Pickard v John Heine & Son Ltd [1924] HCA 38; (1924) 35 CLR 1 (20 August 1924)

Pickard Informant, Appellant; and John Heine & Son Limited Defendant, Respondent.

This is an appeal in Federal jurisdiction from the decision of a Deputy Stipendiary Magistrate at Glebe, in New South Wales, on 20th December 1923, upon an information against the respondent for breach of a Commonwealth industrial award. The award, No. 113 of 1920, was made between the Amalgamated Society of Engineers, claimant, and the Adelaide Steamship Co. Ltd. and others—including John Heine & Son Ltd.—respondents. The claimant organization is now the Amalgamated Engineering Union (Australian Section), and the appellant is a member of the Council of the organization and was the informant. The information alleged a breach or non-observance of the award by the respondent in that William James Lees, engineer's tradesman, being then in the respondent's employ, and having been in such employment for more than fourteen days, and not being a casual worker, the respondent did not pay to him the wages due for 25th April 1923, namely, nineteen shillings and twopence, contrary to the provisions of the Commonwealth Act and the award. The respondent pleaded not guilty, and after hearing evidence and argument the Magistrate dismissed the information. The Magistrate stated a case by which the matter comes to this Court on appeal.

The real point of the case may be briefly stated. The award, as it stood after variation on application dated 14th June 1921, was, so far as concerns this case, as follows:—Clause 1 provided a minimum rate of wages to employees "per week," except as to certain casual employees for whom the minimum rates were to be per day. Sub-clause (h) provided: [The sub-clause was here set out]. The evidence showed that Lees was not a casual employee, that he was employed for more than fourteen days, and it was conceded that, if entitled to be paid for 25th April 1923, the sum claimed was correct. The defence rested on the contention that the facts satisfied the provisions of sub-clause (h) inasmuch as they enabled the Magistrate to decide that Lees could not be usefully employed on the date mentioned by reason of a cause which the employer could not reasonably prevent. The circumstances relied on for this were that 25th April 1923 was observed as Anzac Day and was a State holiday in New South Wales, that employees working under State awards on that day would be entitled to double pay, and that it would have been unprofitable, in such circumstances, to have worked the respondent's engineering establishment on that day, since about 140 men were under State awards and 110 were affected by Federal awards.

In reply to requests from this Court the Magistrate informed us that he found "(1) that the engineers employed by the defendant of whom the said Walter James Lees was one could not be usefully employed by the defendant on the public holiday—Anzac Day—25th April 1923, because of the absence on holiday of assistants and other workmen about the defendant's works and that it would be uneconomic to employ the engineers without assistance; (2) that there was no evidence that (a) there was any strike on 25th April 1923 by the union in question or by any other union, (b) there was any breakdown in machinery on that day, (c) there was any stoppage of work for any similar cause; (3) that the said Walter James Lees on 25th April 1923 attended the works of defendant and was ready and willing to work and that there was no work available for him; (4) that the absence of assistants and other workmen from work on Anzac Day 1923 was due to the unwillingness of the employer to pay extra holiday pay to them."

The question of law which emerges is this: Upon the true construction of sub-clause (h) of clause 12 of award No. 113 of 1920 is the absence, on a State holiday, of assistants and other workmen which is caused by the employer's unwillingness to pay them the double holiday pay required by a State award, and which results in the employment during that day of a member of the organization on weekly hiring not being useful, because uneconomic, a "cause which the employer cannot reasonably prevent," and therefore a cause entitling him to deduct a day's pay from the member's minimum weekly wage?

