Re Andrew John Short v FW Hercus Pty Ltd [1993] FCA 51; (1993) 40 FCR 511 (23 February 1993)

FEDERAL COURT OF AUSTRALIA

Re: ANDREW JOHN SHORT
And: F.W. HERCUS PTY LTD
No. S I3 of 1992
FED No. 72
Number of pages - 29
Industrial Law
[1993] FCA 51; (1993) 40 FCR 511

COURT

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Keely(1), Burchett(2) and Drummond(3) JJ.

CATCHWORDS

Industrial Law - interpretation of award - interpretation of order varying the Metal Industry Award 1984 Part II by insertion of new cl. 30 "Introduction of Change" and new cl. 31 "Redundancy" - cl. 31 providing entitlement to severance pay where "an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone" - whether word "wishes" denotes employer's subjective desire to retrench employee or merely "objective" cessation of employer's wish to have the job done by anyone - whether employee entitled to severance pay on redundancy - whether permissible to examine history of clause for purpose of interpretation - whether necessary for ambiguity to appear on face of document before history may be examined - effect of statements in judgment leading to adoption of form of clause as indicating its meaning - scope of context for the purpose of construction.

Interpretation of Documents - context - history of the adoption of a clause - whether there must be apparent ambiguity before history may be examined.

Metal Industry Award, 1984 - Part II - Draughtsmen, Production Planners and Technical Officers

The Merchant Service Guild of Australia v. Sydney Steam Collier Owners and Coal Stevedores Association (1958) 1 FLR 248

Nurses (South Australia) Award (Interpretation) Case (1981) 48 SAIR 151

Knox v. Grace Brothers Holdings Ltd (1985) 8 FCR 497

City of Wanneroo v. Holmes [1989] FCA 369; (1989) 30 IR 362

Seamen's Union of Australia v. Adelaide Steamship Co. Ltd. (1976) 46 FLR 444

Seymour v. Stawell Timber Industries Pty Ltd [1985] FCA 236; (1985) 9 FCR 241

Australian Agricultural Company v. Federated Engine-Drivers and Firemen's Association of Australasia [1913] HCA 41; (1913) 17 CLR 261

Saraswati v. R [1991] HCA 21; (1991) 172 CLR 1

Codelfa Construction Proprietary Limited v. State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337

Macdonald v. Longbottom (1859) 1 El and El 977 [1859] EngR 635; (120 ER 1177)

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

Busby v. Chief Manager, Human Resources Department, Australian Telecommunications Commission (1988) 20 FCR 463

The Queen v. The Industrial Commission of South Australia; ex parte Adelaide Milk Supply Co-operative Limited (1977) 16 SASR 6

Termination, Change and Redundancy Case (1984) 8 IR 34

Australian Energy Ltd v. Lennard Oil N.L. (No. 2) (1988) 2 Qd R 230

HEARING

ADELAIDE, 11, 12 November 1992
23:2:1993

Counsel for the Appellant: Mr T Stanley

Solicitors for the Appellant: Duncan Groom

Hannon

Counsel for the Respondent: Ms S Zeitz

Solicitors for the Respondent: Baker O'moughlin

Counsel for the Minister

(Intervener): Mr S Marshall

Solicitors for the Minister

(Intervener): Australian Government

Solicitor

ORDER

The Court orders that:

1. The appeal be allowed.
2. The orders made on 29 May 1992 in matter No. S I5 of 1991 be set
aside and in lieu thereof the appeal from the decision of the
Industrial Court of South Australia made on 15 November 1991 be
dismissed.

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

DECISION

KEELY J. The Industrial Court of South Australia ("the Industrial Court") ordered on 15 November 1991 that F.W. Hercus Pty Ltd. ("the respondent") pay to Mr. A.J. Short ("the appellant") the sum of $3376 for severance pay. The respondent appealed to the Federal Court and on 29 May 1992 a judge gave judgment allowing the appeal and setting aside the order of the Industrial Court. The present appeal is from his Honour's judgment.

2. The Minister, on behalf of the Commonwealth, intervened in the appeal under s.60 of the Industrial Relations Act 1988 (Clth) ("the Act") in the public interest.

