FEDERAL COURT OF AUSTRALIA

Australasian Meat Industry Employees Union v Australian Meat Holdings Pty Ltd [1999] FCA 696

INDUSTRIAL LAW – employment contract – dismissal – meaning of “serious and wilful misconduct” – interim award – variation – whether variation by later award should be regarded as varying the interim award – meaning of “an order affecting an award” within s 150 of the Workplace Relations Act 1996 (Cth) – whether difference between “variation” and “setting aside” – whether varied order is void ab initio

Industrial Relations Act 1988 (Cth)

Workplace Relations Act 1996 (Cth)

Industrial Relations Reform Act 1993 (Cth)

Adami v Maison Deluxe Limited (1924) 35 CLR 143 considered

Gould v Mt Oxide Mines Ltd [(1916) 22 CLR 490 applied

W R Knott v Carlton and United Breweries Ltd (1958) 13 IIB 212 considered

Johnson v Marshall, Sons & Co Ltd [1906] AC 409 cited

Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 cited

Hall v General Motors Holdens’ Ltd (1979) 45 FLR 272 cited

R v Balfour; Ex parte Parkes Distributions Pty Ltd (1987) 17 FCR 26 applied

McIntosh v Minister for Health (1986) 17 FCR 463 applied

Forbes v New South Wales Trotting Club Ltd (1979) 143 CLR 242 considered

The Queen v Marks; Ex parte Australian Building Construction Employees and Builders Labourers’ Federation (1981) 147 CLR 471 considered

O’Toole v Charles David Pty Ltd (1990-1991) 171 CLR 232 cited

Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 cited

AUSTRALASIAN MEAT INDUSTRY EMPLOYEES UNION v AUSTRALIAN MEAT HOLDINGS PTY LTD (ACN 011 062 338)

QG 111 OF 1997

AUSTRALASIAN MEAT INDUSTRY EMPLOYEES UNION v AUSTRALIAN MEAT HOLDINGS PTY LTD (ACN 011 062 338)

QG 119 OF 1997

DOWSETT J

25 MAY 1999

BRISBANE

THE COURT ORDERS THAT:

1.         The application no QG 111/97 be dismissed.

2.         The application no QG 119/97 be dismissed.

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

REASONS FOR JUDGMENT

The Applications

1                     There are two applications, in each of which the applicant is the Australasian Meat Industry Employees Union and the respondent is Australian Meat Holdings Pty Ltd.  The respondent operates numerous meatworks throughout Queensland and New South Wales, including the Fitzroy River plant near Rockhampton.   Each application is brought on behalf of a former employee of the respondent at that plant to recover payment in lieu of long-service leave allegedly due by the respondent to the employee in question.  In application no QG 111/97 the relevant former employee is Peter Mackay.  In application no QG 119/97 the relevant former employee is John McCallum.  The applicant also seeks the imposition upon the respondent of pecuniary penalties.

2                     Mr Mackay was first employed by the respondent at the Fitzroy River plant on 15 January 1985.  His employment was terminated on or about 23 May 1995.  Mr McCallum was first employed there on 22 March 1988.  His employment was terminated on or about 20 July 1995.  As I understand the evidence, for reasons associated with the nature of the industry and the history of industrial relations between the respondent and its employees, both men had, on occasions, been dismissed and re-employed during their respective periods of employment. 

3                     Clause 23A of the Australian Meat Holdings Pty Ltd – Rockhampton Abattoir – Interim Award 1995 is the relevant provision as to long-service leave.  It grants to employees who have served for between five and ten years, pro-rata entitlement to long-service leave where their “engagement is permanently terminated by the employer for any cause other than serious or wilful misconduct …”.  It is common ground that Messrs Mackay and McCallum are entitled to payment for pro-rata long-service leave unless, in either case, termination was for “serious or wilful misconduct”.  The respondent alleges that each employee was terminated for participating in strike action by refusing to work, despite requests by the respondent that he do so, and that such conduct was both serious and wilful misconduct.  The applicant denies that such conduct constituted serious or wilful misconduct.  Each case therefore requires an examination of the circumstances in which the employees participated in the relevant industrial action.  It is common ground that if the strike action in question was a protected action within the meaning of s 170PG of the Industrial Relations Act 1988 (Cth) (now known as the Workplace Relations Act 1996 (Cth)) (the “Act”), it could not be serious or wilful misconduct for the purposes of the award.  The applicant, however, does not concede that unprotected action would necessarily constitute such misconduct. 

Protected Action

4                     It is appropriate to commence with a brief examination of the relevant legislative provisions relating to strike action.  They are found in ss 170PA et seq of the Act.  Section 170PD provides that where an employer or an organization of employees wishes to negotiate an agreement in relation to employees of that employer, either may give notice initiating a bargaining period.  For present purposes, that step was taken on 23 September 1994.  Pursuant to s 170PF, the bargaining period commenced seven days later on 30 September.  Sub-section 170PG(2) provides:-

During the bargaining period, an organization of employees that is the negotiating party, a member of such an organization who is employed by the employer, or an officer or employee of such an organization acting in that capacity, is entitled, for the purpose of supporting or advancing claims made by the organization that are the subject of the industrial dispute, to organize or engage in industrial action directly against that employer and, if the organization, member, officer or employee does so, the organizing of, or engaging in, that industrial action is protected action.

5                     Section 170PH requires at least seventy-two hours’ notice to the employer of any intention to take such action, stating the nature of the intended action and the day when it will begin.  In the absence of such notice, the action is not protected.  Section 170PM provides for “immunity” in respect of protected action.  As I have said, it is accepted that protected action would not be serious or wilful misconduct for present purposes.

Enterprise Agreements

6                     It is also necessary to say something about the significance of enterprise agreements.  The Act permits an employer and its employees to enter into an agreement as to the relationship between them which may not comply with the terms of an existing award, subject to the approval and supervision of the Industrial Relations Commission (the “Commission”).  It appears from the evidence that in 1995, the respondent was anxious to negotiate such an agreement, and that this matter was the subject of ongoing negotiations between the applicant and the respondent.

Background Evidence

7                     Both parties were anxious to canvass the long history of industrial disagreement between the respondent and its employees and the personal qualities of some of the people involved.  In particular, the respondent sought to lead substantial material as to industrial unrest going back over many years, and the applicant led much evidence critical of the attitudes and methods of Mr Hughes, an employee of the respondent.  In general, I took the view that such matters were not prima facie relevant, although I indicated that I would entertain submissions as to the relevance of any particular aspect.  The evidence was generally limited to events occurring in 1994 and 1995.  Events in 1994 have a particular relevance which I will address in the course of discussing the evidence.

Mr Mackay’s Evidence

8                     Mr Mackay is now retired.  He commenced as a meatworker in 1967.  In about 1970, he went to work at the Fitzroy River meatworks.  During 1994 and 1995, he was aware of a campaign of industrial action taken by the respondent’s employees.  He considered that the respondent had retaliated by introducing “minimum tally” and by standing down employees for an extra day on each occasion on which they conducted a stoppage.  The “tally” was the number of carcasses processed in the course of any one day, the minimum and maximum tallies being fixed by the award.  Employees’ remuneration varied to some extent, dependent upon the daily tally.  By selecting minimum tally, the respondent ensured that employees received minimum wages for the relevant day.  Obviously, standing down employees for an extra day following an industrial stoppage also reduced their capacity to earn.  In the course of evidence, it emerged that minimum tally was accompanied by selection of a slow chain speed, another matter of complaint by employees.  Carcasses would enter the boning room (where Mr Mackay was employed) hanging from a continuous chain and pass various stations at which different parts of the boning process were performed.  The speed of the chain was variable.  It is implicit in the complaint that employees were also able to work at varying speeds.  By setting the chain at minimum speed, the respondent ensured that employees would take the whole of a day to dispose of the day’s tally when, in fact, by working at a faster speed, they could have disposed of it earlier and gone home without any reduction in pay for the day.  I will return to these matters at a later stage.

9                     In May, 1995 Mr Mackay understood that the respondent, through its industrial relations manager, Mr Hughes, had agreed that if employees of the respondent at its various plants appointed separate consultative committees with a view to negotiating for separate enterprise agreements, it would lift the tally “to a reasonable level within one month”.  Mr Mackay considered that the respondent had defaulted under this agreement and understood that the applicant intended to take industrial action, a decision about which was to be taken on 19 May 1995.  He attended work on that day.  A meeting was held at which workers indicated a desire to strike.  An official of the applicant, Paul Jensen, advised them against taking that action because no appropriate notice had been given, meaning that it would not be protected action.  Mr Mackay knew that if they took action on that day, they would “probably be sacked by the managers and that they would then selectively re-hire when it suited them.”  Mr Mackay says that he voted against industrial action for this reason.  The majority, however, voted for taking industrial action, and so the employees completed clean-up procedures and left the plant.  Mr Mackay subsequently received a letter advising him that he had been dismissed for “serious and wilful misconduct”.  He was subsequently offered work upon the basis of what he described as “the trial enterprise bargain agreement”.  He declined this work.  I will explain this agreement at a later stage.

10                  In cross-examination, Mr Mackay agreed that he had also been dismissed in mid-1994.  He acknowledged his signature on a document dated 27 June 1994 (ex 24) in the following form:-

I hereby acknowledge that I have received from Australian Meat Holdings Pty Ltd a copy of the statement made by Deputy President Maher on June 22^nd 1994 in matter C31675 of 1994. 

I further acknowledge and understand that the AMIEU Queensland Branch Executive has agreed to adopt the Deputy President’s statement in settlement of that dispute as per the correspondence from the AMIEU State Secretary to Australian Meat Holdings Pty Ltd dated June 24^th 1994, a copy of which I have also been provided with.

11                  The statement by Deputy President Maher is ex 23.  Mr Mackay agreed that he had seen it at some stage.  I infer that a copy was given to him prior to his signing ex 24.  It refers to 118 employees who had been dismissed by the respondent on 7 June 1994 “because they walked off the job” and to various aspects of the dispute.  It then states:-

If the executive adopts and accepts this proposal as the basis for settlement the Company will offer to re-employ the 118 dismissed employees.

I add to that proposal these observations.  Firstly, those 118 employees who were dismissed did not, in my view, carry out the requirements of the dispute procedure and therefore the Company was not wrong in what it did.  Further, that in supporting employees who carry out the disputes procedure, which is a fundamental aspect of the proposal, I take that to mean that the union will not be offering to support those who do not carry out the procedures.  Finally, in a dispute in May 1993 over the dismissal of sixty-nine employees at this plant the Commission then issued a statement in which it noted that in future cases where the disputes procedure was breached the Company would take immediate dismissal action.  This is exactly what has happened on this occasion and involves some of the same people again. 

In the future, the Company has indicated, it will not accept employees’ actions in not working in accordance with the procedure.  It will dismiss the workers concerned and it will not be persuaded to take them back.

12                  I infer that Mr Mackay was re-employed in 1994 with knowledge of the respondent’s attitude as outlined in the statement.  Mr Mackay said that he did not think that such attitude related to his employment with the company during 1995 because he had been stood down over Christmas, 1994 and re-hired.  It is difficult to accept that statement at face value.  Exhibit 23 relates to industrial action in 1994, but refers to a dispute in 1993 and to the respondent’s attitude at that time.  The respondent had indicated, in 1993 and again in 1994, that it would take a serious view of unauthorized stoppages in the future.  There seems to be no justification for limiting the warning to the 1994 working year.  The matter is probably of little importance for present purposes in view of Mr Mackay’s acknowledgment that when he left work on 19 May, he knew there was a risk that he would be dismissed.

Mr McCallum’s Evidence

13                  Mr McCallum commenced at the Fitzroy River Meatworks in 1972.  He was dismissed in 1986 when the present respondent took over the operation.  He then worked as a house painter for two years, but recommenced at Fitzroy River in February 1988.  He continued there until July 1995.  Throughout 1994 and the first half of 1995, he was aware that the applicant was negotiating with the respondent.  Stoppages in support of the applicant’s claims occurred at numerous of the respondent’s plants.  Mr McCallum asserted that the respondent “retaliated” by setting minimum tallies at Fitzroy River and adopting the practice of standing down workers for one day after each one day industrial stoppage.  Between October 1994 and May 1995, there were several stoppages which Mr McCallum understood to be “protected action, approved by the Industrial Relations Commission”.  At some stage, the amount of the applicant’s claim was reduced.  It also agreed that negotiations for enterprise agreements could occur on a “shed by shed” basis, this being a reference to the respondent’s various plants.

