Chenoweth v Transadelaide [2001] SAWCT 29 (23 March 2001)

Chenoweth v TransAdelaide [2001] SAWCT 29

JUDGMENT OF: His Honour President Judge WD Jennings, His Honour Deputy President Judge JP McCusker and His Honour Deputy President Judge BP Gilchrist

Referral to the Full Tribunal - Whether annualised salary provided for by changes to relevant award after period of incapacity commenced can be relied upon for purposes of s 39 review or whether the applicant is limited to the award as it was at the time of commencement of incapacity and percentage increases to award rate since that time - Proper construction given to expression "changes to the rate of remuneration" as it appears in s 39 - Found applicant's weekly payments fair and in accordance with proper approach prescribed by s 39(2)(a)(i) - Applicant's notice of dispute dismissed - Dissenting decision - S 39, s 94A(2), reg 10 of Workers Rehabilitation and Compensation Act 1986 - TransAdelaide Bus and Tram Operators Paid Rates Award 1995 Commonwealth - The TransAdelaide St Agnes Depot Appendix 4

Giancaspro v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (SHRM (Australia) Pty Ltd) JD83/1999

O'Brien v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (Andrecco-Hurll Refractory Services Pty Ltd) [2000] SAWCT 72

Khammash v Royal Adelaide Hospital [2000] SAWCT 128.

General Motors-Holden's Automotive Ltd v Valdivia A38/1994

WorkCover Corporation (Baulderstone Hornibrook) v Kent A113/1995

WorkCover Corporation (WB and LT Ashby and Co) v Baker A2/1991

WorkCover Corporation (Bettaform Constructions Pty Ltd v Pizzorno [1997] SAWCAT 3

WorkCover Corporation of SA v Marina (1996) 66 SASR 241

Coalcliff Colleries v Campbell (1964) 81 WN (Pt 2) NSW 318

Coalcliff Colleries v Campbell [1964] HCA 53; (1965) 112 CLR 349

Francese v Corporation of the City of Adelaide (1989) 51 SASR 522

Scott v Sun Alliance Australia Ltd and Another [1993] HCA 46; (1993) 178 CLR 1

Ashfold v Metro Brick (1999) WASCA 1048

Criminale v State Authorities Superannuation Board [1989] HCA 48; (1989) 63 ALJR 665

Bell v McArthur River Mining Pty Ltd (1998) 81 IR 436

Connolly v The Victorian Railways Commissioners [1957] VicRp 62; (1957) VR 466

May v Lillyvale Hotel Pty Ltd (1995) 68 IR 112

Broken Hill Associated Smelters Pty Ltd v Fowler (1979) 23 SASR 149

Broken Hill Associated Smelters Pty Ltd v Gray (1993) 169 LSJS 297

Rainsfords Metal Products Pty Ltd v Antoniades (1975) 12 SASR 61

General Motors Holden's - Automotive Ltd v Workers Rehabilitation and Compensation Corporation (1991) 55 SASR 395

Comcare v Thompson [2000] FCA 790; (2000) 100 FCR 375

1 This matter was referred to this Full Bench of the Tribunal pursuant to s 94A(2) of the Workers Rehabilitation and Compensation Act 1986 ("the Act") for the determination of the following issue:

" ...whether the annualised salary which was provided for by changes to the relevant award after the period of incapacity commenced can be relied upon for the purposes of a section 39 review or whether the applicant is limited to the award as it was at the time of the commencement of the incapacity and the percentage increases to the award rate since that time. The resolution of this dispute turns on the proper construction to be given to the expression `changes to the rate of remuneration' as it appears in section 39."

"1. The Applicant was first employed by the MTT (Municipal Tramways Trust) in November 1976 as a Bus Operator. He was initially employed at the Hackney Depot driving buses. He worked full time on rotating shifts, and also worked overtime.

2. After nine years of service at the Hackney Depot the Applicant moved to the St Agnes Depot with a classification of Bus Operator. He continued to work full time on shift work and overtime.

3. The Applicant initially sustained injury to his lower back in the course of his employment on 11 October 1984. He suffered injury by attempting to prevent a passenger falling over in the bus, after the bus moved suddenly.

4. The Applicant required some treatment for his disability but was able to substantially continue with his employment duties as a bus driver until 20 October 1987 when he suffered further injury to the lower back, in the course of his employment.

5. Following the incident in October 1987 the Applicant had further time off work for rest and recovery until 23 February 1988 when the Applicant was working split shifts which gave an opportunity to rest during the middle of the working day.

6. On 23 February 1988 the Applicant suffered a further aggravation to his back injury in the course of his employment, which resulted in him being off work for some three and a half months.

7. He was then able to return to driving duties which he continued on a full time basis with further periods of incapacity until about 18 August 1995. On about 18 August 1995 the Applicant suffered an aggravation and a new claim for compensation was then accepted by determination of 25 August 1995.

8. The Applicant was then required to reduce the amount of driving time, under doctor's instructions. He continued working, at a reduced working capacity, until about January 1997 when he was removed from all driving duties. At that time he was still working in the St Agnes Depot. He was paid wages for the work he performed in accordance with the St Agnes Depot Appendix of the Award after October 1996, and was paid weekly payments of compensation for the time he was partially incapacitated.

