HIGH COURT OF AUSTRALIA

                                                       Blackley

                                                           Vs.

                                        Devondale Cream (Vic.) Pty. Ltd.

                   (Barwick C.J.(1), McTiernan(2), Kitto(3), Taylor(4), Menzies(5) JJ.)

                                                   2 February 1968

CATCHWORDS

Constitutional Law (Cth) - Inconsistency between Commonwealth and State laws - Award of
Commonwealth Industrial Commission binding employers in respect of wages paid to non-unionists
- Determination of State Wages Board prescribing minimum wage payable to employees - Non-
unionists within operation of determination - Whether determination binding - Validity - The
Constitution (63 & 64 Vict. c. 12), s. 109 - Conciliation and Arbitration Act 1904-1961 (Cth), ss.
61, 119 - Labour and Industry Act 1958 (Vict.), ss. 198, 199, 200.

HEARING

Sydney, 1967, October 18, 19; 1968, February 2. 2:2:1968
APPEAL from the Industrial Appeals Court of the State of Victoria.

DECISION

1968, February 2.
The following written judgments were delivered: -
BARWICK C.J. At the time relevant to these proceedings the respondent classification of work in
an award made by the Commonwealth Conciliation and Arbitration Commission and known as the
Transport Workers (General) Award (the award). By the award, the Commission prescribed, ordered
and awarded that "the minimum rate of wage required to be paid by employers" who included
members of an organization of employers of which the respondent was a member "shall . . .
comprise the amount of the basic wage . . . and in addition the amount assigned in the following
table . . . for an employee or work of a class indicated therein" (cl. 10). (at p256)

2. The obligation of the employers under the award extended so far as to require them to pay the
prescribed wages to each of their employees whether or not the employee was a member of an
organization of employees which was party to or bound by the award. Macdonald was not at any
relevant time a member of any such organization. He was, however, a member of the Cold Storage
Union of Victoria. (at p256)

3. There was current at the relevant time a determination of a wages board, namely, the Frozen
Goods Board, set up under the Labour and Industry Act 1958 of the State of Victoria (the Victorian
Act). The determination, which applies to the whole of the State of Victoria, is known as the Frozen
Goods Determination, No. 1 of 1964. It purported to specify minimum rates of wages to be paid to
persons employed in the process, trade, business, or occupation of freezing or refrigerating goods of
any kind for the purpose of trade or sale, including the packing and grading of such goods with
certain immaterial exceptions. It also specified a great number of working conditions. Section 198
(1) of the Victorian Act provides that where any employer employs any person on work for which
the lowest prices or rates have been fixed in such a determination, the employer shall be liable to
pay and shall pay to such persons the price or rate so determined in full in money without any
deduction whatever. The employee Macdonald was a person employed in a business covered by the
determination. The amount fixed as the minimum rate by the Frozen Goods Determination in
respect of the work actually performed for the respondent was larger than the amount fixed by the
award in respect of that work. There is no dispute before this Court as to the nature of that work or
as to the fact that it is work within a classification in the appropriate schedule to the award. (at
p256)

4. The respondent was prosecuted on the information of the appellant for breach of the Victorian
Act in that it did not pay its employee Macdonald during a specified week wages at the rate fixed by
the Frozen Goods Determination. The magistrate who heard the information accepted a submission
by the respondent that the Victorian Act in so far as it would impose an obligation upon the
respondent to pay the wages fixed by the determination was invalid because of its inconsistency
with the award; he therefore dismissed the information. The appellant appealed from this decision to
the Industrial Appeals Court under s. 45 of the Labour and Industry Act 1958: but that Court
affirmed the decision of the magistrate and dismissed his appeal. The appellant by this Court's
special leave now appeals against the decision of the Industrial Appeals Court. (at p257)

5. There is no attack upon the award. Indeed, there could not have been in the courts in which the
matter has been so far litigated: see s. 60 of the Conciliation and Arbitration Act 1904-1966 (the
Act). In this Court there is no challenge to its constitutional validity. (at p257)

6. Consequently, consideration of the appeal begins with the undeniable proposition that, in the
circumstances of the employment, the award validly provides that the minimum sum which the
respondent shall be required to pay its employee Macdonald is the appropriate amount prescribed by
the award. That such an obligation may be imposed upon an employer in respect of an employee
who is not at any relevant time a member of an organization which is or has been in relevant dispute
with the employer and bound by the award is well settled: Metal Trades Employers Association v.
Amalgamated Engineering Union [1935] HCA 79[1935] HCA 79; ; (1935) 54 CLR 387 (at p257)

