Purcell v Electricity Commission

(1) This section shall apply to and in respect of every person referred to in subsection (1) of section 59, who becomes a servant of the Commission, and shall so apply to him on and after the date upon which he becomes such servant.

(2) The servant shall be paid salary or wages at a rate not less than the rate which is payable to him immediately before the commencement of this Act, subject to any adjustment necessary to give effect to any fluctuation in the needs basic wage as defined in the Industrial Arbitration Act, 1940, as amended by subsequent Acts, until such salary or wages is or are varied or altered by the Commission.

(3) The servant shall have and enjoy the same rights and privileges, if any, with regard to annual, sick, deferred and extended leave, as if he had continued to be a servant of the County Council. And for the purposes of this subsection, service with the Commission shall be deemed to be service with the County Council.

(4) Where the servant is, immediately before he becomes a servant of the Commission, a permanent servant to whom the provisions of the Local Government and Other Authorities (Superannuation) Act, 1927-1948, apply, those provisions shall continue to apply to him, and for the purposes of such application any reference in that Act to a council shall be construed as including a reference to the Commission.

(5) Where the servant is one to whom the provisions of subsection (4)do not apply, he shall be entitled to retain the rights and privileges, if any, in relation to payments on retirement or death to which he would have been entitled if he had continued to be a servant of the County Council. And for the purposes of this subsection, service with the Commission shall be deemed to be service with the County Council.

(6) The servant shall not be entitled to claim benefits under this Act as well as under any other Act, ordinance, regulation or resolution in respect of the same period of service.

(7) Where any condition of employment of the servant is, immediately before he becomes a servant of the Commission, regulated by an award or industrial agreement, such condition shall continue to be so regulated until an award regulating such condition and binding the Commission is made by a competent tribunal or such condition is regulated by an industrial agreement to which the Commission is a party.

The appellant claims that, by virtue of subss (3) and (5), he is entitled to payment for all accumulated sick leave standing to his credit as at the date of his retirement and to payment in lieu of accrued long service leave, in each case on the basis prescribed by an award covering Sydney County Council employees made on 20 August 1981. Elcom disputes the claim, relying upon s 60(7) of the Act. Hunt J made the declarations sought by the appellant but on appeal to the Court of Appeal (Hutley, Glass and Samuels JJA) the orders made by his Honour were set aside and the summons dismissed.

At the time of his transfer to Elcom in 1952 the rights and privileges of the appellant both with regard to sick leave and in relation to payments on retirement or death were those set out in cl 14(h) and cl 17(b) respectively of the Sydney County Council (General Conditions) Award dated 30 September 1949. There was no right on retirement on account of age to be paid for accumulated untaken sick leave but an employee with ten years or more service was entitled to payment in lieu of accrued long service leave

On 26 November 1953 an industrial agreement was made between Elcom and a number of industrial unions representing Elcom employees. Clause 3(2) provided for long service leave after ten years service and conferred an additional entitlement for every further completed period of five years service. There was no provision, as there was in the 1949 Award, for payment on retirement in respect of accrued long service leave, but a proviso was added to the effect that in the case of officers transferred under the provisions of the Act, long service leave entitlements under the subclause would not be less than those to which they would have been entitled had they not been transferred. Such officers were also to be credited with whatever untaken long service leave had accrued to them with their previous employer and such entitlement was deemed to have accrued from year to year. Clause 3(3) conferred an entitlement to sick leave and for such entitlement to be cumulative with a proviso that officers transferred to the Commission under the Act would be credited, in addition, with sick leave standing to their credit with their previous employer at the date of transfer.

A further industrial agreement was made covering Elcom employees on 15 December 1955. This agreement contained provisions relating to long service leave and sick leave similar to those contained in the Sydney County Council Award of 1949 and included provisos identical to those set out in the 1953 agreement.

It is unnecessary to detail the subsequent history of industrial relationships touching the issue before the Court save to observe that on 20 August 1981 the Sydney County Council (Salaried Division - General Conditions) Award was made. Clause 13.1.9 conferred on Council employees for the first time a right on retirement on attaining the retiring age prescribed by that award to payment for all accumulated untaken sick leave. Clause 15 of the Award deals with long service leave in a manner which is presumably somewhat more favourable than had existed under any earlier awards. It is common ground that it is in the interests of the appellant to claim payments on his retirement in accordance with the 1981 award rather than by reference to any Elcom award.