9. After his removal from driving duties in early 1997 the Applicant was given rehabilitation duties in the Sheriff's Office performing clerical work. He worked on these duties full time for a period of 5 months.

10. In late 1997 the Applicant obtained employment as a technical officer in Transport SA and was appointed permanently in May 1998.

11. The Applicant is still working for Transport SA in that position, and currently receives an annual salary of $32,500.00.

12. The Applicant continues to receive a weekly payment of compensation from TransAdelaide for his continuing incapacity. The weekly payment is equal to 80% of the difference between his current earnings and the Notional Weekly Earnings as set by TransAdelaide.

13. The Applicant's Notional Weekly Earnings were set by determination of 25 August 1995 at the rate of $657.39, based upon the rate of pay for a Bus Operator, Class 7, as at 18 August 1995, being $515.60. The Notional Weekly Earnings were calculated by reference to average earnings of comparable bus operators, including an average of the base rate, an average of shift penalties and an average of regular rostered overtime, but excluding any un-rostered overtime.

14. Subsequent Section 39 increases have been made. By determination dated 11 August 1997, the rate of notional weekly earnings increased from $657.39 to $670.54 on and from 19 August 1997, this being a 2% increase. By determination dated 14 July 1998 the rate of notional weekly earnings were increased to $690.66 on and from 22 August 1998, this being a 3% increase. By determination dated 31 August 1999 the rate of notional weekly earnings were increased to $718.28 per week on and from 22 August 1999, this being a 4% increase.

15. At the time of the determination of 25 August 1995, the Applicant's contract of employment was governed by the TransAdelaide Bus and Tram Operators Paid Rates Award 1995 Commonwealth ("the Award"). Under the Award the Applicant was classified as an Operator Class 7 and paid as such. Had the Applicant not suffered his incapacitating disability in 1995 he would have continued to have worked as an Operator Class 7 in accordance with the Award.

16. In about October 1996 the provisions of the Award changed. At that time a new TransAdelaide St Agnes Depot Appendix 4 to the Award came into operation. Pursuant to that new Award there was an introduction of aggregated fortnightly remuneration. The agreement reflected new career classification structures, aggregate rates of pay and revised conditions of employment.

17. The base rate of pay for an Operator Class 7 under the Award remained the same as the rate of pay for an operator S5 under the TransAdelaide St Agnes Depot Appendix 4, namely $515.60.

18. Pursuant to Clause 5.3 of the St Agnes Depot Appendix, a fortnightly aggregate salary was established to include a fixed rate of weekly payments, inclusive of payment for ordinary hours of work, annual leave loading, shift penalties, rostered daily overtime, "grey days" and additional time worked in lieu of gazetted leave.

19. The fortnightly aggregate remuneration of $1,538.50 became operative on 6 of October 1996. That was equal to $40,000.00 per annum. That sum was increased by 2% effective on 1 July 1997. A further 3% increase became effective on and from the first pay period after 1 April 1998.

20. If the Applicant had not suffered the 1995 disability, he would have been entitled to be paid the fortnightly aggregate remuneration as of 6 October 1996, which was then the weekly amount of $769.25.

21. A further 4% increase became effective on 1 April 1999.

22. In order for bus operators to receive the fortnightly aggregate remuneration, they need to work at least 178.5 hours over a four week period, including working 21 days in the 28 day period, which is equivalent to an average of 44.63 hours per week of work.

23. The Applicant did not make any application pursuant to Section 39(2)(a)(ii) prior to the subject determination being made."

3 S 39 of the Act provides as follows:

"39. (1) Where a worker to whom weekly payments are payable is incapacitated for work or appears likely to be incapacitated for work for more than one year, the Corporation shall, during the course of each year of incapacity, review the weekly payments for the purpose of making an adjustment to the amount of those payments under this section.

(i) changes in the rates of remuneration payable to workers generally or to workers engaged in the kind of employment from which the worker's disability arose; or

(ii) if the worker applies, in accordance with the regulations, for the adjustment to be made on the basis of changes in rates of remuneration prescribed by an award or enterprise agreement payable to a group of workers of which the worker was a member at the time of the occurrence of the disability - changes in those rates of remuneration; and

(b) operates from the end of the year of incapacity in which the review is made.

4 It was common ground between Mr Lieschke, counsel for the applicant, and Mr Lines, counsel for the respondent, that the scope of a review under s 39 is limited to the adjustment of weekly payments based on those changes in circumstances prescribed by s 39(2)(a)(i) and s 39(2)(a)(ii): Giancaspro v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (SHRM (Australia) Pty Ltd) JD83/1999; O'Brien v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (Andrecco-Hurll Refractory Services Pty Ltd) [2000] SAWCT 72; Khammash v Royal Adelaide Hospital [2000] SAWCT 128.

5 Mr Lieschke advised the Full Tribunal that the regulation referred to in s 39(2)(a)(ii) came into effect on 1 December 1999, being reg 10 of the General Regulations to the Act and that no application had been made pursuant to that regulation.