7. To my mind, it is nothing to the point in deciding this case that the employee Macdonald could
not have successfully sued the respondent for the wages thus prescribed, if the right view be that he
could not. I find no need to discuss the possible views in this connexion nor to attempt to form a
firm opinion upon that question. It is sufficient, in my opinion, for present purposes that the Act
operating upon the award requires the respondent to pay to Macdonald not more than the stated sum
as a wage for the performance of the work in question. In my opinion, it is the obligation which the
statute imposes upon the respondent with which this appeal is concerned, not with the rights or
obligations inter se of the respondent and its employee. It may be true that the award does not
purport directly to regulate those rights and obligations. But that, to my mind, does not leave open
an area in which laws may be made which impinge upon the obligation which the award imposes on
the employer. (at p257)

8. But the appellant submits that the Victorian State Act operating upon the determination of the
wages board may validly require the respondent to pay its employee a larger sum by way of wages
for the performance of the same work than is prescribed by the award. The paramountcy of the
Commonwealth law, i.e., the Act and the award, is not challenged as indeed it could not be. But it is
said, as well as I comprehend the argument, that because the Act working through the award gives
no rights to the employee who is not a member of an organization bound by and entitled to the
benefit of the award, the State may give to that employee rights against his employer which impose
upon the employer different or, if it matters, larger obligations than those laid upon him by the Act
and the award. It is said that this involves no inconsistency because the rights of "non-unionist"
employees are not within the "field" which the Act and the award purport or intend to occupy. (at
p258)

9. I am unable to accept such an analysis. It seems to me that it attempts to dissociate in an
inadmissible way the right of the employee to recover a wage from the obligation of the employer to
pay it. On the assumption I have for present purposes been prepared to make, the non-unionist
employee has no right to recover the wage the award prescribes. But to so say does not deny that the
employer bound by the award is under obligation to pay it - an obligation at least enforceable by the
employee organization both civilly and criminally. Properly understood, the act and the award, in
placing that obligation upon the employer, enacts, in my opinion, that the sum so to be paid is the
only sum which by law the employer is obliged to pay. The description "minimum wage" must not,
in my opinion, be allowed to obscure the fact that in truth the prescribed wage is the largest wage
which the employer is required by the Act and the award to pay. It is also of course the least he can
lawfully pay. But no room is left, in my opinion, for a statute of the State to require the payment of
a larger sum by way of wages than the amount prescribed by the award. To give the employee a
right to be paid the larger wage is, in my opinion, to come into direct collision with the provisions
of the award. It is not possible, in my opinion, to dissociate his right from the obligation of the
employer: but, in any case the Victorian Act purports to impose an obligation on the employer to
pay the specified wage. (at p258)

10. In my opinion, there is no need in this case to seek to define the intended field of the federal
legislation in order to resolve the question of inconsistency. The case, to my mind, is one of direct
collision in which the State law, if allowed to operate, would impose an obligation greater than that
which the federal law has provided should be the amount which the employer should be bound by
law to pay. (at p258)

11. Obedience to the one, the award, is disobedience to the other, the determination. Payment by the
respondent of wages conforming to the award involved it in disobedience of the State provisions. Of
course both may be obeyed by the employer by abandoning the protection of the Act and award and
paying the larger sum. But, in my respectful opinion, that they may both be obeyed in that sense
indicates their inconsistency. (at p259)

12. However, if we are to consider what was the field of the Act and the award it should be
concluded, in my opinion, that they clearly intend exclusively and exhaustively to regulate the
obligations of the employers bound by the award towards all their employees as to all matters within
the ambit of the dispute in settlement of which the award was made and, in particular, as to the
wages which by law the employer should be bound to pay to all his employees. Thus, any State
enactment which entered the field of those obligations would be inconsistent with the Act and
award. (at p259)

13. As, in my opinion, the relevant provision of the Victorian State Act and the wages board
determination for breach of which the respondent was charged is clearly inconsistent with the
provision of the Act and award as to the wages to be paid, there is no need for me to indicate other
respects in which, in my opinion, relevant inconsistency exists between the two provisions. (at
p259)

14. In my opinion, the appeal should be dismissed. (at p259)

McTIERNAN J. I agree in the judgment and reasons of the Chief Justice. (at p259)

KITTO J. In this case an information charging a contravention of a law of the State of Victoria was
dismissed in the Metropolitan Industrial Court at Melbourne upon the ground that in its application
to the facts alleged the law was inconsistent with a law of th Commonwealth, and accordingly was
to that extent invalidated by s. 109 of the Constitution. The informant appealed unsuccessfully to the
Industrial Appeals Court of the State of Victoria and now appeals to this Court pursuant to special
leave granted under s. 39 (2) (c) of the Judiciary Act 1903-1959 (Cth). (at p259)

2. The facts charged were that during a particular week the defendant, the respondent in the appeal,
employed one Macdonald on work for which the lowest rates had been fixed in a certain
determination of the Industrial Appeals Court established under the Labour and Industry Act 1958
(Vict.), and did on 31st March 1966 at South Melbourne in contravention of the provisions of the
Act fail to pay in full to Macdonald the appropriate rates for such work. (at p259)