The problem in the case is to reconcile the provisions of subss (3) and (5) of s 60 of the Act with those of subs (7). At first instance Hunt J resolved the problem in favour of the appellant. His Honour considered that he was bound to apply the interpretation placed on s 60(3), (5) and (7) by Sheppard J in Matheson v Electricity Commission (NSW) [1978] 2 NSWLR 305. In that case Sheppard J concluded that subs (7) was a general provision and that, as such, it should be read as not derogating from subss (3) and (5) which in his view were special provisions dealing with particular matters. Adopting this construction, Hunt J made the following declarations:

(1) that the plaintiff is entitled to payment for all accumulated sick leave standing to his credit as at the date of his retirement and has been so entitled since such a benefit was awarded to employees of the Sydney County Council pursuant to the provisions of the Sydney County Council (Salaried Division - General Conditions) Award; and

(2) that the plaintiff is entitled to extended leave or long service leave, or payment in lieu thereof, on the basis prescribed by cl 15, Long Service Leave, of the Sydney County Council (Salaried Division - General Conditions) Award made on 20 August 1981.

The Court of Appeal took a different view of the provisions, holding that they could be read together and that, when so read, they disclosed a coherent and sensible scheme. According to the interpretation preferred by the Court of Appeal, subss (3) and (5) should be read subject to subs (7). The consequence of this interpretation is that the rights which the two earlier subsections create in favour of a transferred employee against Elcom, to the extent to which they are based on a condition of employment regulated by an award or industrial agreement, are brought to an end when an award regulating that condition and binding on Elcom is made by a competent tribunal or that condition is regulated by an industrial agreement to which Elcom is a party.

The function of subss (3) and (5) is to create rights in favour of a transferred employee against the Commission by reference to the rights and privileges he would have had if he had continued to be a servant of the authority from which he has been transferred. These rights are quantified on the footing that his service with Elcom is deemed to be service with the old employer. The provisions are prospective and open-ended in the sense that they do not expressly limit the duration of their operation in any way. Mr Handley QC for the appellant submits that this requires that the subsections be read as conferring rights which will continue throughout the transferred employee's service with Elcom. So understood, the subsections may be seen as giving effect to a policy of ensuring that the transferred employees should continue to receive from Elcom the benefits they would have received had they continued in their old employment - they would lose nothing as a result of the statutory transfer. This interpretation, it is urged, involves no collision with subs (7), so long as that subsection is confined to conditions of employment relating to matters other than those referred to in subss (3) and (5).

However, the words " any condition of employment" (italics supplied) are by no means consistent with the minor role which the appellant assigns to subs (7). They indicate that the provision has a wider operation than the earlier provisions. Having this wider operation, its first limb prescribes the conditions of employment between the date when the employee is transferred to the service of Elcom and the date when a relevant award or industrial agreement becomes binding on Elcom, including those conditions of employment referred to in the earlier subsections which are governed by awards or agreements. It is the second limb, which terminates the continued effect of any award or agreement binding on the Council, that is inconsistent with subss (3) and (5) as interpreted by the appellant, unless it is read down in the manner suggested.

In terms subss (3) and (5) seem to constitute an exhaustive prescription of the rights of a transferred employee with respect to the matters with which they deal. If so, on the assumption that they have the continuing prospective operation ascribed to them by the appellant, they would deny to a transferred employee enjoyment of benefits provided by an award binding on Elcom even in the event that such benefits proved more generous than those provided by an award governing employment with the old employer on the matters referred to. It is scarcely to be supposed that the legislature intended such a result. It is one thing to suggest that it was intended to secure to an employee the benefits he would have obtained, had he remained with the old employer. It is quite another thing to suggest that it was intended to preclude him from enjoying more generous benefits provided by the new employer.

The appellant seeks to outflank this difficulty by submitting that subs (6) permits an employee at his option to pursue more generous benefits under an Elcom award once such an award is made. On this view, subss (3) and (5) prescribe rights and privileges which are minima and which are not exhaustively defined by those subsections. No doubt in an appropriate context provisions of this kind are regarded as creating minimum rights. However, in the present case there is great force in the argument that subss (3) and (5) are expressed exhaustively, and that those subsections prescribe the rights and privileges which the transferred employee should continue to enjoy to be those which he would have enjoyed had he continued in the service of the old employer, subject to the operation of subs (7).