6 Mr Lieschke took the Full Tribunal to the Award and the various appendices thereto, and in particular to Appendix 4 which is known as The TransAdelaide St Agnes Depot Appendix, and in particular to cl 5.1, cl 5.2 and cl 5.3. He pointed out that the applicant was paid wages by way of fortnightly remuneration which included annual leave loading, shift penalties, rostered daily overtime, additional days work (grey days) and payment for additional time worked in lieu of gazetted leave, ie he was paid a set rate.

7 He compared that with the other appendices to the Award which relate to different locations, and all of which were different. It is not necessary for the purpose of these reasons to refer to or go into those differences.

8 Mr Lieschke took us to cl 5.5.1(a) of the Award which provided for a 2 per cent increase in wages commencing on or after 1 July 1997 and contended that this represented a change to the aggregated fortnightly remuneration as set out in cl 5.2.

9 He maintained the change to aggregated fortnightly remuneration plus 2 per cent should be applied in this case.

10 Mr Lieschke then referred to a number of cases and relied upon certain passages contained therein: General Motors-Holden's Automotive Ltd v Valdivia A38/1994, WorkCover Corporation (Baulderstone Hornibrook) v Kent A113/1995, T O'Connor & Sons Pty Ltd v Pece A13/1989, Giancaspro v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (supra), Khammash v Royal Adelaide Hospital (supra), WorkCover Corporation (WB and LT Ashby & Co) v Baker A2/1991, O'Brien v WorkCover/MMI Workers Compensation (SA) Ltd (Andrecco-Hurll Refractory Services Pty Ltd) [2000] SAWCT 72, WorkCover Corporation (Bettaform Constructions Pty Ltd v Pizzorno [1997] SAWCAT 3. For reasons set out hereunder we are not persuaded those passages are directly relevant or assist us in our task in this matter.

11 He contended that when the compensating authority is also the employer (as is the case here) it should be expected to apply all relevant award changes, without the need for a s 39(2)(a)(ii) application, if the award changes are the most accurate guide to changes to the actual rates of remuneration. He contended that an exempt employer should not be afforded the fiction of ignoring award changes.

12 Mr Lines contended that the purpose of s 39 of the Act is not concerned to assess the worker's future loss of earning capacity, but rather his notional weekly earnings in accordance with the statutory formula that renders it irrelevant that his employment is about to change or end (Khammash supra).

13 He submitted that the s 39 process is not a repeat of the methodology of determining the notional weekly earning rate pursuant to s 4 and s 35 of the Act and that the considerations under the s 39 process are different, ie pursuant to s 39 (2)(a)(i) the two main considerations are :

(b) those changes which are "payable to workers generally or workers engaged in the kind of employment from which the worker's disability arose". (emphasis is ours)

14 He relied upon the approach taken by the Tribunal in T O'Connor and Sons Pty Ltd v Pece (supra) at 8 as being the approach that should be followed:

"In our view 'rates of remuneration' are the rates which are applied to the number of hours worked including overtime and including any other matters allowed in a section 4 calculation of average weekly earnings and are not, for the purposes of section 39, total weekly packages. Accordingly, we do not think that variations in the availability of work, either in the number of hours per week or in the sense of jobs coming to an end or in the sense that generally there may be unemployment are relevant to a section 39 calculation.

We hold that what is to be reviewed is the amount of the weekly payments currently payable, which, by definition, will have been calculated in accordance with section 35. If the current weekly payment, pursuant to section 35, includes provision for overtime, the assumption as to hours which gave rise to the figure calculated under section 35 is not to be altered. The only adjustment to be made is to apply any variation in rates to those hours."

15 Thus he submitted that an adjustment pursuant to s 39(2)(a)(i) is limited to increases or decreases in the hourly rates of remuneration which form the basis of setting the original notional weekly earnings rate.

16 In this context he submitted that the hourly rates for remuneration of bus operators of the applicant's level have not increased under the relevant appendix for an operator of the applicant's level, ie Operator Class 7, and he referred us to Agreed Facts par 17 and par 22.

17 Mr Lines submitted that the aggregate fortnightly remuneration as set out in cl 5.2 of Appendix 4 is not necessarily what a bus operator at the St Agnes Depot would be paid in any given twenty eight day cycle but is adjusted according to actual shifts and overtime worked along with certain other factors. Consequently he submitted that an increase in the average hours to be worked on a revised roster system with revised working conditions does not qualify as a change in the rate of remuneration for the purposes of s 39(2)(a).

18 Secondly, he submitted the changes in the Appendix apply only to bus operators employed at the St Agnes Depot, not to workers generally or to bus operators as a class of workers and that therefore whether or not the aggregated fortnightly remuneration constitutes a change in the rate of remuneration, it is not a change to be considered or is relevant pursuant to s 39(2)(a)(i).

19 In the end result, this referral requires this Tribunal to correctly interpret and apply the provisions of s 39 and in particular s 39(2)(a)(i) to the agreed facts of this case.

20 The net effect of the approach that Mr Lieschke urges upon us is for there to be a re-assessment of the applicant's notional weekly earnings to reflect what his earnings probably would have been had he not suffered the compensable disability.

