Compensation (Commonwealth Government Employees) Act 1971: s.34

Counsel for the Appellant: B.J. Gross QC and R.F. Wilkins

Solicitor for the Respondent: Australian Government Solicitor

2. The orders made by a single Judge of this Court on 20 November 1989 be set aside.

3. The decision and orders of the Administrative Appeals Tribunal of 27 July 1989 be restored.

4. The respondent pay the costs of the appellant of this appeal and of the appeal from the Administrative Appeals Tribunal to this Court at first instance.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

This is an appeal from the decision of a Judge of this Court made pursuant to s. 44 of the Administrative Appeals Tribunal Act 1975 setting aside a decision of the Administrative Appeals Tribunal and ordering that the application to the Tribunal be dismissed.

2. The applicant in the matter before the Tribunal and the appellant in this appeal was injured in a motor vehicle accident which occurred on 10 March 1988. The respondent was the appellant's employer at the date of the accident. The appellant was seriously injured in the accident and sought payment of compensation from the respondent pursuant to the Compensation (Commonwealth Government Employees) Act 1971 ("the 1971 Act"). That Act was repealed and replaced by the Commonwealth Employees' Rehabilitation and Compensation Act 1988 ("the 1988 Act") from 1 December 1988; but transitional provisions in the 1988 Act made the 1971 Act relevant legislation at all material times.

3. Pursuant to sub-s. 124(1) of the 1988 Act, that Act applies to an injury suffered by an employee before the date of commencement of the Act, but an employee is not entitled to compensation under the 1988 Act if compensation was not payable under the 1971 Act if that was the Act in force when the injury occurred. (See para. 124(2)(c) of the 1988 Act.) The Tribunal stated, and it was apparently agreed by the parties, that sub-para. 6(1)(b)(iii) of the 1988 Act provided the appellant with a right to compensation under that Act in the circumstances of the case before the Tribunal subject to the appellant having been entitled to compensation under the 1971 Act.

4. Sub-paragraph 6(1)(b)(iii) of the 1988 Act reads as follows:

an injury to an employee may be treated as

having arisen out of, or in the course of,

his or her employment, an injury shall, for

the purposes of this Act, be treated as

having so arisen if it was sustained:

...

(b) while the employee:

...

(iii) was travelling between the place where he

or she normally resides and another place,

being a place where he or she resides

temporarily, as a matter of necessity or

convenience, for the purposes of his or her

employment;"

5. The appellant's application for compensation was rejected by a delegate of the Commission for the Safety, Rehabilitation and Compensation of Commonwealth Employees, a commission established by the 1988 Act. The appellant applied to the Administrative Appeals Tribunal for review of the delegate's decision.

6. The Tribunal directed that the delegate's decision be reversed and that the matter be referred to the Commission for determination of the amount of compensation to be paid to the appellant. The sole issue before the Tribunal was whether the facts of the case attracted the operation of para. 34(1)(b) of the 1971 Act which read as follows in its relevant parts:

"34(1) ... where an employee ... who is, as an

incident of his employment and without

charge to him, provided temporarily with

living accommodation or receives an

allowance in respect of his employmment as

compensation for temporarily providing his

own living accommodation ... makes a

journey from that living accommodation ...

during a period during which he is not

required for work, then --

...

(b) in the case of a journey from that living

accommodation -- if the journey commenced

during the period that commenced when he

last ceased to be required for work and

ended at nine o'clock in the morning of the

day immediately following the day on which

he last ceased to be required for work ...,

the journey shall be deemed, for the

purposes of sub-section 32(1), to have been

a journey from his employment by the

Commonwealth."

7. The Tribunal held that the facts of the case came within the operation of para. 34(1)(b).

8. The respondent appealed from that decision to this Court. The only issue on that appeal, head by a single Judge of the Court, was whether the living accommodation provided to the appellant was provided "without charge to him". There was no submission to the learned primary Judge that that issue raised a matter of fact only and that there was no question of law as required by s. 44 of the Administrative Appeals Tribunal Act 1975 and no such submission was made to this Full Court. The parties considered that the appeal involved a matter of statutory construction. Whether this approach of the parties is correct is open to considerable doubt as there is much to be said for the view that the words "without charge to him" in sub-s. 34(1) bear no more than their ordinary meaning and that the issue was one of fact only. See Lombardo v Federal Commissioner of Taxation [1979] FCA 66; (1979) 28 ALR 574 per Bowen C.J. at p 576.

