Re Her Majesty R In Right of Victoria and the Honourable Don Hayward MP, Minister of Education of Victoria v Australian Teachers' Union [1993] FCA 209 (4 May 1993)

FEDERAL COURT OF AUSTRALIA

Re: HER MAJESTY THE QUEEN IN RIGHT OF THE STATE OF VICTORIA and THE HONOURABLE
DON HAYWARD M.P., MINISTER OF EDUCATION FOR THE STATE OF VICTORIA
And: AUSTRALIAN TEACHERS' UNION
No. VI24 of 1993
FED No. 290
Number of pages - 9
Industrial Law

COURT

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

CATCHWORDS

Industrial law - award - interpretation - use of phrase which was defined for the purposes of clause - whether phrase used other than in defined sense - use of extrinsic material - reasons for decision of Full Bench which made the award - whether ambiguity - whether inconvenience.

Words and phrases - "For the purposes of this clause " - "means" - "voluntary separation package".

Industrial Relations Act 1988 s. 51.

Teaching Service Act 1981 (Vic.)

Acts Interpretation Act 1901 s.19A.

Public Sector Management Act 1992 (Vic.)

Victorian Teachers Redundancy Interim Award 1992

Sherritt Gordon Mines Ltd v Commissioner of Taxation (1977) VR 342.

K. and S. Lake City Freighters Pty. Ltd. v Gordon and Gotch Ltd. [1985] HCA 48; (1985) 157 CLR 309.

Codelfa Constructions Pty. Ltd. v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337.

Printing and Kindred Industries Union v Davies Bros. Ltd (1986) 18 IR 444.

HEARING

MELBOURNE, 28 April 1993
4:5:1993

Solicitors for the Applicants: Victorian Government Solicitor

Counsel for the Applicants: Mr Dalton QC and Mr Lacy

Solicitors for the Respondent: Holding Redlich

Counsel for the Respondent: Mr Bromberg

ORDER

THE COURT:
1. Orders that the application of the second applicant is dismissed.

2. Declares that, on the proper construction of cl. 3(d) of the Victorian Teachers Redundancy Interim Award 1992:
(a) the expression "voluntary separation package" bears the

meaning of that phrase as defined in cl. 3(a)(i), namely a
voluntary separation package offered and accepted in
accordance with the terms set out in the circular appearing
at page 40 of exhibit N1 in matter C No. 32353 of 1992 as
amended to 16 December 1992;
(b) the employer is under a duty not to terminate the employment
of any employee covered by the award, and any employee has a
right not to have employment covered by the award terminated
otherwise than:
(i) in the case of an employee whose employment is
terminated by virtue of acceptance of a voluntary
separation package as defined in cl. 3(a)(i), namely a
voluntary separation package offered and accepted in
accordance with the terms set out in the circular
appearing at page 40 of exhibit N1 in matter C No.
32353 of 1992 as amended to 16 December 1992; or
(ii) in accordance with the disciplinary, dispensation with
service, or efficiency provisions contained in the
Teaching Service Act 1981 (Vic.).

(Note: Settlement and entry of orders is dealt with by 0.36 of the Federal Court Rules.)

DECISION

GRAY J By application filed on 21st April 1993, the applicants sought an interpretation of an award, pursuant to s. 51 of the Industrial Relations Act 1988 ("the Act"). The award concerned was made on 24th December 1992, by a Full Bench of the Australian Industrial Relations Commission. Because of the brevity of the award, it is convenient to set out the whole of its text:-