3. The issue on the hearing of the appeal was whether the appellant was entitled to severance pay under clause 31 of the Metal Industry Award 1984 - Part 11 - Draughtsmen, Production Planners and Technical Officers ("the award"), which is an award within the meaning of the Act. It was not contended that the amount ordered by the Industrial Court was incorrect if this Court found that the appellant was entitled to severance pay.

4. The reasons for judgment of the Industrial Court included the following:-

"I now turn to the third ground of defence which is that the
applicant was not made redundant within the meaning of the
award and therefore has no entitlement.
There is little dispute on the facts which are as follows;
The respondent operates a business manufacturing machine
parts. The applicant was employed by the respondent from
approximately January 1985 as a trainee draftsman. ...
I find that in late 1990 his employment was terminated by
the respondent. ... it is clear that whatever the precise
date of termination the applicant had been in full time
employment with the respondent for four or more years.
The duties which the applicant performed were those of a
detail draftsman as provided by the award. The
circumstances of termination were that in approximately
October 1990 the applicant was approached by the work's
manager and informed that the respondent would have to let
him go because the respondent was experiencing a downturn in
trade. ...
At the time of the applicant's termination he was one of two
full time drafting employees. Mr. Hercus also performed
drafting work. The applicant's drafting position was not
filled after his termination. The respondent continued to
require drafting work to be performed as it forms a
fundamental part of its production of machine items. After
the applicant's termination any drafting was performed by
the remaining draftsman or Mr. Hercus. The termination was
not associated with any technological change. The applicant
was terminated at about the same time as various other
employees in various sections of the respondent's workplace
who were also terminated because there was a downturn of
trade. Due to a reduction in orders the whole enterprise
operated at a reduced level of output. Approximately one to
two weeks after the respondent terminated the applicant's
employment it contacted the applicant to offer him some
casual work as a draftsman but he declined.
It was Mr. Hercus' evidence that the applicant was
terminated along with other employees in other sections of
the workplace in the following context:-
'I must refer to the fact that it has - basically the
practice of taking people on when we're busy and
putting them off when we're slack is something that
we've been doing as long as I can remember, but we are
working in an economy which is cyclical in nature so
that we expect every 7-8 years to have a boom followed
by a bust and that we have always used this as the
means of turning over our labour force. To that end
we don't follow a practice of first on last off, we
take on according to what we need and when we have to
put people off we try and retain those that are most
suited to the work that we have and the work that we
see immediately coming and likewise, if we have to
reemploy, those that were laid off do not have an
automatic first choice, they are considered along with
any other applicants and we select those who are most
suited to the work we have at the time.'
(Transcript p 20-21)
Mr. Hercus explained the respondent's decision to reduce its
employees including the applicant as being imposed upon it. At
p 24 of the transcript he described the respondent's predicament
thus:-
'... Our company is still in the same line of
business, making the same products by
substantially the same methods. We are
tendering for the same type of work. There is
just not enough of it and we are not winning a
big enough share of it to keep the same number
of people gainfully employed. The drawing
office is still there, the drawing board and the
related equipment is still there, we still want
the work done, we just have not got it to be
done and this was not due to any decision made
by us. This was a retrenchment due to our
having insufficient work to do and not a
redundancy through our not wanting it done. We
do want it done and we are using all of our
efforts to gain the necessary orders in order
that it can be done again.'"
Clause 31 of the award relevantly provided as follows:-
"31 - REDUNDANCY
Discussions before termination
(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.
(ii) The discussions shall take place as soon as is
practicable after the employer has made a
definite decision which will invoke the
provisions of paragraph 31(a)(i) hereof and
shall cover, inter alia, any reasons for the
proposed terminations, measures to avoid or
minimise the terminations and measures to
mitigate any adverse effects of any terminations
on the employees concerned.
(iii) For the purposes of the discussion the employer shall,
as soon as is practicable, provide in writing to the
employees concerned and their union all relevant
information about the proposed terminations including
the reasons for the proposed terminations, the number
and categories of employees likely to be affected, and
the number of workers normally employed and the period
over which the terminations are likely to be carried
out. Provided that any employer shall not be required
to disclose confidential information the disclosure of
which would be inimical to the employer's interests.
Transfer to lower paid duties
(b) Where an employee is transferred to lower paid duties for
reasons set out in paragraph 31(a)(i) hereof the employee shall be
entitled to the same period of notice of transfer as he would have
been entitled to if his employment had been terminated, and the
employer may at the employer's option, make payment in lieu
thereof of an amount equal to the difference between the former
ordinary time rate of pay and the new lower ordinary time rates
for the number of weeks of notice still owing.
Severance pay
(c) In addition to the period of notice prescribed for ordinary
termination in subclause 9(d) and subject to further order of the
Commission, an employee whose employment is terminated for reasons set
out in paragraph 31(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
1 year and up to the completion of 2 years 4 weeks pay
2 years and up to the completion of 3 years 6 weeks pay
3 years and up to the completion of 4 years 7 week pay
4 years and over 8 weeks pay
"Week's pay" means the ordinary time rate of pay for the employee
concerned.
...
Incapacity to pay
(n) 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."