9. Before dealing with the relevant statutory provisions, it is appropriate to set out a short summary of the pertinent facts as expressly or impliedly found by the Tribunal.

10. On 7 September 1987 the appellant was given temporary employment by the respondent as an electrical fitter at Khancoban. The terms and conditions of employment were as prescribed in the Snowy Mountains Hydro-Electric Authority - Operation and Maintenace Wages Award 1979. The Award was not produced to the Tribunal or the Court. The respondent informed the Tribunal and it was agreed between the parties before us that the terms and conditions of the Award were not relevant to the appellant's application for review. Pursuant to the Award all employees of the respondent living in the Khancoban area were paid a zone living allowance. It was not contended by the appellant that that allowance was an allowance within the meaning of sub-s. 34(1) of the 1971 Act.

11. At the time of negotiation of his employment the appellant was offered accommodation at a hostel at Khancoban owned and operated by the respondent. He was informed that residents of the hostel were required to pay a service charge ("the Murry Service Charge") of $12.50 per fortnight for the provision of a cleaning service for the room and clean bed linen. Residents of the hostel paid for meals eaten at the hostel and were able to obtain the use of a garage for the payment of a fortnightly fee. The appellant accepted the offer of accommodation and moved into the hostel when he commenced work. The Murray Service Charge was deducted by the respondent from the appellant's fortnightly wage. The Tribunal was satisfied that payment of the Murray Service fee was a condition of occupancy of a room at the hostel. The appellant's room was provided with a bed, a cupboard, an electric heater and a sink, but was uncarpeted.

12. The hostel provided accommodation for approximately 40 single men employed by the respondent. The employees were collected from the hostel each morning by a bus owned by the respondent and transported to their place of employment at one of two power stations operated by the respondent in the area.

13. On 10 March 1988 the appellant was travelling from Khancoban to his parents' home in Singleton. He was unmarried and 21 years of age. Prior to commencing work with the respondent, the appellant lived with his parents in Singleton. On 9 March 1988 the appellant had worked his rostered hours of duty until 6 p.m. The Tribunal found that the appellant had been granted a day of sick leave on 10 March 1988. The appellant suffered his injury when his vehicle collided with another in the course of that journey.

14. The Tribunal determined that the appellant had been provided temporarily with living accommodation as an incident of his employment. The remaining issue for the Tribunal to decide was whether such living accommodation had been provided "without charge" to the appellant.

15. The Tribunal considered that the relevant words of sub-s. 34(1) of the 1971 Act were to be interpreted in their ordinary sense and bore no technical or legal meaning and, in so far as any question of construction arose, the statute was to be construed purposively having regard to the fact that it was beneficial legislation directed to the welfare of employees.

16. The Tribunal considered the relevant facts and found that the living accommodation provided to the appellant had been provided "without charge" to him. The Tribunal considered the Murray Service Charge to be a charge for the provision of services and not a charge for the accommodation provided by the employer.

17. That finding was the sole issue of the appeal brought from the Tribunal's decision.

18. On hearing the appeal from that decision the primary Judge accepted that fees for the provision of services, or facilities such as meals, or the garaging of a motor car, could be distinguished from a charge for accommodation, but took the view that the Murray Service Charge had sufficient relationship with the provision of the particular accommodation for it to be regarded as a charge for that accommodation within the meaning of sub-s. 34(1) of the 1971 Act. His Honour had regard to the Tribunal's finding that payment of the Murray Service Charge was a condition of occupancy of a room at the hostel.

19. Section 34 of the 1971 Act expands the concept of employment in the course of which an employee may suffer personal injury and thereby enlarges the liability imposed on an employer to pay compensation pursuant to s. 27 of the Act. It is unnecessary to look at the history of the legislation or the cases that have led to such legislative provisions. In summary, it may be said that ss. 32-36 of the 1971 Act introduced rights to compensation where there was an adequate nexus between the employee's employment and the journey in which the employee was engaged. Sections 32 and 33 related to journeys to and from employment and s. 34 provided rights to compensation where injuries occurred in the course of the journeys to, or from, accommodation which had some link with the employment.

