R v Kelly; Ex parte Victoria [1950] HCA 7; (1950) 81 CLR 64 (4 May 1950)

HIGH COURT OF AUSTRALIA

THE KING v. KELLY; Ex parte STATE OF VICTORIA [1950] HCA 7; (1950) 81 CLR 64

Industrial Arbitration (Cth.)

High Court of Australia
Latham C.J.(1), Dixon(1), McTiernan(1), Williams(1), Webb(1) and Fullagar(1) JJ.

CATCHWORDS

Industrial Arbitration (Cth.) - Award - Validity - Power to make award a common rule of an industry - Power to fix trading hours of shops - "Industrial dispute" - "Industrial matters" - "Matters pertaining to the relations of employers and employees" - "Matters . . . affecting or relating to work done or to be done" - The Constitution (63 & 64 Vict. c. 12), s. 51 (xxxv.), (xxxix.) - Commonwealth Conciliation and Arbitration Act 1904-1949 (No. 13 of 1904 - No. 86 of 1949), ss. 4, 41 (1), (3), 50 (e).

HEARING

Melbourne, 1950, February 28; March 1-3;
Sydney, 1950, May 4. 4:5:1950
ORDER NISI for prohibition.

DECISION

May 4.
THE COURT delivered the following written judgment: -
This is the return of an order nisi for a writ of prohibition directed to Conciliation and Arbitration Act 1904-1949 and others, prohibiting them from proceeding further upon four awards or orders dated respectively 20th May 1948, 8th December 1948, 5th April 1949 and 1st September 1949. The first of these instruments is an award made by Mr. Kelly in a dispute in which the Australasian Meat Industry Employees' Union was claimant and the Meat & Allied Trades Federation of Australia (an organization of employers) was respondent. This award dealt in detail with wages, hours of work, and many other matters. The order of 8th December 1948 provided that the "regulations, rules, customs, terms of agreements and conditions of employment" determined by the award should be "a common rule of the industries of butchering and the sale of fresh meat and the making for sale or distribution by wholesale of small goods and meat products" in the State of New South Wales (with the exception of the City of Broken Hill) and in the States of Victoria, South Australia and Queensland. The term "fresh meat" is defined. It is declared that "the common rule shall be binding upon" (a) the Australasian Meat Industry Employees' Union, its officers and members respectively, (b) the Meat & Allied Trades Federation of Australia and the members thereof, (c) all employers engaged in the above-mentioned industries and all proprietors of shops selling fresh meat in the aforesaid States, (d) all employees whether members of an organization or not engaged in the said industries in any of the occupations specified in the said award. The order of 5th April 1949 varied this order in a manner not material for present purposes. (at p78)

2. The first of the two main questions raised by the order nisi is whether the order of 8th December 1948 making the award a "common rule" is valid. It appears that a previous award in 1944 had been made a common rule of the industry by Chief Judge Piper acting under the power conferred by reg. 6 of the National Security (Industrial Peace) Regulations, but no argument was addressed to the Court based upon the Defence (Transitional Provisions) Act 1946-1949, which purports to keep those regulations in force until 31st December 1950. The common rule in this case was made by a conciliation commissioner and the Industrial Peace Regulations gave power to the court, and not to a commissioner, to make a common rule. The reasoning in R. v. Foster (1949) 79 CLR 40 shows, moreover, that the regulations were no longer in operation in December 1948. The making of the common rule is, however, authorized in terms by s. 41 of the Commonwealth Conciliation and Arbitration Act 1904-1949. Sub-section (1) of that section, which was inserted by Act No. 10 of 1947, provides: - "The Court or a Conciliation Commissioner may, if it appears to be necessary or expedient for the purpose of preventing or settling an industrial dispute which comes before it or him or of preventing further industrial disputes, declare by an order or award that any term of an order or award shall be a common rule of any industry in connexion with which the dispute arose." Sub-section (3) provides that, before a common rule is declared, certain notices shall be published and interested persons desiring to object shall be heard. The question at issue, therefore, resolves itself into this - whether s. 41 (1) of the Act is within the legislative power conferred upon the Parliament by pars. (xxxv.) and (xxxix.) of s. 51 of the Constitution. (at p79)

