Dailey, A.R. v North Queensland Marine Towage Pty Ltd
[1991] FCA 580
•23 JULY 1991
Re: ALFRED ROBERT DAILEY
And: NORTH QUEENSLAND MARINE TOWAGE PTY LIMITED
No. N I17 of 1990
FED No. 580
Industrial Law
(1991) 39 IR 123
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
INDUSTRIAL DIVISION
Einfeld J.(1)
CATCHWORDS
Industrial Law - interpretation of award - tugboat workers - special provisions for workers who go to sea on "special voyages" - obligation on employer to provide insurance coverage in case of death of employee - additional to superannuation or other retirement benefits - question of need for causal nexus - whether obligation cast on employer to make payment regardless of whether insurance coverage taken out or insurance company pays
Conciliation and Arbitration Act 1904
Industrial Relations Act 1988 section 51
Tugboat Industry Award 1982 Part II clause 9
Geo A Bond and Co Ltd (in liquidation) v McKenzie (1929) 28 AR (NSW) 499 at 503-4
Re Australasian Transport Officers' Association v Commissioner for Railways (Re Argent) (1971) AR (NSW) 377 at 396
Re Dispute - Woollahra Council and F D Bolin (No. 1) (1972) AR (NSW) 111 at 116
De Havilland Aircraft Pty Ltd v Thomas Boyd (1948) 67 CAR 735
HEARING
SYDNEY
#DATE 23:7:1991
Counsel and Solicitor for the applicant: Mr B.D. Hodgkinson
Instructed by: W.G. McNally and Co
Counsel and solicitor for the respondent: Mr S. Thompson of
Blake Dawson Waldron
JUDGE1
The applicant in these proceedings is Mr Alfred Robert Dailey, the Federal President of the Australian Institute of Marine and Power Engineers (the union), an organisation originally registered under the provisions of the Conciliation and Arbitration Act 1904, now the Industrial Relations Act 1988, and authorised to sue on its behalf. On 19 September 1983 the then Conciliation and Arbitration Commission made an award entitled the Tugboat Industry Award 1982 (the award). The applicant claimed that North Queensland Marine Towage Pty Ltd (the respondent), being bound by the award, failed to pay to the Estate of Thomas Ford (deceased), a former employee of the respondent and member of the union, an amount of $75,000, as allegedly stipulated in a clause of the award.
The original application was amended pursuant to an order made by me on 13 December 1990. The amended application seeks, as a preliminary question of law, an interpretation under section 51 of the Industrial Relations Act of the relevant clause of the award 1982, namely:
Part II clause 9:
The employer shall provide insurance coverage of $75,000 in the case of death of an employee in addition to any superannuation entitlements or benefits from the Seafarers' Retirement Fund.
Part II applies to employment on tugboats which proceed to sea on what are called "special voyages" but not with respect to employees engaged regularly or continuously on outside work or on certain other voyages. A "special voyage" is defined as a voyage for which it is necessary to set watches. It is assumed for the purpose of this ruling that the particular deceased employee here fell within this category.
Other clauses of Part II provide for rates of pay, make special arrangements for watchkeeping and for extra categories of duty, and allow for additional periods off duty and rest periods following long hours of duty. Dismissal of and leave for employees and manning levels are basically the same for special voyages as for Part I or ordinary tugboat activities, and an employee's right to any salvage reward is preserved. Clause 8 makes the following provision:
8 - COMPENSATION FOR PERSONAL EFFECTS
If by fire, explosion, foundering, shipwreck, collision or stranding an employee sustains damage to or loss of his personal effects or equipment, the employer shall compensate him for such damage or loss by a cash payment equivalent to the value thereof to a maximum of $1,650 in the case of a master, chief engineer and other officers or $1,300 in the case of stewards, cooks and seamen.
The task posed for the Court is to determine the scope of an employer's obligation under clause 9 in relation to the nature of the insurance and the action required when a claim is made. The first dispute between the parties arises in regard to whether the clause requires a causal nexus between a particular special voyage and an employee's death. The second relates to each employer's individual liability to the successors of the deceased employee.
The applicant made two submissions in relation to this exercise in award interpretation. First, he said that the clause in question is a "beneficial" clause and must therefore be interpreted liberally. Secondly, he argued that any such interpretation must be made in the context of the industrial document of which the clause forms a part.
In that context the applicant submitted as the correct interpretation, that the employer must have insurance of $75,000 to cover the death of an employee to whom Part II applies, and that the employer must in the event of death pay out such a sum. The applicant submitted that the latter is a necessary element of the clause to prevent the insurance cover itself from being completely irrelevant. The applicant said that the death need not have been caused by or arisen from the work. Instead, the ordinary meaning of the clause is that a special benefit is and should be provided because of the additional danger to employees of work at sea, and by reason of the additional risks they undertake and their inability to obtain medical help quickly.