14                  Mr McCallum understood that at a meeting in April 1995 between the applicant and the respondent, the latter had agreed to lift the minimum tally if the various “sheds” formed separate enterprise bargaining consultative committees.  There was already such a committee in place at Fitzroy River, but the employees went through the process of re-electing it in order to comply with the “agreement”.  Notwithstanding this, the tally was not lifted.  By 19 May, Mr McCallum understood that there was to be a stoppage which was either to be decided upon or to commence on that day.  He attended work at about 6.30 am and at 9.30 am, went to a meeting.  Paul Jensen told the gathering that the planned stoppage would not go ahead at that time.  He also advised union members against a strike.  Many employees spoke in favour of such action, alleging that the respondent had reneged on the agreement to lift the tally.  Mr Jensen again advised against a strike.  A resolution was passed that they “go home for the day” in protest at the respondent’s “failure to honour their undertaking to lift the minimum tally”.  Steps were then taken to dispose of carcasses and meat in accordance with established practices, and employees left the premises.  On Monday, 22 May Mr McCallum reported for work at 6.15 am and found a meeting taking place at the gate.  Although Mr McCallum did not expressly say as much, it seems that the assembled employees were not permitted to enter the plant.  On Tuesday, 23 May Mr McCallum again attended the plant.  Again, employees were not permitted to enter.  He went home and during the day, received a letter of termination which is ex “A” to his affidavit.  It says:-

Your participation in strike action on 19 May 1995 constituted serious and wilful misconduct, therefore we wish to advise you that as from that date your services were terminated.

It is necessary that you return any outstanding equipment from the company store and upon a clearance receipt being issued, any monies owing to you can be collected from the pay office between the hours of 8.30 am and 1.00 pm.

15                  Industrial action continued.  On 24 June, a mass meeting was held at the local football oval.  The applicant recommended a return to work, and this recommendation was adopted by the meeting.  Mr McCallum returned to work on Monday, 26 June.  On the following Wednesday, the respondent called a meeting of workers at which Mr Hughes and one Neville Tame (another officer of the respondent) indicated that the respondent wished to implement a trial enterprise agreement.  There were no full-time union officials at the meeting.  A vote of those attending indicated substantial support for such implementation.  Mr McCallum estimated the vote at 150 workers voting in favour and 7 against.  However, on the following day, a mass meeting of employees was held prior to commencing work.  The meeting resolved that no work would be performed under the trial enterprise agreement and that work would only be performed pursuant to the terms of the relevant award.  All employees then left the plant.  Industrial action continued.

16                  On Saturday, 8 July another mass meeting resolved that those members to whom work had been offered should accept.  By this time it was appreciated that the respondent would probably not re-employ all former employees.  Mr McCallum returned to work on 10 July, and as no union delegates had been re-employed, he became an acting delegate.  Workers were unsure whether they were to be  employed on the terms of the trial enterprise agreement or pursuant to the award. Mr McCallum said that he spoke to Mr Hughes by telephone and was told that they would be working in accordance with the trial enterprise agreement.  The employees then indicated that they were opposed to working on those conditions.

17                  On Tuesday, 11 July a further mass meeting was held at the meatworks.  Representatives of both the applicant and the respondent were in attendance.  A person named Haycroft, an industrial consultant, attended at the invitation of the respondent to act as an independent chairman.  The respondent’s representatives raised the question of the trial enterprise agreement.  A secret ballot was taken as to its implementation.  The result was 65 votes for and 65 against.  Mr McCallum asserted that Mr Hughes became abusive and tried to force another vote.  However no further vote was taken, and the employees went home.

18                  On Wednesday, 12 July Mr McCallum again attended for work and offered himself, as he said, “for work under the interim award”.  It is not clear whether he made that statement to a representative of the respondent or whether it was merely his own personal intention.  He was told that unless he was willing to work under the trial enterprise agreement, he should go home.  He relayed this to the other employees, and none of them worked on that day.  On 19 July, at a further mass meeting, a union representative read orders from the Industrial Relations Commission, directing that employees return to work.  Mr McCallum understood that the applicant intended to appeal against this order.  A motion was carried that they reject the order of the Commission “until such time as the order could be appealed”.  He did not report for work and subsequently received a letter dated 19 July, terminating his employment.

19                  In cross-examination, he agreed that the applicant had been conducting weekly, one-day strikes for some considerable period.  As a result of the respondent’s policy of standing down workers for one day for every day on which they were on strike, they were actually working for only three days in each week.  He agreed that he and the other workers at Fitzroy River had broken ranks with the union and that they had been advised that it was important that they not go on strike.  Mr McCallum had signed an acknowledgment dated 30 June 1994 (ex 22), in similar terms to that signed by Mr Mackay (ex 24) and referring to ex 23.  He said that he did not remember receiving a copy of ex 23, but it is probable that he did, and that he received it prior to signing ex 22.  He agreed that when he decided to go on strike on 19 May, he knew that he would probably be dismissed because the respondent had warned employees that “wild-cat strike activity” would not be tolerated.  He expected, however, that he might be re-employed at some later time, as in fact occurred.  He also said that at the meeting held on 19 July, he had understood that the order of the Industrial Relations Commission would be stayed.  He considered that he was not obliged to obey the order because he did not consider it to be fair.

Other Witnesses for the Applicant

20                  The witness, Paul Jensen, was a regional organizer for the applicant.  He said that enterprise bargaining had commenced between the applicant and the respondent in 1993, but by September 1994, it was bogged down.  The federal executive of the applicant took over the negotiations and set up a national negotiating committee.  It gave notice commencing a bargaining period, and industrial action followed.  The respondent responded by imposing minimum tallies, reducing the chain speed and standing down members so that they lost pay in addition to that lost as a result of strike action.  By 1995, “tension was very high at Fitzroy River and getting worse”.  Mr Jensen’s understanding was that by 1995, the union had reduced its claim for a 14 per cent pay increase to a claim for a 6 per cent increase and was agreeable to “works by works” negotiation, with a consultative committee being established at each workplace.  He understood that the respondent had agreed that once the consultative committees had been established, tallies would be restored to maximum levels.  He had expected this to occur by mid-May.  On 11 May, the national negotiating committee resolved that if the respondent did not honour its undertaking to lift the tallies, the Queensland branch of the applicant would call on members to stop work for one week by way of protected action.

21                  On 19 May 1995, Mr Jensen received a telephone call from Max Burns, the assistant plant manager at Fitzroy River, who told him that employees had requested a full-time union official to be present at a meeting which was about to take place.  He attended and addressed a meeting of about 100 people from the boning section who were unhappy that the respondent had not honoured its undertaking.  They had expected industrial action on the following Monday.  Mr Jensen indicated that any such action had to be taken on a state-wide basis in accordance with national negotiating committee resolutions, and that it would be necessary for the various works to vote on the question.  This had not yet occurred.  He recommended that members take no action at that time and that they return to work.  He explained that if they took unprotected action, they would leave themselves open to termination.  He thought that Mr Hughes was awaiting an opportunity to take such action. 

22                  Mr Jensen and a number of the applicant’s other witnesses spent a great deal of time denigrating Mr Hughes, complaining of his bad language and his attitudes.  I note these matters.  I have no doubt that Mr Hughes is quite capable of making his point in a forceful way and that his language may not always be appropriate to the most genteel social circles.  I also have the impression that the demonization of Mr Hughes has become a leitmotiv of the dispute between the applicant and the respondent.  Mr Hughes may have caused offence on occasions, but I doubt whether this contributed, in any significant way, to the problems with which I am presently concerned.

23                  The meeting on 19 May continued, the boners being joined by members from another part of the meatworks.  Mr Jensen again explained the issues.  They voted to “go home for the day”.  The premises were then cleaned up, and the employees left.  Mr Jensen informed management of the decision and spoke to Mr Hughes, who advised him that he would advise the company’s position by the end of the day.  Later that day, Mr Hughes advised Mr Jensen that the company had terminated the employment of all members at Fitzroy River for misconduct, breach of the award and breach of contract.  He said that those members who had not been at work would be offered employment, and that the respondent would advertise for labour as soon as possible.

24                  On Monday, 22 May a mass meeting took place outside the works.  Mr Jensen reported his discussion with Mr Hughes.  The members presented themselves for work, but they were not permitted to enter the plant.  A picket line was established on 22 May and remained in place until about 24 July.  Negotiations continued.  A conciliation conference took place in the Industrial Commission on 6 June.  Commissioner Grimshaw recommended that employees return to work upon certain conditions, but there was then a dispute as to the meaning of a relevant clause of the award.  There was a further conciliation conference with Commissioner Grimshaw on 14 June, at which he found that the May terminations were valid and that the respondent would have to comply with a preference clause in the award in re-employing labour.  On 15 June, there was a further mass meeting at which an officer of the union, Brian Crawford, gave a report on the proceedings before Commissioner Grimshaw.  A further meeting on 16 June, attended by about 180 members, resolved that members would only return to work upon the basis of the existing interim award and if all members who had been dismissed were re-employed.  On 23 June, in a telephone conversation, Mr Hughes said that the respondent would not refuse to re-employ any of its former employees.

25                  A further meeting was held on 24 June 1995.  Between 180 and 200 people attended.  Mr Jensen recommended that they return to work.  The recommendation was accepted.  On Monday, 26 June all members presented for work.  Mr Jensen also attended, but was refused admission.  He said that the respondent offered work to about 100 or 150 members but refused work to union delegates and honorary officials.  Those who were offered work accepted.  Subsequently, Mr Jensen was told that the respondent called a meeting on that day to discuss the proposed enterprise agreement.  On 27 June Mr Jensen was informed that seven new employees had commenced at the meatworks, that they were not members of the union, had no medical clearances and no initial training.  Mr Jensen, with a Mr McPhee, went to the works but was not admitted.  Mr Jensen was subsequently told that Mr Parker, the respondent’s manager, had indicated that any person who did not want to work with the seven new employees could leave.  He also said that those former employees who had not been re-employed would not be re-employed in the future.

26                  Mr Jensen subsequently heard of a meeting on 28 June which voted strongly in favour of a trial enterprise agreement.  On Thursday, 29 June he attended a meeting of about 155 members.  They resolved that they were prepared to discuss enterprise bargaining, but only in consultation with the union, and that they were presently prepared only to work under the interim award.  Union officials informed Mr Hughes of that position.  He was then in Rockhampton.  He said that there would be no work offered until members were willing to work under the new enterprise agreement.  The picket line was re-established.  Notice of protected action was given shortly thereafter, and industrial action commenced at all of the respondent’s meatworks on 3 July.  This action lasted for approximately one week.

27                  On 4 July there was a conciliation conference before Commissioner Grimshaw.  The Commissioner “terminated the protected action”.  The union recommended that all workers at Fitzroy River go back to work.  Members at other sheds apparently did so.  Mr Jensen had a conversation with Mr Hughes in which the latter said that the respondent would re-employ all former employees.  On 5 July, a meeting was held at the gates.  Mr Jensen advised members of the terms of the Commissioner’s order and read it out.  A resolution was adopted, rejecting the recommendation.  On Saturday, 8 July there was another mass meeting at which a recommendation was made that members return to work.  That recommendation was accepted, and members returned to work on 10 July.

28                  On that day, Mr Jensen attended at the meatworks.  Some members complained about having to work under an enterprise agreement.  They believed that such an agreement was about to be introduced.  They said that they weren’t being allowed to work under the terms and conditions of the interim award.  Mr Jensen said that:-

At this point in time members made a decision that they would not go to work under the enterprise agreement terms.

29                  Mr Jensen asserted:-

It became apparent that the award was not being applied and that Parker and Burns were attempting to implement by stealth their proposed enterprise agreement which had not been agreed.