20. Before examining the terms of s. 34, it is necessary to note the contents of several other sections of the Act.

21. Sub-section 5(1) defined "separate living accommodation" as follows:

"'separate living accommodation', in relation to an

employee, means living accommodation provided for

the exclusive use of the employee, or of the

employee and his family, being accommodation that

includes cooking, bathing and sanitary facilities;"

22. "Separate living accommodation" as defined may not be intended to extend beyond accommodation provided by an employer. The introduction of the word "provided" in the definition brings with it the concept of a provider and in the context of the legislation the provider would be the employer.

23. Section 8 of the Act expanded the scope of the meaning of the term "employment" by stating various circumstances that were to be included within the meaning of the term. In particular, sub-s. 8(3) provided as follows:

"For the purposes of this Act other than section

32, the employment of an employee by the

Commonwealth includes the attendance of the

employee at his place of employment (other than a

part of that place constituting separate living

accommodation of the employee) at any time during

a period when he is not required to engage in his

employment where the attendance is reasonably

incidental to his employment."

24. Sub-section 34(1) is to be read in context with the succeeding sub-ss. (2) and (3) which seek to define other circumstances in which journeys will be deemed to be journeys to or from the employee's employment. A cardinal feature in each sub-section is a reference to "living accommodation". Sub-s. 34(6) of the Act states that the reference in the section to "living accommodation" does not include a reference to "separate living accommodation".

25. If there is a general purpose to be gleaned from s. 34, having regard to the other provisions of the Act, it would be an acknowledgement that accommodation, not bearing the character of a residence of permanence, or a home, is likely to be an intermediate place, journeys to or from which would be likely to retain some element of connection with the employment. Although s. 35 of the 1971 Act limited a right to compensation to injury arising in the course of the first journey on a day when the employee was not on duty, para. 36(1)(b) made it clear that purpose or destination of the journey had no bearing upon the entitlement to compensation.

26. In sub-s. 34(1), an employee provided temporarily with living accommodation as an incident of employment without charge to him, or who received an allowance in respect of his employment as compensation for temporarily providing his own living accommodation, received the benefit of expanded journey provisions. To qualify under sub-s. 34(1), the accommodation would have to be situated either at or outside the place of employment, but was not more than a temporary provision and was not accommodation of the type defined as "separate living accommodation".

27. Sub-section 34(2) referred to "living accommodation" provided as an incident of employment situated within the place of employment and to terms of employment which restricted the employee's ability to absent himself from his place of employment.

28. Sub-section 34(3) referred to "living accommodation" situated outside the place of employment provided as an incident of employment and to terms of employment restricting the employee's ability to absent himself from such accommodation.

29. In neither sub-s. 34(2) nor sub-section 34(3) was there any requirement that the living accommodation be temporary; nor was there any requirement that the accommodation be provided without charge to the employee. In each of sub-ss. 34(1), (2) and (3) it was essential that the accommodation be provided as an incident of employment or that an allowance as compensation for providing the employee's own living accommodation be an allowance in respect of employment.

30. The exclusion of accommodation of the type defined as "separate living accommodation" from the operation of s. 34 would appear to have made possible the occurrence of harsh anomalies. The introduction of the more general provisions in s. 6 of the 1988 Act appears to have removed that possibility for injuries which occurred after 1 December 1988.

31. Read together, sub-ss. 34(1), (2) and (3) are concerned with accommodation which has some particular nexus with the employment. In respect of sub-ss. 34(2) and (3) that nexus is an element of control vested in the employer. In sub-s. 34(1) the connection appears to be the temporary nature of the accommodation provided or of the allowance paid. The addition of the words "and without charge to him" to the words "as an incident of his employment" in that sub-section may relate to the concept of control when placed in conjunction with the temporary accommodation. Otherwise it is very difficult to see what purpose the words served in the context of the section having regard to the general purpose the section sought to achieve. Why an employee who was charged for temporary accommodation should be denied the benefit of the journey provisions which applied to an employee who was provided with the same type of accommodation without charge is not easy to resolve.

32. We think it may reasonably be inferred that the legislature intended that such disabling consequences would only occur where the charge was directly related to the accommodation and not to ancillary services or outgoings that may arise out of occupation of the accommodation. The section must have envisaged that the combination of a lack of control and rights of occupation which may attach to accommodation for which a charge was made may provide such independence that the degree of nexus between the employment and the accommodation had been so reduced as to warrant the denial of the benefit of a right to compensation for injury suffered in the course of a journey to or from that accommodation.

33. Viewed in this way it would be a requirement of the sub-section that the payment of any charge be directly related to the accommodation provided as an incident of the employment.