3. In 1910 in Australian Boot Trade Employees' Federation v. Whybrow & Co. [1910] HCA 53; (1910) 11 CLR 311 it was unanimously held by a Court consisting of Griffith C.J. and Barton, O'Connor, Isaacs and Higgins JJ., that the Constitution did not authorize the Parliament to confer upon the tribunal constituted under the Act power to declare a common rule in an industry. At that time, and up to 1947, the relevant provision of the Act was contained in s. 38, which provided:- "The Court shall, as regards every industrial dispute of which it has cognisance have power . . . (f) to declare by any award or order, that any practice, regulation, rule, custom, term of agreement, condition of employment or dealing whatsoever determined by an award in relation to any industrial matter shall be a common rule of any industry in connection with which the dispute arises." It is clear, however, that no distinction can be drawn between the present case and Whybrow's Case (2) on the basis of any difference between the language of the old s. 38 (f) and the new s. 41 (1). The reasoning of all the judgments in Whybrow's Case [1910] HCA 53; (1910) 11 CLR 311 makes it quite plain that it is by reason of its inherent nature that the common rule is held to be outside the constitutional power. That which is actually authorized by s. 41 (1) is exactly the same thing as that which was authorized by s. 38 (f), and it was held that that very thing could not be constitutionally authorized. This was because the constitutional power is limited to conciliation and arbitration between disputing parties, and to make a common rule is to go outside the scope of conciliation and arbitration and to assume a function of general industrial legislation. It was clearly recognized by both Isaacs J. (1910) 11 CLR, at pp 337, 338 and Higgins J. (1910) 11 CLR, at pp 345, 346 that it might (to use the words of s. 41) be "necessary or expedient for the purpose of settling an industrial dispute" to make a common rule. But each, like the other members of the Court, rejected the contention that this afforded any reason for saying that a specific function essentially different from conciliation or arbitration was "incidental" to conciliation or arbitration. Isaacs J. (1910) 11 CLR, at p 338 said: - "It is not open to the grantee of the power actually bestowed to add to its efficacy, as it is called, by some further means outside the limits of the power conferred, for the purpose of more effectively coping with the evils intended to be met." Then follows a passage which concludes with the well known and often quoted saying that "you may complement, but you may not supplement, a granted power." (at p80)

4. If, then, the common rule is to be upheld in this case, it is necessary that Whybrow's Case [1910] HCA 53; (1910) 11 CLR 311 should be overruled, and we were invited to overrule it. Whybrow's Case [1910] HCA 53; (1910) 11 CLR 311 ought not, in our opinion, to be overruled. The decision has stood for forty years, the reasoning of the judgments commends itself to us as unanswerable, and the main argument presented to us, while it has commanded consideration, does not seem to us to cast any doubt upon that reasoning. (at p80)

5. The argument naturally founded itself on changes which have taken place over the years in the accepted view of the nature and scope of the power conferred by s. 51 (xxxv.). The view adopted by the majority of the Court in the first Whybrow Case [1910] HCA 8; (1910) 10 CLR 266 with respect to inconsistencies in Federal awards and State laws was expressly overruled in Clyde Engineering Co. v. Cowburn [1926] HCA 6; (1926) 37 CLR 466 , but the reasoning of the dissenting judgments of Isaacs and Higgins JJ. in the first Whybrow Case [1910] HCA 8; (1910) 10 CLR 266 , which was in substance adopted in Cowburn's Case [1926] HCA 6; (1926) 37 CLR 466 , has no bearing on the power to make a common rule. Isaacs and Higgins JJ. were themselves parties to the decision as to the common rule in the third Whybrow Case [1910] HCA 53; [1910] HCA 53; (1910) 11 CLR 311 . It was suggested that in 1910 the view was entertained that the power to arbitrate, which is conferred by the Commonwealth Conciliation and Arbitration Act, partakes of the nature of judicial power, and that this view was rejected in Waterside Workers' Federation v. Alexander Ltd. [1918] HCA 56; (1918) 25 CLR 434 . It was also suggested that it is now established that the arbitral power is of the nature of legislative power rather than judicial power, and the decision that the common-rule provisions were invalid was said to rest fundamentally on the view that the arbitral power was judicial in its nature. But the argument will not really bear examination. It employs words in different and misleading senses. On the one hand, the comparison in the Whybrow Cases between the arbitral power and judicial power was only intended to illustrate and emphasize the fact that s. 51 (xxxv.) does not enable the Parliament to legislate, or to authorize any other body to legislate, on the general subject of industrial conditions. On the other hand, it was not suggested in Alexander's Case (1918) 25 CLR 434 that the arbitral power was in any relevant sense a legislative power. On the contrary, Isaacs and Rich JJ. (1918) 25 CLR, at p 463 were careful to point out that an arbitrator did not legislate in the true sense: he made a determination, and the Act then operated to give to the terms of his determination the "character of a legal right or obligation." When it is said that industrial awards are of a legislative character, the point of the statement is to be found in the fact that such awards prescribe rules of conduct for the future in respect of the disputing parties and do not determine the rights and duties of those parties under the law as it already exists. (at p81)

