Dunlop Perdriau Rubber Co Ltd v Federated Rubber Workers' Union of Australia [1931] HCA 33; (1931) 46 CLR 329 (2 October 1931)

HIGH COURT OF AUSTRALIA

Dunlop Perdriau Rubber Company Limited Defendant, Appellant; and Federated Rubber Workers' Union of Australia Informant, Respondent .

H C of A

2 October 1931

Gavan Duffy C.J. , Rich, Starke, Dixon and McTiernan JJ.

Manning K.C. (with him Cook ), for the appellant.

Flannery K.C. (with him H. G. Edwards ), for the respondent.

Manning K.C. , in reply.

The following written judgments were delivered:—

Oct. 2

Gavan Duffy C.J.

I concur in the judgment of my brother Dixon.

Rich J .

No useful purpose will be served by restating the facts or reiterating the reasons expressed in the judgment of my brother Dixon, with which I agree. The appeal should be allowed with costs and the conviction quashed.

Starke and McTiernan JJ.

This is an appeal in the form of a special case from a Stipendiary Magistrate of New South Wales exercising Federal jurisdiction. The Dunlop Perdriau Rubber Co. Ltd. was charged on information that it, in breach of an award of the Commonwealth Court of Conciliation and Arbitration, failed to pay Charles Clerihew, an employee, a full week's wages due and payable to him for the period extending from the 14th to 20th April 1930, both days inclusive. Under the award, made on 13th May 1926, employees in the position of Clerihew were entitled to a weekly wage which was to be paid not later than Friday in each week, but no employer was allowed to keep more than two days' pay in hand. Employment could be determined by a week's notice on either side, given at any time during a week. But clause 14 (e) in the award provided as follows:—"No employer shall—for the purpose of saving payment for any holiday—in any week in which a holiday or holidays fall, give employees notice of an intention to determine their employment. In all weeks in which holidays occur—including holidays not kept on Mondays—the employees shall be entitled to a full week's wages if it is not through his own fault that any deduction can properly be made by the employer." The holidays referred to are nine, and include Good Friday, Easter Monday and Anzac Day. Employees are entitled to these nine holidays "without any deduction from the weekly rates" and "if worked upon" they are entitled to double time. The question in this appeal depends upon the proper interpretation of the ill-drawn and badly punctuated clause 14 (e). The object of the first part of the clause is to prohibit the termination of employment for the purpose of saving payment for any holiday in any week in which a holiday falls, whilst the latter part of the clause reinforces the earlier clause 14 (c) providing that employees shall be entitled to the nine holidays without any deduction from weekly rates, except such deductions as are allowable owing to the fault of the employee (cf. clause 15 (c) (1) and (2), (d) (2)). A re-arrangement of the clause will better indicate our opinion of both its meaning and its purpose:—No employer shall give employees notice of an intention to determine their employment for the purpose of saving payment for any holiday in any week in which a holiday or holidays fall. In all weeks in which holidays occur—including holidays not kept on Mondays—the employees shall be entitled to a full week's wages if it is not through their own fault that any deduction can properly be made by the employer. It is not, as it seems to us, the point of time at which the notice is given or its expiration in a week in which a holiday falls that is important, but whether the notice is given for the purpose of saving payment for any holiday in any week whatever in which a holiday or holidays fall. A notice given for that purpose is bad, and the employment is not thereby terminated, with the result, expressly stated in the award, that the employees are entitled to a full week's wages for the week in which the holiday or holidays occur, subject to any allowable deduction. Now, the Stipendiary Magistrate has found, upon the evidence before him, that the notice of intention determining the employment of Clerihew and the other employees was given for the purpose of saving payment for the Easter holidays, namely, Good Friday, Easter Monday and Anzac Day. In our opinion that finding is supported by the evidence and should not be disturbed. In the early part of 1930, there was a serious decline in the sales of the commodities manufactured by the Dunlop Perdriau Rubber Co. Ltd., and a shortening of hands in its Sydney factory seemed advisable. But the Company did not shorten hands: by notice on 8th April 1930, it terminated the engagement of all the employees, and notified them that its factory would be closed down from Thursday, 17th April, until Monday, 28th April 1930, and that they might present themselves for re-engagement (unless otherwise notified) on Monday 28th or Tuesday 29th, according to their several classes of work. The factory was accordingly closed down for the period mentioned. But it is to be observed that in this period three holidays fell, and also two Saturdays and two Sundays, as shown in the following table: 18th (Good Friday), 19th Saturday, 20th Sunday, 21st Monday (Easter Monday), 22nd Tuesday, 23rd Wednesday; 24th Thursday, 25th Friday (Anzac Day), 26th Saturday, 27th Sunday. Consequently, there were, in the period, only three working days—the 22nd, 23rd and 24th—unless overtime or double time were paid. The manager of the Company declared that the factory was closed down and all hands dismissed during the Easter period because of the decline in trade. But the Stipendiary Magistrate did not accept this statement—partly, we should think, because he did not believe that the full extent of the decline in trade was known to the manager until after the posting of the notice of dismissal, and partly because he did not believe that the decline in trade warranted the dismissal of all the employees, but only a shortening of hands. The Magistrate, putting on one side the suggested reason for closing down, then concluded that the real purpose of the notice of intention to dismiss, and the dismissal of, all the employees was to save payment for holidays in the weeks in which Good Friday, Easter Monday and Anzac Day fell. Such a finding obviously depends upon the opinion the Magistrate formed of the credibility of the witnesses called for the Company, and this Court has said over and over again that it must be guided by the opinion of the tribunal which has seen and heard the witnesses. Some reliance was placed on the fact that all employees who were re-engaged were notified that they would receive and did receive three days' payment in lieu of holidays occurring during the period of stoppage. If, however, the notice terminating the engagement of the employees was a good notice, then the payment was a gratuity; and, if it was not good, then the employees were not paid the weekly wage awarded to them for the weeks in which the holidays fell. This notification, therefore, does not seem to us of any real importance, though it was suggested that it recognized the obligation to pay, because the employees were dismissed for the purpose of saving payment for holidays in the Easter period. Again, reliance was placed on the fact that Clerihew received a notice on the 23rd April that he would not be re-engaged, but that is immaterial if the prior notice of dismissal posted by the Company was bad. It is not very clear on the evidence whether Clerihew was employed from Wednesday to Wednesday, Friday to Friday, or Monday to Monday. The information alleges Monday to Monday, but the week of employment is unimportant, for, whichever period is taken, the Good Friday holiday falls within it.

