Government Transport, Commissioner for v Kesby

High Court of Australia|1972-07-01|Before: Mason JJ

For the reasons stated I am of opinion that the appeal should be allowed.

The respondent, while employed by the Commissioner for Government Transport, sustained on 23rd March 1966 an injury which arose out of and in the course of his employment. The injury was not caused by his own serious and wilful misconduct. One result of the injury was that during the period from 2nd October 1969 to 1st September 1970 the respondent was incapacitated so as to be unable to perform the duties of the classification to which at the date of the injury he had been appointed, namely, those of a bus driver. However, his incapacity was not total and during that period he was employed by the Commissioner as a cleaner. In these circumstances, as is now common ground, he was entitled under s. 124 (1) of the Transport Act, 1930 N.S.W. (as amended) to be paid the difference between "the salary for the time being payable to officers with the same classification and with the same length of service therein" as he had at the date he received the injury, and the amount actually paid to him as remuneration for his employment as a cleaner. In an action in the District Court, the respondent claimed that the amount of his entitlement was $576, but the learned trial judge accepted the contention made on behalf of the Commissioner that the respondent was entitled only to $198, and gave judgment for that amount. The Court of Appeal allowed an appeal from this decision, and substituted a judgment for $576 [1] . The Commissioner has obtained special leave to appeal from the judgment of the Court of Appeal.

Where an officer has been incapacitated by injury arising out of and in the course of his employment so as to be unable to perform the duties of the classification to which at the date of the injury he had been appointed, he shall, except where such injury was caused by his own serious and wilful misconduct, be paid, during such incapacity, not less than the salary for the time being payable to officers with the same classification and with the same length of service therein as such officer had at the date he received the injury, but such salary shall cease to be payable when such officer is retired from or otherwise leaves the transport service. I have already indicated that the dispute between the parties was not as to whether the respondent was entitled to receive payment in accordance with the provisions of the subsection, but as to the amount of his entitlement. It was not in contest that the respondent was an "officer" within the meaning of the subsection, or that the word "salary", which would not naturally be used to describe the earnings of a bus driver, must in its context in s. 124 (1) be given a meaning that will render it applicable to all officers employed by the Commissioner; it must therefore include wages. Nevertheless, even if the word "salary" is given that expanded meaning the operation of the section remains doubtful, particularly when it is sought to be applied to the conditions under which bus drivers work today.

For a matter which has come to us as a test case the evidence is unfortunately meagre, confused and imprecise. The material before us has been supplemented to some extent by the production of the relevant awards and by statements from the Bar table, but it remains incomplete. The conditions of employment of bus drivers are regulated by awards which fix the minimum rates at which wages are to be paid and provide in addition for payments described as increments for service and margins. All of these payments form part of the total amount of the wages payable to a bus driver and would clearly enough come within the description of his "salary" as that word is used in s. 124 (1). Under the awards forty hours, divided into no more than five shifts, constitute the ordinary hours of duty of each weekly period, but the Commissioner may require any employee to work reasonable overtime at overtime rates and an employee is obliged to work overtime in accordance with the Commissioner's requirements. It is further provided that the duty to be performed by bus drivers is to be rostered so as to allow two clear days off duty in each week, but that any employee required to work on his rostered day off shall do so unless prevented by ill health; an employee who works on his rostered day off is paid at penalty rates. There is some evidence that in practice a bus driver is required to work one "day off cancelled" (as it is called) during each fortnight and that this work is regarded as overtime. The officer of the Commissioner called to give evidence on this subject said that "bus drivers do one" (i.e. "day off cancelled") "each fortnight", and later gave the following evidence:

Q. Do bus drivers of that classification have the right to refuse overtime? A. No, unless for reasons of health they must work a day off cancelled a fortnight if it applies at the depot by agreement with the unions and they also have to work in accordance with their roster. They can change by mutual exchange, change a Saturday.