When the section is read as a whole, it becomes reasonably clear that the architect of s 60 intended that the transferred employee should continue to enjoy the relevant rights and privileges as if his service with the old employer remained on foot, subject to the qualification that those rights and privileges, to the extent to which they were conditions of employment regulated by an award or industrial agreement, would be regulated by an award or industrial agreement binding on Elcom, once such an award or industrial agreement came into existence. When read in this way, the provisions give the transferred employee suitable protection in the interregnum between the date of his transfer to Elcom and the date when he obtains the benefit of an award or industrial agreement binding on Elcom. From that moment onwards it is the Elcom award or industrial agreement, not the old employer's award, which is the charter of his rights and privileges as well as being the charter of the rights and privileges of Elcom employees who are not transferred to it from service with other authorities. It is then open to the Industrial Commission to determine by its award whether or not the transferred employees will continue to enjoy any benefits of the kind mentioned in subss (3) and (5) which may be superior to those conferred by the new award. As has been noted in the references earlier in these reasons to the Elcom awards of 1953 and 1955 those awards did contain provisions of this kind.

This statutory regime is more sensible and practical than the regime which would prevail if the appellant's argument were to be accepted. On that argument the relevant rights and privileges of an employee transferred from the County Council are thereafter always open to be ascertained by reference to a County Council award, whether it be the award that regulated the relevant conditions of employment immediately prior to transfer or some later award applying to the County Council. The curious result would be that the rights and privileges of Elcom's transferred employees would be regulated by an award to which Elcom is not a party while the rights and privileges of its other employees would be regulated in the ordinary way by an award to which it is a party. Such a result could not have been intended by the legislature.

We should mention that, on the view which we take of subss (3) and (5), the operation of those provisions in relation to rights and privileges, not being conditions of employment regulated by an award or industrial agreement, for example, rights having their source in statute or contract, would be unaffected by subs (7).

In the result, agreeing as we do with the construction given to s 60(3), (5) and (7) by the Court of Appeal, we have no need to consider so much of the appellant's argument as was based upon the maxim generalia specialibus non derogant. The maxim applies only where there are two inconsistent provisions which cannot be reconciled as a matter of ordinary interpretation.

This appeal raises no real question of principle. Its outcome turns upon the construction of s 60(3) and (5) of the Electricity Commission Act 1950 NSW (the Act). Since the proper construction of those two subsections is, to no small extent, a matter of impression and my conclusion in relation to it differs from that of the other members of the Court, it would seem unnecessary that I do more than briefly indicate what I consider that construction to be. My views in that regard accord generally with the views expressed by Sheppard J in Matheson v Electricity Commission (NSW) [1978] 2 NSWLR 305 at 310ff and by the learned primary judge (Hunt J) in the present case.

Section 60 must be read in the context of the legislature's plain expectation that, in due course, the terms and conditions of employment of previous employees of the Sydney County Council "transferred or appointed to the service" of the Electricity Commission of New South Wales would be the subject of an award made by the New South Wales Industrial Commission or some other competent industrial tribunal. Read in that context, the section can be seen to contain some merely transitional provisions and some guarantees of terms of employment in respect of particular matters. The transitional provisions are plainly designated as such. Under s 60(2), a transferred employee "shall be paid salary or wages at a rate not less than the rate which is payable to him immediately before the commencement" of the Act "until such salary or wages is or are varied or altered" by the Electricity Commission. Section 60(7) provided for the continued applicability of provisions of an award or industrial agreement regulating "any condition of employment" of such an employee immediately before he became a servant of the Electricity Commission "until an award regulating such condition and binding the Commission is made by a competent tribunal or such condition is regulated by an industrial agreement to which the Commission is a party". In contrast, the guarantees contained in subss (3) and (5) and the continued application of the provisions of the Local Government and Other Authorities (Superannuation) Act 1927 NSW effected by subs (4) are worded in permanent terms. They operate to ensure that, in the case of subss (3) and (5), an employee shall enjoy rights and privileges which he would have been entitled to enjoy if he had remained in the employment of the County Council and that, in the case of subs (4), the provisions of an Act which had applied to him while he was an employee of the County Council shall continue to apply to him while an employee of the Electricity Commission. As a matter of language, all three subsections confer rights and privileges which continue during the transferred employee's service with the Electricity Commission.