3. At the hearing, proof was given of the determination of the Industrial Appeals Court, called the
Frozen Goods Board Determination, and of a federal award called the Transport Workers (General)
Award, 1959. The State determination fixed certain weekly and hourly rates as the lowest that might
be paid to any person employed in certain kinds of work including the work in which the respondent
had employed Macdonald. To the rates so fixed ss. 198, 199 and 200 of the Labour and Industry Act
applied. Section 198, according to its terms, made the respondent liable to pay to Macdonald
without any deduction the rate determined as the lowest for his work, and gave the employee a right
to recover the same notwithstanding any smaller payment or agreement to the contrary. Section 199
empowered a court imposing a penalty under the Act to order the offender to pay arrears payable
under the Act. Section 200 made it an offence (inter alia) to employ a person at a lower rate than the
rate determined, or to contravene or fail to comply with any of the provisions of the determination
or of the provisions of the Act relating to determinations. (at p260)

4. The federal award had been made by the Conciliation and Arbitration Commission under the
provisions of the Conciliation and Arbitration Act 1904-1961 (Cth) in settlement of a dispute
between the Transport Workers Union of Australia (a registered organization under that Act, which
will be referred to as the union) and a number of employers. The log of claims to which the dispute
related is not in evidence, but it is common ground that the material provisions of the award were
validly made as being within the ambit of an inter-State industrial dispute and appropriate to its
settlement. What this involves I shall have to discuss, but first it is necessary to state the material
provisions of the award. First there was a general provision that, with immaterial exceptions and
exemptions, the award should be binding on the union, its officers and members, and should be
binding on the named employers in respect of all their employees of the classifications enumerated
in table "B" appearing in cl. 10 of the award, "whether such employees are members of the claimant
union or not". Clause 10 was headed "Wages" and it provided:

       "The minimum rate of wage required to be paid by employers
       shall, in any area or place indicated in the following table
       'A', comprise the amount of the basic wage assigned therein
       to that area or place, and in addition the amount assigned
       in the following table 'B' for an employee or work of a class
       indicated therein." (at p260)

5. Then followed provisions requiring payment of a weekly basic wage set out in table "A" in
respect of (inter alia) a part of Victoria which included South Melbourne and an additional amount
according to classifications set out in table "B", including a classification into which Macdonald fell
in respect of his employment by the respondent. (at p261)

6. The Conciliation and Arbitration Act provided by s. 61 that an award determining an industrial
dispute should be binding on (amongst others) all parties who, having been notified of the industrial
dispute, did not satisfy the Commission that they were not parties to the dispute, and also all
members of organizations bound by the award. (It is not contested on this appeal that the Victorian
Chamber of Manufactures, having been cited, was bound as a party to the dispute, and that
consequently the respondent as a member of that organization was itself bound by the award.) By s.
119 the Act provided for the imposition by certain courts of a penalty for any breach of non-
observance of an award by a person bound by it ; and it provided also that in proceedings for such a
penalty the court might order an employer who had not paid an employee an amount to which he
was entitled under an award to pay to the employee the amount of the underpayment. By s. 122 a
penalty was provided for wilfully making default in compliance with an award ; and s. 123
conferred upon "an employee entitled to the benefit of an award" a right to sue in any court of
competent jurisdiction for any payment by way of wages within twelve months from its becoming
due to him. (at p261)

7. The fact and nature of the employment of Macdonald by the respondent were proved. The fact
was also proved that the respondent paid Macdonald an amount which was less than the lowest rate
fixed by the Frozen Goods Board Determination for the work that he was employed by the
respondent to do. Finally, it was established that Macdonald was not at any material time a member
of the union mentioned in the federal award. (at p261)

8. For the reasons indicated in Collins v. Charles Marshall Pty. Ltd.(1955) [1955] HCA 44; 92 CLR
529, at pp 548, 549, affirmed (sub nom. Charles Marshall Pty. Ltd. v. Collins) (1957) AC 274, at p
286, it is necessary to put aside s. 65 of the Conciliation and Arbitration Act which purports to
invalidate (inter alia) a determination of a State industrial authority to the extent of any
inconsistency with a federal award or in relation to a matter dealt with in a federal award. The
question before us depends basically upon the meaning and application of s. 109 of the Constitution
which provides that when a law of a State is inconsistent with a law of the Commonwealth, the
latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid. The relevant
State and federal laws here in question are, on the one hand, the provisions of the Labour and
Industry Act in so far as, according to their terms, they required the respondent to pay Macdonald
the rate which the determination fixed as the lowest rate to be paid to an employee doing his work,
and, on the other hand, the provisions of the Conciliation and Arbitration Act in so far as they gave
legal force to those provisions of the Transport Workers (General) Award which were expressed to
bind the respondent to pay Macdonald, notwithstanding that he was not a member of the union, the
amount of the minimum rate of wages prescribed for his classification. (at p262)