21 In our view, that approach is erroneous. In WorkCover Corporation of SA v Marina (1996) 66 SASR 241 at 249 - 50, Doyle CJ suggested that other than in the case of overtime the Act did not permit the recalculation of average weekly earnings. With respect, that tentative view must be correct. As His Honour observed at 250:

"... the Act is one which necessarily involves sacrifices of flexibility in favour of certainty, and is one which does not attempt to match exactly entitlements and current events."

22 It has always been a basic tenet of workers compensation legislation that once pre-injury earnings have been determined, that determination "was res judicata and remained immutable thereafter ...": Coalcliff Colleries v Campbell (1964) 81 WN (Pt 2) NSW 318 at 320, per Sugermann J (see also Coalcliff Colleries v Campbell [1964] HCA 53; (1965) 112 CLR 349).

23 S 39 is couched in terms of an adjustment to weekly payments. It is not a means by which to recalculate the assessment of weekly notional earnings. It simply provides for increases or decreases in the amount of compensation payments payable to an incapacitated worker to reflect rises and falls in wages, as the case may be.

24 A literal interpretation to s 39(2)(a)(i) must result in the general thrust of the arguments of Mr Lines succeeding.

25 Such an approach is appropriate as the words of that sub-section are clear and unambiguous and as earlier emphasised in these reasons for decision, must relate to and are restricted to changes in the rates of remuneration payable to "workers generally" or "to workers engaged in the kind of employment from which the worker's disability arose". Those words must be interpreted in accordance with their ordinary and natural meaning.

26 It seems to us that if the submissions and arguments contended for by Mr Lieschke were to succeed then sub-s (i) of s 39 (in the context of the section as a whole, and what appears in sub-s (ii)) would simply have no work to do.

22 27 If there was an application before us pursuant to s 39(2)(a)(ii), then that may lead to a different result; however as beforementioned, there is no such application before us.

28 For these reasons we find in favour of the arguments submitted by Mr Lines and find that the applicant's weekly payments are fair and in accordance with the proper approach prescribed by s 39(2)(a)(i) and thus the applicant's notice of dispute should be, and is hereby dismissed.

29 The certificate accompanying this referral describes the dispute for the purposes of s 94A(2) and rule 6 in the following terms:-

"... whether the annualised salary which was provided for by changes to the relevant award after the period of incapacity commenced can be relied upon for the purposes of a section 39 review or whether the applicant is limited to the award as it was at the time of the commencement of the incapacity and the percentage increases to the award rate since that time. The resolution of this dispute turns on the proper construction to be given to the expression `changes to the rate of remuneration' as it appears in section 39."

30 For the purpose of the referral I will assume the "changes to" was meant to be "changes in". The parties have agreed a number of facts. These are set out in the decision of the majority.

31 S 39 provides the following:-

"(1) Where a worker to whom weekly payments are payable is incapacitated for work or appears likely to be incapacitated for work for more than one year, the Corporation shall, during the course of each year of incapacity, review the weekly payments for the purpose of making an adjustment to the amount of those payments under this section.

(i) changes in the rates of remuneration payable to workers generally or to workers engaged in

the kind of employment from which the worker's disability arose; or

(ii) if the worker applies, in accordance with the regulations, for the adjustment to be made on the basis of changes in rates of remuneration prescribed by an award or enterprise agreement payable to a group of workers of which the worker was a member at the time of the occurrence of the disability - changes in those rates of remuneration; and

(b) operates from the end of the year of incapacity in which the review is made.

(3) Where the Corporation makes an adjustment to weekly payments in pursuance of this section, the Corporation shall give notice in writing, in the form prescribed by regulation, to the worker -

(a) containing such information as the regulations may require as to the grounds on which the adjustment is being made; and

(b) informing the worker of the worker's rights to have the Corporation's decision reviewed."

32 Prior to amendment (No 53 of 1995), sub s (2) read:-

for the first and second years of incapacity - shall operate from the expiration of those years and shall be based on changes-

in the rates of remuneration payable to workers generally or to workers engaged in the kind of employment from which the worker's disability arose;

if the worker applies, according to the regulations, for the adjustments to be made on the basis of changes in rates of remuneration payable to workers engaged in the kind of employment from which the worker's disability arose and furnishes satisfactory evidence of such changes - in those rates of remuneration;

for the third and subsequent years of incapacity - shall operate from a date fixed by the Corporation and shall be based on changes in the average minimum award rate since an adjustment was last made under this section."

33 The provision in its original form was considered by Stanley J in Coles New World v Nemeth (unreported A56/1990). He stated (14 - 15):-

"It is to be observed that pursuant to that latter provision (viz. section 39) the worker has no entitlement to apply to have the weekly payments adjusted in accordance with its provisions. The obligation cast upon the Corporation, where the incapacity has already or is likely to exceed one year in duration, is mandatory.

Moreover if an adjustment is to be made it can only operate from the expiration of the first-year of incapacity and is to be adjusted either having regard to increases which workers generally have received or to wages paid to workers engaged in the kind of employment from which the worker's disability arose.

That is, subsection (1) does not provide a general power of review to make an adjustment to the weekly payments based upon economic considerations. Rather the conditions upon which these payments may be reviewed are prescribed by the terms of it."

