, the increase in average production was relied on to show that inefficient employees had been dismissed.

21. The first line of the respondent's defence was sub-clause (k) of clause 51 of the Award. Mr. Watson conceded that this sub-clause does not give to an employer bound by the Award any right to dismiss; it simply excludes from the operation of clause 51 terminations of employment resulting from conduct which would justify instant dismissal independently of the Award. A similar view has been taken of other clauses in awards, referring to rights of employers to dismiss for misconduct, neglect of duty or inefficiency. See, for example, Industrial Relations Bureau v. Knox Auto Parts & Accessories Pty. Ltd. (1982) 1 IR 314, at p 316.

22. It is established by authority that the right of an employer to dismiss an employee summarily is no different in principle from the right of any party to a contract to bring that contract to an immediate end. Such a right depends upon whether the other party to the contract has repudiated the contract, by conduct evincing an intention no longer to be bound by it. Where such conduct consists of a breach, as distinct from an express repudiation, the breach must be of such a fundamental nature as to amount to a throwing up of the contract as a whole. See North v. Television Corporation Ltd. (1976) 11 ALR 599, at pp 608-609 per Smithers and Evatt JJ. and pp 615-616 per Franki J., and Laws v. London Chronicle (Indicator Newspapers) Ltd. (1959) 1 WLR 698, at pp 700-701.

23. This tends to suggest that the sort of inefficiency which would be required to justify instant dismissal would be inefficiency involving "inability to effect something", rather than simply failure to achieve the level of efficiency which the employer might desire. See the definitions of "inefficiency" and "inefficient" in the Shorter Oxford Dictionary. A similar view was taken by the Commonwealth Industrial Court in Printing Industry Employees Union of Australia v. Jackson & O'Sullivan Pty. Ltd. (1957)1 FLR 175. At p 177, Spicer C.J. said:

"Insofar as the award provides for dismissal
without notice for inefficiency in my opinion
it preserves the common law right of the
employer so to dismiss on that ground. This
right arises from the prnciple that when a
skilled labourer, artisan or artist is
employed there is on his part an implied
warranty that he is of skill reasonably
competent to the task he undertakes. See
Harmer v. Cornelius ((1858) [1858] EngR 939; 5 CB (NS)
236, at p 246.) In that case Willes J.,
in his judgment said :- "Thus if an
apothecary, a watchmaker or an attorney be
employed for reward they each impliedly
undertake to possess and exercise reasonable
skill in their several arts. The public
profession of an art is a representation and
undertaking to all the world that the
professor possesses the requisite ability and
skill. An express promise or express
representation in the particular case is not
necessary." This is a proposition of law
which Viscount Simonds refers to in Lister v.
Romford Ice and Cold Storage Co. Ltd. ((1957)
2 W.L.R. 158, at p. 164.) as never having been
questioned.

Willes J., also said :- "It may be, that if
there is no general and no particular
representation of ability and skill, the
workman undertakes no responsibility. If a
gentleman, for example, should employ a man
who is known to have never done anything but
sweeep a crossing, to clean or mend his watch,
the employer probably would be held to have
incurred all the risks himself." (See also
Joyce v. The Insurance Commissioner ((1948)
QSR 139, at p 143.)"

Morgan J. stated the law to the same effect at pp. 183-184. At p. 180, Dunphy J. added to the category of inefficiency the failure or neglect of an employee possessing a particular skill to exercise it.

24. On no view could the failure of any employee in the present case to achieve the standards of speed and perfection expected by the respondent be said to amount to inefficiency which would justify instant dismissal according to common law. Indeed, there was no evidence before the Court, other than figures from which average production of garments per employee could be calculated, and some calculations from those figures in respect of specific days, which suggested inefficiency of any kind. The five former employees who gave evidence were cross-examined by means of general allegations as to their inefficiency and the inefficiency of others. Apart from some evidence that some of the dismissed employees may not have "pulled their weight" in the production of garments, the effect of the cross-examination was negligible. No attempt was made by the respondent to lead any evidence of any specific failure or neglect on the part of any of the dismissed employees that would amount to "inefficiency". Such evidence as the respondent did lead was of the most general kind.