5. It was submitted by counsel for the appellant and by counsel for the Minister that the appeal should be allowed. The respondent's counsel submitted that his Honour was correct in deciding that clause 31 did not apply to the termination of the appellant and that the appeal should be dismissed.

6. It was not disputed that the appellant's employment was terminated due to a shortage of work arising from economic difficulties being experienced by the respondent. The respondent's counsel proceeded from that step to argue that on the evidence it could not be held that at the time of the termination "... the employer no longer (wished) the job the employee (had) been doing done by anyone" within the meaning of those words in subclause 31(a)(i) of the award, which is set out earlier in these reasons. It was submitted that the crucial word in subclause 31(a)(i) was the word "wishes" and that it drew "a distinction between a pro-active decision by the employer to terminate and a reactive decision forced on it by economic circumstances."

7. In my opinion no such distinction is drawn in the subclause. The respondent's submission gives undue emphasis to the word "wishes" and insufficient weight to the opening words of the subclause. Those words are "Where an employer has made a definite decision ..." and they are immediately followed by the words "that the employer no longer wishes the job the employee has been doing done by anyone ...".

8. The respondent's works manager informed the appellant "that the respondent would have to let him go because the respondent was experiencing a downturn in trade". In my opinion the respondent had made a "definite decision" that it "no longer (wished) the job ... done by anyone ..." It is not to the point that, before making that decision, the respondent "wished" that it was not experiencing a downturn in trade and wished that it did not have to let the appellant go because of that downturn in trade. It plainly no longer required the job done and the reason for that decision was that, as a result of the downturn in trade, "we just have not got it to be done" .

9. The "definite decision" to which the subclause refers is a "decision that the employer no longer wishes the job ... done by anyone ...". In my opinion the words "employer no longer wishes" mean that the employer no longer "wants" or "requires" or "desires" the job done. That wish is formed after considering the matter and making a definite decision as to what it "wishes". The word "wishes" in the subclause is not referring to the "wish" of the employer that it had sufficient orders so that it would not "have to let him (the employee) go".

10. The respondent's counsel submitted that, on the evidence, the respondent wished "to maintain the employee in that employment" but subsequently came "to a decision that (it) must dismiss the employee concerned" . In my opinion on that evidence the appellant was entitled to severance pay under subclause 31(c) of the award because the respondent had "made a definite decision that the employer no longer wishe(d) the job ... done by anyone ... and that decision may lead to termination of employment ..." (subclause 31(a)(i)) and it did so lead.

11. Counsel for the appellant, counsel for the Minister, and counsel for the respondent each submitted that there was no ambiguity and relied upon the plain meaning of the words, given their natural and ordinary meaning, read as a whole and in context. I agree with them that there is no ambiguity but, for the reasons set out above, I accept the submissions of the appellant and of the Minister as to what that meaning is.

12. It follows that in my opinion the appeal should be allowed and the orders made by his Honour on 29 May 1992 should be set aside.

BURCHETT J. On 14 May 1986, an order was made by the Australian Conciliation and Arbitration Commission varying the Metal Industry Award, 1984 - Part II - Draughtsmen, Production Planners and Technical Officers, inter alia, by the insertion of a new clause 30, headed "INTRODUCTION OF CHANGE", and a new clause 31, headed "REDUNDANCY". Clause 31 contained elaborate provisions in respect of redundancy, among which was a general obligation to provide severance pay, relieved by a capacity to apply to the Commission "to have the general severance pay prescription varied on the basis of the employer's incapacity to pay". But this appeal is concerned with the opening words of sub-cl. (a)(i), upon which the whole clause depends -

"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 ... ".

