R v Clarkson; Ex parte General Motors-Holden's Pty Ltd [1976] HCA 8; (1976) 134 CLR 56 (12 March 1976)

HIGH COURT OF AUSTRALIA

THE QUEEN v. CLARKSON; Ex parte GENERAL MOTORS-HOLDEN'S PTY. LTD. [1976] HCA 8; (1976) 134 CLR 56

Industrial Law (Cth)

High Court of Australia
Barwick C.J.(1), Stephen(2), Mason(3), Jacobs(4) and Murphy(5) JJ.

CATCHWORDS

Industrial Law (Cth) - Conciliation and Arbitration - Variation of award - Conciliation and Arbitration Commission - Powers - Industrial dispute - Ambit - Log of claims - Claim relating to termination of employment - Award expressly excluding State law or awards - Variation to preserve effect of State law permitting reinstatement by court of employee unjustly dismissed - Whether valid - Conciliation and Arbitration Act 1904-1974 (Cth), ss. 55, 59 - Industrial Conciliation and Arbitration Act 1972-1975 (S.A.), s. 15(1)(e).

HEARING

Melbourne, 1975, October 2; 1976, March 12. 12:3:1976
PROHIBITION.

DECISION

1976, March 12.
The following written judgments were delivered: -
resulted in the application for prohibition which is now before the Court, the facts necessary to be known in order to resolve the questions raised are few. Accordingly, I have abstracted them in basic form in these reasons. (at p58)

2. The respondent Union provoked a dispute with employers in the industry in which it represented employees, by a letter of demand containing a log of claims. The first-named prosecutor (General Motors-Holden's) ("the first prosecutor"), one of the companies upon which the demand was served, did not accede to the demands. Neither did any other company or person upon whom the log was served. The dispute thus arose: the employees being in different States, it was in the relevant jurisprudence of the Conciliation and Arbitration Commission, a dispute extending beyond the limits of any one State. However, the dispute was resolved by an award made by consent. (at p59)

3. The clauses of the award made by consent, which it seems to me bear on the resolution of the present matter, are as follows:

"3 - Incidence of Award
(a) This award shall have effect in the State of New South
Wales, Victoria, Queensland and South Australia to General
Motors-Holden's Pty. Limited as to every operation carried
on within or in connection with a plant principally concerned
with manufacturing, repairing and/or assembling of
trucks or motor cars or parts or components thereof.
(b) From the date of coming into operation of this award
any other award or determination or ordinance or State Act
or industrial provision which might otherwise have applied
to employees covered by this award shall be as a term and
condition of this award excluded from applying to such employees
and the Company. Provided, however, that this sub-clause
shall not affect the operation of the Vehicle Industry
(Long Service Leave) Award 1965 as amended from time to
time."
"6 - Contract of Employment
Weekly or Casual Hire.
(a) Except as hereinafter provided, employment shall be by
the week. An employee not specifically engaged as a casual
employee shall be deemed to be employed by the week.
Performance of Work.
(b) An employee not attending for duty shall except as provided
by clauses 23, 24, 25, 26, 27, 28 (Holidays, Annual
Leave, Sick Leave, Bereavement Leave, Jury Service and
Make Up of Workers' Compensation Payments) of this
award lose his pay for the actual time of such non-attendance.
Termination of Employment.
(c) (i) Employment shall be terminated by a week's notice
on either side given at any time during the week or by the
payment of forfeiture of a week's wages as the case may be.
Such notice may be given at any time but shall expire at the
ordinary finishing time of a working day or shift. Notice given
before the commencement of a day's work or shift shall be
deemed to have been given at the end of the previous day's
work or shift and notice given during a day's work or shift
shall be deemed to be given at the end of that day's work or
shift. This shall not affect the right of the company to dismiss
an employee without notice for malingering, inefficiency,
neglect of duty or misconduct and in such cases wages shall
be paid up to the time of dismissal only.
(ii) Where an employee has given or been given notice as
aforesaid he shall continue in his employment until the date
of the expiration of such notice. An employee who having
given or been given notice as aforesaid, without reasonable
cause (proof whereof shall lie upon him) absents himself
from work during such period shall be deemed to have
abandoned his employment and shall not be entitled to payment
for work done by him within that period.
Provided that where the Company has given notice as
aforesaid, an employee on request made prior to his absence
shall be granted leave of absence without pay for up to one
day in order to look for alternative employment.
. . .
Redundancy
(e) (i) Notwithstanding anything elsewhere contained in
this claim where an employee with at least 12 months' continuous
service with the Company is to be retrenched by the
Company for redundancy as defined in paragraph (ii) hereof
he shall be entitled to the following notification of termination
of his services -
1. If the employee is less than 50 years of age he shall be
entitled to two weeks notice of retrenchment plus an
additional period of notice equivalent to one ordinary
working day for each completed year of continuous
service up to 20 years and two ordinary working days
for each completed year of continuous service in excess
of 20 years.
2. If the employee is 50 years of age or more he shall be
entitled to two weeks notice of retrenchment plus an
additional period of notice equivalent to two ordinary
working days for each completed year of such service.
(ii) For the purpose of this sub-clause 'redundancy' means
an employment situation arising out of the work available
being reduced because of technological and/or methods
changes introduced by the Company into its operations and
resulting in the number of employees exceeding the number
deemed by the Company to be necessary for the performance
of the available work but shall not include retrenchment as
a result of fluctuations in production activity because of
changes in the market or in economic conditions or for any
other cause for which the Company cannot be reasonably
held responsible.
(iii) During the period of notice referred to in paragraph
(i) of this sub-clause, the rate of pay of an employee coming
within the provisions of this sub-clause shall not be reduced
but he shall during such period, if so directed by the Company
perform a class or classes of work other than that normally
performed by him.
(iv) (1) An employee given notice pursuant to paragraph
(i) of this sub-clause may terminate his employment
prior to the expiration of such notice.
(2) An employee terminating his employment pursuant
to sub-paragraph (1) hereof shall -
A. Provided he gives the Company at least one
week's notice of his intention so to do, be
paid an amount equal to 50 per cent of the
wages prescribed by this award he would
have received for ordinary hours occurring
between the termination of his employment
and the expiry of the notice required by
paragraph (i) hereof; or
B. if he fails to give the Company at least one
week's notice of his intention so to do, be
paid up to the time at which he ceases work.
(v) (1) Notwithstanding the foregoing provisions of this
sub-clause the Company having given an employee
notice of his retrenchment or redundancy
as defined in paragraph (ii) hereof may,
at its discretion, terminate the employment of
such employee before the expiry of the notice
prescribed by such paragraph (i) hereof.
(2) If the Company terminates the employment of
an employee pursuant to sub-paragraph (1)
hereof it shall -
A. If the termination is through no fault of the
employee, pay the employee an amount
equal to the wages he would have received
for ordinary hours occurring between the
termination of his employment and the expiry
of the notice required by paragraph (i)
hereof; or
B. in other circumstances, pay the employee up
to the time at which his employment ends."