" INTERIM AWARD
Further to the decision issued by the Commission on 24
December, 1992, the Commission makes the following award:
1 - TITLE
This award shall be known as the Victorian Teachers
Redundancy Interim Award, 1992.
2 - APPLICATION OF AWARD
This award is binding on the Australian Teacher's
Union, its officers and its members and on Her Majesty The
Queen in the right of the State of Victoria in respect of
all its employees engaged as teachers.
3 - REDUNDANCY
(a) For the purposes of this clause:
(i) "voluntary separation package" means a
voluntary separation package offered and
accepted in accordance with terms set out
in the circular appearing at page 40 of
Exhibit N1 in matter C No. 32353 of 1992
as amended to 16 December 1992,
(ii) "employer" means Her Majesty The Queen in
the right of the State of Victoria, and
(iii) "employee" means a teacher covered by this
award.
(b) Where an employee has, between 20 November 1992 and 24
December 1992, accepted a Voluntary Separation
Package, that employee may, by notice in writing given
on or before 31 December 1992 to the Director of
School Education, withdraw such acceptance.
(c) Where an acceptance is withdrawn in accordance with
sub-clause (b) above, the employment of such employee
shall not be terminated by virtue of his or her
earlier acceptance of the voluntary separation
package.
(d) Except in the case of an employee whose employment is
terminated by virtue of acceptance of a voluntary
separation package in relation to the termination of
employment of any employee covered by this award, it
shall be the duty of the employer not to terminate
that employment and it shall be the right of an
employee not to have that employment terminated,
otherwise than in accordance with the disciplinary,
dispensation with services or efficiency provisions
contained in the Teaching Service Act 1981 (Victoria).
4 - DURATION
This award shall come into force on 24 December 1992,
and remain in force for a period of three months."

2. As the award itself indicates, the Full Bench published reasons for its decision on the same day as it made the award.

3. The interpretation sought by the applicants was in the following terms:-

"Declare that:
(a) the expression in clause 3(d) of the award "a
voluntary separation package in relation to the
termination of employment of any employee covered by
this award" means any voluntary separation package and
includes but is not limited to the voluntary
separation package defined by clause 3(a)(i) of the
award; and
(b) the true meaning and effect of clause 3(d) of the
award is:
(i) to impose a duty on the employer bound by the
award not to terminate compulsorily the
employment of employees covered by the award;
and
(ii) to confer a right on employees covered by the
award not to have their employment terminated
compulsorily,
otherwise than in accordance with the disciplinary,
dispensation with services or efficiency provisions
contained in the Teaching Service Act 1981 (Victoria).
Provided that the duty imposed and the rights
conferred by this clause do not affect termination of
employees covered by the award where such termination
is brought about by the employee's acceptance of a
voluntary separation package offered by the employer
in relation to the termination of employment."

4. The proceeding came before me for directions on 26th April 1993. The parties indicated that they desired an expeditious determination of the proceeding. I therefore gave directions that the applicants file and serve contentions of fact and law on that day and the respondent file and serve contentions of fact and law on the following day. The proceeding was fixed for trial on 28th April. At the conclusion of the trial, after giving the matter brief consideration, I pronounced an order, reserving my reasons for judgment. The order was in the following terms:-

"THE COURT:
1. Orders that the application of the second applicant is
dismissed.
2. Declares that, on the proper construction of cl. 3(d) of the
Victorian Teachers Redundancy Interim Award 1992:
(a) the expression "voluntary separation package" bears
the meaning of that phrase as defined in cl. 3(a)(i),
namely a voluntary separation package offered and
accepted in accordance with the terms set out in the
circular appearing at page 40 of exhibit N1 in matter
C No. 32353 of 1992 as amended to 16 December 1992;
(b) the employer is under a duty not to terminate the
employment of any employee covered by the award, and
any employee has a right not to have employment
covered by the award terminated otherwise than:
(i) in the case of an employee whose employment is
terminated by virtue of acceptance of a
voluntary separation package as defined in cl.
3(a)(i), namely a voluntary separation package
offered and accepted in accordance with the
terms set out in the circular appearing at page
40 of exhibit N1 in matter C No. 32353 of 1992
as amended to 16 December 1992; or
(ii) in accordance with the disciplinary,
dispensation with service, or efficiency
provisions contained in the Teaching Service Act
1981 (Vic.)."

