Hobart City Council v Webster
[2003] TASSC 36
•10 June 2003
[2003] TASSC 36
CITATION: Hobart City Council v Webster [2003] TASSC 36
PARTIES: HOBART CITY COUNCIL
v
WEBSTER, Alan Ross
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: APPELLATE
FILE NO/S: LCA 104/2002
DELIVERED ON: 10 June 2003
DELIVERED AT: Hobart
HEARING DATES: 22 May 2003
JUDGMENT OF: Underwood J
CATCHWORDS:
Workers Compensation - Assessment and amount of compensation - Weekly earnings - Tasmania - Overtime - Whether a requirement of the worker's contract of employment.
Workers Rehabilitation and Compensation Act1988 (Tas), s70(2)(ab)(i).
Aust Dig Workers Compensation [211]
Employment Law - The contract of service and rights, duties and liabilities as between employer and employee - Effect of industrial awards and agreements on contracts of service - Implied terms - Must be necessary to give contract of employment business efficacy.
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266; Byrne v Australian Airlines Ltd (1995) 185 CLR 410; Australian National Hotels Pty Ltd v Jager (2000) 9 Tas R 153, applied.
Aust Dig Employment Law [5]
REPRESENTATION:
Counsel:
Appellant: I L Hallett
Respondent: R M Grueber
Solicitors:
Appellant: Page Seager
Respondent: Ogilvie Jennings
Judgment Number: [2003] TASSC 36
Number of Paragraphs: 18
Serial No 36/2003
File No LCA 104/2002
HOBART CITY COUNCIL v ALAN ROSS WEBSTER
REASONS FOR JUDGMENT UNDERWOOD J
10 June 2003
The background
The respondent has been an employee of the appellant for about 18 years. He works in the Environmental Services Department of Civic Solutions. On 17 April 2000, he suffered an injury to his back and received workers compensation. Although he recovered sufficiently to return to work, the respondent was not fit enough to go back to his former duties which included working overtime at the Hobart Tip. Accordingly, on his return to work, the respondent was assigned to store work. Unlike the tip, no overtime was involved. However, the appellant paid him a make-up component of the weekly earnings representing the overtime he would have earned had he returned to his pre-injury employment.
The appellant considered that it was not obliged by the law to pay this make-up component and applied to the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") for a review of weekly payments. On 11 November 2002, the Tribunal dismissed that application and this appeal is brought from that order of dismissal.
The issue
Central to this appeal is the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s70(2)(ab)(i) which provides:
(2) The normal weekly earnings of a worker shall be determined in accordance with the following provisions:¾
(a)…;
(ab)in computing normal weekly earnings, any component of the worker's earnings attributed to overtime or excess hours is to be disregarded unless ¾
(i) the overtime or excess hours was or were a requirement of the worker's contract of employment; and
(ii) …
(iii) …".
The Tribunal held that the overtime that was paid to the respondent for working at the tip was "a requirement of the [respondent's] contract of employment". For the appellant, it was contended that this determination reflected an error of law, for although the respondent used to work regular overtime at the tip in accordance with a roster, this was not a requirement of his contract of employment.
For the respondent, it was contended either:
(a)upon a proper construction of the provisions of the Act, s70(2)(ab)(i), overtime was a requirement of the respondent's contract of employment even though it was not a term of that contract; or
(b)it was an implied term of the contract of employment that the respondent was required to work overtime.
The award
The terms of the respondent's employment were governed by the Municipal Employees Award. It was common ground that it, unlike some awards, did not require overtime to be worked. Clause 21 dealt with "Overtime and Stand-by". It made provision for payments and other conditions in the event of overtime being worked. Clause 21(g) provided:
"(g) An employee not normally required by the employer to make himself/herself available for the purposes of the employer outside his/her ordinary hours of duty shall, if required to do so, be paid an allowance of $10.50 per day on Friday, Saturday and Sunday and holidays as prescribed by clause 22 of this award, and $8.60 for all other days, in addition to any other payment due to him/her under the terms of this Award."
This clause cannot be construed to mean that an employee is bound to work reasonable overtime if required by the employer to do so, and Mr Grueber, who appeared for the respondent, did not contend to the contrary. The Tribunal referred to this clause in its reasons for judgment at par15 in the following terms:
"Given the evidence that the worker did not receive the allowance referred to in Clause (g) of the Award, it is arguable on the face of that provision that the employer had required him to make himself available for overtime. No detailed submission was made as to why this provision was not applicable nor evidence adduced as to any particular practice or interpretation contrary to this inference."
I think that cl 21(g) of the award is no more than a provision for a stand-by payment which the employer is obliged to pay if the arrangement is that a worker will be available to do overtime if called upon. If overtime is actually worked, the worker is paid at the overtime rate prescribed elsewhere in the clause.
The facts
The majority of the work done by the appellant's environmental section of Civic Solutions was done within a five day working week, but because of the need to keep the tip open virtually 365 days a year, overtime had to be worked. Accordingly, the Council prepared two rosters. One was for those skilled at using a bulldozer and other machinery, and the other was for other work that had to be done at the tip, such as manning the gate and the weigh bridge. Since at least 1994, the rosters have been prepared six months in advance and the overtime offered to the employees on a equitable basis. The respondent had his name on both rosters and worked overtime regularly. Some employees were only on one roster and a small section of employees were not on either roster. The culture in the section was that employees were expected to do their share of overtime. The manager of the section said in his evidence that a willingness to do overtime was a factor in deciding whether or not to take on new employees. He said that if an employee said that he [sic] was not prepared to do overtime, that employee would be asked the reason why that was so. Ability and willingness to do overtime was a factor in determining whether to engage a new employee. An employee on a roster was able to swap his rostered day with another employee on the roster. The manager made it clear that if overtime was not performed by the regular workforce, he would engage external workers to do the overtime at the tip. Regular rostered overtime was expected from the workforce, but the evidence was clear that the appellant could not compel anyone to work overtime and that a refusal to do so would not affect a worker's job, nor his ordinary hours of work. The Tribunal neatly summed the position up in the following passage at par7 of its reasons for judgment:
"This arrangement [for working overtime] did not create an absolute obligation on any particular worker or on the workforce as a whole to the extent of being a condition of employment but rather it was a challenge by the employer to it's (sic) workforce that they could perform the overtime or alternatively someone else would be brought in to do it."
