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[1997] FCA 515
Federal Court of Australia
1997-06-12
Heerey J
Original judgment source is linked above.
act to take over all Army Messes. As a consequence the Mess at Puckapunyal ceased to be run by the Department of Defence in February 1994. SERCO then commenced to run the Mess with its own staff. All staff at Puckapunyal were paid their normal rates of pay, including penalties, until 11 March 1994. From that date, catering attendants employed by the Department of Defence at Puckapunyal ceased to be paid penalty allowances. There were no longer any duties which required shift work. In the case of the applicants there was a reduction in compensation payments from 11 March 1994 because their compensation was thereafter based on salary applicable to their GSO 3 and GSO 2 levels respectively, but without shift penalty. As at 11 March 1994 there were approximately 140 positions affected at Puckapunyal, approximately 30 to 40 of which were catering employees. The vast majority of those catering employees accepted a redundancy offer. Some of those who took redundancy then became employees of SERCO, but others obtained unrelated work or left the workforce. For those who did not have many years of service it was better not to take the redundancy package. Those employees had a statutory entitlement to work on for between seven to thirteen months, depending on their length of employment before they were actually terminated and declared redundant. The evidence as to what happened to GSO 2s and GSO 3s who had been employed as catering staff and who stayed on rather than take the redundancy offer was described in the following terms by the Administration Manager for Puckapunyal, Mr Bailey: One of the objectives of the Commercial Support Program literally wiped out all of those positions within Puckapunyal, we had no equivalent positions into which we could place them, effectively, so they were left with a couple of alternatives. One, was to transfer lower down - to accept a downgrade into a lower position - which some did. One was to re-train them - which we did - so that they could seek alternative employment and a different classification - which some did. And others, through re-training efforts, were promoted to higher level GSO positions. Mr Bailey produced a schedule showing the earnings of a number of catering attendants and occupiers of other positions who had remained employed by the Department of Defence after 11 March 1994. That schedule is as follows: Employee A - GSO2 - Catering Attendant When this employee ceased work in a mess in March 94 and was then redundant, he was retrained and in December 94, through his own efforts, promoted on merit to a GSO3 Storeman position. Pay Day Pay Day 1-3-94 24-3-94 $774.40 wages $774.40 wages $331.88 penalties no penalties Employee B - GSO2 - Catering Attendant When the mess closed in March 94 and this employee was then redundant she was retrained until August 94. She was then promoted on merit to a clerical position (Administrative Service Officer Grade 2) in Darwin. Pay Day Pay Day 24-2-94 10-3-94 $823.74 wages $823.74 wages $251.38 penalties no penalties Employee C - GSO2 - Catering Attendant When the mess closed in March 94 and this employee was redundant he was retrained and ultimately promoted on merit to a clerical position (Administrative Service Officer Grade 2) in January 95 at Puckapunyal.
Pay Day Pay Day 10-3-94 24-3-94 $823.74 $823.74 $112.40 no penalties. GSO 2 and GSO 3 attendants like Mrs Bortolazzo and Mrs Saffron who remained employed at Puckapunyal and did not take the redundancy payment were not paid penalty rates but only their base salary. Redundancy payments were only open to people who were "fit for and at work" and who had been at work for a qualifying period of two months. Therefore the package was not available to Mrs Bortolazzo and Mrs Saffron. The finding which the Tribunal made was that Mrs Bortolazzo and Mrs Saffron would not have been paid penalties above their base salaries after 11 March 1994 if they were not incapacitated for work. The Tribunal's Decision The Tribunal discussed a number of other Tribunal decisions and in particular Re Warren 40 ALD 737 (1995). The Tribunal concluded that: ... the normal weekly earnings of Mrs Saffron and Mrs Bortolazzo, calculated as required by s 8(1) of the Act to include shift penalties, would exceed the amount per week of the earnings that Mrs Saffron and Mrs Bortolazzo, who continued to be employed by the Commonwealth, would receive if they were not incapacitated for work. On the evidence we are satisfied that the applicants, if they were not incapacitated for work, would not have received shift penalties after 10 March 1994, because there were no duties or catering attendants GSO 2 or GSO 3 which required shift work. ...
We find that the amount of normal weekly earnings of Mrs Saffron and Mrs Bortolazzo as calculated under s 8(1) is required by s 8(10)(a) to be reduced by the amount by which it exceeds the amount per week of the earnings that Mrs Saffron and Mrs Bortolazzo would have received after 10 March 1994 if they were not incapacitated for work. We find further that if they had not been incapacitated for work after 10 March 1994 Mrs Saffron would have received a salary of a GSO 2 without shift penalties and Mrs Bortolazzo would have received the salary of a GSO 3 without shift penalties. Accordingly the decision was affirmed. Conclusion In my opinion the Tribunal was correct in its construction of s 8(10)(a). The applicants' construction would require a reading into s 8(1)(a) of something like "in the employment in which he or she was engaged at the date of injury". I accept the submission of counsel for the applicants that the Act is social legislation which ought to be construed, in the event of ambiguity, liberally in favour of injured employees: McDermot v Owners of SS Tintoretto [1911] AC 35, Wilson v Wilsons Tileworks (1960) 104 CLR 328 at 335. But a liberal interpretation is one thing, rewriting the statute is another. Moreover, the construction for which the respondent contends is consistent with the structure and purpose of the Act. The provision of compensation is to operate from week to week; see for example the detailed formulae in s 19. The underlying policy is that an injured employee should not be worse off during the period of incapacity as a result of work-related injury. However, it follows conversely that the injured employee should not be better off. I do not doubt for a moment that the sudden termination of regular penalty payments would create great hardship for people like Mrs Bortolazzo and Mrs Saffron. Financial commitments and lifestyle would be drastically affected. The figures already quoted in this judgment make that clear enough. Nevertheless, most terms and conditions of employment do not include a permanent right to overtime. Had they not been injured, Mrs Bortolazzo and Mrs Saffron would from 11 March 1994 have suffered the reduction in income as a result of the cessation of overtime work. The Act does not place them in any better position because they were not working at that date but in receipt of compensation. The appeal will be dismissed with costs, including reserved costs. I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment of the Honourable Justice Heerey. Dated: Associate Appearances Counsel for the applicant: Mr P J Coish Solicitor for the applicant: Ryan Carlisle Thomas Counsel for the respondent: Ms J Bonsey Solicitor for the respondent: Australian Government Solicitor Date of hearing: 1 - 2 May 1997
McDermot
Owners of SS Tintoretto
(1960) 104 CLR 325
(1960) 104 CLR 328