By these words the draftsman of the clause sought to define the concept of redundancy for the purposes of the award.

2. In the present case, there is no dispute that the appellant was an employee and the respondent an employer bound by the award. The appellant claimed severance pay under cl. 31. His employment had been terminated by a definite decision of the employer, unrelated to the ordinary and customary turnover of labour. The sole question with which the appeal is concerned is whether the respondent's decision fell within the words "the employer no longer wishes the job the employee has been doing done by anyone".

3. The appellant's application (couched as a claim for a redundancy payment of $3,376) came before an Industrial Magistrate. Evidence was given on behalf of the respondent of the circumstances in which the appellant had been retrenched, as follows:

"No section was closed, no line of business was off-loaded
or abandoned, no new process was introduced enabling the
work to be done with fewer people. Our company is still in
the same line of business, making the same products by
substantially the same methods. We are tendering for the
same type of work. There is just not enough of it and we
are not winning a big enough share of it to keep the same
number of people gainfully employed. The drawing office is
still there, the drawing board and the related equipment
(are) still there, we still want the work done, we just have
not got it to be done and this was not due to any decision
made by us. This was a retrenchment due to our having
insufficient work to do and not a redundancy through our not
wanting it done. We do want it done and we are using all of
our efforts to gain the necessary orders in order that it
can be done again."

The Industrial Magistrate rejected an argument that cl. 31 did not apply in these circumstances. The respondent then appealed to a judge of the Court, who upheld its appeal. His Honour founded on the use of the word "wishes" in cl. 31, holding that the clause is concerned with the subjective desires of an employer who wishes to change his mode of operation, and not with the consequences of economic necessity. From this ruling, the appellant now appeals.

4. In my respectful opinion, the better view of the clause is to see it as objectively, and not subjectively, framed. It is concerned with the fact of a change brought about by the making of a decision in circumstances unrelated to the ordinary and customary turnover of labour. The wide spectrum of technological and economic reasons for the decision is restricted only by the exclusion referring to the ordinary and customary turnover of labour. That an economic downturn is not excluded is, of course, consistent with the express right of the employer to apply to the Commission for a variation of severance pay on the ground of incapacity to pay. The contrary argument rests entirely on the word "wishes". But the clause is not made conditional upon the employer wishing to retrench an employee. The clause simply postulates the cessation of the employer's wish to have the particular job done by anyone. That may be because some delightful alternative has enticed the employer; because the job has just come to an end; because of the employer's insolvency; or for any one of a number of other reasons. The clause does not say that the employer must be happy about his decision; only that he must have made it.

5. The question was raised whether it is legitimate, for the purpose of construing a clause of an award, to look at what was called the history of the provision. In The Merchant Service Guild of Australia v. Sydney Steam Collier Owners and Coal Stevedores Association (1958) 1 FLR 248 at 251, 254 and 256-7, the Commonwealth Industrial Court construed an industrial agreement containing a clause which had appeared in a succession of similar agreements over a period of about 25 years. The clause being perhaps ambiguous, the court relied on its adoption by the parties from the series of prior agreements, under which a particular interpretation had been accepted, as showing its true construction. There was authority to support this approach: the decision of Fair J. in O'Donnell v. Walter Buchanan, Limited (1947) NZLR 906 at 910; Jack v. The Fairymead Sugar Company Limited (1917) 11 QJPR 109 at 115; and see Pickard v. John Heine and Son Limited [1924] HCA 38; (1924) 35 CLR 1 at 9-10, Nurses (South Australia) Award (Interpretation) Case (1981) 48 SAIR 151 at 153-157, Knox v. Grace Brothers Holdings Ltd (1985) 8 FCR 497 at 501, 505-509, Australian Iron and Steel Limited v. Atkins (1938) 37 AR 196 at 198-199, Goldstein v. Maloney (1940) 39 AR 343 at 351, City of Wanneroo v. Holmes [1989] FCA 369; (1989) 30 IR 362 at 378-379, and D.C. Pearce and R.S. Geddes, Statutory Interpretation in Australia (3rd ed., 1988) s. 3.12. But as the construction of the clause which appealed to the court had also been acted upon after the parties had entered into the industrial agreement, the court referred to Watcham v. Attorney-General of the East Africa Protectorate (1919) AC 533, a decision of the Privy Council which is no longer regarded as good law: F.L. Schuler A.G. v. Wickman Machine Tool Sales Ltd [1973] UKHL 2; (1974) AC 235. So far as Merchant Service Guild is concerned with conduct after the making of the industrial agreement, it was accordingly not followed in Seamen's Union of Australia v. Adelaide Steamship Co. Ltd. (1976) 46 FLR 444 at 445; but I do not think that decision affects its authority in relation to the use which may be made, in appropriate circumstances, of the history of a clause found in an industrial agreement. Nor do I think Seymour v. Stawell Timber Industries Pty Ltd [1985] FCA 236; (1985) 9 FCR 241 is of assistance. That was a special case concerned, as appears most clearly from the dissenting judgment of Keely J. at 254-255, not with the history of an award provision, but with the effect of a prefatory statement made by the parties at the time when it was introduced into the award. The question that divided the court was whether the statement was any clearer than the award itself, a question reminiscent of the difficulties which often arise in relation to the analogous explanatory memoranda presented by ministers to the Parliament.