34 His Honour then went on to deal with the concomitant provision, namely s 38, and stated (15 - 16):-

"What then is the extent of the power contained in section 38? Is it a general power of review which enables the Corporation to increase or decrease weekly payments, provided that the worker or the Corporation can demonstrate change to the worker's circumstances, or does subsection (3) restrict the power of review so that an adjustment in the amount of the weekly payments can only be made to take account of any change in the worker's incapacity for work, insofar as the incapacity is attributable to `compensable disability'.

Under the former legislation which relates to worker's compensation, and indeed pursuant to the right to review weekly payments of compensation contained in similar legislation which operated elsewhere in this country and formerly in England, an entitlement to a review of the weekly payments only arose where there had been a change in the worker's circumstances. Crossfield v. Tanian (1900) 2 QB 629 and Moakes v. Blackwell Colliery Co Ltd (1917) 1 KB 565. That is, a review was not to be treated as an opportunity for reconsideration of an award for compensation upon the very same facts as they were when it was made. Those changes of circumstances may have been either to the worker's incapacity for work or to a change in the rates of pay which had formed the very basis for the initial calculation of the weekly payments.

Under the present Act the legislature seems to have split the right of review which was formerly contained within one section into two separate provisions.

We consider that section 38 does not provide a general unrestricted basis for review. If subsection (1) stood alone it might be capable of providing a general right of review notwithstanding section 39. But subsections (3) (4) and (5) of section 38 all seem to militate against the section being construed as containing a general power of review. Rather those provisions indicate a legislative intent that the provision of subsection (1) should be confined to cases where a review of the quantum of the weekly payment is required having regard to a change in the worker's incapacity for work.

We are further persuaded to adopt that view because the provisions of section 39 seem to evince on (sic) intention that the right to have the weekly payments adjusted having regard to economic considerations, are confined to the circumstances therein prescribed."

35 Nemeth's case involved a worker employed as a merchandising officer but expecting promotion to Point of Sale Coordinator. Prior to realising that hope, she suffered injury. Having dealt with the fixing of the average weekly earnings, (s 4), and the prospective approach required by Francese v Corporation of the City of Adelaide (1989) 51 SASR 522, Stanley J stated (20):-

"All that post injury evidence may have been relevant on an application to show changed circumstances in an attempt to justify a review of the weekly payment. However for reasons which we have given we do not consider it was. Section 39(2) seems to imply that an economic adjustment must be based upon the kind of employment from which the worker's disability arose. We consider the kind of employment of the worker to which that subsection refers is her position as at the date of the injury rather than to some promotional position to which she may have (sic) appointed in the future."

36 Nemeth's case made no reference to T. O'Connor and Sons Pty Ltd v Pece (1989) 1 WCATR 160. That may be of little consequence. In Pece the worker had been engaged on a project that had been completed. If the accident had not happened, the probability was that he would have been unemployed or employed on the basic award rate. His s 4 determination had set his average weekly earnings at well above the basic award rate. Thus the employer purported to review that weekly payment and varied it down to the basic award rate. This was done in purported reliance upon s 38, in the form of that provision prior to 1991. By sub s (3), the Corporation was allowed to adjust the amount of the weekly payments to take account of, "any change in the extent of the worker's incapacity for work".

37 Bright J rejected this attempted use of s 38(3). He stated (161):-

"... while the word `incapacity' as used in that subsection comprehended more than a worker's medical state, it did not include such considerations as a change in the amount of overtime available at a time subsequent to the initial fixing of the worker's weekly payments pursuant to section 35."

38 Bright J stated his view of section 39 in the following terms (168):-

"In our view `rates of remuneration' are the rates which are applied to the number of hours worked including overtime and including any other matters allowed in a section 4 calculation of average weekly earnings and are not, for the purposes of section 39, total weekly packages. Accordingly, we do not think that variations in the availability of work, either in the number of hours per week or in the sense of jobs coming to an end or in the sense that generally there may be unemployment are relevant to a section 39 calculation."

39 In WB and LT Ashby & Co v Baker (1991) 3 WCATR 9 Stanley J considered the meaning of, "changes in the rates of remuneration payable". The Pastoral Industry Award 1986 had been varied to require employers to pay in addition to the usual pay, an amount for occupational superannuation. Importantly the worker suffered his injury on 25 October 1987. The Award was varied for superannuation on 4 July 1988. In September 1988 the worker sought review under section 39 to account for that variation.

40 Stanley J commenced his analysis by considering whether the component of superannuation would be included in reckoning the average weekly earnings under section 4. He concluded it would be (17). He then considered the operation of s 39(2)(a)(ii). He concluded (18) that the superannuation component awarded in July 1988 constituted a change in the rate of remuneration payable. In so doing he said (18 - 19):-

"... Such payments to a superannuation fund form an incident of the contract of employment. They represent money earned by the worker as a reward for his services to the employer, albeit that the worker does not derive immediate benefit therefrom, and importantly the quantum of the payment is directly related to the gross money earned as a shearer. We think therefore that such payments may properly be characterised as a `rate of remuneration' because they represent a payment by the employer to the worker for the services rendered by that worker to the employer which payment is directly tied to his other earnings."