No basis was given for this conclusion.

30                  On Tuesday, 11 July Mr Jensen attended a meeting at the meatworks in company with Mr Crawford.  This was the meeting chaired by Mr Haycroft.  I have recorded the outcome of that meeting.  Mr Jensen alleged that on 12 July, Mr Hughes “attempted to start the trial enterprise agreement which involved working 10 hour days.  Saturdays were to be ordinary time and there was no overtime.  The trial also included a 40 hour week and no tally system, even though the day work rates were based upon the tally”.  He asserted that the “kill floor” refused to start work in protest, and then offered themselves for work under the interim award.  They did not work again until Monday 24 July.  A further meeting was conducted on 19 July at which Mr Crawford read out the orders of the Commission.  This included a “return to work” order.  A motion was carried that the members reject the order and await the outcome of an appeal.  Nobody presented for work on that day, and the picket line was reformed.

31                  A mass meeting on 24 July was attended by approximately 130 members.  Mr McPhee, on behalf of the union, reported on the outcome of an application to stay Commissioner Grimshaw’s order.  He also advised that the matter had been set down for hearing before a Full Bench on 28 and 29 July.  Mr Jensen recommended that members return to work as the applicant had heard rumours that non-union labour was to be employed.  The meeting voted on the recommendation, the result being a tie.  Mr Jensen again strongly recommended that members return to work.  About twenty to thirty members then presented for work, and the majority subsequently followed.  Some were permitted to start immediately, whilst others were told that they would be contacted when needed.  Some members were neither employed nor told that they would be contacted.

32                  In cross-examination, Mr Jensen said that the applicant and the respondent subsequently reached an agreement pursuant to which there are currently extended shifts and no tallies at the Fitzroy River meatworks.  This agreement has now been in place for about four years.

33                  Walter James Curran was an official of the applicant at all relevant times.  He said that in about 1992, negotiations commenced, designed to develop a national award for meatworkers, including wage increases.  In June 1993 there was a claim for a 9 per cent wage increase for Queensland workers.  Enterprise bargaining proceeded slowly.  He alleged that the respondent was “particularly intransigent and adopted what I regarded as an ideological strategy in opposition to the claim”.  There was some difference of opinion in the appellant’s ranks as to tactics, including as to the desirability of industrial action, particularly against the respondent.  It was perceived that the respondent was aiming to remove the tally system and at “casualizing” the industry.  I take the latter reference to be to the employment of labour on a casual basis.

34                  In 1994, the Industrial Relations Reform Act 1993 (Cth) came into operation, allowing for protected action, provided that employees complied with the provisions of the Act.  In September 1994 the applicant established a national negotiating committee to take charge of the dispute in Queensland.  A bargaining period was initiated and claims made.  The respondent retaliated by imposing minimum tallies at Fitzroy River.  Agreements were reached with other employers.  Mr Curran considered that during 1994, the respondent was faced with potential financial difficulty relating to plant maintenance.  He thought that the respondent was interested in reducing labour costs and wished to exclude the union or reduce its presence at work sites.  It seems that Mr Curran, who was based in Victoria, was particularly concerned to ensure that Mr Hughes’ approach to industrial relations was not successful.  Mr Hughes also caused concern by challenging the applicability of the relevant award to workers at Fitzroy River.  As a result of his challenge, the union sought an interim award, which was granted in March 1995.  I will discuss this award at a later stage.

35                  Mr Curran said that the respondent maintained minimum tallies and slow chain speed from November 1994, throughout the period of dispute.  It also stood down employees at Fitzroy River for an additional day for each day of stoppage.  On occasions during 1995, Mr Hughes stated that he had prepared a proposed enterprise agreement, but he did not produce it until late in June of that year.  Mr Curran formed the view that Mr Hughes was looking for an opportunity to undertake the mass dismissal of employees.  Mr Hughes’ tactics were apparently successful to the extent that the applicant reduced its claim to a 6 per cent increase.  It also agreed to negotiation on a “shed by shed” basis.  Mr Curran alleged that in exchange for those concessions, Mr Hughes had agreed to raise the tally “and apply the award”.  On 11 May, the national negotiating committee resolved that Mr Hughes be urged to honour the undertaking and that if he did not do so, there should be further stoppages (ex 15).  The Fitzroy River workers were very anxious to take industrial action because, as it was said, they had borne the brunt of Mr Hughes’ tactics for longer than some of the other sheds.  The applicant was, however, anxious to maintain uniform action at all of the respondent’s sheds.  Mr Curran said that he did not regard the taking of industrial action, whether protected or unprotected, as being misconduct and that in 1994, the laws relating to protected action were still relatively new, suggesting that they were not fully understood. 

36                  Mr Curran said that he understood Mr Hughes to have undertaken on 21 April to “raise the minimum tally”, depending upon the availability of stock.  In the course of cross-examination, he indicated that Mr Hughes had offered to do all in his power to achieve an increase in tally, subject to the availability of stock.  Mr Curran said that for reasons peculiar to the economics of the industry, management would choose either minimum or maximum tally, rather than any intermediate position.  His attention was drawn to the resolution of the national negotiating committee dated 21 April (ex 14).  It was pointed out to him that although the resolution emanated from the meeting at which Mr Hughes allegedly gave his undertaking, it made no reference to it.  Mr Curran’s explanation of this was unconvincing.  The following exchange is informative:-

(Mr Herbert) And it was central to the resolution of that situation, from what you say, that Mr Hughes had given an undertaking, unequivocal undertaking, that he would move to a maximum tally, and yet a central feature of an agreement like that wasn’t even put in the resolution that was put to the employees?

(Mr Curran)  I am sorry, I never said Mr Hughes gave an unequivocal undertaking.  I never said that.  And I’ve answered your question, and I will answer it again for you.  Mr Hughes, in the discussions, made it clear that he would restore maximum tally to the works, including Rockhampton, and in respect to the comment that you alleged to Mr Hannon about ten weeks, I explained to you why that would have said, and that Mr Hughes agreed and understood, it was understood that it was a proviso.  Anybody in the industry knew, it wasn’t a mandate to say that you’re going to get maximum tally day in and day out.  Provided the livestock were available, then Mr Hughes would do all in his powers to see that that would be accomplished.  That it what was done, and when this resolution would have been put to Rockhampton, I would have expected the people who were on the national committee, or at the works, would have related what the intent from the discussions were, from questions that would have been asked, and not to set anything in motion other than to get this going so you could start the way forward.

37                  Mr Curran had previously said that the purpose of the resolution was “an attempt to have an agreement for us to proceed around the headings that had been negotiated.”  It seems curious in the circumstances that there should have been no reference to raising the tally.  Mr Curran agreed that in 1995, the appellant’s plan was to concentrate its resources on what was described as a “spearhead campaign” against the respondent.

38                  Ross Michael Richardson was an official of the applicant and a member of the national negotiating committee during 1994 and 1995.  Mr Richardson said that he had directed that a fax dated 18 May 1995 (ex 18) be sent to Mr Hughes at either the respondent’s Dinmore plant or its Bremer River plant, enclosing a copy of the resolution dated 11 May, 1995.  The letter refers particularly to the question of minimum tally and proceeds as follows:-

The position of the union remains unchanged in that the status quo must remain in place before any enterprise bargaining can proceed and that includes the application of the awards in the manner that applied prior to the present dispute.

We are now in dispute with you over a number of award clauses which you have blatantly refused to apply in the correct manner, and by that I mean the manner in which they were applied for many years leading up to this dispute. 

I would appreciate your urgent response and agreement to these issues and advise that unless we receive confirmation that, (1) the awards will be correctly applied and, (2) that AMH will act on increasing its production, thereby allowing the present employees to earn a livable wage and put an end to the disruptive industrial environment which is being caused by trying to starve the workers into submission, then the attached resolution of the combined negotiating committee may be activated.

39                  The attached resolution revealed an intention to call on members to stop work for a week unless Mr Hughes gave an immediate undertaking to honour his “commitments” and a resolution to take whatever industrial action might be necessary to achieve an enterprise agreement with the respondent.  Mr Hughes denied ever receiving this letter, by fax or post.  It was faintly suggested that the letter and accompanying resolution might constitute notice of industrial action.  They cannot do so because there is no indication of the starting date of the proposed action as required by subs 170PH(3) of the Act.

40                  Mr Richardson said that the letter originated from the Brisbane office of the applicant.  He referred to ex 19, an extract from the office posting book, which suggests that the letter was posted to Mr Hughes.  Mr Richardson said that he also requested that the letter be faxed to Mr Hughes.  The only copy of the letter which has been produced bears fax markings which, to my mind, suggest that such copy was faxed from the Central District office of the applicant at 12.45 pm on 18 May.  Mr Richardson said that a copy was probably faxed from Brisbane to Rockhampton, but that would not account for these fax markings.  The applicant has not provided a “clean” copy of the letter or any copy bearing fax markings suggesting transmission from a fax machine at the Brisbane office.  The only version held at the Brisbane office is in the form of the exhibit.  No transmission report is available.  Mr Richardson said that at the relevant time, the applicant’s machine did not generate such a report.  No cover sheet has been produced of the kind generally transmitted as part of a fax transmission.  Mr Hughes said that such a letter, if received by the respondent, would have been referred to him.  Given Mr Hughes’ denial of receipt of either the letter or the fax transmission, and the irregular circumstances to which I have referred, I am not prepared to find that any such letter or fax was sent to Mr Hughes or the respondent.

41                  Another aspect of the letter and the accompanying resolution are of interest.  In paragraph 2 of the letter and in paragraph 2 of the resolution, reference is made to increasing production to “above minimum tally”.  There is no reference to maximum tally.  Mr Richardson was of the view that the letter referred to a level between minimum and maximum.  This is inconsistent with Mr Curran’s evidence that in the industry, a decision to move to above-minimum tally would necessarily mean maximum tally. 

42                  In cross-examination, Mr Richardson was also asked about a letter to Mr Hughes, dated 3 May (ex 20).  The letter reads relevantly as follows:-

As you are aware, we have elected our negotiating committee at Fitzroy River and are in the process of formulating an enterprise agreement. 

We have had three meetings with the local management and our committee has had some productive ideas put forward.  We have organized further meetings for our committee to discuss these ideas.  Our members are keen to progress to a position of at least earning a respectable wage.

To achieve this, we would request that, as a sign of good faith, the company progressively increase the kill level and boning room tally between minimum and maximum tallies as per the award.

The membership would view this as a positive sign from the company as an indication of their willingness to enter into a mutually beneficial enterprise agreement.

43                  This appears to be a little inconsistent with a belief on the part of those sending the letter that there had been a firm undertaking by Mr Hughes to raise tallies upon the formation of a negotiating committee.  The letter came from “The On-Plant Negotiating Committee AMH Fitzroy River Works”, and it seems reasonable to infer that such a body would have been kept aware of the state of negotiations between the applicant and the respondent, particularly as its own election was allegedly in discharge of the applicant’s obligation given in exchange for Mr Hughes’ undertaking.  Mr Richardson agreed that by 3 May, the relevant people would have been aware of the undertaking allegedly given by Mr Hughes.  The next witness gave an explanation of ex 20 to which I will refer in a moment.

44                  The witness, John Patrick Curran, had been employed at Fitzroy River for about twenty years prior to July 1995.  In 1995, he was the applicant’s works secretary at that meatworks and was a member of the enterprise bargaining committee.  There were about six meetings of that committee between 1994 and mid-1995.  In the course of its deliberations, Mr Hughes made it clear that the respondent wanted flexible working hours, no tally system and work days of up to ten hours.  In about April 1995, Mr Curran heard that Mr Hughes had agreed to lift the minimum tally “and go back to normal production levels within six weeks on the basis of an agreement with the union”.  He understood that the union had agreed to negotiation on a “shed-by-shed” basis.  He said that Mr Hughes did not keep his end of the bargain and did not lift the tally.  Early in May 1995, Mr Curran was told by Mr Darren McPhee that the national negotiating committee had decided on a stoppage if the tally was not raised.  He said that employees at Fitzroy River were angry that Mr Hughes had not kept his end of the bargain.  They understood that there was to be a stoppage to be decided upon at a meeting on one Friday in May, to commence on the following Monday, and to last for a week.  He understood that at the meeting on 19 May, Mr Jensen advised against any stoppage because it would be unprotected.  The meeting, however, decided upon a one-day stoppage on that day and that they would return to work on the following Monday.  The plant was then cleaned up, and the employees finished work.  During the following week, Mr Curran received a letter terminating his employment.  He has not returned to Fitzroy River.  At some time in June, he was contacted by a representative of the respondent.   He was told that there was to be a meeting, and that if it went according to plan, there might be work thereafter.  Mr Curran attended the meeting.  This was the meeting at which the vote on the enterprise agreement was equally split. 