Q. They must get less? A. Yes, get less if they wish, but they cannot refuse unless there is mutual agreement.

The meaning of this passage is somewhat obscure but it suggests, contrary to the earlier statement of the witness, that not all bus drivers work the "day off cancelled"; it is clear that a driver may be exempted on medical grounds from working this extra day (and the respondent was in fact so exempted in November 1967) but this evidence suggests further that the "day off cancelled" is not worked at every depot. The evidence does not disclose whether there is any general practice of working overtime other than on the "day off cancelled". Under the awards it is also provided that time worked on a broken shift is to be paid for at penalty rates which are known as "shift penalty rates". Although there does not appear to have been any evidence on the point, it was agreed by both parties before us that in consequence of a direction by the Commissioner every bus driver works one penalty shift in each week.

The evidence leaves it doubtful how the amount of $198, which according to the submission of the Commissioner represented the respondent's entitlement, was arrived at. The learned Judges of Appeal thought that the sum was reached by multiplying the number of hours actually worked by the respondent as a cleaner (including overtime) by the respective hourly rates payable to a bus driver with the same length of service, so that work in excess of forty hours in any week would be paid for at the overtime rates payable to such a bus driver, and by deducting from this total the amount actually paid to the respondent. The evidence given at the trial supports the view that the amount was calculated in this way, i.e., as if s. 124 (1) required the Commissioner to pay the employee for the work actually done at the rates (including overtime rates) at which officers with the same classification and length of service would be paid for working the same hours within their own classification. However, counsel for the Commissioner informed us that the calculation by which $198 was reached apparently ignored overtime. Whether or not this was so, it is clear that in making the calculation the Commissioner did make an allowance for penalty shift rates.

On behalf of the Commissioner it was submitted that the "salary" payable to the respondent under s. 124 (1) is an amount of money calculated by multiplying the basic wage rate (by which it was no doubt intended to include increments and margins) applicable to a bus driver with the relevant length of service by the ordinary hours of duty, that is forty, and by adding such additional amount as is necessarily earned by each bus driver because of a requirement by the Commissioner that is applicable to all bus drivers - this addition would allow the shift penalty rates to be included. Alternatively it was submitted that if s. 124 (1) did not justify the inclusion of this additional amount, the "salary" should be regarded as simply the basic rate of pay for the standard hours of work.

It was contended on behalf of the respondent that under s. 124 (1) he was entitled to be paid the amount that would be earned by a bus driver with the same length of service who worked for the hours and under the conditions that such men usually work; such an amount would, it was said, include payments for overtime as well as for penalties. It was said that payments for overtime and for shift penalties form an integral part of the total wage normally paid to a bus driver and that it would be unrealistic to fail to take account of these payments in calculating the "salary" of a bus driver under s. 124 (1). It was further said that if it were found that different bus drivers worked different periods of overtime and thus earned different amounts in any given period, the "salary" for the purposes of s. 124 (1) should be determined by taking an average. In fact the amount of $576 was reached by taking an average of the actual weekly earnings of two bus drivers who had the same seniority as the respondent had at the date of his injury and who were employed at the depot at which the respondent had worked, and by deducting from the result the amount the respondent had actually received. The Court of Appeal held that the word "salary" in s. 124 (1) should be construed to mean "earnings", that is, the wages or earnings for the time being payable to officers with the same classification and the same length of service as the respondent had when he received the injury, and that having regard to the course of the proceedings and the attitude of the parties the sum of $576 could be taken as the amount of those earnings in the present case.