5. Section 51(1) of the Act provides that the Court may give an interpretation of an award on application by the Minister or an organisation or person bound by the award. The phrase "the Minister" is to be construed in accordance with s. 19A(1)(c) of the Acts Interpretation Act 1901 as meaning the Minister for the time being administering the Act. It is therefore not a reference to the second applicant, who is the Minister for Education in the State of Victoria. The second applicant is not an organisation or person bound by the award. He was named as a party to the dispute in part settlement of which the award was made, but clause 2 of the award makes it clear that the only parties bound are the respondent, its officers and members and the first applicant. For those reasons, I dismissed the application of the second applicant.

6. It will be seen that the interpretation which I gave is entirely different from that sought in the application. Indeed, it is directly contrary to that urged by counsel for the applicants. In order to understand the way in which the applicants' argument was put, it is necessary to recite briefly the circumstances surrounding the making of the award.

7. Prior to 20th November 1992, the employment conditions of teachers in the state schools system in Victoria were regulated by the Teaching Service Act 1981 (Vic.) and by certain certified industrial agreements registered with the Industrial Relations Commission of Victoria. In effect, teachers employed by the State of Victoria had permanent employment, terminable only for misconduct or inefficiency. On 20th November 1992, the Public Sector Management Act 1992 (Vic.) came into operation. By order in council made under that Act, the certified agreements were terminated before their terms had expired, and certain provisions of the Teaching Service Act 1981 (Vic.) were overridden. The result was that the State of Victoria acquired the right to terminate the employment of its teachers at its discretion, and without cause.

8. Also on 20th November 1992, the State of Victoria announced its intention to reduce its teaching establishment to the extent of 4,000 positions out of a total teaching service of approximately 42,000. It was hoped to secure the termination of employment of 2,175 teachers before 1st January 1993, by means of what was called a voluntary separation package. Documents detailing the terms of that package were dated 23rd November 1992. They were to be distributed by school principals on and after that date. Offers of a package were to be made to certain classes of teachers and expressions of interest were sought from other classes of teachers. 30th November was the closing date for expressions of interest and for acceptance of the first round of offers. There was to be a further round of offers on and after 11th December, a final closing date for acceptance of offers for all packages for primary school teachers on 18th December and a resignation date for primary and most secondary teachers on 31st December.

9. This proposed timetable was thrown into disarray by the fact that, on 23rd November, the respondent in the present proceeding notified the Australian Industrial Relations Commission of the existence of a dispute concerning the termination of employment of teachers employed by the State of Victoria and the State of Tasmania. A senior deputy president of the Australian Industrial Relations Commission made an interim award in part settlement of that dispute. That interim award was set aside on appeal on 14th December. As a result, by a memorandum dated 15th December 1992, the Director of School Education of the State of Victoria made some amendments to the arrangements for implementing the voluntary separation package. The result was that offers could be made on 15th, 16th, 17th and 18th December, resulting in closing dates for acceptance of 21st, 22nd, 23rd and 24th December respectively. In each case the resignation date was to be 31st December. Further, it was suggested that offers would be made to teachers during the holiday period on the four days up to and including 24th December, with closing dates for acceptance on the three days up to and including 31st December, and a resignation date of 8th January 1993. It was indicated that further offers would be made progressively during the holiday period and that resignations would take effect from the dates indicated in letters of offer. It was common ground that the alterations made to the package by this memorandum gave rise to the words "as amended to 16 December 1992" in clause 3(a)(i) of the award.

10. By a further memorandum dated 11th February 1993, the Director of School Education announced a resignation incentive scheme for temporary teachers. By yet another memorandum dated 23rd March 1993, the Director of School Education announced what was called "Voluntary Separation Package - Phase II". It is unnecessary to set out in detail the terms of these memoranda. It is sufficient to say that they involve the offer of incentives to various categories of teachers employed by the State of Victoria to terminate their employment. It is common ground that the terms of both memoranda differ significantly from the terms of the original voluntary separation package.