34. As noted earlier his Honour distinguished fees paid for optional services such as the provision of meals, or the garaging of a motor car, from the type of charge which denied the operation of the sub-section. He concluded that the compulsory nature of the Murray Service Charge made it a charge for the accommodation provided and therefore the appellant was not entitled to compensation under the 1971 Act.

35. However, a charge described as a charge for a service remains such if the true nature of the charge is that of a fee for a service. There was no suggestion by either the appellant or the respondent that the service charge was other than that which it purported to be, namely, a contribution to the cost of a cleaning and laundry service. In our opinion, it was appropriate for the Tribunal to note and to give some weight to the fact that the respondent, a longstanding employer of labour to whom the 1971 Act applied, chose not to charge rent or a fee for a licence to occupy a hostel room and limited any charge payable by an employee to a charge for a specified service. It is true that the need for the fee arose out of the occupation of a room, but that did not make it a charge for the providing of the accommodation. The Murray Service Charge differed little in character from a reimbursement of a charge, or a contribution or levy for the cost of providing heating, or airconditioning services, for the benefit of an occupant of accommodation. To include such a charge within the meaning of sub-s. 34(1), it would be necessary to read the sub-section as extending to charges incidental to the provision of accommodation and to do so would be to fail to limit the operation of the sub-section to facts which showed that it was the accommodation provided as an incident of employment that had been charged to the employee.

36. In our opinion, to say that the fortnightly payment of $12.50 was a condition of the appellant's right to occupy the room at the hostel does not, of itself, provide an answer to the question whether the appellant was, "without charge to him, provided temporarily with living accommodation ...". We think that, upon the proper construction of sub-s. 34(1), an employee is not disentitled to the benefit contemplated by the sub-section unless the charge made by the employer is made for the living accommodation provided temporarily by the employer. In our opinion, the "living accommodation" contemplated by sub-s. 34(1) is the physical premises provided by the employer in which the employee may live. The fact that the employer may charge the employee for services, the provision of which will enhance the employee's enjoyment of the living accommodation, does not, in our opinion, bring about the result that the living accommodation itself has not been provided "without charge".

37. Counsel for the appellant submitted that difficulties would arise in the application of sub-s. 34(1) to the facts of particular cases if it is necessary in every case to ascertain the nature and extent of charges made by an employer for anything other than the physical accommodation provided by him. It was submitted that a construction of the section which would avoid these difficulties should be preferred. We do not think this submission carries much weight, but it does point up the relevance and importance of ensuring that the charge made by the employer is made for the living accommodation provided by him.

38. The precise point which arises in the appeal is free from authority, but some assistance is to be gained from the decision of Cross J. (as he then was) in Butter (Inspector of Taxes) v Bennett (1962) 1 Ch 293. In that case an employee was employed under a service agreement which provided that his employer should be responsible for the cost of coal, coke, gas and electricity required for heating a house in which the employee was required by the terms of his employment to live. The employer also paid for the upkeep of the garden around the house. The question for decision was whether the costs incurred by the employer were expenses incurred "in or in connection with the provision of living accommodation" within s. 161(3) of the Income Tax Act 1952 (UK). Cross J. held that the expenses were not so incurred by the employer. He thought that, as the sub-section referred to the employee residing in the living accommodation, it was clear that those words referred simply to a house or flat as a physical object, and that the expenditure in question could not be said to have been incurred in providing that accommodation. Cross J.'s decision was affirmed on appeal: (1963) 1 Ch 185. At 198 Pearson L.J. (as he then was) said:

"In my opinion, 'provision' must mean continuing

provision and, therefore, the expense of

continuing to provide the house by payment of

rates and taxes and by keeping it in repair are

expenses incurred in, or in connection with, the

provision of living accommodation. On the other

hand, the expense of providing coals for heating

and electricity for heating, cooking and lighting

are incurred in or in connection with the

provision of other benefits or facilities or the

provision of supplies and not in connection with

the provision of living accommodation."

39. Butler's Case was decided in a different statutory context, but it does afford a useful illustration of the distinction between living accommodation as such and the provision of services which may enhance the occupier's enjoyment of that accommodation.

40. We are, therefore, of the opinion that the appeal must succeed. The orders made by the primary Judge should be set aside and the decision and orders of the Tribunal restored. The respondent is to pay the cost of this appeal and of the appeal from the Tribunal.