The appeal and its disposition
19 As discussed above, the applicant challenges the Tribunal's determination that s 21 was applicable and also that s 33 was applicable. The applicant also contends the Tribunal failed to address a submission made about the operation of s 21 and, in so doing, failed to make relevant findings of fact. Telstra submits that the Tribunal made no such errors.
20 It is convenient first to dispose of the contention that the Tribunal failed to address a submission made by the applicant concerning the applicability of s 21. It may be, having regard to the Tribunal's reasons, that it did not fully appreciate the nature of the argument that may have been put about the section. However, ultimately this does not matter. In these proceedings the applicant has developed an argument that s 21 does not apply. For reasons set out below, I do not accept this argument. Whether s 21 applies or not does not depend on any particular facts concerning the termination of the applicant's employment with Telstra. Specifically, it does not matter that the applicant was not paid superannuation entitlements on the basis that she was entitled to a lump sum because of total and permanent invalidity, which is one specific fact pointed to by counsel for the applicant.
21 The Tribunal was correct in finding that s 21 applies to the applicant for the following reasons. The section speaks of a person who "retires voluntarily, or is compulsorily retired". It has been said that the word "retired" prima facie refers to resignation or voluntary withdrawal from an appointment or employment: see Gullett v Gardner (1948) 22 ALJ 151 at 154. But context can suggest some different meaning: see Giannoulis v Email Superannuation Pty Ltd (1990) 33 IR 479 and plainly the word has a wider meaning given the reference to "compulsorily retired". Indeed it has also been said that in ordinary usage, "retirement" has a number of shades of meaning: see Dadeeton v Commissioner of State Taxation [2004] SASC 88. In Dadeeton the Full Court of the Supreme Court of South Australia determined that there had been a "retirement" of a trustee (for the purposes of state stamp duty legislation) whether the retirement was voluntary or involuntary and the word comprehended removal from the office of trustee.
22 In the present case, the expression appears in legislation concerning public sector employees. As early as 1922 notions of voluntary and involuntary retirement were manifest in legislation concerning Commonwealth public servants. Section 85 of the Commonwealth Public Service Act 1922 (Cth) provided:
(1) Every officer having attained the age of sixty years shall be entitled to retire from the Commonwealth Service if he desires so to do; but any such officer may (unless retired as hereinafter provided) continue in the Service until he attains the age of sixty-five years.
(2) If any officer continues in the Service after he has attained the age of sixty years, he may at any time before he attains the age of sixty-five years be retired from the Service by the Board, or, in the case of an officer of the First Division, by the Governor-General.
This section clearly contemplated both voluntary and involuntary retirement between the ages of 60 and 65.
23 Section 86 provided:
When an officer has attained the age of sixty-five years and in the opinion of the Board it is desirable in the interests of the Commonwealth that the officer should continue in the performance of the duties in his office, and the officer is able and willing to do so, the Board may direct the officer to continue in his office for a fixed time not exceeding twelve months, otherwise every officer on attaining sixty-five years of age shall retire from the Service.
This section contemplated compulsory retirement at age 65. It is compulsory in the sense that by operation of the section (but subject to Board direction) an officer is retired from the Service: see generally Department of Defence v Human Rights and Equal Opportunity Commission (1997) 78 FCR 208 at 215 and Peacock v Human Rights and Equal Opportunity Commission (2003) 73 ALD 341.
24 However, s 20 provided:
If at any time the Board finds that a greater number of officers is employed in any Department or Branch of a Department than is necessary for the efficient working of that Department or Branch, any officer whom the Board finds is in excess may be transferred to such other position of equal classification and salary in the Service as the officer is competent to fill, and if no such position is available the officer may be transferred to a position of lower classification and salary. If no position is available for the officer the Board may retire him from the Public Service.
It can be seen that s 20 used the word "retire" when referring to the dismissal or termination of an officer by the Board of Commissioners in what would, in a contemporary context, be described as a redundancy situation. These notions of voluntary and compulsory retirement were repeated in the Commonwealth Employees (Redeployment and Retirement) Act 1979 (Cth). Division 2 (entitled "Compulsory Retirement") of Part III (entitled "Retirement of Employees") of that Act contained s 19 which authorised a Permanent Head to "retire" an employee (including an officer) when, in effect, they could no longer be usefully employed in the Australian Public Service (or specified statutory authorities). Similar provisions were enacted in the Public Service Legislation (Streamlining) Act 1986 (Cth) including s 76W which enabled a Departmental Secretary to "retire" an officer who was excess to requirements.
25 Having regard to this legislative history and the scope of the legislation regulating "retirement" in the Australian Public Service in force at the time the Act was enacted, namely 1988, it is difficult to avoid the conclusion that the expression "retires voluntarily, or is compulsorily retired" was intended to have a wide operation and to include circumstances where an employee was dismissed from employment because the employee was redundant. This would be so even if the applicant's employment was not directly affected by this legislation at the time she was made redundant. Once the width of the expression is recognised, it follows it comprehends any person to whom the Act applies even if that person's employment was not then directly regulated by legislation dealing with termination (including redundancies) in the Australian public sector.