41 This decision is significant. It rejected a narrow meaning of the word "rate". Superannuation is a distinct component of the worker's remuneration. Stanley J's judgment takes a view that Parliament meant "rate of remuneration" to be understood as the way a worker's total reward was made up. I consider this is the correct view. To the extent Pece is authority to the contrary it should not be followed. I set out my reasons for that conclusion.

42 The notion of "rates" in the industrial relations field in Australia does not have the restricted meaning contended for by Mr Lines. The meaning that ought to be attributed to the word in the context of this Act should conform with industrial parlance and meaning: see Scott v Sun Alliance Australia Ltd and Another [1993] HCA 46; (1993) 178 CLR 1 at 5-6.

43 An instructive example of the meaning of the word in industrial parlance is the Equal Pay Case (1969) 127 CAR 1142. That concerned the right of women to be paid the same as men, a proposition now only remarkable for it not having always been so. Well within the memory of those in industrial work at the time are the slogans of the women's' groups and trade unions who pursued the claimed namely, "equal pay for equal work" and "the rate for the job". These were not used in any narrow sense. Far from it. It was a reference to the job, not the gender, being the relevant criteria for reward. That this was the general understanding of the word "rate" is further confirmed by a review of case law.

44 In Scott v Sun Alliance Australia Ltd and Another (above cited), the words "rate of pay" were notionally divorced from any temporal element in the Court's reasoning. In explaining the meaning of the words, "the ordinary time rate of pay of the worker (as expressed by reference to a week)", in s 69(1)(a)(ii) Workers Compensation Act 1988 (Tasmania), the Court stated (5):-

"... it is not always the case that a worker will have an ordinary time rate of pay. There may be no industrial award or agreement regulating his or her employment, and his or her contract of employment may not distinguish between ordinary and other time rates of pay or may provide for remuneration by a formula which has no temporal element - for example, piece work or commission."

45 In Ashfold v. Metro Brick (1999) WASCA 1048 the Full Court considered the case of a worker whose employment was subject to an industrial agreement namely the Metro Brick Armidale (Enterprise Bargaining) Agreement 1994. It is instructive to set out part of the judgment of Owen J, (Pidgeon and Ipp JJ concurring):-

"Item 12(1) of the Award provides for an employer to enter into a contract with a worker for payment by results by piecework. Under the EBA employees employed for a full time 38-hour week could choose to have their rate of pay calculated at either piecework rates or time rates. Piecework rates were fixed by Part 2 of Appendix A of the EBA and at the time of the appellant's injury the rate was $21.23 for every 1,000 verticore/speedy bricks set. Time rates were based on an hourly rate for a 38-hour week and under Part 1 of Appendix A of the EBA the rate was fixed at $376.83 per week.

Up until 16 March 1995 the appellant had opted for, and been paid, in accordance with the piecework rate provided for under the EBA. On 16 March 1995 the appellant suffered a disability in the course of his employment and became entitled to receive compensation under the Act. Initially the appellant received compensation payments of $376.83 per week calculated at the time rate of pay. Prior to the injury the appellant earned an average of $562.70 per week calculated at the piecework rate."

46 As will be seen from the usage in Owen J's judgment, there is no temporal quality obligated by the notion of "rate". And in the result, the Court set the compensation by reference to the piecework rates, explaining as follows:-

"In my opinion the plain and ordinary meaning of the words used in cls 7 and 11 are that a worker's `weekly earnings' will be the amount the worker was actually earning under the Award at the time of the injury, less those payments specifically excluded. It seems to me that in this case, unless the Award or Agreement expressly provide otherwise, the appellant's `weekly earnings' should be calculated at piecework rates as this rate properly reflects what the worker was actually earning under the Award at the time of the disability."

47 In Criminale v. State Authorities Superannuation Board [1989] HCA 48; (1989) 63 ALJR 665 the Court was concerned with the rates of pay of employees paid at an hourly, daily, weekly or fortnightly rates or by piecework for the purposes of the Local Government and Other Authorities (Superannuation) Act 1927 (NSW). In the course of their decision the judges made reference, apparently with approval, to the observations of Mahoney JA in the New South Wales Court of Appeal. The High Court said (666, 667):-

"... On appeal, Mahoney JA (with whom Hope and McHugh JJA agreed) rejected the construction placed upon the definition of `employee' by Lee J. Mahoney JA said:

`Phrases such as "rate of remuneration" look to the amount of money to be paid and the period to be worked to establish the entitlement to it. Prima facie, if remuneration is fixed at a weekly rate, then to be entitled to the sum fixed, the employee must work for the week; if it is an annual rate, then prima facie he must work for the year. The stipulation for remuneration at "£x per week" or "£x per annum" prima facie establishes that there is a weekly or annual rate and that prima facie entitlement accrues in respect of that period: see generally Railway Executive v Culkin [1950] 2 All ER 637 per Lord Simonds, at 641 and per Lord Reid, at 651. ...'