The question that arises in the present appeal is by no means free from difficulty. The problems of interpretation created by s. 124 (1) are, I think, caused by the fact that the sub-section lays down one formula which is intended to apply to a variety of situations and in truth is inadequate to do justice to all of them. An officer to whom the subsection applies is entitled to be paid not less than the salary specified "whether he is able to work or not" (Commissioner for Railways (N.S.W.) v. London [1] ). He may be incapacitated for any work. He may be capable of performing duties other than those of the classification which he held before his injury but may refuse to perform those other duties and still not lose his right under the sub-section: Commissioner for Government Transport v. Royall [1] . On the other hand, he may work in some other classification, which will not necessarily be a lower classification than that to which he had been appointed at the time of his injury: cf. Commissioner for Government Transport v. Royall [2] . In his new classification the hours which he works may be longer or shorter than those which he formerly worked. In all these cases the sub-section gives him one and the same entitlement; it is true that it is a minimum entitlement but the maximum must be sought elsewhere than in the sub-section. Moreover, the right given by the sub-section depends on the existence of the conditions stated in the sub-section and on nothing else: this was clearly established by Commissioner for Government Transport v. Royall [1] . For these reasons I agree with the Court of Appeal that it is impossible to regard the sub-section as laying down a scale of remuneration for work done or as making the amount payable under the sub-section depend on the amount of work which the officer actually does. I am therefore unable, with all respect, to agree with the view taken by Owen J. in Semlitsky v. Commissioner for Road Transport and Tramways [3] , that an officer to whom the sub-section applies who works overtime is entitled to be paid for the overtime at the rates applicable to the classification which he held before his injury. It is true that s. 124A of the Transport Acts refers to the "payment of salary at a rate ascertained in accordance with section one hundred and twenty-four of this Act", and that s. 124B uses similar words, but the "rate" which s. 124 (1) prescribes is the minimum rate at which the incapacitated officer is entitled to receive remuneration. The respondent is not entitled to be paid at the rate applicable to bus drivers for overtime worked as a cleaner, and the sub-section entitles him to payment only to the extent to which the total remuneration which he in fact receives falls short of the minimum to which the section entitles him.

(1951) 85 C.L.R. 95, at p. 105. 2. (1966) 116 C.L.R. 314. 3. (1966) 116 C.L.R., at p. 317. 4. (1966) 116 C.L.R. 314. 5. (1952) 52 S.R. (N.S.W.) 151, at p. 160

The question for decision in the present case, however, is how that minimum is to be ascertained. It was submitted on behalf of the respondent that the section is compensatory in character - see Commissioner for Railways (N.S.W.) v. London [1] and Laumets v. Commissioner for Railways (N.S.W.) [1] - and should therefore be construed so as to ensure that an officer to whom it applies is no worse off than if he had not been incapacitated. However, the fact that s. 124 (1) has a compensatory aspect in my opinion affords little assistance in its interpretation. Compensation may be generous or it may be inadequate, and the measure of the compensation which the sub-section affords has to be ascertained from the words it uses rather than from a consideration of its general character.

(1951) 85 C.L.R., at p. 109. 2. (1953) 89 C.L.R. 15, at p. 23.

I have already said that the word "salary" in s. 124 (1) is not used in its strict sense but must include wages. The words "the salary for the time being payable to officers with the same classification and with the same length of service therein " must refer to the amount of wages payable to those officers for their work. However, the word "salary" does connote an element of periodicity and regularity. As was pointed out in Commissioner for Government Transport v. Royall [2] , the sub-section seems to assume that "a uniform salary" will be payable. The sub-section does not refer to the remuneration which a particular officer with the relevant classification and length of service may happen to get in circumstances special to him. Further, there is, in my opinion, not the least warrant in the sub-section for understanding it as referring to the average of the amounts payable to officers with the relevant classification and length of service; the average of the payments made to all officers might well be an amount not in fact payable to any one officer. When the sub-section speaks of "officers" it must refer to officers generally, but it is not quite accurate to say that it means "all officers", for it is, I think, necessary to add the qualification that they must be officers to whom a full salary is payable, so that officers who are, for example, ill, or on strike, or under suspension for misconduct would not be included in the description. The "salary" therefore in my opinion means the full amount of wages payable, for the time being, to officers generally of the relevant classification and length of service for the work which such officers are regularly required to perform in the ordinary course of their employment.