The question stated for the opinion of the Court should, we think, be answered in the negative, and the appeal thus dismissed.

Dixon J .

Notwithstanding the caption of some of the process, the parties agree that the conviction from which this appeal is brought was in fact made by a Stipendiary Magistrate sitting as a Court of Petty Sessions exercising Federal jurisdiction. Upon this view the appeal is given by sec. 73 (II.) of the Constitution and is governed by sec. 39 (2) (b) of the Judiciary Act 1903-1927 and sec. IV. of the Appeal Rules. In determining such an appeal it is the duty of this Court to give its own judgment according to its own opinion in the same manner as on appeals from a Judge sitting without a jury (Bell v Stewart[1]).

The information upon which the appellant was convicted was laid under sec. 44 of the Commonwealth Conciliation and Arbitration Act 1904-1930, and alleged that the appellant on Thursday, 17th April 1930, committed a breach of an award of the Commonwealth Court of Conciliation and Arbitration by failing to pay to an employee named Charles Clerihew a full week's wages due and payable to him for the period extending from Monday, 14th April, to Sunday, 20th April 1930, both days inclusive. The award, by which the relations between the appellant and its employee were regulated, prescribed minimum wages at weekly rates. It prescribed maximum hours of duty (without payment of overtime) for "each of the five days of the week—Monday to Friday inclusive" as well as maximum hours for "a week," and it determined the overtime rates to be paid "for work done beyond the prescribed hours of duty in the industry on any one day or night or week." It provided that for all time on duty on Sundays and on nine specified annual holidays, of which Good Friday, Easter Monday and Anzac Day were three, employees should be paid at the rate of double time and that all employees should be entitled to these nine holidays without any deduction from the weekly rates. It further provided that employment might be determined only by a week's notice on either side, but that such notice might be given at any time during the week. The clause of the award upon which the information was founded is in the following terms:—"No employer shall—for the purpose of saving payment for any holiday—in any week in which a holiday or holidays fall, give employees notice of an intention to determine their employment. In all weeks in which holidays occur—including holidays not kept on Mondays—the employees shall be entitled to a full week's wages if it is not through his own fault that any deduction can properly be made by the employer." The number of employees whom the appellant employed at its factory in Sydney on or about 8th April 1930 was somewhat more than 900. On that day the factory manager caused a notice to be posted up notifying employees that from Thursday, 17th April, until the next Monday, 28th April, the factory would be closed, and further that their engagements would be terminated at closing time, some on the 15th, some on the 16th, and the others on the 17th April, according to the nature of their work. The notice stated that the factory would resume work on Monday, 28th April; that all present employees might present themselves for re-employment unless otherwise notified, and that all employees who might be thus re-engaged would receive three days' payment in lieu of the holidays occurring during the period of stoppage. The holidays so occurring were Good Friday, 18th April, Easter Monday, 21st April, and Anzac Day, 25th April. Clerihew fell within the class of employees for whom the notice fixed 17th April as the date of the termination of their engagements. He received his wages up to and including that day. The practice was to pay wages weekly on Fridays calculated up to the previous Wednesday. This was in accordance with the award, which provided that wages should be paid not later than Friday in each week: that no employers should be allowed to keep more than two days' pay in hand; and that if an employee left on proper notice, or was dismissed, he should be paid his wages on leaving or being dismissed. On 23rd April Clerihew received by post a notice from the appellant, dated 17th April, stating that as circumstances precluded his further employment there would be no necessity for him to apply for re-engagement when the factory resumed operations. A large number of similar notices was sent out to employees and when the factory resumed the number re-engaged was little more than 740. Upon the next pay-day these hands were all paid a day's wages for each of the three holidays, Good Friday, Easter Monday and Anzac Day. Nevertheless, the Magistrate expressly found that upon the evidence before him the notice of 8th April "was posted for the purpose of saving payment for the usual Easter holidays during which the works were closed." It is evident that his finding cannot apply to payment of the employees who were re-engaged; because the notice announced that they would be, and they in fact were, paid for the holidays. And in relation to the employees who were not re-engaged the finding cannot be accepted, at least without explanation and modification. It appears clearly enough from the evidence that the appellant's factory manager was faced with the necessity of reducing, if not suspending, production; although it is true that until the day following the posting of the notice he did not receive from his head office a statement of the amount by which his manufactures for April must be diminished. He decided before 8th April