6. No one doubts you must read any expression in its context. And if, for example, an expression was first created by a particularly respected draftsman for the purpose of stating the substance of a suggested term of an award, was then adopted in a number of subsequent clauses of awards dealing with the same general subject, and finally was adopted as a clause dealing with that same general subject in the award to be construed, the circumstances of the origin and use of the clause are plainly relevant to an understanding of what is likely to have been intended by its use. It is in those circumstances that the author of the award has inserted this particular clause into it, and they may fairly be regarded as having shaped his decision to do so. The rules of construction, Mason and Wilson JJ. said in Cooper Brookes (Wollongong) Proprietary Limited v. The Commissioner of Taxation of the Commonwealth of Australia [1981] HCA 26; (1981) 147 CLR 297 at 320, are really rules of common sense. Common sense would be much offended by a refusal to look at the facts I have summarized. As Isaacs J. said in Australian Agricultural Company v. Federated Engine-Drivers and Firemen's Association of Australasia [1913] HCA 41; (1913) 17 CLR 261 at 272, citing Lord Halsbury L.C.: "The time when, and the circumstances under which, an instrument is made, supply the best and surest mode of expounding it."

7. The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps most often, the immediate context is the clearest guide, but the court should not deny itself all other guidance in those cases where it can be seen that more is needed. In literature, Milton and Joyce could not be read in ignorance of the source of their language, nor should a legal document, including an award, be so read.

8. That much is fairly clear. Where there is seen to be a difficulty, the court can often go to the history of the matter. A number of illustrations will be found in Nurses (South Australia) Award (Interpretation) Case (ubi supra). But an ambiguity or obscurity may not be immediately seen on the face of a document. Both the problem and its solution may appear only when the wider context from which an expression first sprang is brought to notice. Is the court then forbidden to look past the document itself that is before it? The respondent says the instant award is clear, and we must shut our eyes to what went before. I think there are two answers to this argument. On the one hand, I do not accept that the award is clear on its face. The fact that I have given it a meaning by a process of construction (as it happens, contrary to the respondent's contention) cannot disguise the possibility of understanding the language, as the learned judge understood it, differently. (Cf. Pickard v. John Heine and Son Limited [1924] HCA 38; (1924) 35 CLR 1 at 9, per Isaacs A.C.J.) That is certainly sufficient to justify a reference to its source. Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form, only a kind of wilful judicial blindness could lead the court to deny itself the light of that history, and to prefer to peer unaided at some obscurity in the language. "Sometimes", McHugh J. said in Saraswati v. R [1991] HCA 21; (1991) 172 CLR 1 at 21, the purpose of legislation "can be discerned only by reference to the history of the legislation and the state of the law when it was enacted". Awards must be in the same position.