9. Both laws were susceptible of obedience at the one time : if the respondent had paid Macdonald
at the lowest appropriate rate fixed by the State determination, or at any rate higher than that, he
would by so doing have complied with both laws. But it is said that inconsistency between them
nevertheless existed because the intention of the federal law according to its true construction was to
provide the exclusive answer to the very question to which the State law offered its own answer. If
that is so, the argument for inconsistency should necessarily be upheld, on the authority of
conclusive decisions of this Court and the Privy Council. (at p262)

10. But identification of the question to which the respective laws addressed themselves is all-
important ; for the binding authorities on inconsistency insist in the plainest terms that where a
federal law and a State law are both capable of being observed at the one time there is no
inconsistency between them unless the federal law intends to lay down the only rule upon the
subject for which the State law purports to prescribe a rule of its own. "When the Parliament of the
Commonwealth and the Parliament of a State each legislate upon the same subject and prescribe
what the rule of conduct shall be, they make laws which are inconsistent, notwithstanding that the
rule of conduct is identical which each prescribes, and s. 109 applies. That this is so is settled, at
least when the sanctions they impose are diverse (Hume v. Palmer [1926] HCA 50; (1926) 38 CLR
441) But the reason is that, by prescribing the rule to be observed, the federal statute shows an
intention to cover the subject matter and provide what the law upon it shall be" : Ex parte McLean
[1930] HCA 12; (1930) 43 CLR 472, at p 483 In O'Sullivan v. Noarlunga Meat Ltd.(1957) AC 1, at
p 28 the Privy Council approved this statement, and approved also the well-known statement of
Isaacs J. in Clyde Engineering Co. Ltd. v. Cowburn (1926) 37 CLR 466, at p 489: "If a competent
legislature expressly or impliedly evinces its intention to cover the whole field, that is a conclusive
test of inconsistency where another legislature assumes to enter to any extent upon the same field."
Their Lordships then added : "In applying this principle it is important to bear in mind that the
relevant field or subject is that covered by the law said to be invalid under the section" (i.e., s.
109)(1957) A.C. 1, at pp. 27, 28. (at p263)

11. What, then, was the question, or subject, with which the State law here relevant purported to
deal? What was the subject of the "lowest wage" provisions of the State determination? Plainly it
was the lowest rates of wages that employees in the industry should be entitled as against their
employers to receive. It formed part and shared the character of the more general subject, namely
the mutual rights and obligations of employees and employers under the terms and conditions of
employment in the industry. Was it, then, the subject, or included in the subject, to which the federal
Act and the minimum wage provisions of the award together were addressed ? This is a question of
construction. (at p263)

12. The appellant bases his whole argument on the proposition that the question to which the federal
provisions gave their answer was, what should be the minimum rates of wages for the employees of
the employers bound by the award. But this is ambiguous, and it is of critical importance to perceive
and resolve the ambiguity. The question may mean, what should be the minimum rates of wages to
which any employee, whether unionist or not, should be entitled as against his employer ; but on the
other hand it may mean, what should be the minimum rates of wages which the members of the
union shall be entitled both to receive from the employers for their own services and also to have
the employers pay to non-union employees for theirs. These questions are in completely different
fields. The first is a question as to the rights and obligations inter se of each employee, whether
unionist or non-unionist, and his employer. The second is the same in respect of unionist employees,
but in respect of non-unionists it is a question as to the rights and obligations inter se of the union
and its members on the one hand and each of the employers on the other. That is to say that as
regards non-unionists it is a question as to the extent to which the employers' freedom to engage
non-union employees on such terms and conditions as they may be willing to accept shall be
curtailed so that the members of the union shall not be at a disadvantage in the labour market. It is
true that this latter question relates to the wages which the employers shall pay to their non-union
employees, but it has nothing whatever to do with the legal situation between them. Consequently a
federal law which, while intending to provide the exclusive answer to this question, does not exhibit
any intention to confer rights upon the non-union employees and correlative obligations upon their
employers leaves the subject of the non-unionist employees' minimum rights outside its operation,
and therefore wide open to be governed by State laws which are capable of being simultaneously
observed. (at p264)