that he must reduce the number of employees and he put in hand the work of selecting those who must be dismissed. The proper inference is that he closed the factory in order to effect the dismissals and to suspend production but that he decided upon the period 17th April to 28th April for doing so because it contained three holidays and two Saturdays and Sundays. It appears probable that wages were paid for the three holidays in order to show that the appellant had no intention of avoiding this payment, at least in the case of those whose employment was resumed after the suspension. The purpose therefore of giving notice in the case of those who, like Clerihew, were not to be re-employed was to terminate their services finally, but the reasons for choosing 17th April as the date upon which the notice should expire included the fact that it was followed by holidays for which the appellant must pay persons who remained in its employment. The question whether such a reason amounts to the purpose of saving payment for a holiday which the award proscribes, depends upon the interpretation of the ill-drawn provision of that instrument which has already been set out. Its language should, in my opinion, be construed as if it said that a notice of dismissal expiring in a week in which a holiday falls shall not be given for the purpose of avoiding payment of wages for the holiday, but notwithstanding any notice given for such a purpose, an employee shall be entitled to a full week's wages for the week in which the holiday occurs, except in so far as any deduction may be allowable by reason of some default of the employee. While this re-statement of the provision removes some of the obscurities and answers some of the questions which arise from the disorder of its terms and the peculiarities of its punctuation and syntax, it preserves the ambiguity contained in the word "week." This word is capable of meaning the calendar week commencing on Sunday, any consecutive seven days, the week observed by the particular employer in the calculation of wages, or the five days from Monday to Friday which the award calls a week; and other meanings may be suggested. As a notice given for the purpose of avoiding payment for a holiday must not expire in the week in which the holiday falls, it might become important to decide amongst these alternative meanings. But in this case the holiday fell on the day after the expiry of the notice, and in no view of the word "week" could the day of expiry of the notice, a Thursday, end the week. It follows that in this case the expiry of the notice and the holiday must occur within the same week whatever meaning is given to the word "week." In saying this, it is, of course, assumed that the notice itself cannot operate to constitute the period of seven days terminating with the notice the "week" by reference to which the validity of the notice itself shall be tested. The case is thus reduced to the question whether the employer, when he has decided finally to dismiss an employee without any definite expectation of re-engagement, is forbidden in his choice of a time for the termination of the engagement to select a date because it is followed by a holiday within the same week. This, in my opinion, is not what the provision means to inhibit: it is directed against the device of creating a break in the relation of employer and employee when, unless that relation were discontinuous, a holiday would be included in the time for which wages were calculated.

Upon the true interpretation of the provision, I do not think that "saving payment for any holiday" is "the purpose" for which a notice of dismissal is given when the real cause of terminating the engagement is not the desire to avoid payment for a holiday, though the occurrence of a holiday is the reason for fixing the precise date for the expiry of the notice. In this case an apparent complication exists because the notice, when given, was addressed indifferently to those who were to be dismissed finally and those who were to be re-engaged and paid for the intervening holidays, and because the identity of the members of those two classes remained to be ascertained. But this circumstance does not tend to show that the purpose of the notice was really to save payment for a holiday contrary to the true meaning of the provision. It shows no more than that a total suspension of manufacture was decided upon during the period in which the holidays occurred in order to effect a number of objects. It remains true that in so far as it resulted in employees receiving no payment for Good Friday, it was because their discharge was final. The purpose of final discharge was not to bring about this result although the dismissal having been decided upon for other reasons the holiday was not left out of account in selecting the date for the expiry of the notice. It may be that the appellant desired to avoid payment of wages for the three working days which occurred between 17th and 28th April, but this is not material. The notice, therefore, was effectual to end the employment on and from Thursday, 17th April 1930.

The last paragraph in the provision of the award relating to holidays, in my opinion, does not mean that a full week's wages must be paid, although the engagement is finally and completely terminated before the end of the "week."

The appeal should be allowed and the conviction quashed.

Appeal allowed with costs. Conviction quashed.

Solicitors for the appellant, Ferguson & Vine Hall.

Solicitors for the respondent, Sullivan Bros.

[1] [1920] HCA 68; (1920) 28 C.L.R. 419.