9. But even if the language, read alone, appeared pellucidly clear, the tendency of recent decisions - and this is the other answer to the argument put - would seem to require the court to look at the full context. Only then will all the nuances of the language be perceived. The judgment of Mason J. (with which Stephen and Wilson JJ. expressed agreement) in Codelfa Construction Proprietary Limited v. State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 at 347-353 contains an extended discussion of the principles upon which a court may take account, when construing a contract, of the circumstances surrounding the agreement of the parties upon those particular terms. In the course of that discussion, Mason J. suggested (at 350) that "perhaps ... the difference ... is more apparent than real" between the view that evidence is admissible only to resolve an ambiguity, not to raise it, and the view that extrinsic evidence is receivable both to raise and to resolve an ambiguity. He concluded (at 352):

"The true rule is that evidence of surrounding circumstances
is admissible to assist in the interpretation of the
contract if the language is ambiguous or susceptible of more
than one meaning. But it is not admissible to contradict
the language of the contract when it has a plain meaning.
Generally speaking facts existing when the contract was made
will not be receivable as part of the surrounding
circumstances as an aid to construction, unless they were
known to both parties, although ... if the facts are
notorious knowledge of them will be presumed." (Emphasis
added.)

The fact is that words are frequently susceptible of more than one meaning. Paradoxically, ambiguity may be born of the reader's clarity of thought which perceives a potentiality for an alternative meaning. But in many cases only evidence of extrinsic facts can show that the potentiality has substance. The old case Macdonald v. Longbottom (1859) 1 El and El 977 [1859] EngR 635; (120 ER 1177), to which Mason J. referred, is an example, since there is nothing necessarily ambiguous in the expression "your wool" (indeed Erle J. at 986 described it as "most explicit") - only evidence that at the time the vendor had both wool of his own growing, and also wool which he had bought in from others, could raise an ambiguity, while at the same time solving it once the other party was shown to have known the facts.

10. Mason J. returned to the subject in his dissenting judgment in K. and S. Lake City Freighters Proprietary Limited v. Gordon and Gotch Limited [1985] HCA 48; (1985) 157 CLR 309 at 315, when he said:

"Problems of legal interpretation are not solved
satisfactorily by ritual incantations which emphasize the
clarity of meaning which words have when viewed in
isolation, divorced from their context. The modern approach
to interpretation insists that the context be considered in
the first instance, especially in the case of general words,
and not merely at some later stage when ambiguity might be
thought to arise."

This is a broad proposition, applicable to problems of construction generally, although it was put forward in the context of statutory interpretation. In that context, this court said (in the joint judgment of Neaves, Burchett and Lee JJ.) in Busby v. Chief Manager, Human Resources Department, Australian Telecommunications Commission (1988) 20 FCR 463 at 468:

"(A)s Dixon C.J. said in Commissioner for Railways (NSW) v.
Agalianos [1955] HCA 27; (1955) 92 CLR 390 at 397, 'the context, the
general purpose and policy of a provision and its
consistency and fairness are surer guides to its meaning
than the logic with which it is constructed'. See also the
dissenting judgment of Mason J. in K. and S. Lake City
Freighters Pty Ltd v. Gordon and Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309
at 315, where he referred to 'the cardinal rule of statutory
interpretation that requires the words of a statute to be
read in their context'. If that mode of interpretation is
truly followed, there must be occasions when it leads to a
passage being understood in a sense it would not bear upon a
reading in isolation. This is not a shiny new rule, but an
approach embedded in the law at least since Lord Coke: see
S.G.G. Edgar, Craies on Statute Law (7th ed., 1971), pp
96-101."

11. The principles of statutory interpretation referred to are not inapplicable to an award which seeks, in a way, to legislate for the terms and conditions of employment of a number of persons engaged in a particular industry. (Cf. Geo. A. Bond and Co. Ltd. (In Liquidation) v. McKenzie (1929) 28 AR 498 at 503.) Their application to the present problem would require the court to consider the wider context of the award provision as the product of a series of decisions which might reveal plainly its general purpose and policy. When the provision is read against that background, as I shall show, there can be no doubt that it was not intended to have a restricted meaning, but rather to have a wide operation in cases of redundancy, for whatever reason.