6. In George Hudson Ltd. v. Australian Timber Workers' Union [1923] HCA 38; (1922) 32 CLR 413 , it was held that the provision in the Commonwealth Conciliation and Arbitration Act that an award should be binding on successive assignees and transmittees of the business of any party bound by an award was valid. But this decision lends no countenance to the common rule. Isaacs J. made this plain (1922) 32 CLR, at pp 440, 441 . The provision in question simply made the award effective "throughout the whole period of its operation for and against those who during that period are or voluntarily come within the area of the dispute." (The italics are the italics of Isaacs J.) (at p81)

7. The most substantial argument for the common rule, however, rested on a series of cases which begins with Burwood Cinema Ltd. v. Australian Theatrical & Amusement Employees' Association [1925] HCA 7; (1925) 35 CLR 528 and may be said to end with Metal Trades Employers' Association v. Amalgamated Engineering Union [1935] HCA 79; (1935) 54 CLR 387 . The other cases in the series are Amalgamated Engineering Union v. Alderdice Pty. Ltd. [1928] HCA 38; (1928) 41 CLR 402 , Amalgamated Clothing & Allied Trades Union of Australia v. D. E. Arnall & Sons [1929] HCA 35; (1929) 43 CLR 29 and Long v. Chubbs Australian Co. Ltd. [1935] HCA 11; (1935) 53 CLR 143 , and to the list should be added R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte Kirsch (1938) 60 CLR 507 . Alderdice's Case was overruled by the Metal Trades Case. In the first of these cases, the Burwood Cinema Case, the reasons for judgment give no support to the proposition that power to make a common rule can validly be given to the court or to a conciliation commissioner. Isaacs J. expressly says that "the common rule as one extreme is excluded" (1925) 35 CLR, at p 541 . The principle upon which the doctrine of the Metal Trades Case rests is "that the interest which an organization of employees possesses in the establishment or maintenance of industrial conditions for its members gives a foundation for an attempt on its part to prevent employers employing anyone on less favourable terms. As a result an industrial dispute may be raised by it with employers employing none of its members, and an award may be made binding such employers and regulating the terms and conditions upon which they may employ unionists or non-unionists" (per Dixon J. in R. v. Commonwealth Court of Conciliation and Arbitration; Ex parte Kirsch (1938) 60 CLR, at pp 537, 538 . But in such a case there is ex hypothesi a dispute between the organization and the employers whom it is sought to affect by the award. The award does not affect any non-disputant. It does not create (as the common rule would create) actual rights and duties as between persons who are non-disputants. According to the theory of the Metal Trades Case it does nothing that is "foreign to arbitration" (per Isaacs J. in Arnall's Case (1929) 43 CLR, at p 44 ). This is made plain by Latham C.J. in the Metal Trades Case (1935) 54 CLR, at p 408 . A common rule does effect a result which is "foreign to arbitration." The distinction may seem technical, and the practical result of observing it may be, as Mr. Ashburner said, merely to compel the joining of many additional parties as respondents before the court or commissioner - but any parties so joined would not be bound by an award made in relation to the dispute unless they were parties, not only to the proceedings, but also to the dispute. The distinction has been observed and emphasised throughout the whole series of cases, it is a clear and logical distinction, and, in our opinion, it ought to be observed and the power to make a common rule denied. (at p82)

8. The other question in the present case relates to the validity of clause 16A of the award of 20th May 1948. Clause 16 of the award deals with hours of labour, providing for what are to be deemed to be "ordinary working hours." Clause 17 provides for meal intervals, and clause 18 for overtime. Clause 18 declares (inter alia) that all time worked outside the ordinary working hours on any one day shall be deemed to be overtime and shall be paid for at time and a half. These clauses are not challenged. But clause 16A is attacked. It need not be set out in full. It provides that "notwithstanding anything contained in clause 16 of this award the following shall be the opening and closing times of butchers' shops." Then follows a detailed prescription of the hours of opening and closing, which differ according to season, day of the week, State, and district. The clause was amended in certain details by the order of 1st September 1949. The term "butcher's shop" is defined by clause 33 of the award. (at p83)

9. We think that, as a matter of construction, clause 16A operates to compel all proprietors of butchers' shops who are among the parties bound by the award to close their shops at the times specified irrespective of whether they employ any employee or employees. It applies, in our opinion, to shopkeepers who employ no labour equally with shopkeepers who employ labour. It was sought to limit the application of clause 16A by reference to clause 3 which provides that the award "shall be binding on the Australasian Meat Industry Employees' Union its branches and its members and on the Meat & Allied Trades Federation of Australia and its members in respect of all their employees in the classifications contained herein whether members of the Union or not." But it seems impossible to apply clause 3 so as to limit in any intelligible way the operation of clause 16A. No meaning can be attached to an obligation to close shops "in respect of employees." The shop must be either closed or not closed. It seems equally impossible to apply clause 3 so as to limit in any intelligible way the operation of clause 35 (b), which provides that deliveries of meat (subject to certain extensions) shall not be made outside the opening and closing hours of retail shops. We think that the true purpose and effect of clause 3 is to provide that, so far as the award affects employees, it shall bind members of the employers' organization in respect of all their employees whether those employees are members of the union or not. So construed, clause 3 has no limiting or qualifying effect on clause 16A or clause 35 (b). (at p83)

