JAMES MENZ and BORDER EXPRESS PTY LTD

Case [2013] AATA 317

[2013] AATA 317

Division GENERAL ADMINISTRATIVE DIVISION

File Number

2010/3673

Re

JAMES MENZ

APPLICANT

And

BORDER EXPRESS PTY LTD

RESPONDENT

Decision

Tribunal

PROFESSOR RM CREYKE, SENIOR MEMBER
Date 17 May 2013  
Place Canberra

The decision under review, so far as it relates to entitlement to Rostered Days Off, is affirmed.

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PROFESSOR RM CREYKE, SENIOR MEMBER

Catchwords

COMPENSATION – Commonwealth employee – calculation of incapacity payments – calculation of normal weekly earnings – whether rostered days off are an allowance according to section 8 of the SRC Act 1988 – whether deductions from payslips of amount ‘banked for RDOs’ authorised by sections 8 and 19 of the SRC Act 1988

Legislation

Safety, Rehabilitation and Compensation Act 1988 (Cth) sections 4, 8, 19 and 62

Cases

Bortolazzo v Comcare (1997) 75 FCR 385

Re KCZH and Comcare [2009] AATA 861

Re Pike and Linfox Australia Pty Ltd [2011] AATA 378

Re Sutton and Comcare (1996) AATA 168

Re Zarb and Comcare (1997) 48 ALD 718

Steggles Pty Ltd v Vandenberg (1987) 163 CLR 321

Secondary Materials

Road Transport (Long Distance Operational) Award 2010 clause 20

Transport Workers (Long Distance Drivers) Award 2000 [Transitional] clause 29

REASONS FOR DECISION

PROFESSOR RM CREYKE, SENIOR MEMBER

17 May 2013

  1. Mr James Menz has an accepted condition of left shoulder injury (tear of supraspinatus and infraspinatus tendon), and secondary psychological injury. He has not worked since 13 August 2010. Mr Menz has not resigned from Border Express, but has been certified unfit to work.

  2. Liability was accepted for the injury from 9 May 2008. Mr Menz’s Normal Weekly Earnings (NWE) amount was originally calculated by reference to a twelve week period prior to the date of injury. Subsequently his NWE was increased having regard to award changes.

  3. On 29 June 2010, his employer, Border Express, a licensed corporation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (Act),[1] decided the extent of its liability for incapacity payments under section 19(2) and (3) of the Act for the weeks ending 28 February 2010 to 23 May 2010.

    [1] Safety, Rehabilitation and Compensation Act 1988 (Cth) (Act) s 4(1) – defines ‘licensed corporation’.

  4. Mr Menz sought reconsideration of that decision on 5 July 2010 under section 62 of the Act. Border Express made a further decision on 30 July 2010 affirming its decision of 29 June 2010.

  5. Mr Menz sought further review by the Tribunal on 27 August 2010. The matter was heard by the Tribunal in Canberra on 31 January 2013. Following a telephone directions hearing on 20 March 2013 further material was provided on 27 March 2013.

    Background

  6. Mr Menz has been employed by Border Express as a long haul driver since 5 February 1989. Except for the first eight to ten years, he was paid trip money rather than for hours worked. According to material in evidence, prior to the week commencing 28 July 2008, no deduction for Rostered Days Off (RDO) was shown on Mr Menz’s salary record. Instead 2 hours, or a…

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JAMES MENZ and BORDER EXPRESS PTY LTD [2013] AATA 317
Case
[2013] AATA 317
Decision Date

CaseChat Overview and Summary

In the case of Menz v Border Express, the dispute centred around the calculation of the employee's Net Weekly Earnings (NWE) for the purpose of determining his entitlements under the Transport Workers (Long Distance Drivers) Award 2000 [Transitional]. The matter was brought before the Administrative Appeals Tribunal, which had to determine whether the deductions made from the employee's pay for Rostered Days Off (RDO) constituted an 'allowance' under section 8 of the relevant Act. The employee, Mr Menz, had been employed by Border Express as a long-haul driver since 1989 and had been paid trip money rather than for hours worked for most of his employment. From 28 July 2008, Border Express began to deduct amounts for RDO from Mr Menz's pay, which continued until he ceased working on 13 August 2010.

The primary legal issue before the Tribunal was whether the deductions made for RDO constituted an 'allowance' under section 8 of the Act. This section defines NWE as the average number of hours worked multiplied by the average hourly ordinary time rate of pay, plus the average amount of any allowance payable to the employee in each week, other than an allowance payable in respect of special expenses. The Tribunal had to consider whether the RDO payments, which were akin to annual leave, could be classified as an allowance. The Tribunal found that while the RDO was recompense for Mr Menz's labour, it was not an additional amount paid for conditions encountered during service, special qualifications, or special duties. Instead, it was a paid leisure day earned as a result of working at his normal work for a set period.

The Tribunal concluded that the RDO payments were not 'allowances' for the purposes of section 8 of the Act. Therefore, they should not have been included in the calculation of Mr Menz's NWE. The Tribunal's decision was based on the nature of the RDO, which was similar to annual leave, and the fact that it did not constitute an additional payment for special conditions or duties. The Tribunal found that Border Express's inclusion of RDO payments in the NWE calculation was incorrect. As a result, the Tribunal ordered that the RDO payments should not be included in future calculations of Mr Menz's NWE.