11. On 15th February 1993, the respondent made application to the Australian Industrial Relations Commission to vary the award. On 15th March 1993, it amended its application. On 5th April 1993, it made a further application which, if granted, would prohibit expressly the first applicant from processing both the resignative incentive scheme for temporary teachers and the voluntary separation package - phase II. In the last mentioned application, the respondent alleged that the processing of the resignation incentive scheme for temporary teachers and the voluntary separation package - phase II had involved breaches of the award. Among other things, the respondent sought the insertion of a "bans clause" into the award. The allegations of breaches of the award apparently prompted the applicants to seek an interpretation of it.

12. The interpretation sought by counsel for the applicants would involve the rather startling conclusion that a specific definition of the phrase "voluntary separation package", which is laid down "for the purposes of this clause", and which was conceded to govern construction of the phrase when used in sub-clauses (b) and (c), does not govern the use of the identical phrase in sub-clause (d). The definition is not qualified by any words such as "unless a contrary intention appears" or "unless the context otherwise requires". It is a definition which uses the word "means" and not the word "includes". It is therefore to be considered as an exhaustive definition. See Sherritt Gordon Mines Ltd. v. Commissioner of Taxation (1977) VR 342, at p 353.

13. The first argument put by counsel for the applicants was based on the proposition that the process of construction should start with the actual words used, which should be read according to their ordinary meaning; only if the meaning is not clear should there be resort to context. Authority for this proposition was said to be found in the judgment of Deane J in K. and S. Lake City Freighters Pty. Ltd. v. Gordon and Gotch Ltd. [1985] HCA 48; (1985) 157 CLR 309, at p 321. In part of a sentence on that page, Deane J did say, "the starting point of the construction of s. 133 must be the actual words of the section." The immediately preceding sentence, however, reads, "The words of s. 133 must, of course, be read in their context in the Act and in the particular Part of the Act in which they are found....". The sentence which I have quoted in part begins with the words, "That having been acknowledged...". In other words, Deane J was acknowledging the need to use as a starting point the context of words to be construed in a statute. This proposition is expressed with even greater clarity in the same case by Gibbs CJ at p 312 and Mason J at p 315. Thus, the phrase "voluntary separation package", when used in clause 3(d) of the award, must be construed in the context of that clause.

14. Even if it were permissible to isolate the phrase in clause 3(d), it would hardly be legitimate to ignore the presence of a definition in the same clause. Nor would it be possible to ignore the use of the same phrase in two other sub-clauses. It is true that the presumption that words are used consistently throughout a document may be rebutted. See generally Pearce and Geddes, Statutory Interpretation in Australia (3rd ed. 1988), at pp 65-67. Rebuttal is less easy where the phrase is used in every sub-clause of a single clause than in a case in which similar words are found in separate clauses, dealing with different subjects, in a lengthy document. It is even less easy in the face of a definition which, in its terms, does not acknowledge that a different meaning could be imparted to the defined term by context.

15. Counsel for the applicants then sought to suggest that the expression used in clause 3(d) was not the defined expression "voluntary separation package", but was the expression "voluntary separation package in relation to the termination of employment of any employee covered by this award". According to their argument, this was a composite expression, intended to relate to a different subject matter from that defined. This argument requires some analysis of the structure of clause 3 of the award.

16. It is clear that sub-clause (b) is designed to permit an employee, who had accepted a voluntary separation package (as defined) prior to the making of the award, to withdraw such acceptance. The effect of this sub-clause is that there will be three classes of persons. The first class is those who have accepted a voluntary separation package prior to 24th December 1992 and who withdraw their acceptance in accordance with sub-clause (b). The second class is those who have accepted such a package prior to the making of the award but who do not withdraw their acceptances, or who accept a package in the defined sense in accordance with its terms, i.e. an offer made during the 1992/93 holiday period. The third class is all those who have not been offered, or have not accepted a voluntary separation package in the defined sense.