45                  With regard to the wording of ex 20, Mr Curran said that it was worded in that form to avoid further inflaming the situation.  In cross-examination, he said that his understanding of Mr Hughes’ undertaking as to the tallies had been that they would be gradually increased from minimum to maximum over a period of six weeks.

Respondent’s Witnesses

46                  Leslie William Parker was the plant manager at Fitzroy River.  He said that on 7 June 1994, 118 boners and slicers, including Mr Mackay, were terminated for refusing to work.  All other employees then took strike action in support of them, and the plant was closed.  The applicant invited the respondent to re-employ the terminated workers upon the applicant’s indicating that it would not support any member who acted in disregard of union policy and rules.  Negotiations and correspondence ensued, resulting in re-employment and the statement by Deputy President Maher to which I have previously referred.  The terminated employees were required to apply for re-employment, and every employee was required to acknowledge receipt of a copy of Deputy President Maher’s statement and of the adoption by the union of the terms of settlement referred to in that statement.

47                  During the period from June 1994 to May 1995, there were ten periods of strikes at Fitzroy River, each of them purportedly protected action pursuant to the Act.  On 12 May, the plant union president, Darren McPhee, requested permission to hold a mass meeting.  Before any such permission was granted, the meeting took place.  It was initially a meeting of boning room employees, but they were later joined by slaughter floor employees.  Employees did not return to work immediately after the meeting.  Union representatives sought to speak to Mr Parker and his assistant, Mr Burns, but they refused to speak to them whilst employees were not working.  Employees then returned to work.  Mr Parker subsequently met with union representatives.  Mr Hughes also participated by telephone.  Mr McPhee said that the stoppage had occurred because the company would not move to increase employees’ earnings.  Mr Hughes said that if they were “fair dinkum”, he would come to Rockhampton and spend two days with them, discussing the matter.

48                  Between 15 and 18 May, Mr Parker heard rumours that there was to be notice of a one-week stoppage over tally levels and that the notice would be given late on Thursday so as to prevent the respondent from cancelling the kill on Friday.  This implies that with enough notice, the respondent would not kill on the Friday, and that the applicant would aim to give minimum notice of industrial action to prevent the respondent from so acting.  Carcasses of beasts killed on Friday would normally be boned on the following Monday, after being kept in cold storage over the weekend.  It is not entirely clear whether stopping the kill would avoid further economic pressure on the respondent or increase economic pressure on employees by reducing their incomes.  It may be that both aspects were involved.  On the evening of Thursday, 18 May Mr Parker arranged for a security guard to watch the company’s fax machine during the evening and to inform him of any notice of stoppage given by the union.  No such notice was received.  On 19 May, Mr Parker heard that employees had held a meeting early in the morning.  As a result of something that he heard about this meeting, he contacted Mr Hughes, who told him to stop the kill.  Subsequently, Mr Jensen told him that he had tried to get the employees to return to work, but that they had refused.  Mr Darren McPhee said that he had also tried to bring about that result.  Employees left the plant at 9.30 am. 

49                  On Sunday, 21 May Mr Hughes told Mr Parker not to allow employees to start work on the following day as he was considering alternative courses open to him.  Later on that day, Mr Hughes told Mr Parker that employees were to be terminated.  On Monday, 22 May Mr Parker spoke to Mr Jensen, who advised him that Mr Hughes had told him (Jensen) on Friday that the workers who had stopped work were to be terminated.  Mr Parker then saw a large group of people walk into the plant, approach Mr Burns and have a discussion with him.  Mr Jensen subsequently told him that the workers were offering themselves for work and that they had only left work on Friday in protest.  Mr Parker said that they should have considered the consequences before they stopped work and that they now had a problem.  There was a subsequent conversation involving Mr Hughes, Mr Parker, Mr Jensen, Mr McPhee and Mr J Curran.  Mr Hughes said that those who had taken part in the stoppage were terminated, that those who were absent from work on Friday for a legitimate reason would be offered jobs and that he would talk to the union about the future of those terminated.  Letters of termination were then prepared.  As the chillers were full, staff members commenced boning and were subsequently joined by employees from other plants. 

50                  On 23 May, Mr Jensen and Mr Hughes discussed the dispute by telephone in Mr Parker’s presence.  Mr Jensen’s position was that employees were ready to go back to work on the conditions existing at the start of the dispute and to discuss enterprise bargaining.  Mr Hughes said that he did not accept this, as the applicant had been negotiating with the respondent right up to the day before the stoppage.  Mr Hughes pointed out that he had previously complained about discipline of employees who did not comply with the law relating to industrial stoppages.  The respondent subsequently advertised for labour.  A meeting of former employees took place at the gates on Friday, 26 May.  The various plant officials of the applicant and Mr Jensen then came to Mr Parker’s office.  There was a further discussion by telephone with Mr Hughes.  Mr Jensen said that Mr Richardson, the union president, had agreed that employees would not strike in future without appropriate sanction.  Mr Hughes said that he needed more than Mr Richardson’s assurances on that score.  There was a discussion about employing new employees and about the rules of picketing. 

51                  On Wednesday, 31 May Mr Parker was told to prepare lists of suitable employees.  He already had this matter in hand.  Potential employees were subsequently contacted.  On 7 June, numerous applications for employment were received, although the picket line was still in place.  On 24 June, Mr Parker arranged to commence killing.  On Monday, 26 June 215 employees commenced, including Mr McCallum.  Mr Parker told people on the kill floor that they would be starting enterprise bargaining talks almost immediately.  On Tuesday, 27 June employees were accepted for the boning room.  They were also told about impending enterprise bargaining.  During that day, seven employees who had not previously been employed, started work.  Mr Parker heard rumours that there might be stoppages over their employment.  He told the boning room and kill floor employees that they had been employed during the strike, and that the company would not be terminating them. 

52                  On 28 June the respondent’s proposals for enterprise bargaining were outlined at a meeting of employees.  A consultative committee was elected, and discussion ensued.  On two occasions, Mr Hughes offered to have the respondent’s representatives withdraw so that frank discussion could take place, but on each occasion, a majority of members indicated that this was not necessary, although there was no formal vote.  At the end of the meeting, there was a substantial majority in support of the proposal.  On the following day, however, union officials said that employees did not want to engage in the trial enterprise agreement and would only work under the award.  Mr Hughes said that he considered that they were on strike.  Subsequently, the respondent received notice of strike action from midnight on Sunday, 2 July until midnight on Sunday, 7 July.  This reference in Mr Parker’s affidavit should probably be to Sunday, 9 July.  As a result, staff came from other plants to process meat already in the chillers.

53                  Mr Parker said that on Tuesday, 4 July the Industrial Commission determined that employees should resume work on the basis of a six week trial of the enterprise bargain.  He prepared the plant to kill on the following Wednesday, 5 July.  That day, he heard Ross Richardson on the radio, saying that the strike was not yet over and that the applicant intended to appeal against the decision.  The picket line remained in place.  Mr Parker was asked by Mr Tame to distribute copies of the Commission’s decision to the picket line.  He did this.  On 6 July, Commissioner Grimshaw ordered employees to return to work.  On Saturday, 8 July a mass meeting of employees voted to return to work under the interim award.  On Monday, 10 July the kill floor employees reported for work on the basis of the interim award.  Mr Parker tried to talk them into starting on the terms of the trial enterprise agreement.  Mr McCallum and a Mr Roots came to Mr Parker’s office and told him that they would not start the trial.  They spoke to Mr Hughes by telephone and received copies of the Commission’s orders.  They then returned to a meeting which was taking place.  On Tuesday, 11 July at a further meeting, a vote on the enterprise agreement was tied.  Mr Hughes then advised employees that work would be available for those who wanted it under the terms of the enterprise agreement, but subject to the result of the Commission hearing on the following day.  This aspect of the evidence may be of some importance.

54                  On Wednesday, 12 July about twelve people reported to work and were employed under the terms of the trial agreement.  On Thursday, 13 July Mr Parker arrived at work at about 6.00 am and saw employees gathering outside the gate.  He spoke to them and was told that they were willing to work under the interim award.  Mr Parker said that the respondent would employ them under the trial enterprise agreement.  A picket line was then formed.  Only fifteen employees worked under the terms of the trial agreement.  On 14 July the picket line was still in place, but nineteen employees worked under the terms of the agreement.  On Monday, 17 July representatives of the applicant spoke to Mr Parker, advising that employees were prepared to work under the terms of the interim award and to negotiate an enterprise agreement.  Mr Parker responded that work was only available under the enterprise agreement.  There was a further telephone conversation with Mr Hughes in which he advised to the same effect.  Seventeen employees worked under the trial agreement on that day.  On 18 July, the Commission varied the interim award to permit the trial enterprise agreement with effect from 17 July.  About seventeen employees worked on 18 July.  On 19 July, those employees who had not returned to work were terminated.  This included Mr McCallum.  On Monday, 24 July the picket line was again in place, but only for an hour or two. 

55                  Maxwell Edward Burns was the assistant plant manager at the relevant times.  He said that on 19 May 1995 he spoke to Darren McPhee after noticing that boning room employees had not gone back to work following their smoko.  He was aware that a meeting had taken place.  Mr McPhee said, “They are not having a go at you, they are having a go at us.”  Mr Burns said, “Over the 72 hours not being given?”.  I assume this to be a reference to notice of industrial action.  Mr McPhee said, “Yes”.  There was further discussion about trying to resolve the matter.  Mr Burns advised Mr Parker, who then advised Mr Hughes.  Later that morning, Mr Burns heard Mr Jensen addressing a meeting. Subsequently, Mr Jensen and Mr McPhee spoke to Mr Parker, Mr Howland and Mr Burns in Mr Parker’s office.  They said that the workers were going home in protest over the company not increasing the kill to maximum tally and that they would return to work on Monday.  Mr Jensen said that he had done everything possible to get them back to work. 

56                  On 22 May there was a mass meeting of employees at the gate.  About 150 employees attempted to enter the premises.  Mr Burns told Mr McPhee that there was no work available.  Mr McPhee asked if workers had been sacked.  Mr Burns said that he had no instructions and directed them to leave.  Mr McPhee asked if there would be work on the following day.  Mr Burns said that he had not been advised of this.  The employees subsequently returned to the road.  Later that morning, there was a meeting between Mr Hughes, Mr Parker and Mr Burns, representing the respondent and Mr Jensen, Mr McPhee and Mr J Curran, representing the applicant.  It may be that Mr Hughes participated by telephone.  On Tuesday, 23 May a picket line was set up at the gate.  Negotiations continued.  On 31 May and 1 June, management discussed re-employment of identified personnel, and Mr Hughes instructed local management to telephone those people to inform them that the respondent intended to set up an enterprise agreement shortly after work re-commenced and that if they were interested, they should submit applications prior to 7 June.

57                  On Wednesday, 7 June there was another meeting at the gate, following which numerous former employees came into the plant.  They said that they wanted to apply for jobs.  Mr Parker told them that they could get application forms from the office.  The group then left.  On 8 June, some of the people who had been invited to come to work did so.  On 16 June, Mr Crawford, an official of the applicant, inquired as to whether employees would be on piece-work or time-work if they started.  Mr Burns said that he would get back to him on this.  On 26 June, operations commenced with 215 employees processing about 181 head of cattle.  On 27 June, the kill level was increased.  On 28 June, management arranged a meeting with all employees at which Mr Hughes proposed a six-week trial of an enterprise agreement.  The meeting was adjourned at 11.00 am so that employees could consider the proposal.  It recommenced at 1.00 pm.  Only seven people voted against the trial. 