For my part, I am unimpressed by the argument that it could not have been intended that an employee transferring to the Electricity Commission should be entitled to continue, for so long as he remained employed by the Commission, to enjoy the rights and privileges to which he would have been entitled in respect of the matters mentioned in subss (3) and (5) if he had remained in his employment with the County Council. Such a provision may well have reflected an industrial arrangement that no employee would suffer future prejudice in relation to those matters by reason of the statutory transfer of his or her services. In that regard, there is nothing surprising in an arrangement or statutory provision to the effect that employees "transferred to the service" of a new employer pursuant to an Act of Parliament (see Act, s 59(1)) should be guaranteed that they would enjoy and continue to enjoy the same rights and privileges which they would have been entitled to if they had been permitted to continue in their previous employment. Indeed, the Australian Constitution itself contains a provision having such an effect: see Constitution, s 84; Flint v The Commonwealth (1932) 47 CLR 274.

Such a construction of subss (3) and (5) does not involve the proposition that the terms and conditions of employment of transferred employees in relation to the relevant matters would thereafter be whatever might be agreed or fixed in relation to employees of the County Council. Subsections (3) and (5) are to be read not as substituted terms of employment but as superimposed guarantees of minimum terms with respect to leave (subs (3)) and payments on retirement or death: subs (5). In relation to those matters, the prima facie terms and conditions of employment of a transferred employee are those laid down by the award applicable to him as an employee of the Electricity Commission. The terms and conditions of any such award are however, of their nature, minimum terms and conditions. They are subject to contractual variation to allow, for example, for such things as the payment of higher wages upon promotion. In the case of transferred employees, they are also subject to the overriding guarantees of s 60(3) and (5) in relation to the particular matters to which those subsections refer. It is only if a transferred employee's rights and privileges under the award applicable to him as an employee of the Electricity Commission are, in relation to those matters, less favourable than the rights and privileges to which he would have been entitled if he had continued in the service of the County Council that his rights and privileges will, in relation to those particular matters, be increased to correspond with what his entitlement would have been if he had continued in the employment of the County Council. In that event, his entitlement will be fixed by reference to the current award determining the terms and conditions of employment for employees of the County Council. His entitlement will not however arise under that award. It will be under the statutory guarantees which the Parliament enacted in his favour at the time his services were transferred.

One can point to a number of other provisions of the Act which support that construction of subss (3) and (5). The provision of subs (6) of s 60 is one of them. That subsection provides that a transferred employee shall "not be entitled to claim benefits under this Act as well as under any other Act, ordinance, regulation or resolution in respect of the same period of service". It applies to the case where alternative "benefits" of the same kind arise under the Act and some other source. In providing that, in such a case, the employee shall be required, in effect, to choose which of the alternative benefits of that kind which he wishes to claim, the subsection lends support to the view that the rights and privileges conferred by the Act should, in at least some cases, be seen as alternatives superimposed upon rights and privileges under, for example, the Industrial Arbitration Act 1940 NSW. Other provisions which support that construction of subss (3) and (5) are s 62(3)(b) and s 63(3) which make clear that provisions relating to employees transferred from service with other previous employers were intended to be of other than a transitional character. Ultimately, however, the main argument for giving to subss (3) and (5) the construction I would give them is that that construction firmly accords with what the words of the subsections say, namely, that the transferred employee shall "have and enjoy" or be "entitled to retain" the same rights and privileges or the rights and privileges to which he would have been entitled "if he had continued to be a servant of the County Council" and that, for the purposes of the relevant provision, "service with the Commission shall be deemed to be service with the County Council".

Nor, in my view, do the provisions of s 60(7) provide any foundation for rejecting that construction of subss (3) and (5). Once the operation of subss (3) and (5) as overriding guarantees of minimum terms of employment in relation to the matters specified is appreciated, there is no inconsistency between those subsections and subs (7). Subsection (7) operates to confirm the terms and conditions of employment which are primarily applicable to regulate the employment of transferred employees with the Electricity Commission. Subsections (3) and (5) superimpose changing guaranteed minimum terms, with respect to the specified matters, upon those primary terms and conditions. In any event, if there were inconsistency between the special provisions of subss (3) and (5) and the general provisions of subs (7), it would, conformably with the ordinary approach to inconsistency between special and general statutory provisions, properly be resolved by construing the general provision to cover cases other than those dealt with by the special provisions. Indeed, if the provisions of subss (3) and (5) are confined so as to have a merely transitional operation, it is difficult to see that they perform any function additional to that performed by the general words of subs (7).

I would allow the appeal, set aside the order of the Court of Appeal and reinstate the declarations and order of the learned primary judge.