17. The first class is dealt with in sub-clause (c). The second class is the subject of the initial qualification in sub-clause (d). The purpose of this qualification is to recognise that those who have accepted the package which existed at the time of making of the award, and who do not withdraw their acceptances, will have their employment terminated. The third class is dealt with in the operative part of sub-clause (d), which creates an obligation of the employer not to terminate their employment and a right of the employees not to have their employment terminated. There is an exception to this obligation and this right, which is found in the proviso to sub-clause (d). When viewed in this way, the elements of the clause have a logical progression. That progression suggests that the words "in relation to the termination of employment of any employee covered by this award" do not exist to qualify the words "voluntary separation package" immediately preceding them. Rather, they exist to introduce the obligation and the correlative right created by the operative part of the sub-clause. They define the employment to which that operative part relates and give content to the words "that employment" where they appear twice.

18. Counsel for the applicants sought to escape this reasoning by reference to the lack of a comma after the words "voluntary separation package" in sub-clause (d) and the presence of a comma after the words "covered by this award". They pointed to the fact that, in sub-clauses (b) and (c), initial qualifying words are followed by commas. Reference was made to the view of Pearce and Geddes, at pp 93-94, that those who draft legislation in the present era do punctuate carefully, and that punctuation should no longer be regarded as possibly the errors of printers or proof readers. That may well be the case with respect to legislative drafting. The award is plainly not drafted with the degree of precision that would permit punctuation to govern its construction. The phrase "voluntary separation package" in clause 3(b) is given initial capitals; elsewhere, it is entirely in lower case. The definite article appears incorrectly in one place in clause 2 and in one place in the definition of "employer" in clause 3(a)(ii). The structure of clause 3(d) is clumsy. It is really an operative provision with two exceptions. One of those exceptions appears in the qualifying opening words and the other in the proviso. It might have been wiser for those who drafted the clause to have dealt with the second class of persons in a separate sub-clause. It is impossible to accept that the drafting of the clause is so precise that the absence of a comma should be significant but the presence of a definition of a specific phrase should be ignored on one of the occasions when that phrase is used.

19. It is not as if the phrase "voluntary separation agreement" has some particular industry meaning, or some generic meaning which would cause it to be used carelessly. It is a rather strange and euphemistic expression. There is no particular reason why, if the framers of the clause wished to permit the first applicant to proceed with any scheme of voluntary redundancy which it might invent, some appropriate and well understood form of words could not be found to express that intention. It would be extremely odd to have chosen to use a defined phrase with fourteen words added to it, in order to signify something which could be dealt with more briefly, with greater accuracy and with more clarity.

20. Counsel on both sides sought to gain comfort from the reasons of the Full Bench in its decision given on 24th December. In doing so, each counsel disclaimed the submission that there is any ambiguity involved in clause 3(d). It is only if there is ambiguity that resort can be had to extrinsic material as an aid in construction. Such material cannot be used to contradict the language of the document. See Codelfa Constructions Pty. Ltd. v. State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337, at p 352 in the judgment of Mason J There is no clearly established test which can be applied in determining whether an ambiguity exists. See Printing and Kindred Industries Union v. Davies Bros. Ltd. (1986) 18 IR 444, at p 449. In the present case, I do not believe that there is ambiguity. The purpose of clause 3 of the award is clear from an examination of its own terms. The intention of the framers of the clause, to be gathered from its terms, is to prevent the State of Victoria from terminating the employment of teachers by any means other than the two specified, namely the voluntary separation package which existed at the date when the award was made and the disciplinary, dispensation with services or efficiency provisions contained in the Teaching Service Act 1981 (Vic.). The intention was not to leave it open to the employer to devise and present to teachers further schemes of voluntary redundancy, at least while the interim award was in operation.