58                  On Thursday, 29 June Mr Burns arrived early at the works and noticed Mr Jensen and other officials of the applicant at the front gate, stopping employees from going to work.  Subsequently, officials of the applicant spoke to representatives of the respondent, advising that employees would not work under the trial enterprise agreement, but would work under the award.  Mr Hughes said that he considered the employees to be on strike.  Later that day, a notice of protected action in the form of a strike to last the whole of the next week (2-9 July) was received.  The picket line continued in place.  On 4 July, the Commission recommended a return to work on the basis of the trial and on 5 July, terminated the bargaining period.  On 6 July, the Commission ordered employees back to work.

59                  On 10 July, employees reported for work under the interim award.  They were given copies of the proposed trial, and Mr Parker sought to persuade them to commence on that basis.  Mr McCallum and Mr Roots came to Mr Parker’s office and said that they would not work the trial.  Mr Hughes was contacted by telephone and instructed Mr Parker to give copies of the orders of the Commission to Messrs McCallum and Roots, who then returned to the other employees.  Messrs Parker, Howland and Burns subsequently went to a meeting of employees at which Mr Jensen said that the orders of the Commission were only recommendations and that the union recommended that they return to work under the terms of the interim award.  At a meeting on 11 July, union officials and officers of the respondent gave extensive explanations of the terms of the proposed enterprise agreement.  A vote was taken which resulted in equal numbers for and against the trial.  Mr Crawford told members that they should present for work under the award, but Mr Hughes said that work would be offered in accordance with the enterprise agreement.  On 12 July, twelve people presented for work under the trial enterprise agreement, and all were employed.  In the following week, a few more people returned to work on that basis.  On 18 July, the Commission varied the interim award to permit the trial.  The picket line remained in place.  Employees who had not returned to work were terminated on 19 July.  (Mr McCallum was one of these employees.)

60                  John Thomas Hughes was, at relevant times, the General Manager (Abattoirs’ Industrial Relations, and Personnel) for the respondent.  He said that from June 1994 to May 1995, there had been ten periods of strikes by employees at Fitzroy River, each purportedly protected action pursuant to the Act.  During that period, there were also regular appearances in the Commission.  On or about 17 October 1994, the respondent notified the Commission and the applicant that it considered its operations to be “award free” and sought a “minimum rates” award for each of its plants.  It indicated that, assuming no further unprotected industrial action and genuine attempts on the part of the applicant to reach agreement, it would maintain existing rates, methods of payment and other terms and conditions until an award or enterprise agreement could be negotiated.  On 31 March 1995, Boulton J made an interim award.  I will return to this award at a later stage.

61                  On 13 April Mr Hughes advised the union that as from 18 April, Fitzroy River would be working on a “time-work” basis in accordance with the interim award.  The union notified the Commission of an industrial dispute in relation to that and other matters, requesting an urgent hearing.  A hearing started on 20 April but was adjourned to allow negotiation.  On 21 April, Mr Hughes attended a meeting at the union office to discuss resolution of the dispute.  One issue discussed was the tally.  Mr Hughes said that on more than one occasion, he said that he would not give any guarantee or commitment to increase to maximum tally and that the plant would work to the award.  Subsequently, the applicant and respondent reached agreement in relation to the Fitzroy River plant as follows:-

1.         Work would recommence on a piece-work basis;

2.         The payment of incentive rates would be restored to follow-on labour and time-workers in the original manner and not as a constant unit rate;

3.         The union was not opposed to shift-work being introduced.

62                  It was further agreed, with respect to enterprise bargaining negotiations, that the “up-front wage claim” would be removed and that negotiations would be referred to plant negotiating committees.  The terms of this agreement were set out in a resolution of the national negotiating committee dated 21 April (ex 14).  On the same day, the union wrote to Mr Hughes (ex “H” to his affidavit) saying:-

On behalf of the national negotiating committee, I would confirm that the claim for a 6 per cent wage increase will now be referred to the individual plant-by-plant negotiating committees, and advise that enterprise bargaining negotiation will now proceed through those plant committees.

It is agreed that those negotiations will proceed without delay and will be subject to review as to their progress in four weeks time.

63                  Mr Hughes wrote back on the same day (ex “I” to his affidavit) saying:-

The company will accept the proposal put by you, however, like the union, we are not prepared to forsake our award rights.

If the company requires shifts to be worked at Rockhampton and the union does oppose the move and refers the matter for determination by the Commission, the company will exercise its right to operate under the time-work provisions of the award in the same manner that has operated prior to our acceptance of this proposal.

64                  On 24 April, Mr Richardson advised Mr Hughes that workers at Fitzroy River had voted to reject the agreement reached between the applicant and the respondent.  Mr Hughes replied that if the Rockhampton employees did not want to accept the resolution, then they would remain on time-work.  Subsequently, Mr Richardson said that employees had resolved to accept the resolution.  On 24 April, the plant recommenced production on a piece-work basis.

65                  It will be recalled that on 11 May, 1995 the national negotiating committee adopted a resolution complaining that Mr Hughes had not increased tallies.  Mr Hughes was not made aware of this resolution until it was mentioned in the Industrial Relations Commission on 9 June.  However he was told, on about 11 May, that employees had voted to go on strike in protest at the respondent’s not working maximum tally.  On 12 May, there was an unauthorized stoppage for a meeting.  In a subsequent telephone conversation between Mr Hughes and Mr McPhee, the latter said that the stoppage was due to the company’s not moving towards maximum tally.  Mr Hughes said that he was not prepared to increase tallies because of continuing industrial stoppages, and that if employees were serious about earning more money, they should look at enterprise bargaining.  He said that he was willing to come to Rockhampton for two days to discuss the matter with them.  He also said that if employees took unprotected action, they would be terminated.

66                  Between 15 and 18 May, Mr Hughes became aware of a rumoured stoppage, notice of which was to be given late on Thursday night so that the company would not have time to clear out the chillers.  No such notice was received.  On Friday, 19 May Mr Hughes heard of a meeting of boning room employees, apparently protesting against the applicant’s not having given the respondent notice of stoppage.  Mr Parker was told to stop slaughtering.  That afternoon, Mr Hughes spoke to Mr Jensen, telling him that striking employees would be terminated.  On Sunday, 21 May he instructed Mr Parker to proceed accordingly.  Negotiations continued thereafter.  There was no substantial difference between Mr Hughes’ evidence and that of the other witnesses in this regard.  The parties appeared before Commissioner Grimshaw on 9 June 1995, at which time the applicant said that it had advised its members not to take industrial action, and that it had known that the company would take what it called “retaliatory action”.  The Commission recommended that the company comply with clause 10 of the award, requiring preference to union members in engaging labour.  At this stage, employees were refusing to go back to work unless all ex-employees were re-employed, a position which Mr Hughes would not accept. 

67                  On 26 June, some ex-employees were re-engaged and on 28 June, Mr Hughes addressed the meeting at which the proposed enterprise agreement was approved by a substantial majority.  The following day, as I have said, the union advised that employees would not work pursuant to the enterprise agreement, but would work pursuant to the interim award.  On that day, the applicant gave notice of a strike from 2 to 9 July (ex 17).  The matter was again before Commissioner Grimshaw on 4 July.  He recommended a trial of the enterprise agreement and advised that he intended to terminate the bargaining period.  On 5 July, he did so.  The applicant appealed. 

68                  On 6 July, Commissioner Grimshaw issued a certificate under s 166A of the Act, allowing the respondent to sue the applicant for damages.  He said that he would revoke the certificate if employees returned to work on 7 July.  The applicant rejected this, and Commissioner Grimshaw directed employees to cease industrial action and to work in accordance with the lawful and reasonable directions of their employer.   The applicant was directed to take all necessary steps to ensure compliance.  It indicated that it would not do so as it did not believe that the Commission had power to make the order.  On 11 July, the second vote on the enterprise agreement was taken, resulting in the tied vote.  Mr Hughes then said that work would be offered under the trial agreement but that if the Commission subsequently so decided, then working arrangements would be adjusted, presumably to comply with the terms of the award.  This aspect of the evidence may be of some importance.  Mr Crawford said that employees should present themselves pursuant to the award.  On 12 July, a small number of employees returned to work.  

69                  Further hearings in the Commission occurred on 12 and 17 July, following which Commissioner Grimshaw issued an order suspending the operation of the interim award to enable the implementation of the trial.  On 19 July, Mr Hughes was advised that a meeting of employees had rejected the Commission’s order.  Mr Hughes told Mr Crawford that employees who refused to work in accordance with the order would no longer be employed by the respondent.  Mr Crawford said that he had made it clear to employees at the meeting that if they decided not to return to work, they would be terminated.  Mr Hughes advised Commissioner Grimshaw of these events by letter dated 19 July.  On 20 July, Commissioner Grimshaw’s order as to the termination of the bargaining period was stayed and subsequently, the applicant’s appeal against the “return to work” order was successful.  There was also an appeal against the order suspending the interim award.  Whilst that appeal was technically successful, the Full Bench made its own order, also effective from 17 July.  That order permitted the trial of the enterprise agreement, but the terms were varied to provide greater protection of employees’ conditions.

70                  Mr Hughes’ perception of the applicant’s industrial campaign was a little different from those of some of the other witnesses.  He considered that the strikes had regularly been for two days, on Fridays and the following Mondays.  His response was to stop the kill to avoid over-filling of the chillers.  Thus he would stand-down the slaughtermen on Thursdays.  This would mean that there would be no product for boning until the next Wednesday, following a kill on Tuesday.  Therefore he would stand down the boning room staff for the Tuesday.  He was cross-examined upon the basis that most of the stoppages were for one day, suggesting that the applicant accepts that there were at least some one-day and some two-day stoppages.  Mr Hughes said that he had not received the letter of 18 May (ex 18) or any fax transmission of it.  By 19 May, Mr Hughes had heard rumours of a stoppage likely to last a week but had been unable to confirm them.  He was therefore expecting notice of intention to take industrial action.

Proceedings in the Industrial Relations Commission

71                  The circumstances surrounding the ultimate dismissal of Mr McCallum require a close examination of proceedings in the Commission, although those proceedings are not particularly relevant to Mr Mackay’s position.  The above summary of the evidence includes the beliefs of some witnesses as to what was happening in the Commission, but those beliefs were not all accurate.  It is difficult to isolate the relevant incidents of those proceedings and to relate them to the evidence of the various witnesses.  Mr Hughes was the only witness who referred to them in detail, although a number of documents in evidence also assist in identifying the course of events. 

72                  Exhibit 27 is a transcript of proceedings before Boulton J on 20 April 1995.  At pp 48 and 49, his Honour said:-

During the conference … discussion took place in relation to the basis on which enterprise bargaining might proceed at the AMH plants.  The discussion centred on a number of proposals and concessions which needed to be considered by the parties as a basis for those negotiations.

Those points are as follows:

Firstly, the union would withdraw its claims in relation to up-front payments as a pre-condition for enterprise bargaining at the AMH plants.

Secondly, there would be a consideration of the maintenance of a status quo position during the negotiations at the plants.

Thirdly, the plant level negotiations would allow all issues to be addressed and would involve rank and file employees as well as union officials.

Fourthly, a timetable for the enterprise negotiations would be established and that timetable would involve regular report-back sessions to the Commission.

…

The company has put forward a proposal in relation to the maintenance of the status quo during the enterprise bargaining negotiations.  That proposal has been the subject of considerable discussion.  The union has indicated that it wishes to consult its delegates and members about that proposal.

73                  It seems likely that the meeting on 21 April (at which Mr Hughes is said to have undertaken to increase the tally) was concerned with the question of the status quo as discussed in the Commission on 20 April.  In those circumstances, the absence from the subsequent resolution (ex 14) and letter to Mr Hughes (ex “H” to his affidavit) of any reference to an undertaking to raise tallies suggests strongly that anything said by Mr Hughes as to that matter had not amounted to, or been understood as a firm undertaking.  I think it likely that either in the Commission or at the meeting on the 21^st, some indication was given as to the possibility of tallies being raised, but I am not satisfied that any undertaking was given as suggested by Mr W Curran and other witnesses.  If workers at Fitzroy River believed that there had been any such undertaking, then they had been misled.  I am strengthened in this view by the subsequent letter from the plant negotiating committee to which I have referred (ex 20), and by the general lack of agreement amongst the applicant’s witnesses as to the terms and meaning of the alleged undertaking.