This consent award was made on 26th August 1974. The relevant part of the log of claims was cl.21:

"21. Contract of Employment.
All employment shall be by the week. Employment shall be
terminated by an employer by a week's written notice or by
paying two weeks' wages in lieu of notice. The employer shall
not give an employee notice at the commencement of, or
during a period of annual leave." (at p61)

4. On 27th March 1975, the Supreme Court of South Australia, on an application by an employee dismissed by the first prosecutor for misconduct, held that s. 15(1) (e) of the Industrial Conciliation and Arbitration Act, 1972-1974 (S.A.) was inconsistent with the terms of the award and inoperative to authorize a declaration or order to be made by the Industrial Court of South Australia as to the dismissal of the employee or for his reinstatement. Section 15(1) (e) of the South Australian Act is in the following terms:

"(e) to hear and determine any question as to whether the
dismissal from his employment of an employee, not being an
employee who has under any Act or law a right of appeal or
review against his dismissal, was harsh, unjust or unreasonable
and the Court may, if it thinks fit, direct the employer
of that employee to re-employ that employee in his former
position on terms that are not less favourable to the employee
than if he had not been dismissed from his employment and
without limiting the generality of the foregoing may order
that the employee be paid a sum not exceeding a sum equal
to the wages that he would have received had he been employed
in that employment between the time of his dismissal
and the time at which he was re-employed, but the Court
shall not exercise the jurisdiction conferred on it by this paragraph
unless an application invoking that jurisdiction is made,
by or on behalf of the dismissed employee, within twenty-one
days from the day on which it is alleged that the employee
was so dismissed from his employment." (at p62)

5. Thereafter, the Conciliation and Arbitration Commission, of its own motion but after hearing the parties to the award, varied the award as follows:

"That the said award be and is hereby varied as follows:
1. By adding the following words to sub-clause 3(b):
And further provided that this sub-clause shall not affect
the operation of s. 15(1)(e) of the Industrial Conciliation
and Arbitration Act 1972-1974 of the State of
South Australia or any order made thereunder (and
shall be deemed never to have affected such operation).
2. By adding the following new sub-clause 6(h):
(h) Saving Provision
The provisions as to termination of employment by the
Company contained in this clause shall, in the case of
employees employed within the State of South Australia,
be subject to the operation of the provisions of s. 15
(1) (e) of the Industrial Conciliation and Arbitration
Act 1972-1974 of that State. In the case of an employee
ordered to be re-employed in his former position pursuant
to the provisions of that section, the conditions of
his employment upon such re-employment shall be not
less favourable to the employee than would have been
the case if he had not been dismissed from his employment."

6. The first prosecutor, on 13th May 1975, sought and obtained from this Court an order nisi for a writ of prohibition to restrain the Commission from proceeding further in the matter of the variation in the award upon the ground that the variation of the award was outside the limits of the industrial dispute which had been settled by the consent award and that there was no other industrial dispute extending beyond the limits of any one State which the variation would have prevented or settled. (at p63)

7. There can be no doubt that the terms of a demand, where the dispute is constituted by a failure to agree to the demand, set the ambit of the dispute. This fixes both the upper and lower limits of the dispute. It is of considerable importance that this should be so, both in the interests of employer and employee. It is also essential that those limits be scrupulously respected, both in the making of the initial settlement of the dispute by an award and in any subsequent variation of that award. (at p63)

8. In the present case, the first prosecutor rightly says that there is no dispute other than that in respect of which the ward was made to which the competence of the Commissioner to vary the award could be referred. It is not appropriate here to discuss the question whether constitutional power in its limitation to the settlement of industrial disputes extending beyond the limits of any one State provides a satisfactory basis for the regulation of industrial relations. The Constitution does so limit the power of Parliament and, therefore, indirectly, the power of the Commission. In making its award, the Commission must confine itself within the constitutional limits as much as the Parliament must in legislating. Thus, an award made in the first instance and any variation of the award must be justifiable as being in settlement of a dispute, the ambit of which has been fixed or be capable of being fixed in terms at the time of the dispute. (at p63)

9. The question whether the South Australian Act, in providing machinery for the re-employment of a dismissed employee where the Court is of opinion that the dismissal, though lawful, was in the circumstances harsh, unjust or unreasonable, was inconsistent with the terms of the award and would operate in derogation of the rights of the employer given by the award, was decided by the Supreme Court of South Australia. That decision is binding on the parties to the present proceedings and, in my opinion, it is not open in this case for this Court to reconsider that matter as between these parties. (at p63)