12. The starting point may be taken to be the decision of the Full Court of the Supreme Court of South Australia in The Queen v. The Industrial Commission of South Australia; ex parte Adelaide Milk Supply Co-operative Limited (1977) 16 SASR 6, although it would certainly be possible to go back much further. The Supreme Court of South Australia was concerned with the question of the jurisdiction of the state's Industrial Commission to make provision by award for redundancy. There was no issue about the substance of the proposed provision, but members of the Court made clear their understanding of what was involved. It is convenient to look first at the judgment of Mitchell J., who cited (at 34) the following statement from a decision in the previous year of the New South Wales Industrial Commission:

"It can fairly be said that in industrial circles the term
redundancy payment has come to mean compensation for losses
of various kinds suffered by employees who have given
substantial services to an employer and whose services are
terminated because, for one reason or another, the employer
no longer needs them."

Mitchell J. accepted this statement. Bright J., who dissented on the jurisdictional issue, said (at 26-27):

"The word 'redundant' does not occur in the Act. In its
industrial sense it is not defined in the Oxford Dictionary.
The application which I have already set out attempts a
definition for the purpose of the proposed award. A
consideration of the cases leads me to think that the
question of the redundancy of an employee is linked to the
question of the continued utility of the job which he is
performing. In other words it does not relate to the
personal competence of the employee in the job which he is
performing. If I am right in this, then in its widest form
the concept of redundancy connotes that an employee becomes
redundant whenever (and for whatever reason) his employer no
longer desires to have performed the job which that employee
was doing. A wide variety of instances are contained in the
definition clause in the application but they all seem to
fit into this connotation, even the reference to
retrenchment of employees for any reason whatsoever."

The definition clause to which Bright J. referred embraced (as appears at 16) dismissal by reason of diminishment of the requirements of a business for work of a particular kind through

"technological automation, mechanization change,
re-organization, rationalization or centralization in the
processing industry; fall in demand of products for whatever
reason; or retrenchment of employees or an employee for any
reason whatsoever."

13. It was in connection with this statement of Bright J. and the passage quoted by Mitchell J. (to each of which he referred at 8-9) that Bray C.J. made (at 8) a statement that has since become in part embedded in a number of awards, including the subject award:

"I should begin by saying that I agree with Bright J. that
the concept of redundancy in the context we are discussing
seems to be simply this, that a job becomes redundant when
the employer no longer desires to have it performed by
anyone. A dismissal for redundancy seems to be a dismissal,
not on account of any personal act or default of the
employee dismissed or any consideration peculiar to him, but
because the employer no longer wishes the job the employee
has been doing to be done by anyone."

Here the expression containing the words "no longer wishes" was first composed. In its original setting, it is plain that it was not meant to convey the limitation for which the respondent contends. On the contrary, it was meant to capture the full breadth of the concept elaborated by Bright J. and referred to in the passage quoted by Mitchell J.

14. When the Termination, Change and Redundancy Case (1984) 8 IR 34 came before the Australian Conciliation and Arbitration Commission, what Bray C.J. had said was highlighted in the submission presented by the Australian Council of Trade Unions. The reasons make it plain that no narrowing of the concept of redundancy was intended. In the course of them (at 55-56), the Commission stated:

"(The ACTU) contended that redundancy protection should
apply essentially where an employee is dismissed through no
fault of his own and relied on ILO Convention 158 which
referred to terminations for reasons which relate to the
operational requirements of the business, namely, reasons of
an economic, technological, structural or similar nature.
It also relied on the definition of the Chief Justice, Mr
Justice Bray in the South Australian Supreme Court which, it
contended, was the commonly accepted meaning of redundancy
in Australia ... . This definition:
(a) refers to a job becoming redundant and not to a
worker becoming redundant;
(b) recognizes that redundancy situations may not
necessarily involve dismissals; and
(c) emphasizes that the job or work has disappeared
through no fault on the part of the employee.
A key element in that definition is that the employer no
longer requires to have the work done by anyone." (Emphasis
added.)

It will be noted that the Commission substituted an unambiguous word for Bray C.J's choice of "wishes", but the Commission did not suggest that it was changing the meaning at all; it was simply using a more appropriate word.