74                  On 4 July, Commissioner Grimshaw terminated the protected action then being taken by the applicant and indicated in his reasons (ex 34), that he considered the basis for an interim enterprise agreement outlined by Mr Hughes, was (for Fitzroy River):-

… an appropriate basis on which a resumption of work should occur for a trial period of six weeks.  During this period a consultative committee should be formed to oversee and monitor its progress.  Should any dispute arise in relation to the working of the agreement normal settlement of disputes procedure should prevail.  Further, the proposal presented by the union and marked ex “AMIEU 2”, starting at point 4 and going onwards, should form the basis of further negotiations for enterprise bargaining agreements to be created in other AMH plants in Queensland.  It should be noted that the enterprise agreement for each plant must stand alone and should not be used as a precedent.

75                  He then said:-

I repeat, no worthwhile purpose can be achieved by the prolonging of this industrial dispute.  The Commission recommends an early resumption.

76                  On 5 July, Commissioner Grimshaw terminated the bargaining period (ex 28), and on 6 July, gave a certificate pursuant to s 166A, apparently for the purpose of permitting action in tort against the union, but retaining the right to revoke the certificate in the event that industrial action ceased.  On that day, Commissioner Grimshaw also ordered that employees cease industrial action and work in accordance with lawful and reasonable directions of the employer, and that the union take all necessary steps to ensure that employees complied.  On 18 July, Commissioner Grimshaw suspended the operation of the interim award to allow a trial of the enterprise agreement (ex 31).  On 20 July, Boulton J stayed the order terminating the bargaining period.

77                  On 3 August, the Full Bench of the Industrial Relations Commission gave leave to appeal in respect of the orders of 5 and 18 July.  Those appeals were upheld upon the basis that there had been no proper hearings prior to the making of the orders.  With respect to the order of 18 July suspending the operation of the interim award, the Full Bench virtually renewed the order with effect from the original date, although with certain significant changes to the terms, designed to ensure that employees’ conditions were not worse than under the interim award.  I will discuss this matter in more detail at a later stage.

The Interim Award

78                  There are numerous references in the evidence to the “interim award”.  This was an award made by Boulton J on 6 April 1995 as a result of Mr Hughes’ attack upon the applicability of the award which had been previously thought to apply.  The full name of the interim award was the “Australian Meat Holdings Pty Limited – Rockhampton Abattoir – Interim Award 1995”.  It was common ground that it was based upon the terms of another award, the Queensland Meatworks (Metro Meat (Peterborough) Ltd & Ors) Award 1984 (the “Peterborough Award”).  The long-service leave provisions of the latter award were varied on 21 July 1995.  In particular, a reference to termination for “serious or wilful misconduct” was replaced by reference to “serious and wilful misconduct”.  The applicant asserts that this amendment should be taken as also amending the interim award, although the precise basis in law for that submission is not clear.  Such an outcome would be surprising because it would mean that amendments made to the Peterborough award in proceedings between the parties thereto would be binding upon the respondent pursuant to the interim award, although it had not been heard on the matter.  It was not suggested that any provision of the Acts Interpretation Act 1901 (Cth) would advance the applicant’s argument.  I proceed upon the basis that the amendment to the Peterborough award did not effect a consequential amendment to the interim award. 

79                  At this stage, I should observe that there are difficulties in applying to workers under the interim award the concept of continuous employment and the procedures for terminating same, both of which issues are relevant for present purposes.  Clause 6 of the interim award demonstrates this point.  However the case was conducted upon the basis that, save in one respect, the employees in question were, in effect, permanent employees in the usual sense, and I proceed accordingly.  I will discuss the exceptional matter at a later stage.

80                  The applicant submits that the expression “serious and wilful misconduct” is “a standard form and appears in various acts and awards”.  It is also said that to read the words “serious” and “wilful” disjunctively (ie to read the provision literally) would “negate the significance of the inclusion of the word “serious”.  This appears to mean that if wilful misconduct were a sufficient justification for dismissal in this context, then there would be no room for the operation of the word “serious”.  I reject this argument.  It is conceivable that misconduct may be serious, although not wilful.  I have in mind, in particular, negligent misconduct.  That the expression “serious and wilful misconduct” may be used in other legislation and/or awards does not exclude the possibility that use of the current expression “serious or wilful misconduct” was deliberate.  The award must be interpreted in accordance with its terms.  This is not a case in which to do so would result in an outcome which could, in any sense, be described as inappropriate.  Such looseness of construction is inappropriate in construing legislation which imposes pecuniary penalties.  I consider that either serious or wilful misconduct, leading to dismissal would dis-entitle the employee in question to payment of any pro-rata long-service leave entitlement. 

81                  I turn to the meaning of the expression “serious or wilful misconduct”.  A case of general relevance for present purposes is the decision of the High Court in Adami v Maison Deluxe Limited (1924) 35 CLR 143.  An employed manager disobeyed an express direction by his employer to attend and supervise a particular activity.  He was dismissed, and in an action for wrongful dismissal, the employer asserted that the employee had misconducted himself by refusing to carry out his duties and by wilfully disobeying its reasonable orders.  Isaacs ACJ considered that this raised two different grounds of misconduct, namely: (1) wilfully disobeying the employer’s order; and (2) refusing to carry out his duties.  The employer, in effect, submitted that wilful disobedience of any lawful order constituted a repudiation of the employment agreement, entitling it to determine such employment.  Isaacs ACJ doubted the correctness of this proposition.  At p 151 his Honour considered the meaning of the expression “wilful default”, adopting the words of Rich J in Gould v Mt Oxide Mines Ltd [(1916) 22 CLR 490 at 528 - 529] as follows:-

‘Wilful’ default is a term which, like most other terms, must depend for its precise connotation on the subject matter and the context.  It does not connote dishonesty.  Here it means – a course of conduct consciously pursued in circumstances which would indicate to a reasonable man who considered the matter that the duty he has undertaken to the company is not being performed with due care for its interests.

82                  Isaacs ACJ then continued:-

But the effect of the word ‘wilful’ varies, and, as I have said, the only universal guide is to ascertain from its surroundings what the word is intended to connote.  One commanding circumstance is to ascertain the subject matter as a totality of which it is predicated that it must be wilful.  Here the subject matter is not ‘disobedience,’ but ‘disobedience of a lawful order’.  It is the whole compound expression that must be ‘wilful,’ and not the one word ‘disobedience’ adding a proviso ‘if the order be lawful’.  It is no doubt a correct principle that, once the relation of employer and employee is established, obedience to lawful orders is, if not expressly, then impliedly, contemplated by the contract creating the relation, and mere disobedience of such orders is a breach of the bargain.  But whether disobedience in a given case is of such a character as to justify a complete dissolution of the contract by one of the parties and, as here, a forfeiture by the other of valuable accruing rights, together with some degradation – altogether a severe penalty – is, in my opinion, quite a different matter.

83                  At p 152 his Honour said:-

‘Wilfully’ does not necessarily connote in that connection anything criminal or immoral, but it does connote some deliberate design or purpose to derogate from duty.

84                  Of the second ground, Isaacs ACJ said at p 153:-

It is incontestable that any conduct of an employee which is not merely inconsistent with some particular obligation involved, and possibly not striking at the root of the matter, but which is inconsistent with the relation established, is a just cause for the employer’s termination of that relation.  Habitual neglect or a definite refusal of a general kind to pursue the employer’s lawful policy of business would afford such justification.  That is what has happened here.

85                  The other members of the Court (Gavan Duffy and Starke JJ) were less inclined to limit the power to dismiss for disobedience.  At pp 155 - 6, their Honours said:-

Now it may well be – and the cases and the books suggest the conclusion – that where it is a condition of the contract that the servant should obey all lawful orders of a master, then a wilful or deliberate and intentional disobedience of any of those orders is tantamount to refusal to be bound by the terms of the contract, entitling the other party to treat it as at an end, and to dismiss the servant … .

86                  Their Honours were, however, not obliged to consider any difference as between their view and that taken by Isaacs ACJ because they considered that the employee’s conduct had clearly demonstrated an intention to refuse to be bound by the terms of his contract,  “… and his failure to obey instructions was such as to go to the foundation and root of the whole contract between the parties.”

87                  Each of the words “serious”, “wilful” and “misconduct” is capable of bearing different shades of meaning.  The matter is further complicated because the language with which I am directly concerned appears in the context of entitlement to pro-rata long-service leave payments, but refers to action taken in a different context, namely dismissal.  At least in theory, it is possible that an employee’s alleged misconduct could be such as to justify his or her dismissal whilst not being serious or wilful misconduct for the purposes of the provision relating to loss of long-service leave benefits.  This was the problem referred to by Gamble J in W R Knott v Carlton and United Breweries Ltd (1958) 13 IIB 212.  In considering the expression “serious and wilful misconduct” in a context similar to the present, his Honour said at p 214:-

Before considering in detail the proper meaning to be attached to these words there are two matters of general reference which should be borne in mind as they tend to clarify the real nature of the issue now before this Court.

The first matter is that we are not concerned with the right of the employer summarily to dismiss the appellant without notice for his refusal to carry out a lawful order given to him.  This right of the employer is not an issue and is not challenged.  It is quite clear in the authorities and was in fact properly considered in argument before us that facts which may justify summary dismissal may not amount to serious and wilful conduct as that phrase is to be construed in a clause dealing with a forfeiture by a worker or his dependants of rights created by an act of a remedial industrial character.

The second matter to keep in mind is that the Act does not operate in a vacuum but in a sensitive sphere of activity in a highly industrialized society where industrial disputes are inevitable and form part of the pattern of the economic life of the community and where the disputes are controlled and directed from the workers’ point of view not by an individual worker but by trade unions – groups of trade unions or by committees set up by the central council of the Trade Unions.

88                  His Honour continued at p 214:-

The basic word, is of course, ‘misconduct’.  The word is not apt to describe a breach of contract and is more appropriate to describe generally some reprehensible or culpable activity.  However, it is quite clear on analysis that the word is used in the Act solely in relation to conduct which constitutes a breach of contract of service.  It is clear therefore that the word is intended to describe a particular type of breach of contract, namely one which according to the current and generally accepted moral standards of the community would be regarded as reprehensible and deserving of censure in the circumstances.

89                  Other comments made by Gamble J also appear relevant for present purposes.  His Honour said at p 214:-

The word ‘serious’ is the measuring rod for the gravity of the misconduct.  All the elements of the conduct called in question must be taken into account including the probable effect of the conduct upon the safety and well-being of the employer’s business, his property and other employees, the fact that the conduct is in breach of a regulation, an award or determination and also the subjective elements such as the knowledge and skills which the worker ought reasonably to have possessed and the motivation and general state of the mind of the worker at the time.

The word ‘wilful’ has many shades of meaning varying from perverse and stubborn to ‘done or suffered of his own free will or choice’ …  In the context in which the word is used in the Act and particularly having regard to the fact that it is part of a clause which is to operate as a forfeiture of rights and as a disqualification the word in our view postulates the existence of some reasonable area of freedom of choice.  The Oxford Dictionary meaning ‘done or suffered of one’s own free will and choice’ seems to us to express the essential character of the word ‘wilful’ as it is used in this section of the Act.  It is quite clear that a worker’s freedom of choice, like that of everyone else, may be completely destroyed by threats, duress or intimidation.  The difficulty of determining the effective power of such threats and intimidation will, of course, vary according to the circumstances but the task in each case is the same – one has to weigh the overriding or pull of the threat on the will of the person concerned against the probable consequences of, or the nature of, the conduct or omission alleged to have been induced by such a threat.  The will that is to be taken as the area fought for in this conflict is not that of a saint or a martyr, but that of an ordinary responsible and conscientious worker of our present-day community.