25. A number of facts clearly tend against the proposition that the employees were dismissed for inefficiency. The fact which speaks loudest is that the respondent made no attempt to replace those employees, but was prepared to reduce its productive capacity. The dismissal of a large number of employees at the same time is of great significance; if the respondent really desired to increase the efficiency of its workforce, it is more likely that it would have chosen one or two employees against whom a clear case for dismissal could be established, and dismissed them, in the hope that the others would thereby be encouraged to perform better. In addition, some of the employees who were dismissed were re-employed temporarily for short periods after their dismissal, although they seem to have been employed in the "downstairs" area, performing different jobs from those which they were employed to perform before their dismissal. The notion of dismissal for inefficiency is completely incompatible with the reasons which were advanced to the employees at the time. I do not accept the respondent's evidence that talk of a lack of orders, and the terms of the letters of reference, were lies, designed to soften the blow of dismissal, and to ease the transition to new employment for each of the dismissed employees. In my view, it is unlikely that the respondent would run the risk of communicating to prospective employers untruths about the reasons for dismissal. Still less is it likely that the respondent would have refrained from telling any of the dismissed employees that they were being dismissed for inefficiency. Mr. Kinghorn gave three different versions of how the "reference" letters came into existence. In an early written statement, he said, "I did not write that letter and I was not aware of it until I returned from overseas...". In an affidavit filed in this proceeding, he swore that he "composed" the letter. In his evidence in chief, he was asked questions on the basis that he had composed the letter, and did not deny it. In cross-examination, he gave evidence that the letter was drafted by his secretary, after he had given instructions that each employee dismissed should be given a "soft" or "buttered-up" letter. These inconsistencies were never explained properly, and make me wary of accepting Mr. Kinghorn's evidence as to the reasons for dismissal. Finally, it is plain that no attempt was made to dismiss any of the employees summarily; notice was given to each in accordance with her length of service as required by the Award.

26. In these circumstances, it is plain that the respondent does not fall within the exception laid down by sub-clause (k) of clause 51 of the Award. None of the employees dismissed was dismissed by reason of inefficiency which would justify instant dismissal. This conclusion leaves open the question whether the dismissals were for the reasons set out in sub-clause (a)(i).

27. The respondent's second line of defence was the proposition that, because the same work continued to be done at the Boonah factory, in the making of the same garments, this was not a case in which the respondent no longer wished the job of any of the dismissed employees to be done by anyone. This proposition would result in an extremely narrow view of cl.51 of the Award. That clause would really be applicable only where persons were dismissed as the result of a complete closure of a factory. An employer could run down a factory progressively, and only those employees who remained at the ultimate closure would be entitled to the benefits of cl.51. A logical extension of the respondent's argument would be that, if an employer were able to automate its processes completely, so that it was only necessary for one person to be employed superintending a control panel, none of the employees dismissed to make way for the new machinery would be entitled to the benefit of cl.51. Indeed, in the course of argument, Mr. Watson embraced this extension of his contention. In my view, the clause is intended to be given a broader interpretation than that. It is a clause designed to give benefits to dismissed employees. No reason appears why it cannot be read as entitling dismissed employees to benefits when an employer reduces the capacity of the plant in which they have been employed by dismissing part of the workforce. There is no reason why the clause cannot be applicable even where the jobs of two persons are consolidated and performed by one person; in such circumstances, it can be said, without doing violence to the language, that the employer no longer wishes the job of the other person to be done by anyone. It should be borne in mind that cl.51 of the Award is a standard form clause, introduced into a number of awards as a result of the decisions of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Cases (1984) 8 IR 34 and (1984) 9 IR 115. An examination of the texts of those decisions, particularly at pp 55-56 and 61-62 in the first case, and p 128 in the second case, shows that a broad view should be taken of the reach of the clause.

28. In the present case, the net effect of the dismissals was a reduction in overall numbers of garments produced in the factory. This was because there were fewer people to produce them. There was evidence, on which the respondent relied strongly, to the effect that the reduction in the number of garments produced was not proportional to the reduction in the number of employees. This indicates that, in choosing which employees to dismiss, the respondent preferred to dismiss less productive employees rather than more productive ones. This approach is to be expected. Mr. Kinghorn did accept in cross-examination that the remaining employees were not producing more garments than they were producing before; the average per employee was higher, at least during some periods because the most productive employees were retained.