13. One must, of course, recognize that it is not impossible for a State law governing mutual rights
and obligations of employers and their non-union employees to be inconsistent with a federal law
governing the mutual rights and obligations of the same employers and their unionist employees in
respect of their non-unionist employees. For example, a provision of the former class which
prescribed that the lunch-break should be taken only at a specified time of day would be inconsistent
with a provision of the latter class which prescribed that the lunch-break shall be taken at a different
time of day ; but the reason would be that observance of the one provision necessarily means
disobedience of the other. Where, however, a federal provision conferring rights on A as against B
as to the way in which B shall conduct himself in regard to a particular matter vis-a-vis C and a
State provision conferring rights on C as to the way in which B shall treat him in regard to the same
matter can both be observed on each relevant occasion - as is the case here, where the federal
provision is in substance a prohibition upon paying non-unionists less than X dollars and a State
provision is a command to pay non-unionists (as well as unionists) at least X + Y dollars - they are
not incapable of standing together, for there is neither any opposition between their respective
commands nor any implication in the federal provision that it shall be a source of rights in C against
B in regard to that matter. (at p264)

14. That the federal law with which we are here concerned did not intend to deal at all, let alone
exhaustively, with the subject of the lowest rates of wages which non-unionist employees should
have a right to receive from employers in the industry is, it seems to me, a necessary conclusion
from the language of the award, from the terms of the Act and from the limited character of the
authority which the arbitral body was exercising when it made the award. The language of the
award is plain enough : the employers who are bound are bound, not in favour of all their
employees whether members of the union or not, but "in respect of" all such employees. There is an
eloquent abstention from any form of words which might suggest that the award is conferring rights
on employees who, being non-members of the union, were strangers to the dispute and the
settlement of it. The Act likewise refrains from conferring any rights to the benefit of an award
upon employees who are not bound by the award ; and the specification in s. 61 of the persons
bound by an award does not include an employee who was neither a party to the dispute which the
award settled nor represented by an organization which was a party to it. The provisions as to
enforcement of awards, ss. 109, 119, 123, show plainly that such an employee cannot recover wages
by virtue of the award. So far as he is concerned the award is res inter alios acta. The authority to
make it was conferred as an exercise of the Parliament's power under s. 51 (xxxv.) of the
Constitution to make laws with respect to arbitration for the settlement of industrial disputes
extending beyond the limits of any one State ; and it would obviously be foreign to the whole
concept of the settlement of a dispute, and to the whole concept of an arbitration for that purpose, to
give the arbitrator authority to regulate the rights and obligations of persons who, not being parties
to the dispute, could not in the nature of things be parties to the arbitration for its settlement. (at
p265)
15. This is not only recognized by but is the foundation of the judgments in this Court which
establish that a federal award may validly contain provisions protecting members of a disputing
union by forbidding the disputing employers to give to non-members of the union less advantageous
terms or conditions of employment than the award prescribes for members of the union (provided,
of course, that the ambit of the dispute is wide enough for the purpose). Indeed, before the principle
was established, Isaacs J., in contending for it, put the matter squarely upon its correct basis. In
Amalgamated Engineering Union v. Alderdice Pty. Ltd. ; In re Metropolitan Gas Co. (1928) 41
CLR 402, at p 420 his Honour said : "The Act necessarily contemplates a dispute between given
disputants. The Court, of course, cannot go beyond the dispute of those parties. It can only grant
something for their benefit and in relation to them. But that is not the point here. The point is : What
can they dispute about as an industrial matter affecting their relations ?" The italics are his Honour's,
and I adopt their emphasis. Only "their" relations are within federal competence. The general
question was settled in 1935 in the Metal Trades Case [1935] HCA 79; (1935) 54 CLR 387 , from
which it will suffice to make two quotations. Latham C.J. said : "An agreement between two
persons may produce an effect upon third persons, but it can impose duties or confer rights only
upon those who make the agreement. Similarly an award may produce an effect upon third persons,
but it can directly affect the legal relations only of those who were parties to the arbitration
proceedings of which it is the result" (1935) 54 CLR, at p 403 . And Dixon J. was no less specific :
"The reason for the award would be to compose the difference between the disputants, and it would
be an award 'with respect to reciprocal duties and obligations of the parties appearing or represented
in that dispute'. But one of the reciprocal duties would be to employ strangers only on the same
terms as those parties" (1935) 54 CLR, at p 437 (at p266)

16. Six justices endorsed this view in R. v. Kelly; Ex parte Victoria [1950] HCA 7; (1950) 81 CLR
64 , in a joint judgment which contained very pertinent words : ". . . in such a case there is ex
hypothesi a dispute between the organization and the employers whom it is sought to affect by the
award. The award does not affect any non-disputant. It does not create . . . actual rights and duties as
between persons who are non-disputants . . . it does nothing that is 'foreign to arbitration' (per Isaacs
J. in Arnall's Case [1929] HCA 35[1929] HCA 35; ; (1929) 43 CLR 29, at p 44)"(1950) 81 CLR, at
p 82 (at p266)