10. The first question which, in my opinion, arises is whether cl. 3 of the consent award was itself within the ambit of the dispute between the parties constituted by the log of claims and the employer's failure to agree to the demands there made. There was no clause in the log specifying the incidence which the Union desired for the award. The written request covering the log was for the grant of its benefits to the employer's employees whether or not members of the Union employed in connexion with the vehicle manufacturing industry. But there was nothing, in my opinion, expressly demanded in the log of claims to which the subject matter of cl. 3 of the consent award could be referred. Of course, there can be no question that the parties agreed to the terms of that clause. Probably its presence in the award and its terms were the result of negotiation between the parties. But negotiation is not necessarily indicative of a dispute in the presently relevant sense. Throughout the discussions which presumably prefaced the consent award the parties may not at any time have been in difference as to the terms of the clause or as to the desirability of including it in the consent award. Thus, the case cannot be regarded as one in which some other dispute not directly arising out of the log of claims supervened so as to justify the clause. (at p64)

11. However, par. (a) of cl. 3 might possibly be regarded as incidental to the award in the sense of being a machinery provision for effectuating the substance of the award. But par. (b) is in quite a different case. It purports in terms to preclude the application to the employees covered by the award, not only of any other award or industrial provision, but of any ordinance or State Act: and to do so as a term and condition of the award. Quite clearly, in my opinion, this provision travels beyond the ambit of the dispute. The log in this case is somewhat basic in the demands it makes, claiming minimum amounts for wage payments in various unrelated categories without condescending to what I would have thought to be necessary particularity. Consequently, it is not surprising that a consent ward should have provisions for which no corresponding demand can be found in the log. I have no difficulty in concluding that cl. 3 (b) is not within the ambit of the dispute. (at p64)

12. However, there is a further question, namely, whether that paragraph is valid. Though by consent, the award is an award of the Commission. The Commission's jurisdiction to make an award depends essentially and always on the existence of a dispute of the requisite kind. It can derive no relevant jurisdiction in relation to the making of an award from the consent of the parties. The validity of the clause must be determined according to the jurisdiction given to the Commission. In my opinion, in making an award in settlement of a dispute, the Commission is not empowered to determine that State laws shall not apply to employees under the award. It can, of course, make provisions in settlement of the dispute which will be, or may prove to be, inconsistent with State laws or ordinances. Whether such provisions do prove so inconsistent is a matter of law which the Commission may not decide. Thus, in my opinion, the Commission may neither exclude the operation of State law nor determine that the terms of its award are inconsistent with State law. Clause 3(b) is therefore, in my opinion, invalid and inoperative, except in so far as it evidences the intention of the parties in any circumstances in which that intention is material. Its operation, if any, inter parties, must depend merely on the contractual consequence, if any, of the parties having agreed to it. It cannot be regarded, in my opinion, as a provision of the award made in settlement of the dispute which existed between the parties as a result of the demand in the log of claims. On that view of cl. 3(b) there would scarcely be any room for a valid variation of its terms. (at p65)

13. The Commission, by its variation of the award, has purported to make a provision which imports into cl. 3(b) the operation of s. 15(1) (e) of the South Australian Act and of any order made thereunder. It further seeks to add a provision designed to supplement the addition made to cl. 3(b). (at p65)

14. There are, in my opinion, two reasons apart from the initial invalidity of the clause why this purported variation is invalid. In the first place, such a provision is not within the ambit of the dispute. Whilst it is true that the Commission may vary within the limits of the ambit of the dispute an award made by consent of the parties in settlement of that dispute, the Commission in making the variation is none the less limited to the ambit of the dispute. Also, as I have indicated, the Commission does not derive from the making of, or the terms of, the consent award any authority to vary what the parties have agreed outside the limits of the ambit of the dispute. The jurisdiction of the Commission is essentially derived from the fact and the extent of the dispute. It seems to me, therefore, that an agreement of the parties outside the ambit of the dispute, though contained in an award, is not susceptible of variation by the Commission. (at p65)

15. In the second place, it is not, in my opinion, within the Commission's power to decide that State laws and orders shall or shall not apply to employees bound by the award. Whether State laws do apply will depend on their terms and whether or not they are consistent with the terms of the award. Consistency or inconsistency cannot be determined by express provisions such as those of the purported variation made by the Commission. Those questions depend upon the substantive provisions of the award validly settling the industrial dispute. (at p65)

16. I turn then to the variation attempted to be effected by adding cl. 6(a). The same objections apply, in my opinion, to this clause as to the variation proposed for cl. 3(b). I can find nothing in the log to which such a provision could be referred. I have already set out cl. 21 of the demand dealing with the contract of employment. (at p66)

17. It does not seem to me to matter in this case whether or not the terms of the demand in cl. 21 exclude the employer's common law power of dismissal for misconduct. The demand does fix the ambit of the dispute in relation to the contract of employment and leaves, in my opinion, no room for the qualifying effect of the South Australian statutory power of reinstatement, or rather of re-employment, or of any order made thereunder. The full extent of the limitation of the employer's right of dismissal is set by cl. 21 of the demand and leaves no room for any qualification of the employer's right of dismissal which reinstatement of a lawfully dismissed employee would have. Thus, the proposed variation is not, in my opinion, within the ambit of the dispute. (at p66)

18. Further, for reasons I have already expressed, the Commission has no power to award that a State law shall or shall not apply to employees covered by an award. Therefore, it is to my mind quite clear that neither the variation nor the addition by the Commission to the award is within the ambit of the dispute between the parties as evidenced by the demand and its refusal. Further, neither is a valid provision to be inserted in the award. (at p66)