Alternatively, the applicant submitted that there is a causal link between a special voyage and a death where, as is apparently suggested for this case, the employee would not have died if medical help had arrived earlier. Since I do not know the facts in this case which might in fact require a balancing of ethereal factors with medical opinion in relation to the individual concerned, and because this judgment is confined to the issue of legal interpretation of clause 9, I must put aside the particular aspects of this submission, although the general submission is entitled to be considered as part of the intention and content of the clause.
The respondent submitted first that the insurance required by clause 9 is only to cover a death where it arises as a result of the carrying out of duties on a "special voyage". The respondent pointed to the distinction in industrial practice, as far as employer duties are concerned, between occupational health and non-work illnesses. Furthermore, on a commonsense practical basis, it is necessary that there be a limitation on the causes of death covered by the insurance provided by the employer. In the absence of such a limitation, the respondent submitted, the clause would have impractically wide results.
On the employer's role after a death is concerned, the respondent submitted that the award does not require the employer to pay out $75,000 and that that is a matter for the insurance company. The employer's responsibility is confined merely to provide the information necessary for the insurance company to make a decision in relation to any particular claim.
There are some unsatisfactory elements in the way this question has been posed by the parties. While the agreed facts include that the $75,000 has never been paid, I have not been told whether insurance coverage was ever in fact provided as required by clause 9. If it was, I have not been told whether it was life or accident insurance. Nor do I know how, when, where or from what the deceased member of the union died. Another problem with the question is that it does not include an element concerning what is to be done, so far as a deceased estate is concerned, if the employer is in breach of the requirement to provide insurance coverage.
One aspect of clause 9 seems clear. An employer is required to hold insurance cover for each employee whose work is covered by Part II so that upon an employee's death, a sum of $75,000 becomes payable to the deceased's estate or next of kin. As entitlement to this sum is expressed to be supplementary to superannuation or other retirement benefits, and as the eligibility is otherwise expressed in absolute terms, payment of the $75,000 seems not to be dependant on causal or other links between any incidents of the employment and the death. Taken in its context, the rationale and purpose of the clause, like other provisions of Part II, appear to be to supplement the other entitlements of all tugboat workers with compensation for the additional features or risks of work on special voyages, payable on their deaths to their next of kin.
The more difficult question is whether the clause imposes a direct non- transferable obligation on an employer to pay out the $75,000 whether or not the required insurance cover has been taken out or the money has been received by the employer from the insurance company. As its terms show, clause 8 of Part II of the award makes explicit provision for a direct cash payment by the employer to workers covered by this Part in certain events. All or most of these events would be insurable risks, yet there is no requirement to insure. Thus on one view, the only thing required of the employer by clause 9 is the annual or periodic insurance premium. The other view is that the clause imposes a requirement on the employer to pay the $75,000 and to protect the deceased employee's next of kin from the employer's possible impecuniosity at the time, by taking out a policy of insurance as an indemnity or guarantee of payment.
It has often been held that awards should not be subjected to overlegalistic interpretation - see for example Geo A Bond and Co Ltd (in liquidation) v McKenzie (1929) 28 AR (NSW) 499 at 503-4 in which Street J. stated that:
In construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly.
This approach was approved in Re Australasian Transport Officers' Association v Commissioner for Railways (Re Argent) (1971) AR (NSW) 377 at 396 and in Re Dispute - Woollahra Council and F.D. Bolin (No. 1) (1972) AR (NSW) 111 at 116.
It is certainly true that the various provisions of awards should be read in context and interpreted as far as possible to achieve their obvious intention: see De Havilland Aircraft Pty Ltd v Thomas Boyd (1948) 67 CAR 735, where it was held that the words of an award should be given their prima facie meaning, and should not be read in any limited sense, but in accordance with their plain and ordinary meaning.
In my view the matter can be persuasively argued both ways, one literally, one morally. The question is - which is the correct legal view? On balance, I have formed the conclusion that on a proper reading of its terms, the clause bears the legal meaning most closely consistent with its manifest intent. I find that employers bound by the award have a liability to pay $75,000 to the successors of tugboat workers who die while employed on duties to which Part II of the award applies. This liability is to be indemnified under or by insurance policies, the premiums of which are to be paid exclusively by employers. Upon the death of any of their workers, however occurring and from whatever cause, the employers are required to pay the $75,000 to the legal personal representatives or administrators of the estate of the deceased persons. I leave open the question, because it has not been posed for resolution, whether there is a liability to pay the $75,000 regardless of where the worker happens to be at the time of death.
There is no doubt that if clause 9 imposes no direct liability on the employer to pay out the $75,000 regardless of whether insurance coverage has been taken out, the clause will in many cases be worthless to its proposed beneficiaries. It seems hardly likely that such an empty gesture would have been intended. The only sanction or alternative avenue open to a deprived next of kin or executor would be to sue at common law. If no money was available to fund the litigation, a recreant or wealthy employer would simply be able to avoid the obligation intended by clause 9.
The case will be listed for directions on a date convenient to the parties for the making of any orders or the giving of any necessary directions consequent upon this resolution of the question posed.
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