The first point of law ruled by the Magistrate answers that question in the affirmative. But he came to that conclusion as is seen upon two other rulings, the second and the third. This is one of those cases of small direct pecuniary interest, but of immense general importance. The provision we are concerned with, not only immediately affects thousands of men all over the Commonwealth, but, as appears from the report of a case in the Commonwealth Arbitration Reports[1], a like provision is inserted in other awards. It is, therefore, desirable, not merely to define so far as we can the rights and obligations now in contest, but also to offer the only authoritative guide possible to the Arbitration Court which has to deal with similar cases. Both the second and third rulings of the Magistrate therefore require examination. I shall first deal with the third ruling, as that was very strenuously urged by Mr. Street in his courageous argument. The Commonwealth Conciliation and Arbitration Act 1904-1920, by sec. 38, enacts: "The Court shall, as regards every industrial dispute of which it has cognizance, have power ... (o) to vary its orders and awards and to reopen any question and to give an interpretation of any term of an existing award." In the recent injunction case of Waterside Workers' Federation of Australia v. Gilchrist, Watt & Sanderson Ltd.[2], this sub-section received considerable attention. It was there pointed out by my brother Rich and myself that the "interpretation" power was added by Parliament not as a judicial but as an arbitral power. As a judicial power it could not be validly conferred upon the arbitral tribunal. If it could, it would be exercisable, not merely by the learned President, who is a High Court Justice, but also by any one, even a lay arbitrator, with any tenure of office, if Parliament chose so to limit the tribunal. But, considered as an arbitral function, it is not only valid but may be extremely useful. In one sense, it is in the nature of a variation, because it implies that the "interpretative" determination is to be inserted in and made part of the award, which is, no doubt, thereby and to that extent altered. But in a substantial sense it differs from "variation." To illustrate what I mean, let me suppose a clause in an award providing that "employees of the respondents shall receive £5 per week." If circumstances altered, so as to make £5 10s. a week a proper wage, that would be a true variation of the award, because it would be something different from that originally intended to fit existing circumstances. But if, with no alteration of circumstances, a question arose whether "employees" included all employees or only such as were members of the organization, an "interpretative" addition could be made, stating that "employees" meant those who were members of the organization, because that was always so intended. It is the intention of the arbitrator, as manifested by the award, that is to be law; and to make any yet unexpressed intention effective it must be put into words and inserted so as to become part of the award. That is what I understand by "interpretation" as distinct from "variation." No doubt, when inserted the effect is the same in each case. But the practical and just ground for doing one may not be that for doing the other. The "interpretation" is meant to apply the award to circumstances as they existed when the award was made—the variation is meant to adapt the award to altered circumstances. Perhaps, as the subject is so important, a little may be added to clarify the position. The Constitution, in its first, second and third chapters, divides the whole power of the Commonwealth into the three great functions of legislative, executive and judicial. It is clear the arbitral power exercised by the Arbitration Court is neither executive nor judicial in the constitutional sense. Ex necessitate it falls within the legislative domain, being part of the mechanism required by sec. 51 (xxxv.) of the Constitution for making a binding regulative provision in connection with industrial disputes extending beyond the limits of any one State. (Compare the statutory determination of rates of miners' wages by district boards in England—see Halsbury's Laws of England, vol. xxviii., p. 874.)

For these reasons, and upon the authority of the decision of this Court, in the Waterside Workers' Case[3], the interpretation order of Powers J., relied on by the Magistrate in his third ruling, cannot, when it is examined and classified, affect this matter. It is only just, however, to state that, in my opinion, the interpretation order was not intended by Powers J. to do more than state his Honor's opinion of the meaning of sub-clause (h) as it stood, and to add that nothing he then said was to make the present respondent's liability greater than it was without the interpretation.

Then, construing sub-clause (h) as it stands, I do not agree with the Magistrate's view that the word "such" must be judicially eliminated. Nor can I agree with the argument addressed to us that the word "which" should be read as "as" so as to leave the "cause" absolutely indeterminate in nature, and applicable as a valid reason for deducting a day's pay if only the employer can show it is one he could not "reasonably prevent." The latitude that would be attributable to "reasonably prevent" would not be measurable. No weekly employee would know where he stood in such a case. If outside circumstances, utterly unconnected with the immediate working operations, such as economic reasons, trade competition, quarrels with customers, and so on, can be introduced to test the reasonableness of prevention or non-prevention, there is little or nothing of security or definiteness left to the employee. Indeed, if the interpretation suggested be correct, the reference to "breakdown of machinery" is quite superfluous. Of course a breakdown of machinery is properly regarded in itself as a valid cause, for primarily it denotes that the working apparatus itself is incapable, by reason of its own inherent inefficiency, of enabling operations to be carried on. But, if the words "any such cause" are read as "any cause" and if the word "which" is read as "as," besides the cardinal sin of altering the language of a document there would be no necessity of inserting strikes or breakdown of machinery.