29. There is a difference between dismissing people for inefficiency, and dismissing people to scale down the plant, choosing those who are to be dismissed on the basis of relative inefficiency. In the present case, I find it more probable than not that the respondent desired to decrease the capacity of the factory at Boonah. It is unnecessary to determine whether this reduction was simply by way of ceasing to manufacture stock, or whether it resulted from lack of orders. If it were necessary for me to make a finding on this aspect, I should find that it was more probable than not that the respondent did suffer some downturn in orders, and that this was the reason for the reduction in capacity. I regard the statements which were made to the employees at the time of their dismissals, and in their "reference" letters, as more likely to be truthful than the evidence of Mr. Kinghorn on this aspect. If it had simply been desired to cut production by no longer manufacturing stock, there is no reason why the employees dismissed could not have been told that at the time. I do not accept the evidence of Mr. Kinghorn that the employees were told lies to soften the blow of dismissal and to increase their chances of future employment.

30. Of course, it matters not whether the employees were dismissed because of reducing orders, because of a decision to cease manufacturing for stock, or because they were considered to be inefficient (unless the inefficiency were such as to justify instant dismissal). The question is whether they were dismissed for the reason that the respondent no longer wished the jobs that they had been doing to be done by anyone. Once the ground of inefficiency justifying instant dismissal is rejected, the circumstances compel the conclusion that the dismissals were the result of a wish by the respondent that the jobs of the employees no longer be done by anyone. Fewer employees made fewer garments, so the jobs of the dismissed employees were not being done by anyone. No point was taken that the dismissals were due to the ordinary and customary turnover of labour. It follows that each of the dismissed employees became entitled to severance pay under sub-clause (c).

31. The respondent put the applicant to his proof on all issues with respect to the calculation of entitlements to service pay. In the end, the only point which was taken was that there was no proof of continuous service for the requisite periods. The evidence on this aspect consisted of a computer printout, given to an official of the Union on behalf of the respondent, and purporting to show, among other things, the commencing and finishing dates of each of the employees concerned, except for two as to whom this information was afterwards provided by the respondent's pay officer. Mr. Watson argued that evidence of the commencing and finishing dates of a particular employee did not establish continuous service between those dates. In my view, this is not so; there is a presumption of continuance, and in the absence of any evidence suggesting that any employee's service was interrupted, the Court should conclude on the balance of probabilities that the employment was continuous. In addition, the evidence of finishing dates indicates that the periods of notice given to various employees on 18th September differed. The differences accorded with the application of cl.17 of the Award to each employee on the basis that her service was continuous from the commencing date shown in the computer printout. This constitutes an admission by the respondent as to the question of continuous service of each employee.

32. Each of the employees dismissed was at the time of her dismissal, and remains, a member of the Union. I accept the evidence of the applicant and Mr. Laud, an organizer of the Queensland branch of the Union, as to the method of calculation which has been undertaken of the entitlement of each employee for whom a claim is made. I therefore find that each of the following employees is entitled to the amount listed opposite her name, pursuant to cl.51(c) of the Award:

Lorraine Armstrong $1992.00
Sharon Andrew $ 846.80
Margaret Bumstead $1743.00
Ann Brown $1992.00
Sheree Browning $1075.80
Lynda Evans $ 687.40
Sandra Fox $1481.90
Madonna Goan $1481.90
Daphne Gordon $1743.00
Kim Geiger $1992.00
Beverly Harvey $1992.00
Maree Hanh $1992.00
Deborah Harvey $1992.00
Julie Norwood $1743.00
Susan Parcell $ 597.80
Elaine Podlich $1992.00
Leisa Stephen $ 687.40
Jocelyn Slatter $1743.00
Gail Surawski $1992.00
Denise Venzke $1992.00
Doreen Voss $ 996.00
Margaret Wagner $1992.00
Dorothy Wall $1992.00
Lyn Wilson $ 996.00
Pearl Zimmerman $1992.00
Carolyn Zurvas $1992.00.

33. At the conclusion of his final address, Mr. Watson requested that the Court should determine whether or not there had been breaches or non-observances of the Award, and then hear matters relevant to penalty if that should become necessary. It is the practice of the Court, in cases involving s.119 of the Act, to deal with all such matters at once. On being pressed as to his reasons for this request, Mr. Watson made it apparent that the respondent was concerned not so much with penalty as with the question of an order under s.119(3), for the payment of underpayments to the dismissed employees. Mr. Watson revealed the intention of the respondent, if the Court should find that breaches or non-observances had occurred, to seek an adjournment for the purpose of applying to the Australian Conciliation and Arbitration Commission for a variation of the severance pay requirements, pursuant to cl.51(m) of the Award. Mr. Watson argued that the respondent was entitled to obtain a ruling from the Court as to whether it was obliged to pay severance pay, before it had to take any step to vary that severance pay obligation.