The question what is the "salary" in a particular case is purely one of fact. It does not simply depend on the terminology used to describe the amount payable. Thus in the present case it can hardly be doubted that the increments and the margins form part of the "salary" of bus drivers. Similarly a payment referred to as "a shift penalty" or as "overtime" could be said to constitute part of the "salary" of bus drivers if in fact it was an amount payable to bus drivers generally as remuneration for the services that bus drivers generally are regularly required to perform. In deciding what payments answer that description the Court does not look only to what is contained in such awards as are applicable. The words of the sub-section of course do not apply only to bus drivers; they are applicable to officers of various classifications whose remuneration may not necessarily be fixed by awards. When the conditions of the employment of the officers in question are governed by awards, the provisions of the awards will of course be relevant, but the awards themselves may not contain an exhaustive statement of the conditions which govern the total amount of wages regularly payable to officers generally. In the present case, for example, under the awards the Commissioner may require bus drivers to work overtime or on broken shifts or on "days off cancelled". If for the time being the Commissioner makes a requirement applicable to bus drivers generally that each of them shall in each week or fortnight work a specified number of broken shifts or specified hours of overtime or a specified number of "days off cancelled", it would seem to me wrong to ignore this requirement in determining what as a matter of fact is the amount payable to bus drivers generally for their regular work. If the Commissioner exercises his power under the award by imposing a general requirement that bus drivers should each week work a specified number of hours overtime, in my opinion it could truly be said that their ordinary hours of employment would exceed forty, notwithstanding the statement in the award that forty hours shall constitute the ordinary hours of duty. On the other hand, it would not be enough that bus drivers had an expectation that they would usually work some overtime, or indeed that all in fact worked some overtime if the period worked depended on the day to day requirements of the service and varied from person to person or depot to depot.

It follows that in my opinion the Commissioner was right in regarding the salary of bus drivers of the relevant length of service as including any amount regularly payable to such bus drivers by reason of a requirement applicable generally to such bus drivers. He was therefore right in including the shift penalty rates payable in respect of shifts which are worked by drivers generally. On the other hand, he was justified in excluding overtime unless bus drivers generally were required to work a fixed amount of overtime each week. He was required to find the uniform "salary" that officers generally were entitled to receive, not merely the amount that most officers were likely to receive.

It is clear enough that the amount of $576 which the respondent claimed was reached by a method which s. 124 (1) does not contemplate. On the other hand, I find it impossible in the unsatisfactory state of the evidence to say whether or not the figure of $198 suggested by the Commissioner represented the full amount of the respondent's entitlement. Whether it did so or not depended first on whether it included any sum in respect of work done on "days off cancelled". It seems probable on the evidence that bus drivers generally were required by a direction of the Commissioner to work on one such day each fortnight, but it is not clear that this was reflected in the amount of $198. A second question is whether bus drivers generally were required by the Commissioner to work a fixed amount of overtime additional to that on the "day off cancelled"; nothing in respect of any such overtime appears to have been included in the $198. However, to say that it has not been shown that the Commissioner proceeded on a correct basis in fixing the amount of $198 does not mean that this appeal should be dismissed. When the respondent appealed to the Court of Appeal, he did not apply for a new trial but sought an order entitling him to recover $576 in lieu of $198. In my opinion, it should have been held that he had failed to establish that the award of $198 was erroneous and inadequate. In these circumstances his appeal to the Court of Appeal should have been dismissed and the judgment of the District Court ought now to be restored. If, when the Commissioner is in possession of these reasons, he finds that in truth the amount of $198 was not assessed on a correct basis it is to be expected that he will be quick to rectify the error.

I have had the advantage of reading the reasons prepared by my brother Gibbs and am in agreement with them.

High Court of Australia Barwick C.J. Menzies, Walsh, Gibbs and Mason JJ. Government Transport, Commissioner for v Kesby [1972] HCA 64

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