15. Following the decision of the Australian Conciliation and Arbitration Commission, the precise words with which we are now concerned, formulated by Bray C.J. in Ex parte Adelaide Milk Supply Co-operative and accepted by the Commission in the Termination, Change and Redundancy Case, became incorporated in a standard form of clause: see the later Termination, Change and Redundancy Case (1984) 9 IR 115; Re Operative Plasterers Workers Federation of Australia; Ex parte Brown (1992) 67 ALJR 179; McGarry v. Boonah Clothing Pty Ltd (Gray J., unreported, 17 May 1988) at 3-4 and 22; and Municipal Officers Association of Australia v. City of Bayswater (1987) 22 IR 45 at 48-9 - it may be noted that McGarry is partly reported at 80 ALR 284, but this report does not include p 22 of the judgment.

16. Any ambiguity in the expression of cl. 31 is clarified when its sources are examined. In the nature of the industrial process, the draftsman of the variation of the award must have been acquainted with those sources. It is not to be thought that the words of Bray C.J. were deliberately chosen to convey a meaning quite other than his meaning. Especially is this so when his meaning had been examined in detail by the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Cases.

17. I agree in the orders proposed by Keely J.

DRUMMOND J. I agree, for the reasons given by both Keely J. and Burchett J., that the redundancy clause here in question is unambiguous and with the order proposed by Keely J. I wish only to add a few comments of my own.

2. In giving its decision on 9 August, 1985, as a result of which the clause was inserted by its later order of 14 May, 1986 in the Metal Industry Award, 1984 - Part II - Draftsmen, Production Planners and Technical Officers ("the award"), the Australian Conciliation and Arbitration Commission said (at page 1 of Print F9780):

"The matter before the Commission concerns an application
for flow-on of the standards established in the Termination,
Change and Redundancy Case decisions of the Commission.
The Awards concerned are the Metal Industry Award, 1984 -
Part II - Draftsmen, Production Planners and Technical
Officers (the Metal Industry Award) and ... The parties are
agreed on the incorporation of the new standards into the
Awards other than in relation to the question of notice of
termination of employment and the operative date."

3. (The questions concerning notice of termination that then required resolution by the Commission are of no present relevance.)

4. The reasons of the Commission show that the redundancy clause was incorporated in the award by consent of the various parties, as a clause containing one of the "new standards" fixed by the Termination, Change and Redundancy Case decisions. The content of the new standard, so far as redundancy is concerned, is set out in the reasons for decision in the first of those cases, Termination, Change and Redundancy Case (1984) 8 IR 34, particularly at 61-62 and 72-73, and the reasons for the supplementary decision in that case reported at (1984) 9 IR 115, particularly at 128-129. The redundancy clause in this award is a copy of the draft clause prepared by the Commission to cover redundancies occurring in a wide range of circumstances, including redundancies resulting from a general economic downturn or from an insufficiency of work available to the particular employer, i.e., from the kind of circumstances that caused the respondent to terminate the appellant's employment.

5. For the reasons given by Burchett J., I think that, even though the redundancy clause is free of ambiguity, recourse can be had to these matters in interpreting it: they form part of what his Honour has described as "the wider context of the award provision".

6. Moreover, the clause is part of the order of the Commission of 14 May, 1986 that varied the award. Australian Energy Limited v. Lennard Oil N.L. (No. 2) (1988) 2 Qd R 230 is authority that, in interpreting the order of a tribunal framed in unambiguous language regard should still be had to the reasons given by the tribunal for making the order: they form part of the context in which the order was made. That case turned on the proper construction of a declaration made in earlier proceedings between the parties. At page 232, Andrews C.J. (Kelly S.P.J. agreeing) rejected an argument that resort could only be had to the reasons for decision of the judge who made the declaration if it was shown to be ambiguous. He also said:

"I would further hold that it is necessary in order fully to
understand the effect of the declaration to examine the
reasons expressed by McPherson J. in coming to his decision
and the extrinsic evidence and surrounding circumstances
relied upon by him. This is not so much to construe the
words of the declaration as to understand it in its place in
the context of the matter and thus give it its true
construction."

7. Such an approach to construing orders does not conflict with what appears to be the rule, recognised by the majority in Australian Consolidated Press Ltd. v. Morgan [1965] HCA 21; (1965) 112 CLR 483, that ambiguity in a court order (even ambiguity curable by recourse to relevant contextual material) will be fatal to a claim that a person is in contempt of court by breaching that order.