34. Mr. Watson went so far as to argue that if the Court did make an order requiring the respondent to pay each of the dismissed employees a specified sum of money, it would be open to the respondent to apply under cl.51(m) of the Award; in the event that such an application were successful, it was argued that the respondent could return to the Court and have the Court's order varied to accord with the respondent's different obligation. It is unnecessary for me to decide whether such a course could be taken. Having regard to the limited circumstances in which a party subject to a judgment or order can apply to vary that judgment or order once it is entered, I doubt whether the argument is correct. See Halsbury's Laws of England, 4th ed., Vol. 26, paras. 555-564 and Metwally v. University of Wollongong (1985) 60 ALR 68, especially at p 70. If the respondent's argument on this point is incorrect, that might constitute a powerful reason for acceding to its request for an adjournment before any order is made. There are numerous authorities, however, which suggest that it is not proper for a court to adjourn a proceeding for the purpose of allowing one party to better its position by changing the respective rights of the parties. See Willow Wren Canal Carrying Co. Ltd. v. British Transport Commission (1956) 1 WLR 213, R. v. Whiteway; ex parte Stephenson (1961) VR 168, at p 171, Rochfort v. John Fairfax & Sons Ltd. (1972) 1 NSWLR 16 and Aherne v. Freeman (1974) VR 121, at p 127. These cases show that it is the duty of the Court to deal with the rights of the parties to a proceeding as they exist when the proceeding is before it. It would be improper, in my view, to advantage the respondent by affording it an adjournment at this stage.

35. If the matter were one of discretion, I should not accede to the respondent's request for an adjournment. The respondent has known since at least as early as November 1986 that the allegation has been made that it is obliged to pay severance pay in accordance with cl.51(c) of the Award to the dismissed employees. At no stage has it taken any step to inform either the Court or the applicant of its intention to seek a variation of that obligation, until the concluding stages of the final address of counsel for the respondent at the trial. Instead, it has contested its liability to make payments, using a defence which I have rejected. Mr. Kinghorn gave evidence that he was unaware of the obligations imposed by cl.51(c) of the Award at the time of the dismissals. In my view, it is probable that, on finding out that claims were being made against it on the basis of that clause, the respondent cast around for a convenient defence. The one on which it settled was completely inconsistent with the manner of the dismissals, and what the employees were told at the time. In these circumstances, there is little merit in the suggestion on behalf of the respondent that it was entitled to await a ruling of the Court as to its liability before seeking a variation.

36. Mr. Watson did offer undertakings on behalf of the respondent that it would make and prosecute its application to the Australian Conciliation and Arbitration Commission with all reasonable expedition, and that it would not dispose of its assets otherwise than in the ordinary course of business until the determination of that application and of this proceeding. Even assuming that the Court has power to accept such undertakings (as to which see Thomson Australian Holdings Pty. Ltd. v. Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150, at pp 164-66), they would be inappropriate in the present proceeding. The applicant has commenced the proceeding on the basis of enforcement of existing rights; he has no doubt incurred costs, which he cannot recover because of s.197A of the Act; he has succeeded in establishing his right to enforce the Award, and the entitlements of the twenty-six persons for whom claims are made, under the Award as it stands. Injustice to the applicant and to those persons would result from an adjournment at this stage, even if the undertakings were given and were enforceable. In my view, I should proceed to make all of the necessary orders immediately.

37. On the question of the amount of the penalty, I should take into account the nature of the defence adopted by the respondent. In my view, this was not a case of a genuine dispute as to the question of liability. It was not contended that the respondent was a previous offender with respect to any breach or non-observance of an award. It was common ground that the various breaches arose out of a "course of conduct" by the respondent, within the meaning of s.119(1A) of the Act. It is legitimate, however, to take into account the magnitude of the single breach for which a penalty can be imposed. In the present case, a significant number of employees was involved. In all the circumstances, a penalty of $750.00 seems appropriate.

38. Section 120 of the Act gives the Court a discretion to order payment of a penalty into the Consolidated Revenue Fund or to "such organization or person as is specified in the order". The applicant brought the proceeding to enforce the Award, on behalf of the Union and for the benefit of its members. In those circumstances, it is appropriate to order that the penalty be paid to the Union. For the reasons which I have given already, an order will also be made pursuant to s.119(3), that the respondent pay to each of the dismissed employees in respect of whom a claim is made the amount of the underpayment which the respondent is obliged to pay to that employee, pursuant to cl.51(c) of the Award.