17. Finally, in Reg. v. Graziers' Association of N.S.W.; Ex parte Australian Workers' Union [1956]
HCA 31; (1956) 96 CLR 317, the Court dealt specifically with the effect of a prescription in an
award of the minimum rates to be paid to employees as read with a provision that the award should
be binding on certain employers "in respect of their employees whether members of the union or
not". In a joint judgment Dixon C.J., McTiernan J. and I said: "We are concerned only with its
operation under the words 'or not'. By those words it purports to impose a duty upon the employers
not to pay less than a stated minimum" (my italics) "to employees not members of the organization.
To whom is this duty owed? Certainly not to such employees themselves. They are not parties to the
dispute." Then we went on to point out that the inclusion of the provision in the award had in that
case been sought by the employers, with the purpose of destroying the rights of the employees who
were not members of the disputing organization to a higher minimum wage under a State award,
and added: "It has no purpose except to exclude the operation of the State law and it can have no
effect unless it be that." We had no occasion to decide whether it could have that effect, for we
thought that there was no such dispute as would enable the provision to be validly made. Fullagar J.,
however, said that it was not clear to him that the result (of inconsistency) would actually follow,
"because State awards give rights to individual non-unionists, whereas a federal award, to which
they would not be parties, could not give such rights"(1956) 96 CLR, at p 324 To my mind there is
no valid answer to this. His Honour referred by way of contrast to the decision in H. V. McKay Pty.
Ltd. v. Hunt [1926] HCA 36; (1926) 38 CLR 308, where the Court held that a State determination
which according to its terms as applied to the circumstances of the case bound a certain employer to
pay a minimum wage to a certain employee was invalid for inconsistency with a federal award, also
prescribing a minimum wage, which had been made in settlement of a dispute to which both the
employer and an organization of which the employee was a member were parties. The contrast with
such a case as the present, where the employee was not a member of the organization, is in my
opinion of fundamental importance. (at p267)

18. For these reasons I am of opinion that the Industrial Appeals Court was in error in holding that
the information had been rightly dismissed, and the appeal should be upheld. (at p267)

TAYLOR J. This appeal by special leave arises out of proceedings in which the respondent was
prosecuted for a breach of s. 198 (1956) 96 CLR, at p 324 of the Labour and Industry Act 1958
(Vict.). That sub-section provides that:

       "Where any employer employs any person on work for
       which the lowest prices or rates have been fixed in a
       determination, such employer shall be liable to pay and shall pay in
       full in money without any deduction whatever to such person
       the price or rate so determined."

The information alleged that the defendant having employed one Frank Murray Macdonald during
the week ending on 15th September 1965 on work for which the lowest rates had been fixed in the
determination of the Industrial Appeals Court made on 2nd August 1965 in connexion with a
determination of the Frozen Goods Board did on 31st March 1966 at South Melbourne fail to pay in
full to the said Frank Murray Macdonald the appropriate rates for such work in contravention of the
provisions of the Labour and Industry Act 1958. (at p267)

2. By the Frozen Goods Determination (which I shall refer to as the determination) the minimum
rates which might be paid to persons engaged in certain classifications of employment were fixed at
the rates therein specified and it seems that Macdonald was, in fact, employed in work of a
description covered by the determination. However, the respondent claims that the work upon which
he was employed was also covered by an award of the Commonwealth Conciliation and Arbitration
Commission (the award) and it was pointed out that the minimum rates payable to employees
pursuant to that award were lower than those payable pursuant to the determination. In these
circumstances it was contended that there was an inconsistency between the award and the
determination and, between the respective statutory provisions which gave them force, and that, to
the extent of the inconsistency, the Commonwealth provisions must be taken to prevail. The
magistrate before whom the matter initally came accepted this submission and, thereupon, dismissed
the information. A subsequent appeal to the Industrial Appeals Court was also dismissed and this
appeal is now brought against the order of dismissal made by that Court. (at p268)

3. It is conceded for the purposes of the appeal that the work upon which Macdonald was engaged
was work of a kind covered by both the determination and the award. But the argument is that, since
he was not a member of the Transport Workers Union of Australia - the employees' organization
which was the only employees' organization party to the dispute in settlement of which the award
was made - he was not bound by the provisions of that award. That this is so is clear enough from
the provisions of s. 61 of the Conciliation and Arbitration Act and the proposition has been plainly
acknowledged by decisions of this Court. But a majority of the Court in Metal Trades Employers
Association v. Amalgamated Engineering Union (1935) 54 CLR 387 held that it was competent for
an organization of employees to raise an industrial dispute with employers concerning the rates to be
paid, not only to members of the organization, but also to employees who are not members. That is
to say that an industrial dispute, as defined, may be raised by a demand by an employees'
organization which relates, not only to matters pertaining to the relations between the members of
the organization and employers, but also with respect to matters pertaining to the relations of
employers with non-unionists engaged in the same industry. However, it is not competent for
employers to raise a dispute by a demand made by employers upon an organization of employees
that specified rates shall be paid to non-unionists employed by them (Reg. v. Graziers' Association
of New South Wales; Ex parte Australian Workers' Union [1956] HCA 31; (1956) 96 CLR 317) (at
p268)