90                  These comments were made in the context of a case in which a union official had directed members to refrain from performing certain work.  The employee in question had been directed to perform that work by management and had declined to do so because of the direction.  There was apparently evidence as to the likely consequences of disobeying the union directive, which included loss of union membership and social disgrace, upon which evidence the court acted.  There is no such evidence in this case, although one appreciates as a matter of general knowledge that union members are generally reluctant to break ranks with their fellow members.

91                  I have also derived considerable assistance from numerous other authorities cited in argument and in particular, from the decisions in Johnson v Marshall, Sons & Co Ltd [1906] AC 409, Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 and Hall v General Motors Holdens’ Ltd (1979) 45 FLR 272.

92                  Johnson is particularly useful in considering the meaning of the word “serious” used in the context “serious and wilful misconduct”.  The misconduct in that case was using a goods lift contrary to an instruction that no employee was to do so other than when accompanying a load.  At p 415 Lord Atkinson said:-

In none of the authorities to which we have been referred has it been attempted to define ‘serious misconduct’.  It is scarcely susceptible of precise definition.  What amounts to serious misconduct in any given case is a question of fact to be determined by the judge of first instance on the facts of that case, and the function of the Court of Appeal and of your Lordship’s house is confined to deciding the question of law whether there was any evidence to sustain this finding.

93                  At pp 416 - 7 his Lordship continued:-

Indeed, if the word ‘serious’ used in this connection is to have any force or weight at all given to it, it must, I think, be held to mean at least that where the risk of loss or injury resulting to any person or thing from the doing of any particular act is very remote, or where that loss or injury, even if probable, would be trivial in its nature and character, the doing of that act, however wilful, would not amount to ‘serious misconduct’ within the meaning of this statute, unless indeed the indirect influence of the act done on the discipline of the factory is to make every transgression serious.

94                  In Laws the Court of Appeal was concerned with conduct sufficient to justify dismissal rather than with the precise meaning of any statutory term.  However the observations of Lord Evershed MR are of assistance.  At p 287 his Lordship said:-

To my mind, the proper conclusion … is that, since a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service.  It is, no doubt, therefore, generally true that wilful disobedience of an order will justify summary dismissal, since wilful disobedience of a lawful and reasonable order shows a disregard – a complete disregard – of a condition essential to the contract of service, namely, the condition that the servant must obey the proper orders of the master and that, unless he does so, the relationship is, so to speak, struck out fundamentally.

95                  In Hall, Keely J considered summary dismissal in the course of an industrial dispute where the employee in question had refrained from performing his normal duties unless the employer re-instated shop stewards.  The employee asserted that his summary dismissal was contrary to the terms of the award, pursuant to which the employer was entitled to dismiss an employee summarily and without notice “for malingering, inefficiency, neglect of duty or misconduct …”.  His Honour was concerned with the meaning of the term “misconduct”.  By reference to authority, including Laws and Adami, his Honour concluded that misconduct was sufficient to justify summary dismissal if the employee had “disregarded the essential conditions of the contract of service”, or if his conduct was “inconsistent with the fulfilment of the express or implied conditions of service”, or if it was “inconsistent with the relation established”.  His Honour also said at pp 278 - 9:-

I should perhaps make it clear that I am not expressing the view that any failure to work for a few minutes, eg, because of a late arrival at work, would normally result in the employer having the right to summarily dismiss the employee.  It would be necessary to consider all of the surrounding circumstances, possibly including preceding events and any previous warnings given to the employee, in order to determine whether in such a case the employer had the right to summarily dismiss.  Nor am I expressing the opinion that a deliberate refraining from working will necessarily and in all circumstances result in the employer being entitled to summarily dismiss the employee.  Factors may exist of such a nature that in all the circumstances the right to summarily dismiss does not arise, eg a bone fide belief of danger to life arising from the proposed work.  Nor am I expressing any opinion as to whether an employer has the right to summarily dismiss employees who are on strike for a very short time (a period of one hour or half an hour was discussed in argument) where that period is specified in advance to the employer.  It may be that the right to summarily dismiss would exist in such a case, but it is unnecessary for me to express an opinion on that question because that is not the factual position before the court in this case.

96                  I find nothing in any of these cases with which I disagree, however I should say with respect to the reference to “peer pressure” found in the reasons of Gamble J in Knott, that regard must now be had to the provisions of the Act regulating industrial action.  It extends protection to employees who take protected action, however such action must be implemented in accordance with the Act.  If one focuses too closely upon the individual worker and his or her susceptibility to peer pressure, then there may be no point in the distinction between protected and unprotected action.  If a union or a group of employees takes action which is unprotected, but each individual employee is permitted to justify that action by reference to the fact that the union or the group sanctioned it, then the protection offered by the Act will be irrelevant.  The Act clearly contemplates that unprotected action may have significant consequences for those taking it.

97                  Finally, before turning to consider the positions of the two relevant employees, I should deal with some of the submissions made to me.  Firstly, counsel for the applicant submits that Mr Hughes agreed in evidence that, “The parties had gone away (from the meeting on 21 April 1995) with an understanding that if consultative committees were established at each workplace tallies would be raised to maximum over a period of time subject to availability of stock.”  It is also said that he agreed that he was aware that Fitzroy River employees held that belief as at 12 May 1995.  The reference is to p 400 of the transcript at lines 19-28.  I do not consider that the submission accurately reflects the evidence.  If one reads the whole of the evidence on that page, it is quite clear that Mr Hughes was indicating that he had not given an undertaking.  Indeed, at lines 25-28 he said:-

We didn’t give any commitment to go back to maximum tally at any particular time, but we would get back to a normal procedure when I believed that they were functioning properly, in with what the company’s requirements were.

98                  At p 386 of the transcript, Mr Hughes agreed that Mr McPhee had asserted to him that employees were complaining about failure to honour an undertaking which they believed had been given, but Mr Hughes’ position was that he had not given such an undertaking.  At lines 16-17 he said, “I believe that I made them well aware of what was discussed and that I had not agreed to that.”

99                  The second point concerns my earlier observation that in general, employees have been treated as permanent employees for the purposes of these proceedings, notwithstanding the fact that they were actually daily employees, but subject to one exception.  The exception appears in a submission on behalf of the applicant that as daily employees, Messrs Mackay and McCallum could have given notice at any time during the previous day that they would not be working on the following day.  It is said that in such a context, a stoppage for the balance of a day cannot be characterized as misconduct.  Further, it is pointed out that as termination and “stand-down” are regular features of the industry, a short stoppage should not be taken “to abrogate the engagement in a final sense”. 

100               Whilst the point is not without substance, it should not be over-valued.  Pursuant to the award, both the employer and the employee had reasonable expectations of continuity of employment, subject to seasonal factors and availability of stock.  In the course of the trial, counsel for the applicant certainly tried hard to demonstrate that the inconvenience and risks of a strike to the respondent were minimal.  The primary difficulties resulted from the “assembly line” nature of the operation.  As appears from the evidence, beasts were killed on one day and generally boned on the next.  There was evidence that strikes often occurred at times which resulted in carcasses being kept in the chillers for more than the usual length of time, or at least that the respondent was concerned at that possibility.  As one would expect, and as appears from the evidence, although the carcasses can be kept for longer periods, their condition will deteriorate.  It was in the interests of the respondent that carcasses be boned at the optimum time.  Further, the respondent’s position would be worse if the chillers were filled.  Any delay in boning thereafter would have increasingly serious consequences, particularly when killing recommenced.  Thus I am of the view that the applicant’s argument understates the difficulties caused to the respondent by industrial action in the course of a working day without prior notice.  The respondent’s stock-in-trade was obviously highly perishable, and that characteristic was inevitably a fundamental aspect of the structure of the industry.  Further, this was not a case of one or two employees leaving work.  Concerted strike action will have different consequences from individual absenteeism.

101               The third argument to which I wish to direct attention at this stage is advanced on behalf of the respondent.  It is that the respondent having purported to dismiss the relevant employees for serious or wilful misconduct, and there being no evidence of any other reason, the applicant and the court are obliged to proceed upon the basis that such was the case.  I find myself unable to understand this argument, let alone to act upon it.  The provisions of the award relating to the entitlement to pro-rata payment of long-service leave entitlements clearly invite an assessment of the conduct said to have led to dismissal.

Mr Mackay’s position

102               Mr Mackay’s alleged misconduct was taking part in industrial action pursuant to which he and other employees left the plant.  There is no doubt that he did this.  He was aware that his actions and those of his co-workers would result in production stopping on that day and that this was contrary to the respondent’s requirements.  Further, he was aware that the respondent would probably terminate his employment as a result, although he had hopes of re-employment.  I can see no basis for asserting that the withholding of labour without appropriate notice is other than misconduct as between the respondent and its employees.  This was not a case of a short stoppage of the kind mentioned by Keely J.  The principal obligation on the part of the respondent under the contract of employment was to pay for labour provided.  The principal obligation of the employee was to provide that labour, bringing certain skills and experience to the job.  The need for continuity in the availability of labour was obvious, as were the likely consequences of an unannounced disruption to the operation of the plant.  To adopt the words of Keely J in Hall, such conduct was in disregard of an essential condition of the contract of service and inconsistent with the relationship of master and servant established by that contract.  It indicated an intention not to perform the principal obligation placed upon the employee pursuant thereto.  It is of some relevance that Mr Mackay was acting in concert with other employees.

103               There is no doubt that Mr Mackay’s action was wilful.  He voted against industrial action but participated because the majority were of another view.  There is no suggestion that his will was over-borne in the way suggested by Gamble J in Knott.  In any event, as I have said, it would seriously undermine the regime established by the Act if an individual employee could avoid the consequences of taking unprotected action by the simple device of saying that he was maintaining solidarity with his fellow workers.  This misconduct was also serious for the reasons which I have given.  It is true that the respondent expected industrial action, but it also expected appropriate notice pursuant to the Act.  I have considered Mr Hughes’ conduct in this matter.  I have previously indicated that I do not consider Mr Hughes’ aggression or bad language to be of particular relevance.  It is true that Mr Hughes had mounted a quite aggressive industrial campaign, whether it be called retaliation or a counter-offensive.  No doubt, this was causing difficulties for employees, but this was merely another part of the dispute.  There is no suggestion that the respondent had, by its conduct, repudiated its contract with Mr Mackay.

104               In this case, the “seriousness” of the misconduct must be assessed having regard to the fact that the respondent had indicated that it would treat unprotected action seriously.  Further, various union representatives had made it clear that dismissal was likely.  Mr Mackay was aware of the likely serious consequences of the step which he took.  In the circumstances, it follows that it constituted serious misconduct.  It is true that the respondent might have been willing to re-employ him, but that does not mean that the misconduct in question was other than serious.  No doubt an employer must balance various considerations in making such a decision.  I have taken into account the nature of the dispute in which the parties were involved and tried to form an appreciation of Mr Mackay’s point of view.  I have, however, concluded that Mr Mackay was guilty of misconduct which was both serious and wilful.  The application on his behalf must be dismissed.

105               At one stage, the applicant sought to derive some benefit from the provisions of s 334A of the Act, which prohibits the dismissal of an employee upon the ground that he or she had engaged in industrial action in relation to an industrial dispute which had been notified to the Commission or which the Commission had found to exist.  It is not clear how this provision should be read with the provisions relating to protected action to which I have referred.  There has been no substantial challenge to the fact that Mr Mackay was dismissed.  The applicant alleges dismissal of both employees in the statements of claim.  The respondent raises the assertion of serious or wilful misconduct, and the respondent replies, denying termination on those grounds, and that the relevant conduct could be so characterized.  In the absence of any assertion that the dismissal was invalid, s 334A has no relevance for present purposes, save perhaps on the questions of what constitutes misconduct and as to the seriousness thereof.  In light of the specific provisions relating to protected action, it cannot be argued that s 334A permits employees to take industrial action other than in accordance with those provisions.  The section does not purport to alter the obligations of employees, but rather to limit the remedies available to an employer where an employee breaches those obligations.  Section 334A does not, in my view, deprive Mr Mackay’s conduct of its nature as misconduct, nor of its quality of seriousness.  Factually, he was dismissed, and the reason for the dismissal was serious or wilful misconduct.  The provisions relating to long-service leave take effect accordingly.  See Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 428 - 9 (per Brennan CJ, Dawson and Toohey JJ). 