19. However, it was thought by the Commission and argued by counsel before this Court that each of the amendments made by the Commission could be made in exercise of what was styled an "incidental power". I have great difficulty in appreciating the sense in which the word "incidental" is used in this connexion. In the first place, the variations were as to matters of substance. They were purported alterations of, or additions to, substantive provisions of the award. They were not, in my opinion, in any respect in the nature of provisions to secure the effectiveness of the substantive portions of the award and thus incidental in that sense. Nor were they made, in my opinion, in relation to some incidental matter involved in the dispute. Further, they were not provisions reasonably made to accommodate the terms of the settlement of the dispute to some changed circumstances. Nothing in Reg. v. Blackburn; Ex parte Transport Workers' Union of Australia [1953] HCA 55; (1953) 88 CLR 125, esp at pp 137-138 ; Reg. v. Kelly; Ex parte Australian Railways Union [1953] HCA 96; (1953) 89 CLR 461, esp at pp 473-474 ; or in R. v. Metal Trades Employers' Association; Ex parte Amalgamated (1951) [1951] HCA 3; 82 CLR 208, lends any support to the making of the proposed variation. Nothing, in my opinion, in the terms or nature of the only dispute between the parties calls for any resort to any incidental matter or power in order to settle the dispute in relevant respects or to maintain the suitability of the settlement to current conditions. In my opinion, it was a misconception to think that these amendments could be made by dint of some incidental power. (at p67)

20. There was a suggestion in the reasons given by the Commissioner for the variation which he made that the provision contained in cl. 3(b) was in some sense the result of accident or mistake. Again, I have great difficulty in understanding what is meant in this connexion. It is quite clear that the parties did not intend to provide by the award for resort to any State legislation. There is no ground which I have been able to perceive on which it can be said that the consent award was in any sense the result of a mistake or misapprehension. (at p67)

21. In my opinion, the order nisi should be made absolute. (at p67)

STEPHEN J. I would discharge the order nisi in this case for the reasons stated in the judgment of my brother Mason. (at p67)

MASON J. The case presented by the prosecutor in support of its motion to make absolute the order nisi for prohibition granted by Stephen J. is that the respondent John Clarkson, a Commissioner under the Conciliation and Arbitration Act 1904-1975, exceeded his jurisdiction in varying The General Motors-Holden's Pty. Ltd. (Pt 1) General Award 1974 ("the 1974 Award") by including in it a variation which was not within the limits of the industrial dispute settled by the Award. (at p67)

2. The case is complicated by several circumstances. The first is that the 1974 award was a consent award and we are without evidence as to the events which brought it into existence. We have been told that the 1974 award replaced an earlier award made in 1972 binding the prosecutor and the respondent Union. The 1972 award had its origin in various logs of claims served on the prosecutor by interested unions. They all contained a provision in substantially similar terms dealing with the topic that is referred to as "Contract of Employment", that is, the entitlement of an employee to notice of termination of employment and payment of wages in lieu of notice. (at p67)

3. What provision the 1972 award made respecting this claim by the unions we do not know. What we do know is that the relevant provision in the 1974 award went beyond the claim made respecting "Contract of Employment" in the logs antedating the 1972 award. Clause 6 of the 1974 award contained a provision dealing with the subject of termination of employment on the ground of misconduct, a matter not touched by the logs of claims, yet the prosecutor makes no complaint about this provision. (at p68)

4. The event which precipitated the problem which is now before the Court was the dismissal by the prosecutor from its employ at Elizabeth, South Australia, without notice, for misconduct, of Fedor Gnatenko, a member of the respondent Union. Gnatenko thereupon sought in the Industrial Court (S.A.) an order under s. 15(1) (e) of the Industrial Conciliation and Arbitration Act 1972-1975 (S.A.) that he be re-employed in his former position. On 27th March 1975 the Full Court of the Supreme Court of South Australia made absolute an order for prohibition in respect of the proceeding on the ground that there was a direct conflict, and therefore an inconsistency within the meaning of s. 109 of the Constitution, between cl. 6 of the 1974 award and the provisions of s. 15(1) (e) of the State statute. This conflict arose from the last sentence of cl. 6(c) (i), which preserved the right of an employer to dismiss without notice for "malingering, inefficiency, neglect of duty or misconduct" on the footing that the employee was entitled to payment of wages up to dismissal, and the jurisdiction conferred upon the Industrial Court by s. 15(1) (e) of the State Act to determine whether the dismissal of an employee was harsh, unjust or unreasonable and to direct that the employee be re-employed, with power to award payment of wages between his dismissal and his re-employment. (at p68)

5. At the conclusion of his judgment the Chief Justice observed that it was unfortunate that s. 15(1) (e) was made inapplicable by reason of the provisions of the 1974 award and, after referring to certain difficulties, went on to suggest "that these difficulties could be overcome if the federal award were specifically to provide for the application of State legislation like s. 15(1) (e) in the same way as it provides for the application of the Workmen's Compensation Act". (at p68)

6. On 15th April 1975, in the course of other proceedings between the parties relating to a dispute arising out of the dismissal of Gnatenko, Commissioner Clarkson gave notice that he proposed to vary the 1974 award. After hearing argument he varied the award by adding two new clauses, 3(b) and 6 (h). (at p68)

7. Clause 3 relates to the incidence of the award. Sub-clause 3(a) provides that the award shall have effect in New South Wales, Victoria, Queensland and South Australia. Sub-clause (b) initially provided:

"From the date of coming into operation of this award any
other award or determination or ordinance or State Act or
industrial provision which might otherwise have applied to
employees covered by this award shall be as a term and condition
of this award excluded from applying to such employees
and the Company. Provided, however, that this sub-clause
shall not affect the operation of the Vehicle Industry
(Long Service Leave) Award 1965 as amended from time
to time."