The words of exclusion in the definition look neither to the minimum period of employment nor to the period which must be worked in order to become entitled to payment of the amount mentioned in the stipulated rate; they refer simply to the term of employment which stipulates the amount of wages or salary to be paid in respect of a given period of work and excludes persons employed by an `employer' whose wages or salary are expressed by the relevant term as an amount per hour, per day, per week or per fortnight. Looking solely at the terms of the contracts of the employment entered into by the board and the appellant employees, the relevant term in the case of each appellant provided for a nominated wage per week. ..."

48 In Bell v. McArthur River Mining Pty Ltd (1998) 81 IR 436 at 445 the Full Commission (Munro J, MacBean SDP and Hoffman C) stated the following should be drawn from the Criminale (supra) decision:-

"In those passages from the appellate level decisions in Criminale, the association of money payment, the period to be worked, and an entitlement based on the relationship between the two, are identified as elements of a concept of `rate of remuneration'. ..."

49 The meaning of the word "remuneration" is wider than the words "salary" or "wages". In Reg v. The Postmaster General (1876) 1 QBD 658 the Court held remuneration to be the full sum for which the worker is engaged to do the work in question: see also Connolly v. The Victorian Railways Commissioners [1957] VicRp 62; (1957) VR 466, May v. Lillyvale Hotel Pty Ltd (1995) 68 IR 112.

50 I acknowledge that in a statute, the meaning of any word ought to be ascertained by reference to the context in which the word appears and the purpose of the Act rather than by reference to the dictionary meaning in isolation. However an examination of the meaning of the word "rate" in the Shorter Oxford English Dictionary Volume II p 1659, shows the primary meaning to be "a basis for calculating" a quantity or sum. To restrict it to a temporal measure, let alone an hourly one is unsupportable.

51 I turn to consider the scheme of the Act and its history. The Workers Compensation Act 1971 came into operation on 10 June 1971. S 51(1) provided that the compensation payable to incapacitated workers would not exceed a sum equal to 85 per cent of the average weekly earning of the worker during the previous twelve months plus $13.00 for a dependent wife and $5.00 for each child per week. A ceiling of weekly compensation was fixed at $65.00 by s 51(2).

52 Amendment 94 of 1973 became operative on 1 January 1974. It introduced the principle of full wage maintenance. That is, workers were to receive weekly payments equal to their average weekly earnings during the period of twelve months immediately preceding the incapacity. The only ceilings provided were those in s 51(4) being upon the aggregate of the payments of weekly compensation.

53 The legislative objective was described by Walters J in Broken Hill Associated Smelters Pty Ltd v. Fowler (1979) 23 SASR 149 at 152 in the following terms:-

"... The section aims at keeping compensation in step with the worker's average weekly earnings during the relevant pre-incapacity period and it forms the foundation from which the computation of compensation must start. Primarily, the section calls for an answer to the question - What would the worker have earned during the relevant period? The natural answer would be that if he had undergone the same amount of exertion and his conditions of employment had not changed, his contract of employment would have brought to him, in return for his services, the pay and allowances which he would have received had not his injury occurred. ..."

54 Broken Hill Associated Smelters Pty Ltd v Fowler was determined in great degree by consideration of the legislative intent indicated in s 60. That provided average weekly earnings upon which the amount of any compensation is fixed was to be computed in such manner as best gave the rate per week at which the worker was being remunerated. It was this that White J nominated as the "dominant principle" and which was carried through to the 1986 Act: see Broken Hill Associated Smelters Pty Ltd v. Gray (1993) 169 LSJS 297, Francese v Corporation of the City of Adelaide (above cited) at 526.

55 The principle of full wage maintenance in the 1973 amendments was reinforced by the review provision in the 1971 Act. That was s 71. The Industrial Court was required to have regard to such variations in the weekly earnings which would, pursuant to any industrial award or agreement, have applied to the worker if he or she had continued in the same employment as that engaged in before the incapacity: see Rainsfords Metal Products Pty Ltd v Antoniades (1975) 12 SASR 61. This achieved harmony between the respective parts of the scheme.

56 The policy of full wage maintenance underlying the 1986 Act is suitably described by borrowing the words of Owen J in Ashfold's Case (supra), when speaking of the equivalent policy in the Western Australian Act:-

"The general policy behind the Act is to provide a scheme to ensure that workers who suffer a disability in the course of their work are adequately compensated by their employers. The underlying principle is to provide the worker with a weekly compensation payment which reflects, as closely as possible, the amount the worker would otherwise have been earning under the relevant award. In other words, a figure is to be arrived at that neither over compensates nor unfairly prejudices the worker. In my opinion the only way of arriving at such a figure is to provide the worker with an amount that reflects what he was actually earning prior to the injury subject, of course, to the express exclusions. Such a figure ensures that neither the worker nor the employer is unfairly prejudiced as a result of the disability."

57 Owen J related that principle to the facts in Ashfold's Case (supra) which has some relevance here. He said:

"In my view, in the absence of express terms, it would be outside the spirit of the Act to determine the appellant's compensation payments by reference to a calculation of earnings based on time rates. In this case the time rate bears no resemblance to what the appellant was actually earning each week and it bears no resemblance to the way in which what he actually earned was calculated. To determine compensation payments with reference to the time rate would unfairly prejudice the appellant as such a calculation would result in him receiving significantly less than what he actually earned under the Award prior to suffering the disability. I do not believe that such a result was intended by the legislature and that the Act should be construed accordingly."