When the number and variety of respondents are regarded, including Government enterprises, shipping companies, engineering establishments, newspaper undertakings, and so on, the scope of the suggested clause would be so unmeasurably wide as to mean little but difficult litigation to employees if they wished to contest a deduction. First, I rely on the words themselves in their collocation. For clarity sake I segregate the provision thus:—"This shall not affect the right of the management ... to deduct payment for any day the employee cannot be usefully employed—(1) because of any strike by the union or any other union or (2) through (a) any breakdown of machinery or (b) any stoppage of work by any such cause which the employer cannot reasonably prevent." It is the composite expression "stoppage-of-work-by-any-such-cause" that is the antecedent of "which." The word "such" relates to breakdown of machinery. Any "such cause" means, in my opinion, any cause similar to or of the same nature as the breakdown of machinery. A cause is of that nature, in my opinion, if it is so connected with the working of the machinery as to prevent it operating in a manner that makes the employment of the men useful. One might imagine as "such" causes the deprivation of electric current or coal or water, or the desirability of replacing old machinery by new, or putting on protection guards, or overhauling a machine to prevent danger, where signs of possible danger were observed. If these, and others of a like nature which might be mentioned, caused a stoppage of work, because the machinery could not be properly operated, then the range of consideration as to whether the employer could "reasonably prevent" the stoppage would be reduced to understandable limits.

In interpreting documents, should there be any ambiguity, their history, as well as their subject matter, may be important. Personally I see no ambiguity. But as the interpretation I favour was disputed at the Bar, it must be because there is ambiguity. The history of the introduction of the word "such" is written openly in the records of the Arbitration Court. In the material before us we find it referred to. Powers J. in his interpretation order states it. Although I excise that order as an effective judicial determination, I accept the historical statement of facts, as part of the surrounding circumstances when the provision was made. Reading the reasons given by the learned President and reading the report of the case which he refers to, namely, Federated Engine-Drivers' and Firemen's Association of Australasia v. Albany Bell Ltd.[4], in order to ascertain the steps by which the present form of clause (h) was reached by amendment, and the industrial facts that then prevailed, so as to understand fully the subject matter, I am thereby able to place myself in the position of the Arbitration Court, just as a Court in construing a will endeavours to place itself in the testator's arm-chair, in order to understand what he said, so I endeavour to place myself notionally amid the surroundings of the Arbitration Court. When that is done the literal meaning I have given to the word is confirmed.

On the question of when and how far economic considerations enter into the determination of whether, in an appropriate case, the employer could "reasonably prevent" the stoppage from the given cause, I express no opinion at present.

My opinion is that the decision was erroneous, and the appeal should be allowed.

I concur in thinking that the appeal should be allowed. The respondent deducted certain wages which an employee claimed to have earned during a stoppage of work in the respondent's engineering business, and submitted that such deduction was properly made under clause 12 (h) of an award of the Commonwealth Court of Conciliation and Arbitration, which is as follows: [Clause 12 (h) was here set out]. The question we have to determine is whether the stoppage which actually occurred is such a stoppage as is contemplated by the words "any stoppage of work by any such cause which the employer cannot reasonably prevent." The suggested difficulty in interpreting this language arises from the various meanings which have been attached to the word "such" and to the word "reasonably." If we apply to the words in dispute the meaning primarily attached to them in ordinary use and by the lexicographers, we may paraphrase the language thus: "Any stoppage of work arising from any cause of the kind already mentioned which the employer cannot prevent by any means which a reasonable man might be expected to employ in the circumstances." When the language is thus paraphrased, two things become tolerably clear:—(1) That the stoppage contemplated by the sub-section must be the effect of a cause of the same or a like kind with something already mentioned in the same clause. Whether this "something" includes only a breakdown in machinery or extends also to a strike, it is not necessary for our purpose to determine. (2) That either the stoppage or the cause of the stoppage (it matters not which) could not have been prevented by the employer using any of the means which a reasonable man might be expected to employ in such circumstances. In order that the respondent might avail itself of the provisions of the clause it was necessary that it should bring its case within both these propositions; and, in my opinion, it has brought it within neither of them. It is admitted that the stoppage which occurred had no relation either to a strike or to a breakdown in machinery, and the respondent has not satisfied me that it would not have been a reasonable course to pay to those of its employees who are serving under the State award the wages prescribed by that award for holiday work, rather than close its works during the holiday.