4. By s. 61 of the Conciliation and Arbitration Act an award determining an industrial dispute is
binding on all parties who appear or who were represented before the Commission and upon certain
other categories of person but these do not include employees who were not and are not members of
an employees' organization. This means, of course, that Macdonald was not bound by the award.
Consequently, it is said, his rights, given to him by the Labour and Industry Act, cannot be affected
and the award, which purports to apply to all employees doing work of the specified classifications
"whether such employees are members of the claimant union or not", means that the obligation to
pay the specified rates to non-unionists was an obligation imposed upon employers only qua the
employees' organization and other persons bound by the award. But there can be no doubt that,
although s. 61 is expressed in terms which do not include non-unionists in the categories of persons
who are to be bound by an award, their rates of wages may be indirectly affected thereby for the
respondent was bound by the award and to have paid the employee less than the rates specified in
the award would have constituted an offence under the Commonwealth Act (ss. 119 and 122). (at
p269)

5. In this case, however, the rate prescribed by the determination was higher than that prescribed by
the award and, upon the basis broadly outlined above, it was argued that the obligation upon the
respondent to pay the rates prescribed by the award was an obligation imposed only qua the union
and that Macdonald's right to the higher rate prescribed by the determination remained unaffected.
We have not before us, however, the log of claims which originated the dispute in settlement of
which the award was made. It may, of course, have demanded that non-unionists should be entitled
to receive wages at not less than the rates prescribed for all employees. Or it may have demanded
that the minimum rate for non-unionists should be the same as that prescribed for members of the
union and whether higher or lower than the rate, if any, prescribed by or under any State law. But to
have had the log before us would not have assisted the appellant for, in proceedings such as these, it
would not be possible for him to impugn the award on the ground that it extended beyond the ambit
of the dispute (Harrison v. Goodland [1944] HCA 41; (1944) 69 CLR 509 ). We must, therefore,
take the award as we find it. In terms it provides (cl. 10) that the minimum rate of wages required to
be paid by employers shall, in any area or place indicated in the annexed Table A, comprise the
amount of the basic wage assigned to that area or place and in addition the amount assigned in the
appended Table B for an employee or work of a class indicated therein. The award was made on
20th February 1959 and the determination on 2nd August 1964 and, by the latter instrument a
higher rate of wages was prescribed for employees performing the work which Macdonald was
engaged to perform and was, in fact, performing. In my view, it was not, by reason of s. 109 of the
Constitution, operative, by virtue of the Labour and Industry Act, to impose upon the respondent an
obligation to pay a higher minimum rate than that prescribed by the Award (cf. per Isaacs J. in
Cowburn's Case [1926] HCA 6; (1926) 37 CLR 466, at pp 491 et seq). The fact that the
determination was made after the award is, however, not of significance for the result would be the
same if the determination had been made earlier. (at p270)

6. This, I think, is sufficient to dispose of the appeal and I do not, therefore, proceed to examine the
consequences of the proposition that the wages prescribed by the award are wages prescribed to be
paid for work performed subject to the many provisions of the award. There are, of course, many
differences between the conditions prescribed by the award and those prescribed by the
determination. Reference was made to some of these in the course of argument and to the difficulty,
or, even, the impossibility of seeking to define the respondent's obligations by reference to both of
these instruments, or, partly by reference to one and partly by reference to the other. (at p270)

7. I would dismiss the appeal. (at p270)

MENZIES J. The question for decision upon this appeal by special leave from the Industrial
Appeals Court of Victoria, is, whether an employer commits an offence under the Labour and
Industry Act 1958 (Vict.) - which I shall call "the State Act" - when, being a party to a federal award
prescribing the minimum wages to be paid to all employees, including employees not members of a
union a party to the award, it pays an employee, who is not a member of such a union, less than the
wages fixed by a determination of a Victorian wages board, established under the Labour and
Industry Act, as the lowest rate to be paid to a person doing the work of that employee. (at p270)

2. In the circumstances just stated an offence under s. 198 of the Victorian Act was committed by
the respondent in respect of its employee, one Macdonald, unless the relevant provisions of the
Labour and Industry Act are inconsistent with federal law, i.e., the Conciliation and Arbitration Act
- which I shall call "the Commonwealth Act" - requiring compliance with awards made thereunder.
(at p270)