21. In case I am wrong about the question of ambiguity, I have examined the reasons of the Full Bench in detail. There is no explicit statement as to the meaning of the phrase "voluntary separation package" when used in clause 3(d) of the award. It is then necessary to construe the reasons of the Full Bench, to see whether they disclose a clear intention as to the meaning which that phrase should bear in that sub-clause. It is a dangerous exercise to construe an extrinsic document and then use the resulting construction as an aid in construing the primary document.

22. At pp 3-4 of its reasons, the Full Bench set out the substance of a proposed interim award, which it had invited the parties to consider overnight on 18th December 1992. Part of that proposed interim award involved the proposition that any employee whose employment was to be terminated on grounds of redundancy, or of the employee or his or her position being excess to requirements, should be entitled to a benefit not less than that which would be payable under the then existing voluntary separation package. Later in its reasons, the Full Bench recognised that that proposal for an interim award was unacceptable to the respondent.

23. At p 6, the Full Bench recited the terms of an interim award then proposed by the respondent. In the course of its reasons, it rejected much of that proposed interim award. In particular, it rejected the proposition that the redundancy process should be frozen by the award, so that even those who had accepted offers as part of the voluntary separation package which existed at the date of the award, and who did not withdraw their acceptances, should not have their employment terminated. In this context, at p 20, the Full Bench said, "however whatever unfairness arises out the consideration (sic.) does not provide in our view any compelling reason for the Commission to adopt, through the proposed interim award, a course which would stop all terminations of employment by means of the voluntary separation process." This sentence was relied on heavily by counsel for the applicants as indicating the expressed intention of the Full Bench to allow a voluntary separation process generally to continue. In context, it is no such thing. It is a determination to allow, in part, the process already under way to be completed.

24. At pp 21-22, the Full Bench dealt with a proposal in the respondent's proposed interim award to impose an obligation not to dismiss any teacher otherwise than in accordance with the disciplinary or efficiency provisions of the Teaching Service Act 1981 (Vic.). At p 21, the Full Bench said, "subject to one other matter, we are disposed to grant only so much of the application as would create a duty of the kind proposed...". It is not clear what the "one other matter" was, because that sentence is followed by two qualifications. Nonetheless, it is plain that the remark was made in the context of a discussion of the extent to which the Full Bench was prepared to go in prohibiting dismissal of teachers.

25. There is then to be found further discussion about the question of voluntary redundancies. Nothing in that discussion indicates any intention on the part of the Full Bench to permit new and different voluntary redundancy schemes to be offered by the first applicant. It must be remembered that the Full Bench was exercising an arbitral function in relation to a controversy, which arose in part from the specific voluntary separation package which existed at the date of its decision and of the award, and partly from the new statutory scheme in Victoria relating to public sector employment, which gave unfettered powers of dismissal to the first applicant. That controversy was resolved in the first instance by the making of an interim award, which it was hoped would give the parties an opportunity to negotiate to devise a satisfactory scheme of reducing the number of teachers employed by the first applicant. To have permitted the first applicant to continue to offer voluntary redundancies, on terms which might be less advantageous to its employees, without consultation with the respondent as to those terms, would have been very obstructive of the purpose for which the interim award was created.

26. Finally, counsel for the applicants resorted to the argument that, unless clause 3(d) were construed in the manner which they advocated, it would lead to unintended and inconvenient consequences. In the main, these consequences seemed to involve the inability of the first applicant to offer redundancy packages to its staff without obtaining a variation of the award. It was even said that the first applicant would commit a breach of award by processing the resignation of a teacher who wished to resign for personal reasons. I am by no means convinced that this last mentioned consequence would follow. Even if it did, it would not dictate the adoption of a different construction of the award. This is not a situation in which there are two competing constructions, one of which would lead to absurdity. Rather, it is a situation in which the first applicant seeks to avoid what it regards as inconvenience arising from the obvious meaning of the award. What is inconvenient to the first applicant might not be inconvenient to the respondent or its members.

27. In my view, clause 3(d) of the award is very clear. It is to be construed in accordance with the interpretation which I pronounced on 28th April 1993.