The Act, s70(2)(ab)(i)
The Tribunal said at par16:
"'The overtime' in Section 70(2)(ab)(i) is nothing more than the particular overtime worked during the relevant period used to calculate the normal weekly earnings in a particular case. In this case the overtime that was worked in the circumstances outlined above in the twelve month period leading up to the date of the worker's injury was worked as part of the roster system that operated during that period. Given that such overtime was in accordance with the roster system there was a very clear obligation (requirement) that the worker met his undertakings to perform overtime as rostered. Such obligation amounted to an acceptance that he was responsible for arranging a suitable substitution if he was unavailable or unable to work as required by that roster."
Reference was made in the following paragraph to Pasminco Australia Ltd v Grattidge (1996) 5 Tas R 434 but, as the Tribunal acknowledged, the meaning of the Act, s70(2)(ab)(i) was not considered in that case. I have come to the conclusion that error of law attends the above passage in the reasons for judgment. It may well be true that overtime was a requirement of the employer but the legislation specifies that such requirement must be "a requirement of the worker's the contract of employment".
It seems to me upon its plain meaning, that s70(2)(ab)(i) does not refer to overtime that was required as a matter of practice, nor does it refer to overtime that the employer expected to be worked. The paragraph expressly provides that the overtime to which it refers is that which is required to be worked by virtue of the contract of employment. Thus, it was either a term of the award governing the conditions of employment, or it was a term of the contract of employment that the employer could require overtime to be worked, or it was not. To otherwise construe the paragraph would be to give no meaning to the words "the worker's contract of employment".
In this respect, the whole of subs(2)(ab) is instructive. It provides:
"(ab) in computing normal weekly earnings, any component of the worker's earnings attributed to overtime or excess hours is to be disregarded unless ¾
(i) the overtime or excess hours was or were a requirement of the worker's contract of employment; and
(ii) the worker worked overtime or excess hours in accordance with a regular and established pattern and in accordance with a roster; and
(iii) the pattern was substantially uniform as to the number of overtime or excess hours worked; and
(iv) the worker would have continued to work overtime or excess hours in accordance with the established pattern if the worker had not been incapacitated."
Sub-paragraphs (ii) - (iv) refer to overtime that was actually worked during the relevant period. This reinforces the construction that subpar(i) is a reference, not to overtime that was actually worked, but to overtime that was a contractual obligation. This case illustrates that proposition well. The respondent fulfilled the requirements of subpars(ii) - (iv). If, as the Tribunal in effect, held, satisfaction of those subparagraphs also satisfied subpar(i) without more, the provisions of subpar(i) had no work to do. In order to form part of weekly earnings ,overtime must have been:
· a contractual obligation;
· worked in accordance with a regular and established pattern in accordance with a roster;
· that pattern must have been substantially uniform as to the number of hours of overtime worked; and
· but for the accidental injury, that overtime would have continued.
Implied term of the employment?
Byrne v Australian Airlines Ltd (1995) 185 CLR 410 is authority for the proposition that if the conditions of employment are governed by an award that owes its existence to statutory authority, the terms of that award are not necessarily terms of a contract of employment. The award owes its authority to the statute and not to any contract. In such a case it is unnecessary for the contract of employment to deal with any of the matters covered by the award. As Brennan CJ, Dawson and Toohey JJ said, at 421:
"The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award (see Kilminster v Sun Newspapers Ltd (1931) 46 CLR 284) and, as we have said, the award operates with statutory force to secure those terms and conditions."
The law with respect to implied terms is well settled. The classic authority is BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266. The majority advice contains this well known passage at 283, prescribing the requirements for the implication of a contractual term:
"(1) (the implication) must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract".
The joint judgment in Byrne v Australian Airlines Ltd took the view, at 422, that in the case of informal employment contracts, the criteria laid down in the BP Refinery case still applied, but "a rigid approach should be rejected". See also Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; Hawkins v Clayton (1988) 164 CLR 539. The application of Byrne and BP Refinery in cases of employment contracts was considered at length by the Full Court of this Court in Australian National Hotels Pty Ltd v Jager (2000) 9 Tas R 153. In that case, Evans J referred, at 161, to the need for a flexible application of the BP Refinery test in the case of unwritten employment contracts, but added that "[t]he flexibility called for by this caution does not obviate the need to establish that the implication of the term is necessary for the effective operation of the contract".
Clearly it was not necessary to imply a term that the respondent was obliged to work reasonable overtime if required by the appellant to do so in order to give the contract of employment effective operation. The appellant clearly accepted that workers in the position of the respondent were not required to work overtime. A number of them did not work overtime. This did not affect the contracts of employment of those workers. Having regard to the existence of a very detailed and comprehensive award, the respondent's contract of employment was fully effective without the implication of any term concerning overtime. It could not be said a term that reasonable overtime must be worked if required by the appellant, had to be implied in order to give the respondent's contract of employment business efficacy.
For these reasons the order of the Tribunal dismissing the appellant's application for a review of the respondent's weekly payments was erroneous in law and will be quashed. As the referral merely seeks a determination of whether "the worker's rate of weekly payments ought to be reduced", I will need to hear counsel before making a final order.
0
4
1