3. It is now fully established that an award, made under the Commonwealth Act, can validly impose
obligations upon an employer in respect of employees not members of a union party to the award. In
this case therefore the Transport Workers (General) Award, 1959 - an award made under the
Commonwealth Act - (which I shall call "the federal award") required the respondent to pay his
employee Macdonald, who was not a member of the Transport Workers Union, at the appropriate
rate of wages therein prescribed as the minimum rate of wages to be paid. The Frozen Goods
Determination made by the wages board under the State Act (which I shall call "the State
determination") prescribed as the lowest rate to be paid to a person employed as Macdonald was
employed a rate of wages higher than the minimum rate fixed by the federal award. In fact the
respondent paid Macdonald at a rate lower than those prescribed by either the federal award or the
State determination. The respondent was prosecuted for breach of the State Act and its only defence
was that the State Act, in so far as it is material, was inconsistent with federal law and was to that
extent invalid. That defence succeeded. An appeal to the Industrial Appeals Court failed. The
respondent has no merits, but is entitled to any advantage that it can obtain from the existence of
federal law imposing obligations upon it. (at p271)

4. The question is then, whether a State command to an employer to pay a non-unionist employee at
a minimum rate of wages higher than that prescribed by federal law as the minimum rate of wages
to be paid by the employer to that employee gives rise to inconsistency between State and federal
laws with the resulting invalidity of the State law. I have posed the question this way because it is
with the obligation of the employer and not the rights of the employee that this case is concerned.
The respondent is charged with a criminal offence under State law ; its failure to pay the minimum
wages prescribed by the federal award would expose it to prosecution under federal law. It is the
existence of different prescriptions, each supported by the sanctions of the criminal law, that gives
rise to the real difficulty in this case. The legal rights of Macdonald under the federal award do not
seem to me to require examination. (at p271)

5. It was established by the Metal Trades Case [1935] HCA 79; (1935) 54 CLR 387, that, in the
settlement of an industrial dispute between employers and an organization of employees, obligations
can validly be imposed upon the employers in respect of employees not members of unions party to
the dispute. The reason for this decision is not I think of particular importance here ; what is of
importance is the result, namely, that there comes into existence an obligation resting upon
employers under federal law and supported by legal sanctions to pay the minimum rates prescribed.
The point now to be determined, as it appears to me, is simply whether this obligation under federal
law is exclusive and exhaustive. The appellant contends that it is not, and that State law can validly
impose different and more onerous obligations upon employers than those imposed by federal law
so long as there is no actual contradiction of federal law by State law. It was pressed upon us that
the respondent here in paying the minimum rate of wages determined by the State determination
would also be fulfilling his obligation under federal law to pay the minimum rates fixed by the
award. This of course is true enough but to my mind it is not decisive. The problem here arises in
different circumstances, namely, where the payment of wages at a particular rate would meet the
employer's obligations under federal law but would not meet its obligations under State law, if
applicable. (at p272)

6. Although the question now arises simply in relation to minimum rates of pay, it could, of course,
arise with respect to other minimum requirements of which some instances may be given. Thus, if
minimum prices were to be fixed under a valid law of the Parliament, could a State by its legislation
fix higher minimum prices ? Again, if minimum insurance rates were to be fixed under a valid law
of a parliament could a State fix higher minimum rates ? Finally, could a State fix a higher
minimum age for marriage than that fixed by Commonwealth law? In general there is little doubt
that a negative answer should be given to each of these questions notwithstanding that it would be
possible to obey both laws. Such laws would fail for inconsistency on the simple ground that the
Commonwealth law was intended to be exhaustive and exclusive leaving no room for any State
prescription. Nearer home, perhaps, are the actual decisions that State laws that would require
payment of wages in excess of award minimum wages are unconstitutional in circumstances when
both the employer and the employee in question are bound by the federal award. (Clyde
Engineering Co. Ltd. v. Cowburn [1926] HCA 6; (1926) 37 CLR 466; H. V. McKay Pty. Ltd. v.
Hunt(1926) [1926] HCA 36; 38 CLR 308) I see no reason why the same conclusion must not be
reached in this case if attention be directed - as I think it should - to the obligations of employers
rather than to the rights of employees. (at p272)

7. Because I have reached the conclusion that the obligations imposed by federal law upon
employers bound by the Transport Workers (General) Award to pay wages at the minimum rates
fixed is exhaustive and exclusive with respect to unionist and non-unionist employees alike I
consider the decision appealed against was correct and that this appeal should be dismissed. (at
p273)

8. There is what is perhaps merely an alternative way of stating the matter. In Clyde Engineering
Co. Ltd. v. Cowburn [1926] HCA 6; (1926) 37 CLR 466, it was decided that a State law is
inconsistent with federal law if its effect, if enforced, would be to destroy the adjustment of
industrial relations made by a federal award. Part of the adjustment made by the award here was the
fixing of common minimum wages to be paid by employers to unionists and non-unionists alike ; if
the State law were to be enforced the employers bound thereby must, as a matter of legal obligation,
pay non-unionist employees a different and higher minimum wage than that payable under the
award to unionists. In this way there would be an interference with the adjustment of industrial
relations made by the award. Instead of common conditions there would be different conditions for
unionists and non-unionists. (at p273)

ORDER

Appeal dismissed with costs.

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