Mr McCallum’s position

106               Mr McCallum was re-employed after his May dismissal and again dismissed on or about 19 July.  All of the observations which I have made with respect to Mr Mackay have some relevance to Mr McCallum.  However it is the basis for his dismissal on 19 July which must be considered.  By 11 July it was clear that the respondent wished to negotiate an enterprise agreement with its employees at Fitzroy River.  On that day, Mr McCallum was present at a meeting which lasted for most of the day, ending in the tied vote to which I have previously referred.  When there was no decisive outcome, Mr Hughes said that work would be offered under the trial and that if the Commission ruled that they should return to work under the interim award, then working arrangements would be adjusted.  Mr Parker gave similar evidence at par 168 of his affidavit.  This quite important evidence received little attention at the hearing.  The applicant’s witnesses did not refer to it, nor did the respondent cross-examine them about it.  The applicant’s counsel cross-examined Mr Hughes about it at pp 406 - 13.  Its importance lies in the fact that Mr Hughes was, in my view, saying that he would abide by the Commission’s order should it decline to permit the trial.  Contrary to the applicant’s submissions, he was not asserting a right to ignore the interim award.  Obviously enough, the respondent and its employees bound by that award.  Only if the provisions of the Act were invoked to give some form of relief from its operation could its terms be avoided. 

107               It is difficult to believe that Mr McCallum was not aware of the importance of the award in regulating his terms of employment.  Even if he were ignorant of this commonly known fact, it is clear that the position as outlined to the meeting on 11 July, which he attended, was that the trial of the enterprise agreement was dependent upon Commission approval.  If such approval were not forthcoming, then the interim award would continue to apply.  Events occurring between 11^th and 19^th July must be understood in this context.  It was asserted that Mr Hughes had effectively repudiated the contract of employment by offering work to employees (including Mr McCallum) upon the basis of the trial enterprise agreement rather than pursuant to the interim award.  As I have pointed out, it was made clear at the meeting on 11 July that Mr Hughes was offering work which the respondent hoped would be performed in accordance with the trial enterprise agreement, but that if the Commission took a different view, then the respondent would accept that position.  In those circumstances, there is no question of repudiation.

108               On 12 July Mr McCallum offered himself for work under the interim award but as far as I can see, he did not offer himself for work thereafter.  He did not present on 19 July and was dismissed.  With effect from 18 July, the terms of the interim award were varied to the extent that they were inconsistent with the trial enterprise agreement, or at least an order had been made to that effect (ex 31).  Assuming that Mr McCallum was still an employee of the respondent on 19 July, it is necessary to determine the conditions upon which he was then employed. 

109               Pursuant to s 150 of the Act, an award is final and conclusive and not to be challenged, appealed against, reviewed, quashed or called in question in any court, save in accordance with the Act.  In s 150, the word “award” means:-

(a)       An award or order that has been reduced to writing under sub-section 143(1); or

(b)       A certified agreement; or

(c)        An enterprise flexibility agreement …

(See s 4.)

110               Section 143(1) requires the Commission to reduce to writing any decision or determination which it considers to be “an award or an order affecting an award”.

111               The order of 18 July was in the form of a variation of the interim award, notwithstanding the heading “Suspension of Interim Award”. It was therefore an order affecting an award within the meaning of s 143(1).  It follows that it was also an award for the purposes of s 150 and therefore to be accepted at face value, subject to the right of appeal conferred by s 45, notwithstanding its inherent deficiency.  This position is consistent with the decision of Wilcox J in R v Balfour; Ex parte Parkes Distributions Pty Ltd (1987) 17 FCR 26 at 33 and that of Davies J in McIntosh v Minister for Health (1986) 17 FCR 463 at 466 - 7. 

112               It has been suggested, however, that upon such a decision being set aside for procedural defects, it is void ab initio.  See the judgment of Aickin J in Forbes v New South Wales Trotting Club Ltd (1979) 143 CLR 242 at 277:-

That which is done without compliance with applicable principles of natural justice, in circumstances where the relevant authority is obliged to comply with such principles, is not to be regarded as void ab initio so that what purports to be an act done is totally ineffective for all purposes.  Such an act is valid and operative unless and until duly challenged but upon such challenge being upheld it is void, not merely from the time of a decision to that effect by a court, but from its inception.  Thus, though it is merely voidable, when it is declared to be contrary to natural justice the consequence is that it is deemed to have been void ab initio.

113               Assuming that such a proposition is generally correct, nonetheless a provision such as s 150 suggests that any such award is to be obeyed unless and until it is set aside.  The decision of the High Court in The Queen v Marks; Ex parte Australian Building Construction Employees and Builders Labourers’ Federation (1981) 147 CLR 471 supports that view.  In that case, proceedings before a Deputy President were impugned for denial of natural justice.  An appeal to the Full Bench was dismissed after an appropriate hearing.  The unsuccessful party then applied to the High Court for a writ of prohibition directed to Marks J and the other party to the proceedings at first instance.  At p 484 Mason J (with whom Aickin and Wilson JJ agreed) said:-

In any event, what happened before Marks J cannot constitute a basis for prohibition on the ground that there was a denial of natural justice.  The BLF exercised its right of appeal to the Full Bench.  On an appeal the Full Bench may admit further evidence and it may confirm, quash or vary the award or decision under appeal or make an award or decision dealing with the subject matter of the decision under appeal … .  In Twist v Randwick Municipal Council [(1976) 136 CLR 106] this Court held that the existence of a full statutory right of appeal on facts and law was indicative of a legislative intention that the citizen’s only right of redress against the council’s failure to give him an opportunity to be heard before making a demolition order was by way of appeal … . 

The present case has some similarities to Twist.  There is here a full appeal on fact and law under s 35.  Moreover, s 35(9)(a) enables the Full Bench to admit further evidence.  Further, by reason of their very nature and their capacity to create unemployment, to dislocate industry and to disturb the life of the community including the essential services on which the community depends, industrial disputes call for speedy and final determination, an object which is best achieved by recognizing that the remedy of a party complaining that he has been denied natural justice at first instance is to exercise his right of appeal under s 35 to the exclusion of pursuing relief by way of prerogative writ.

There is a problem in saying that a member of the Commission is not under a duty to observe the rules of natural justice and there is a further problem in saying that the Parliament can oust the jurisdiction of this Court under s 75(v) of the Constitution to grant relief against an officer of the Commonwealth by way of prohibition for denial of natural justice.  Even so, the BLF exercised its right of appeal under s 35 and the Full Bench examined the matter for itself.  The BLF does not suggest that there was any denial of natural justice in the appeal, except in so far as it submits that the Full Bench was wrong in upholding the decision not to issue the summons.  In my opinion the BLF received a full and fair hearing in the appeal and in those circumstances any denial of natural justice before Marks J was irrelevant … .

114               The appeal process pursuant to s 45 appears to be no narrower than that available under s 35 of the legislation to which Mason J referred.  If, for present purposes, the primary basis for relief against an incorrect or irregular decision of the Commission is by way of appeal pursuant to s 45, there is little to be said for the view that where such an appeal is successful, the original decision should be treated as having been void ab initio.  For the reasons given by Mason J, such an approach would tend to dislocate industry and disturb community life.  It would not provide certainty in industrial relations if the obligation to comply with such an order depended upon whether it was ultimately upheld on appeal.  That position would also be inconsistent with the provisions of s 45(4) (providing for a stay) and s 150.

115               Although the decision of the Full Bench was upset on other grounds, nothing in Marks suggests that it was incorrect in dismissing the appeal on the procedural fairness point, having itself remedied the defect.  In other words, the High Court did not say that the Full Bench ought to have set aside the original order merely because of the absence of procedural fairness at first instance.  It could reconsider the matter and uphold the original decision if that appeared to be the correct outcome.

116               In the present case, the Full Bench had power to confirm, quash or vary the original decision.  At p 6 of the reasons (ex 33), the Full Bench indicated that it would allow the appeal.  It then considered the matter afresh.  At pp 9-11, it proposed a new order which contemplated the continuation of the trial ordered on 18 July.  (See par 1 on p 9.)  Paragraph 2 provided for variations to the original order.  Paragraph 3 provided for an order by the Full Bench suspending the operation of the award with effect from 17 July and until 29 August, such order to “replace the order made by the Commission”.  In fact, the order eventually made was effective from 18 July.  (See ex 39.)  The difference between, on the one hand, varying an order and on the other, setting it aside, replacing it with another order with some common terms, may be theoretically attractive but there is little relevance in it for most practical purposes.  Although some of the language of the order made by the Full Bench may suggest that it intended to set aside part or all of the order of Commissioner Grimshaw, the better view is that the order was varied.  At all material times, there was an order of the Commission suspending the operation of the interim award and permitting trial of the proposed enterprise agreement.  It serves no good purpose to seek to discriminate between the trial permitted by the order at first instance and that permitted by the order of the Full Bench.  See also O’Toole v Charles David Pty Ltd (1990-1991) 171 CLR 232 at 248 - 9 (per Mason CJ), 269 - 70 (per Brennan J), 285 - 6 (per Deane, Gaudron and McHughJJ) and 303 - 5 (per Dawson J).

117               The respondent and its employees were bound by their contracts, subject to the relevant law.  On 18 and 19 July 1995, the law prescribed that those contracts were subject to the terms of the trial enterprise agreement.  In my view, s 150 required that the parties to those contracts proceed accordingly.  Mr McCallum was obliged to work in accordance with the trial for so long as his employment continued.  More particularly, he was not entitled to take unprotected industrial action.

118               The applicant also submits that Mr McCallum’s letter of dismissal did not assert that he had been guilty of serious or wilful misconduct, and that he was therefore not dismissed for such misconduct.  Although it may have been better had the letter so indicated, no authority is advanced for the proposition that it was necessary to stipulate any reason in the letter.  There is no doubt that he was dismissed because he refused to return to work upon the terms of the trial in accordance with the order of Commissioner Grimshaw.  In any event, the decision of the High Court in Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359, establishes the well known proposition that the termination of an agreement may be justified by proof of circumstances existing prior to such termination of which the terminating party was unaware at the time of termination (per Rich J at 370 - 1, Starke J at 373 and Dixon J at 377 - 8).  If termination may be justified upon grounds not known at the time of the termination, there can be no basis for requiring that grounds be stipulated.  Shepherd is a well-known case, long applied in connection with rescission of contracts in all areas.  It is clear, however, from the cases cited by Dixon J at 377 that its genesis was in the area of Master and Servant.  See also Byrne (supra) at 430 (per Brennan CJ, Dawson and Toohey JJ) and 467 (per McHugh and Gummow JJ).

119               Mr McCallum was aware of events as they were unfolding between 11 July and 19 July.  The orders varying the interim award were read to the meeting at which he was present on 19 July by Mr Crawford, or at least there is no reason to believe otherwise.  The respondent had no option other than to employ its workers in accordance with those orders.  Mr McCallum could choose between accepting employment on those terms or terminating his employment.  He declined to take either alternative and was dismissed because his conduct was inconsistent with his obligations under his contract of employment.  His position was more complicated than was Mr Mackay’s, but to maintain his employment, he had only to obey the order of the Commission.  Any perception that employers or employees may ignore such orders if they are perceived to be “unfair” must be dispelled if the industrial relations system is to work.  It is, perhaps, a little unfortunate that a question of this kind should be answered by reference to strictly legal considerations.  It would be fanciful to imagine that anybody was in a position to carry out an exercise such as that reflected in this judgment prior to making a decision on 19 July 1995.  However, as I have said, the sensible course was, and will always be, to follow the decision of the appropriate tribunal until it is set aside.  I have also taken into account the matters considered in connection with Mr Mackay’s application to the extent that they are relevant to this application.  I conclude that Mr McCallum, too, was dismissed for misconduct which was both serious and wilful.

120               The application on his behalf must also be dismissed.

Associate:

Dated:              25 May 1999