10. The question of the validity of clause 16A depends primarily on the question whether it deals with an "industrial matter" within the meaning of the Commonwealth Conciliation and Arbitration Act. The term "industrial matters" is defined by s. 4 as meaning "all matters pertaining to the relations of employers and employees". The definition goes on to provide that the term includes a number of specified matters, but the subject matter of clause 16A cannot be brought within any of these, unless perhaps it be "(a) matters or things affecting or relating to work done or to be done." We do not think that the subject matter (the closing of shops as distinct from the work of employees in shops) is a "matter pertaining to the relations of employers and employees." The words "pertaining to" mean "belonging to" or "within the sphere of," and the expression "the relations of employers and employees" must refer to the relation of an employer as employer with an employee as employee. The time at which a shopkeeper (who may or may not employ anybody) may open and close his shop is not a "matter" which belongs to or is within the sphere of the relation of that shopkeeper as employer with any person as employee. Nor is it, in our opinion, a matter affecting work done or to be done within the meaning of par. (a) of the definition. Trading hours of an employer are not the same subject as working hours of an employee, and a prescription of trading hours as distinct from working hours does not "affect or relate to work done or to be done." Provisions with respect to trading hours may affect the turnover of shopkeepers who employ persons and so indirectly affect their ability to pay award rates, and this state of affairs may in turn affect the relations of those shopkeepers and their employees. But this is the most that can be said, and it is obviously not enough. It shows only the possibility of an indirect, consequential and remote effect upon the relations of the last-mentioned persons. All kinds of matters, e.g. supply and prices of raw material, the state of the money market, may affect the capacity of employers to pay wages at a certain standard. But these are not industrial matters within the definition contained in s. 4 of the Act. What O'Connor J. said in Clancy v. Butchers' Shop Employees Union (1904) 1 CLR, at p 207 is as true of the Commonwealth Act here in question as it was of the New South Wales Act there under consideration. His Honour said: "If once we begin to introduce and include in its scope" (i.e. the scope of the Act) "matters indirectly affecting work in the industry, it becomes very difficult to draw any line so as to prevent the power of the Arbitration Court from being extended to the regulation and control of businesses and industries in every part." In the case of Commonwealth legislation with respect to the same subject matter any such extension would seem inevitably to involve an excess of the power conferred by s. 51 (xxxv.) of the Constitution. A matter does not become an "industrial matter" or the subject of an "industrial dispute" simply because it is a matter with respect to which persons who are employers and employees are disputing. (at p85)

11. The case of Australian Tramway Employees Association v. Prahran and Malvern Tramway Trust [1913] HCA 53; (1913) 17 CLR 680 presents no difficulty. Whether an employer should permit his employee to wear a particular badge when on duty seems plainly a matter pertaining to the relations between an employer as employer and an employee as employee. The question whether an employee should wear a uniform when on duty would stand on the same footing. The case of Federated Clothing Trades v. Archer [1919] HCA 34; (1919) 27 CLR 207 is less clear so far as it was concerned with the claim by employees that all garments made by an employer should bear upon a label the name of the actual manufacturer. It may be regarded as a border-line case, the justification for the decision being that the order sought would tend to protect employees against possible evasions by an employer of the obligation to pay award rates of wages for work done in the manufacture of clothing sold by him: see per Isaacs and Rich JJ. (1919) 27 CLR, at p 214 and per Higgins J. (1919) 27 CLR, at pp 217, 218 . It may be noted that Higgins J. (1919) 27 CLR, at p 216 , referring to Clancy's Case, said: "What the shopkeeper or his wife or daughter might do after the employees had left was not a matter affecting the employment." (at p85)

12. Prohibition should go as to clause 16A of the award of 20th May 1948 as varied by the order of 1st September 1949, and as to the whole of the orders of 8th December 1948 and 5th April 1949. (at p85)

ORDER

Order absolute for a writ of prohibition prohibiting Frank D. Kelly, Conciliation Commissioner, the Meat and Allied Trades Federation of Australia and the Australasian Meat Industry Employees' Union from proceeding further upon clause 16A of the award made on 20th May 1948 in matters between the said Union and the said Federation as varied by the order of 1st September 1949 and upon the orders of the said Commissioner therein made on 8th December 1948 and 5th April 1949. The said Federation and Union to pay in equal shares the costs of the prosecutor including reserved costs.