By the variation the following words were added:

"And further provided that this sub-clause shall not affect
the operation of s. 15(1) (e) of the Industrial Conciliation
and Arbitration Act 1972-1974 of the State of South Australia
or any order made thereunder (and shall be deemed
never to have affected such operation)." (at p69)

8. Clause 6 of the 1974 award to the extent to which it is relevant is expressed as follows:

"6 - Contract of Employment
Weekly or Casual Hire.
(a) Except as hereinafter provided, employment shall be
by the week. An employee not specifically engaged as a
casual employee shall be deemed to be employed by the week.
Performance of Work.
(b) An employee not attending for duty shall except as
provided by clauses 23, 24, 25, 26, 27, 28 (Holidays, Annual
Leave, Sick Leave, Bereavement Leave, Jury Service and
Make Up of Workers' Compensation Payments) of this
award lose his pay for the actual time of such non attendance.
Termination of Employment.
(c) (i) Employment shall be terminated by a week's notice
on either side given at any time during the week or by the
payment or forfeiture of a week's wages as the case may be.
Such notice may be given at any time but shall expire at the
ordinary finishing time of a working day or shift. Notice given
before the commencement of a day's work or shift shall be
deemed to have been given at the end of the previous day's
work or shift and notice given during a day's work or shift
shall be deemed to be given at the end of that day's work or
shift. This shall not affect the right of the Company to dismiss
an employee without notice for malingering, inefficiency,
neglect of duty or misconduct and in such cases wages shall
be paid up to the time of dismissal only.
(ii) Where an employee has given or been given notice
as aforesaid he shall continue in his employment until the
date of the expiration of such notice ..."

There followed further provisions regulating the circumstances in which an employee might be deemed to have abandoned his employment, the standing down of an employee who cannot be usefully employed, the entitlement of an employee to notice in the event of termination of his services on account of redundancy, his entitlement until the expiration of the notice given on account of redundancy and the rights of a casual employee. (at p70)

9. Clause 6(h), the second variation, which was inserted at the end of cl. 6, is in the following terms:

"(h) Saving Provision
The provisions as to termination of employment by the
Company contained in this clause shall, in the case of employees
employed within the State of South Australia, be
subject to the operation of the provisions of section 15(1)
(e) of the Industrial Conciliation and Arbitration Act
1972-1974 of that State. In the case of an employee ordered to be
re-employed in his former position pursuant to the provisions
of that section, the conditions of his employment upon such
re-employment shall be not less favourable to the employee
than would have been the case if he had not been dismissed
from his employment." (at p70)

10. As the dispute which founded the 1974 award arose out of non-acceptance of the logs of claims which antedated the 1972 award it is necessary to examine cl. 21 of the log served by the Vehicle Builders Employees' Federation of Australia in 1971 which is said to be representative of the claims made respecting "Contract of Employment". It provided:

"Contract of Employment
All employment shall be by the week. Employment shall be
terminated by an employer by a week's written notice or by
paying two weeks' wages in lieu of notice. The employer shall
not give an employee notice at the commencement of, or
during a period of annual leave, sick leave, or whilst on
workman's compensation." (at p70)

11. The 1974 award did not give effect to the claim for payment of two weeks' wages in lieu of notice; it made provision for payment of one week's wages only. Nor did the award give effect to the restriction proposed in cl. 21 of the log which sought to prevent an employee giving notice during sick leave or whilst he was on compensation. These departures from the claim are immaterial. In other respects the award conformed to the claim, although it contained additional and more detailed provisions. (at p70)

12. Section 55 of the Conciliation and Arbitration Act provides that in making an award in relation to an industrial dispute,

"the Commission is not restricted to the specific relief
claimed by the parties to the industrial dispute, or to the demands
made by the parties in the course of the dispute, but
may include in the award any matter or thing which the
Commission thinks necessary or expedient for the purpose
of preventing or settling the dispute or of preventing further
industrial disputes".

By virtue of s. 59, s. 55 applies to a variation of an award. (at p71)

13. The Commissioner did not assert that he made the variation of the 1974 award for the purpose of preventing further industrial disputes, that is, industrial disputes extending beyond the limits of one State; on the contrary, he found that the variation fell within the ambit of the logs served in 1971. Moreover, there is no evidence that, at the time when the variation was made, there was a threat, or even an apprehension, of an inter-State industrial dispute arising out of want of jurisdiction in the South Australian Industrial Court to entertain Gnatenko's application. (at p71)

14. The case therefore turns on the question whether the variation falls within the ambit of the logs served in 1971, that is, whether it is embraced by the claim made in cl. 21 of the Vehicle Builders Employees' Federation's log or is fairly incidental to the dispute which arose out of the non-acceptance of the log. Unless this question can be answered in the affirmative there is not in my view a sufficient relationship between the variation and the original inter-State dispute to bring the variation within the power conferred upon the Commission by s. 59 (see Reg. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Melbourne and Metropolitan Tramways Board [1962] HCA 22; (1962) 108 CLR 166, at p 169 ). (at p71)

15. Viewing cl. 21 as an expression of the unions' claims on the topic of the contract of employment, I do not regard it as touching or attempting to enter the field of dismissal for misconduct. The authors of the log plainly enough confined themselves to the matter of dismissal on notice and demanded an entitlement only in relation to the exercise of that right. (at p71)

16. However, this does not dispose of the case against the respondent Union. There is a further question: what was the relationship between the subject matter of the claim contained in cl. 21 and the provisions of State law regulating reinstatement or re-employment of an employee who has been lawfully dismissed by his employer? (at p71)

17. Although no claim was made to preserve any right of reinstatement or re-employment conferred upon an employee by State law, this in itself would not prevent the Commission from so framing an award as to preserve to the parties such rights and benefits as may flow from State law. A log of claims, though not making express reference to the preservation of rights and benefits accruing under State law, may be so worded as to indicate that the benefits claimed in the log are additional to those conferred by the general law. In deciding whether a clause in a log should be so understood it would in my view be a serious mistake to construe the log with that degree of strictness which is reserved for formal legal instruments. In this field we are concerned only to ascertain the sense of the document for the purpose of determining whether an industrial dispute extending beyond the limits of a State exists and what is its ambit. In general, in the absence of some tangible indication to the contrary, it is appropriate to read the log as asserting a claim which is additional to the rights and benefits bestowed on employees by the general law. (at p72)