26 I now consider the question of whether s 33 applied to the applicant. It is to be recalled that the applicant received a redundancy payment of $104 828.55 and the Tribunal characterised this as "salary, wages or pay" for the reasons quoted at [10] above.
27 A convenient starting point in characterising the payment for present purposes is the agreement conferring the entitlement to redundancy pay. Clause 7 of the Agreement provided the following entitlements:
7. ENTITLEMENTS
7.1 AOTC has agreed to a new benefit framework on the basis that;
(i) a comprehensive process for handling situations of redundancy in AOTC in the future is essential to achieving a restructuring of the telecommunications industry and to union acceptance of that restructuring, and
(ii) AOTC unions have agreed to all other elements of this proposal, and
(iii) AOTC unions and the ACTU have given a firm commitment not to seek flow of the arrangements elsewhere.
7.2 The agreed benefit framework is;
(i) four weeks pay for each completed year of continuous service up to five years,
(ii) three weeks pay for each completed year of continuous service thereafter, plus a pro-rata payment for each completed month of continuous service since the last completed year of continuous service,
(iii) for employees over fifty years of age, four weeks pay for each year of service beyond fifty years of age, including pro-rata adjustment for each completed month of continuous service since the last completed year of continuous service,
(iv) the minimum sum payable under these arrangements, including any payment in lieu of notice (four weeks), to be eight weeks salary and the maximum to be eighty-four weeks salary,
(v) the sum payable to an employee under these arrangements not to exceed the sum of salary that would be payable were the employee to continue in employment until the maximum retiring age.
7.3 For the purpose of calculating any payment under Sub-clause 7.2:
(i) where an employee has, during fifty per cent or more of pay periods in the twelve months immediately preceding the date on which the employee receives notice of retrenchment been paid an allowance for shift work, the weekly average (calculated over a year) amount of shift allowance received during the twelve month period shall be counted as part of 'weekly salary';
(ii) other allowances, being allowances in the nature of salary, may be included with the approval of AOTC.
(iii) where an employee has been acting in a higher position for a continuous period of at least twelve months immediately preceding the date on which the employee receives notice of retrenchment, the salary level shall be the employee's salary in such higher position at that date;
It can be seen that redundancy pay is to be calculated by reference to years of service and, differentially, a nominated number of weeks pay is payable for years of continuous service up to a maximum of 84 weeks salary.
28 Redundancy pay is compensation for the loss of a job. Generally, the longer an employee has been in employment the greater the payment because the loss is viewed as correspondingly greater. That gives rise to calculations based on one or a number of weeks pay for one or a number of years service. But it does not follow that it is a payment, even notionally, for particular weeks of employment even though described as pay. The rationale for such payments is apparent from the decision of the Australian Conciliation and Arbitration Commission in the 1984 Termination, Change and Redundancy Case (1984) 8 IR 34 in which the Commission said:
Having regard to the other aspects of our decision and having regard to what we have said about the existence of, and reason for, unemployment benefits we do not believe that the primary reason for the payment of severance pay relates to the requirement to search for another job and/or to tide over employee during a period of unemployment.
Furthermore we do not believe that it is appropriate, having regard to the equity considerations and the fact that we are prepared to make the redundancy provisions effective in all cases of redundancy no matter what the cause, to have regard to the third consideration refute referred to by CITCA.
We prefer the view that the payment of severance pay is justifiable as compensation for non-transferable credits and inconvenience and hardship imposed on employees. In this respect we agree with the conclusions contained in the CITCA Report but would indicate, at this stage, that in fixing the quantum we have been prepared to take into account the standards established in recent decisions of this Commission and the State Industrial Tribunal.
It is clear from earlier passages in this decision that the non-transferable credits the Commission was speaking about were "credits" that had been built up during the employment, such as accrued benefits like sick leave a long service leave, loss of seniority and loss of the employer's contribution to pension or superannuation.
29 It is a mistake, in my opinion, to treat, as the Tribunal apparently did, the number of weeks pay payable under cl 7.25 of the Agreement as notionally attributable to weeks of employment immediately prior to the employee being made redundant or, perhaps, for a period of weeks following the redundancy. I accept s 33 is concerned with situations where it might be thought that the employee, but for the operation of the section, would receive a double payment. But if redundancy pay is not paid (even notionally) for a week or weeks during a period when the employee might be paid compensation, then no question of double payment would arise. In my opinion the redundancy pay was not comprehended by s 33 and the Tribunal erred in concluding it was. Neither party sought to rely on s 33(2). However, it appears that the various payments referred to are, either, payments referable to specific days, weeks or months (when leave is taken or for a period in which leave could have been taken but was not) ((a), (b), (ba)), amounts that would have been paid for days worked ((c)) or (in so far as my research indicates) payments for work done where the payments are deferred (except in relation to apprentices) ((d)). The exclusion of these various classes of pay for periods worked or which might have been worked provides some limited support for the view that s 33(1) is concerned only with payments of that type.
30 The matter should probably be remitted to the Tribunal to be reconsidered according to law though the parties are to consider what orders should be made to give effect to these reasons. While the applicant has succeeded on only one of two points argued, she should have her costs.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.