58 Those comments are equally applicable in answer to the contention of the respondent in the case before us. What the respondent asks this Tribunal to do is to ignore this objective of the legislation in reading down the provisions of s 39. Such a result would produce "serious injustice": per Scott v Sun Alliance Ltd & Another (above cited) at 12.

59 The dicta of previous Tribunals that s 39 does not provide scope for resetting the rate of average weekly earnings or notional weekly earnings must be correctly appreciated. There is no suggestion that this would be involved. The point made in Nemeth's Case (supra) by Stanley J explains the matter. For s 39 to operate there has to be a relevant change to the position resolved by the section 4 determination. But both provisions have at their legislative heart the implementation of the principle of full wage maintenance.

60 Olsson J's analysis of the legislative scheme in General Motors Holden's-Automotive Ltd v. Workers Rehabilitation and Compensation Corporation (1991) 55 SASR 395 confirms this. He says (404 - 405, 406):-

"A consideration of the scheme of section 39 renders it apparent that the concepts espoused in it, like those of section 4, are pitched at an estimate of future rather than past situations. Section 39 clearly envisages that there is to be an annual review and that, in general, leaving aside any questions of change in capacity for work, amounts of weekly payments once determined are to remain stable for the period of each year under review. So it is that, once the rate has been established for the first year, it is to continue in force until the rate is appropriately determined pursuant to section 39 for the purposes of the second year, and is to operate from the beginning of that year. ..

True it is that section 39 is expressed as adverting to `rates of remuneration', whereas section 4 uses the expression `amount'. On the other hand, we also find the expression `levels of earnings' used in the statutory definition of notional weekly earnings. Because of this somewhat cavalier resort to varying expressions, designed essentially to speak of the same type of thing within various provisions of the statute, it seems to me that the difference in expression ceases to have any real significance for present purposes."

61 Each counsel spent time addressing the words in s 39(2) in addition to those expressly referred. In the absence of objection I state the following opinion. To the extent it was suggested by the respondent that the word "generally" is some reference to State or National Wage Cases, that is not so. All the provision is alluding to is changes which have a collective nature. That theme is continued in each of the categories described.

62 It is argued by the respondent that there is a significant difference between the notions of "workers engaged in the kind of employment from which the worker's disability arose" and "a group of workers of which the worker was a member at the time of the occurrence of the disability". Like Olsson J in General Motors Holden's-Automotive Ltd v. Workers Rehabilitation and Compensation Corporation (supra at 406) it seems to me the difference in expression has little real significance, merely intending to reinforce collective rate changes as opposed to individual ones: see for example Comcare v Thompson [2000] FCA 790; (2000) 100 FCR 375. In each case the question of whether or not the worker meets one or other of the categories described in the provision will be a question of fact. The respondent's contention that they must serve different purposes or be otiose is simply not sustainable. There is no obvious reason for Parliament to have made such a distinction.

63 One final point on the construction of this provision. The argument of the respondent necessarily asks us to read the words of the legislation adding a word that is not there. It is implicit in the respondent's argument that the word "hourly" should be inserted before the words "rate of remuneration". To the extent to which there is any support for that proposition in T O'Connor and Sons Pty Ltd v Pece (above cited) then that authority is in error. It is extremely rare for any Court to find itself impelled to add a word to achieve the legislative intent and this is certainly not such a case: Pearce and Geddes, Statutory Interpretation in Australia 4th Edition par 2.16.

64 The issue for determination in this referral depends on the meaning of "rates of remuneration". For the reasons set out above, I reject the respondent's interpretation. "Rates of remuneration" describes both hourly rates and for the purposes of this examination, annual rates, as well as rates not set by temporal criteria. That answers the issue referred to us.

65 As indicated by the Agreed Facts, the worker had his compensation set in accordance with the St Agnes Depot Appendix of the TransAdelaide Bus and Tram Operators Paid Rates Award 1995, Commonwealth after October 1996 (par 8 and par 15). Under that Award he was classified as an Operator Class 7 and by that I understand a Bus Operator.

66 As explained above the rates of remuneration were changed by Appendix 4 to the Award and calculated on an aggregate fortnightly remunerative basis (par 19). The respondent does not dispute that if he had not been injured his likely earnings would have been as set under the St Agnes Depot Appendix. As the "rate" is not restricted to hourly rate changes, the worker is entitled to the benefit of those rate changes. Moreover, to the degree to which the argument has extended beyond the referral (see tr 40) the obligation on the respondent is mandatory and as a question of fact these changes in the rates of remuneration were payable to workers engaged in the kind of employment from which the worker's disability arose.

67 I answer the question, in the terms referred by saying the annualised salary which is now provided for by changes to the relevant Award after the period of incapacity commenced, is the rate of remuneration to be used in this worker's case for the purposes of the s 39 review. Moreover that the worker satisfies the criteria of changes payable to workers engaged in the kind of employment from which his disability arose.