18. This is the approach which I take to cl. 21 in the present case. It then becomes necessary to consider the argument that cl. 21 is inconsistent with the continued existence under State law of a right on the part of an employee dismissed by notice duly given in accordance with its provisions to apply to a State court for an order under State law that he be re-employed. No doubt in some contexts it may be correct to say that the concession of a right in an employer to dismiss upon the giving of a stipulated notice, with the consequence that the employee dismissed is entitled to wages up to the time of dismissal, is inconsistent with, or excludes, the co-existence of a right in the employee to apply to a court for an order that he be re-employed. This conclusion might be readily reached, as it was by the Full Court of the Supreme Court, in the context of an award which comprehensively sets out the rights of the employer and employee, covering dismissal on notice and summary dismissal for misconduct. (at p72)

19. But in my opinion a different conclusion should be reached in the context of the claim shortly expressed in cl. 21 of the log which is confined, in accordance with the heading "Contract of Employment", to dismissal on notice or on payment in lieu of notice. In this context I am unable to discern any secure foundation for concluding that cl. 21 is so comprehensive in its scope as to exclude the application of a State law such as s. 15(1)(e) of the Industrial Conciliation and Arbitration Act (S.A.) from applying to the dismissal of an employee pursuant to its provisions. (at p72)

20. It was suggested that this view necessarily entails that the dispute lacked the inter-State quality which is an essential element of an industrial dispute in the constitutional sense. The question whether the provisions of the South Australian statute were intended to have an application is, so it was said, inherently a local question not capable of becoming part of an inter-State dispute. I disagree. The application of the State statute was in my opinion incidental to and therefore fell within the ambit of the inter State dispute which came into existence in 1971-1972. It constitutes no reason for concluding that what then arose was a series of intra-State disputes. The existence of different laws in each of the States, each having an application to contracts of employment affected by an award, is no reason for denying an inter-State quality to an identical log of claims served on employers in different States or for denying jurisdiction to the Commission to include in its award a provision which preserves the application of a particular State law. (at p73)

21. It is sufficient for me to say that it is for these reasons that in my view the Commission had jurisdiction to vary the 1974 award by including cl. 6(h). (at p73)

22. I would discharge the order nisi. (at p73)

JACOBS J. Stripped of its accidentals - changes in constitution of the employees' organization, repeal and re-enactment of the State law in altered form, replacement of an original award by a consent award still within the ambit of the original dispute, the introduction of the challenged provision by variation and not by the original or the replacing award as a result of industrial disturbance occurring in one State only - the question comes down to this: when, in an industrial dispute extending beyond the limits of one State a demand of employees includes the following

"21. Contract of Employment
All employment shall be by the week. Employment shall
be terminated by an employer by a week's written notice or
by paying two weeks' wages in lieu of notice. The employer
shall not give an employee notice at the commencement of, or
during a period of annual leave, sick leave, or whilst on
workman's compensation."

is it within the power of the Commission to make an award which includes the following provisions:

"3 - Incidence of Award
(a) This award shall have effect in the States of New South
Wales, Victoria, Queensland and South Australia to General
Motors-Holden's Pty. Limited as to every operation carried
on within or in connection with a plant principally concerned
with manufacturing, repairing and/or assembling of trucks
or motor cars or parts or components thereof.
(b) From the date of coming into operation of this award
any other award or determination or ordinance or State Act
or industrial provision which might otherwise have applied
to employees covered by this award shall be as a term and
condition of this award excluded from applying to such
employees and the Company. Provided, however, that this
sub-clause shall not affect the operation of the Vehicle Industry
(Long Service Leave) Award 1965 as amended from
time to time.
And further provided that this sub-clause shall not affect
the operation of s. 15(1) (e) of the Industrial Conciliation
and Arbitration Act 1972-1974 of the State of South Australia
or any order made thereunder (and shall be deemed
never to have affected such operation)."
"6 - Contract of Employment
Weekly or Casual Hire.
(a) Except as hereinafter provided, employment shall be
by the week. An employee not specifically engaged as a
casual employee shall be deemed to be employed by the
week.
Performance of Work.
(b) An employee not attending for duty shall except as
provided by clauses 23, 24, 25, 26, 27, 28 (Holidays, Annual
Leave, Sick Leave, Bereavement Leave, Jury Service and
Make Up of Workers' Compensation Payments) of this ward
lose his pay for the actual time of such non attendance.
Termination of Employment.
(c) (i) Employment shall be terminated by a week's notice
on either side given at any time during the week or by the
payment or forfeiture of a week's wages as the case may be.
Such notice may be given at any time but shall expire at
the ordinary finishing time of a working day or shift. Notice
given before the commencement of a day's work or shift shall
be deemed to have been given at the end of the previous day's
work or shift and notice given during a day's work or shift
shall be deemed to be given at the end of that day's work or
shift. This shall not affect the right of the Company to dismiss
an employee without notice for malingering, inefficiency,
neglect of duty or misconduct and in such cases wages shall
be paid up to the time of dismissal only.
(ii) Where an employee has given or been given notice
as aforesaid he shall continue in his employment until the
date of the expiration of such notice. An employee who
having given or been given notice as aforesaid, without reasonable
cause (proof whereof shall lie upon him) absents
himself from work during such period shall be deemed to
have abandoned his employment and shall not be entitled to
payment for work done by him within that period.
Provided that where the Company has given notice as
aforesaid, an employee on request made prior to his absence
shall be granted leave of absence without pay for up to
one day in order to look for alternative employment.
(iii) Abandonment of Employment.
It shall be prima facie evidence that an employee with less
than 3 months service has abandoned his employment if
within a period of three consecutive working days from his
last attendance or notification of absence he has not established
that he was absent with reasonable cause.
Standing Down of Employee.
(d) Notwithstanding anything elsewhere contained in this
clause -
(i) The Company shall have the right to deduct payment
for any day an employee cannot be usefully
employed because of a strike or through a breakdown
in machinery or a stoppage of work by any
cause for which the Company cannot reasonably
be held responsible.
(ii) The provisions of clause 40 (Emergency Provisions)
of this award shall apply in the circumstances
set out in that clause.
Redundancy.
(e) (A lengthy clause which I do not set out)
Casual Employment.
(f) (i) A casual employee is one engaged and paid as
such. The maximum period for which a casual employee can
work continuously on a full-time basis (i.e. the total daily and
weekly hours elsewhere prescribed in this award) shall be
one month. In any case where such full-time employment
extends beyond one month, the employee shall thereafter
be deemed to be employed by the week.
(ii) A casual employee for working ordinary time shall
be paid per hour one fortieth of the weekly rate prescribed
by this award for the work which he or she performs plus
20 per cent.
Time Keeping.
(g) Notwithstanding anything elsewhere contained in this
award, the Company may select and utilise for time-keeping
purposes, any fractional or decimal proportion of an hour
(not exceeding a quarter of an hour) and may apply such
proportion in the calculation of the working time of an employee
who, without reasonable cause, promptly communicated
to the Company, reports for duty after his appointed
starting time or ceases duty before his appointed finishing
time.
If the Company adopts a proportion for the aforesaid
purpose it shall apply the same proportion for the calculation
of overtime.
(h) Saving Provision
The provisions as to termination of employment by the
Company contained in this clause shall, in the case of employees
employed with the State of South Australia, be
subject to the operation of the provisions of section 15(1)
(e) of the Industrial Conciliation and Arbitration Act
1972-1974 of that State. In the case of an employee ordered to be
re-employed in his former position pursuant to the provisions
of that section, the conditions of his employment upon such
re-employment shall be not less favourable to the employee
than would have been the case if he had not been dismissed
from his employment."? (at p76)