This was an information laid by Pickard against John Heine & Son Ltd. for breach or non-observance of an award of the Commonwealth Court of Conciliation and Arbitration. By that award the employment of certain workmen, members of the Amalgamated Engineering Union, could only be terminated by a week's notice of either side, but the employer was permitted "to deduct payment for any day the employee cannot be usefully employed because of any strike by the Union or any other union or through any breakdown of machinery or any stoppage of work by any such cause which the employer cannot reasonably prevent." One Lees was a weekly employee of the defendant, and on 25th April 1923 he was informed that no work was available for him and other engineers on that date. It was, in fact, a public holiday (Anzac Day) in the State of New South Wales, and certain assistants and other workmen employed by the defendant would be entitled, under State industrial awards, to extra pay (double rate) if they worked on that day. These assistants and other workmen did not work on 25th April, and the defendant concluded that it would be uneconomic to employ, in their absence, Lees and other engineers on that day. The defendant therefore informed them that no work would be available. Subsequently the defendant deducted from the weekly wage of Lees a day's pay, claiming, pursuant to the award, that he could not be usefully employed on account of a cause, namely, the absence of the assistants and other workmen, which the defendant could not reasonably prevent.

The Magistrate has found that the absence of these assistants and other workmen from work on 25th April "was due to the unwillingness of the employer to pay extra holiday pay to them" and not to the unwillingness of the assistants and other workmen to work on that day if they were paid the holiday rate.

On the part of the informant it was urged that "any such cause" in the clause in the award above set out refers to a "cause," already mentioned, such as breakdown of machinery. But, in my opinion, the better interpretation of this obscure and ungrammatical provision is not to attach it to causes already provided for, but to read it thus: "any stoppage of work by any cause such as the employer cannot reasonably prevent." The antecedent of the word "which," without the word "such" before the word "cause," is the word "cause," and the insertion of the word "such" has not made the words "stoppage of work," "breakdown of machinery," or "any strike," the antecedents of "which." But this does not exhaust the difficulty of the clause, for it was suggested that the sentence means any cause, identical with or similar to a strike or a breakdown of machinery, which the employer cannot reasonably prevent. I confess that I cannot grasp what is meant by something similar to a strike that is not a strike, or something similar to a breakdown of machinery that is not a breakdown of machinery. In any case, the adoption of the interpretation suggested would, in my opinion, result in a conflict between the provision as to "stoppage of work" and the earlier provision as to a "strike" and a "breakdown of machinery." The earlier words would authorize a deduction if employment could not be usefully given owing to a strike or a breakdown of machinery, whereas the later provision would only authorize the deduction if the employer could not reasonably prevent the strike, or the breakdown of machinery, as the case might be. Some construction should be adopted, to avoid this conflict, and the best I can suggest is that already mentioned. No one can say with any certainty what the clause means, and it might be redrafted with advantage to the parties to the award. Even on the interpretation I have adopted, I cannot think that the defendant has brought itself within its terms. The stoppage of work was brought about simply because the employer did not choose to pay holiday rates to other workmen. It could not work these men profitably if it had to pay them double-time rates. That is a misfortune, and no doubt hard upon the defendant. But the stoppage of work was brought about by its own action and was wholly within its own volition. The provision in the award for deducting pay has no application to such a case.

Lastly, we were told that the Arbitration Court had given a decision, or made a sort of supplementary award or determination, which concluded the matter. So far as the present respondent is concerned, I am satisfied that that Court gave no such decision.

The Magistrate's decision that the respondent was entitled to deduct a day's pay from Lees' weekly wage is, therefore, erroneous in point of law.

[1] (1922) 16 C.A.R., at p. 1249.

[2] [1924] HCA 61; (1924) 34 C.L.R. 482.

[3] [1924] HCA 61; (1924) 34 C.L.R. 482.

[4] (1922) 16 C.A.R. 1248.

High Court of Australia

Pickard v John Heine & Son Ltd [1924] HCA 38; (1924) 35 CLR 1 (20 August 1924)

HIGH COURT OF AUSTRALIA