2. Section 15(1)(e) of the Industrial Conciliation and Arbitration Act, 1972-1974 (S.A.) gives jurisdiction to the Industrial Court of South Australia:

"(e) to hear and determine any question as to whether
the dismissal from his employment of an employee, not
being an employee who has under any Act or law a right
of appeal or review against his dismissal, was harsh, unjust
or unreasonable and the Court may, if it thinks fit, direct the
employer of that employee to re-employ that employee in his
former position on terms that are not less favourable to the
employee than if he had not been dismissed from his employment
and without limiting the generality of the foregoing
may order that the employee be paid a sum not exceeding
a sum equal to the wages that he would have received had
he been employed in that employment between the time of
his dismissal and the time at which he was re-employed but
the Court shall not exercise the jurisdiction conferred on it
by this paragraph unless an application invoking that jurisdiction
is made, by or on behalf of the dismissed employee,
within twenty-one days from the day on which it is alleged
that the employee was so dismissed from his employment." (at p76)

3. I have no doubt that it is within the constitutional power of the Commission to include the final proviso of cl. 3(b) and to include cl. 6(h). (at p76)

4. The important point as I see the matter is that the proviso to cl. 3 and cl. 6(h) apart from its concluding sentence are negative or saving provisions. Thereby the applicants are placed in a dilemma of argument from which there is no escape. If cl. 21 of the log is wide enough in the ambit of its subject matter to include within the subject matter of an award positive provisions for reinstatement in terms similar to the terms of the South Australian Act, the applicants fail at the threshold of their argument. What could be done directly can be done indirectly by a positive continuance in force unchanged of the South Australian provision. It is of no consequence that the particular provision of the award would of its nature apply only to employees employed in South Australia. An award need not be uniform in respect of all employees throughout the Commonwealth. On the other hand, if cl. 21 of the log is not wide enough in the ambit of its subject matter to permit the Commissioner positively to include within the subject matter of an award a provision for reinstatement in terms of the South Australian Act, then the award of the Commissioner cannot by implication cover the field of reinstatement which is the subject matter of the South Australian Act. Every award is made against a background of the general law of each State governing the relationship of master and servant. The award may vary or modify or even wholly displace that law. Demands in an industrial dispute are made against the setting of the existing law which can only be varied modified or replaced by an award within the ambit of the demands which constitute the industrial dispute. But there is nothing to prevent an award making it clear that it does not intend or propose to go outside the ambit of the dispute and it can make this clear by expressly saving the operation of the State law on a subject matter. (at p77)

5. Thus on either approach, whether or not the subject matter of the South Australian legislation is within the ambit of the industrial dispute evidenced by the log of claims, the applicants must fail. There can be no objection to the substantive provision in the second sentence in cl. 6(h) that in the case of an employee ordered to be re-employed in his former position pursuant to the provisions of that section, the conditions of his employment upon such re-employment shall be not less favourable to the employee than would have been the case if he had not been dismissed from his employment. The conditions of employment are those to which the particular employee was entitled under the award governing his employment, the award which the Commissioner had previously made. (at p77)

6. I would discharge the order nisi. (at p77)

MURPHY J. The history of this dispute and subsequent proceedings (including the award variation) is set out in other judgments. (at p77)

2. One of the substantial claims which came into dispute when the log of claims was rejected concerned what might be described briefly as the termination of employment and its consequences. The award variation was not in the terms of the original log of claims, and the prosecutor contended that the variation was not within the ambit of the original dispute. (at p77)

3. In dealing with the powers of the Court of Conciliation and Arbitration under the Commonwealth Conciliation and Arbitration Act 1904-1934, Dixon J. said:

"... it has been well understood that, when a dispute in
relation to any particular term of employment or condition
of labour is before the court for settlement, the power of the
court extends to the making of such award as appears apt
and proper to determine the dispute and to give just relief
from the substantial grievance from which it arises. In spite
of the many unrealities which have attended the growth of the
jurisdiction, the discretion of the court to provide that remedy
which on investigation appears best calculated to achieve the
chief purpose of the court, namely, the settlement of
industrial disputes, has never been restricted by a requirement
that it should rigidly adhere to one or other of the
rival proposals or desires of the respective parties. This
principle retains its place in the system and must be applied
to the developed condition of the law. But the court cannot
make an award except for the settlement of the actual
dispute between the parties, and, therefore, it is beyond its
jurisdiction to impose an obligation upon them or one of
them that is not related to the disagreement or issues between
them, that is, to the matter of the dispute. Many expressions
have been used to describe the kind and the degree of connection
which is necessary. It is sometimes said that the
relief contained in the award must be relevant. Sometimes
that it must be reasonably incidental to the settlement of the
differences constituting the dispute. Sometimes that it must
be appropriate to the settlement of the dispute; that is, the
relief must have a rational or natural tendency to dispose
of the question at issue. In applying a test of such a nature, it
is important to understand the true character of the two
things to be brought into comparison, the matter of the
dispute and the provision proposed. To obtain a correct
understanding of the matter in dispute, it is not enough to
read the text of a log of demands without regard to any of
the facts and circumstances out of which it arises. A log is
not an instrument with a prescribed legal effect. It is nothing
but a catalogue of claims supposed to represent the real
desires of actual people." (R. v. Commonwealth Court of
Conciliation and Arbitration; Ex parte Kirsch
[1938] HCA 41; (1938) 60 CLR 507, at p 538.) (at p78)

4. In 1952, in Reg. v. Galvin; Ex parte Amalgamated Engineering Union, Australian Section (13) the majority of the Court (Dixon [1952] HCA 29; (1952) 86 CLR 34, at p 40 the majority of the Court (Dixon C.J., Webb, Fullagar and Kitto JJ.) stated:

"An award cannot give a form of relief that is not relevant
to a matter in dispute, that is not reasonably incidental or
appropriate to the settlement of that part of the dispute and
that has no natural or rational tendency to settle the particular
question in dispute. But the award need not adhere
to the remedy or relief proposed or claimed in the course
of the dispute or in a demand forming a source of the dispute,
so long as the provision in the award is related to the
dispute or its settlement in the manner stated."

They went on to say (1952) 86 CLR, at p 41 :

"The principle is formulated by s. 42 of the Conciliation
and Arbitration Act 1904-1951, although in language which
may possibly be read too widely because of the words 'which
the court or commissioner thinks necessary or expedient for
the purpose of preventing or settling the dispute or of preventing
further ... disputes'. These words might be taken
to allow a more remote or tenuous connection with the dispute
than is requisite as a matter of objective fact." (at p79)

4. The principle they referred to now appears in s. 55 of the Conciliation and Arbitration Act 1904-1973 in these terms:

"In making an award in relation to an industrial dispute,
the Commission is not restricted to the specific relief claimed
by the parties to the industrial dispute, or to the demands
made by the parties in the course of the dispute, but may
include in the award any matter or thing which the Commission
thinks necessary or expedient for the purpose of
preventing or settling the dispute or of preventing further
industrial disputes."

This section is of the utmost importance to the proper operation of the Australian Conciliation and Arbitration Commission, even taking into account the cautionary words in Galvin's Case [1952] HCA 29; (1952) 86 CLR 34 . It is one of the means which Parliament has adopted to free the Commission from excessive technicalities and to enable it to exercise its powers effectively. The work of the Commission will be stultified unless full scope is given to the principle of flexible remedy referred to in Galvin's Case. (at p79)

5. The simple notions of ambit which arose from counter-claims on behalf of employees and employers for minimum and maximum rates of wages are rarely applicable to disputes concerning other terms and conditions of employment, especially where there are multiple claims, as in a log of claims. (at p79)

6. The onus lies on the prosecutor to show that the award variation was not authorized. It has failed to discharge this onus. The variation was clearly connected with the subject of termination of employment and its consequences. It was relevant, incidental and appropriate to the settlement of that part of the dispute. It also had a natural and rational tendency to settle the particular question in dispute. (at p79)

7. In this case, the authority of the Commission extended to determining whether the common law or statute law of a State on any of the subjects of the dispute should or should not continue to apply to the relations between the parties. The Commission could determine that the award provision on a subject was not to affect the operation of any particular State law, or State law generally, with such exceptions as might be appropriate. (at p80)

8. Section 65 of the Conciliation and Arbitration Act 1904-1975 is devoted to the question of federal awards prevailing over State laws and awards. It provides:

"Where a State law, or an order, award, decision or determination
of a State Industrial Authority, is inconsistent
with, or deals with a matter dealt with in, an award, the
latter prevails and the former, to the extent of the inconsistency
or in relation to the matter dealt with, is invalid."

This section appears to invalidate any State law which "deals with" any matter "dealt with" in a federal award, so that the "saving" of State laws in an award would not be effective. However, s. 65 would be invalid if it had this result. See the observations in Collins v. Charles Marshall Pty. Ltd. [1955] HCA 44; (1955) 92 CLR 529, at pp 548, 549 and (1957) AC 274, at p 286; [1957] HCA 13; (1957) 96 CLR 1, at p 8 ; and the discussion in Mills and Sorrell, Federal Industrial Laws 5th ed., pp. 243-246, 288. (at p80)

9. Whatever claims were made, the Commissioner could decline to make a provision which would be inconsistent with the State law on a particular subject. To express that intention clearly, as he did, is not only within his authority but also conforms with his duty under s. 56 of the Act which states:

"An award shall be framed in such a manner as best to
express the decision of the Commission and to avoid unnecessary
technicalities." (at p80)

10. The order nisi should be discharged. There should be no order for costs (see s. 197A of the Conciliation and Arbitration Act 1904-1975 which was inserted by Act No. 138 of 1973). (at p80)

ORDER

Discharge order nisi.