Orders

Orders of the court

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Background

Background to the litigation

Mr Menz sought further review by the Tribunal on 27 August 2010. The matter was heard by the Tribunal in Canberra on 31 January 2013. Following a telephone directions hearing on 20 March 2013 further material was provided on 27 March 2013.Background Mr Menz has been employed by Border Express as a long haul driver since 5 February 1989. Except for the first eight to ten years, he was paid trip money rather than for hours worked. According to material in evidence, prior to the week commencing 28 July 2008, no deduction for Rostered Days Off (RDO) was shown on Mr Menz’s salary record. Instead 2 hours, or a portion of that time if Mr Menz had not worked a full week, was shown as being allocated to an ‘RDO bank’. However, from 28 July 2008 in one record, and from 6 August 2008 in a spreadsheet provided by Border Express for the hearing, an amount commenced to be shown as a deduction for RDO in the payslips or pay calculations for Mr Menz. Thereafter the deductions continued. Mr Menz ceased work on 13 August 2010. Earlier, in a document entitled Employee Previous Earnings the spreadsheet included both RDO hours and, in the ‘amount’ column, a quantification for the RDO hours. These figures were listed against ‘Other leave – RDO’. The entry began for the week ending 3 July 2005. In the same spreadsheet, there was an item ‘RDO Bank Linehaul’. For that item hours were shown for RDOs but an amount of Nil was listed in the amount column. The hours shown against both ‘Other leave – RDO’ and ‘RDO Bank Linehaul’ generally corresponded. However, there were discrepancies for some entries, but generally the differences were no more than an hour. The entries for ‘Other leave – RDO’ were irregular and apparently corresponded with weeks in which Mr Menz had actually taken RDOs. The entries for ‘RDO Bank Linehaul’ appeared weekly. These notations continued until the payment date of 6 August 2008 when the entry for ‘Other leave - RDO’ no longer appeared. Instead, against ‘RDO Banked’ there is a deduction of hours and a corresponding deduction in the amount column. The hours correlated with the number of hours Mr Menz had accrued in the RDO Bank. In other words, they do not represent hours taken under the RDO entitlement. These notations appeared each week. These changes in the spreadsheet were not explained. In a letter to the Tribunal dated 30 January 2013 the following information was provided by Border Express in relation to the reduction. The letter noted that a Border Express employee was entitled to an RDO of one day for each month of employment. The entitlement had been included in the Transport Workers (Long Distance Drivers) Award 2000 [Transitional] clause 29, and subsequently the Road Transport (Long Distance Operational) Award 2010 clause 20. It was accepted by both parties that it is the terms of the Transitional award which are relevant for the purposes of this matter. The letter said:An RDO is in addition to the entitlement to days off provided elsewhere.RDOs accrue and are paid in accordance with the Award. In each pay period a portion of an employee’s wages are held in their ‘RDO Bank’. The purpose of ‘banking’ a portion of the weekly wage is to enable the employee to take an RDO day a month and receive normal pay, with the wages for the RDO being paid out of the RDO bank at the applicable Award rate at the time that the RDO is taken by the employee.The Award entitlement to accrue and be paid for an RDO provides no increase in weekly pay at any time.In circumstances where an employee does not take an RDO during employment, the RDO entitlements are accumulated in the ‘RDO bank’. The value of the accumulated RDO entitlement is paid to the worker in accordance with the Award, such as when the employee takes an RDO or on cessation of employment or taking long service leave. Alternatively, Border Express can make payment of the value of accumulated RDOs not taken during employment at the request of an employee.Mr Menz has a current accrural of 236.50 hours ‘banked’ at the applicable award rates. During the period 3 May 2008 to 13 August 2010, the accrual of RDOs were banked at the applicable Award rate…As at 30 January 2013, Mr Menz has 236.50 hours of accumulated RDO entitlements, which are valued at $4,517.15 based on the current hourly rate in the award of $19.10 per hour.The sum of $4,517.15 accrued during this period will be paid to Mr Menz in accordance with the Award or at his request as part of his entire outstanding entitlement to RDO.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The RDO was an entitlement akin to annual leave. She acknowledged that for the employer it had a monetary value attached, but she claimed it had no monetary value for employees. For every week worked a set number of hours accrued in the RDO bank.Consideration The decision under review was a decision made by Border Express on 30 July 2010 to affirm the decision of 29 June 2010 which calculated the amount of Mr Menz’s NWE for the weeks ending 28 February 2010 through to the week ended 23 May 2010. His NWE at that time was shown as $1,596.21 and his Normal Working Hours (NWH) as 58.16 hours per week. The NWH was the outcome of a decision by the Tribunal on 25 February 2010. The figure for NWE of $1,596.21 was the applicable amount based on a ‘normal’ rate of $16.7474 per hour and took into account award increases added to the initial amount of $1,573.41. The NWE amount of $1,596.21 was the figure which resulted from an award increase effective from on 29 September 2009. In its reconsideration decision of 30 July 2010, Border Express noted that the full amount of $1,596.21 per week had been paid to Mr Menz as incapacity payments from the period 28 February 2010 to 30 June 2010. The reconsideration decision reaffirmed the calculation for the period to 30 June 2010. Border Express also noted in its decision that it had no jurisdiction to consider any application for review for the period from 1 July 2009 to the week ending 28 February 2010 since that was outside the terms of the original decision. The original decision related only to the weekly incapacity payments from the period 28 February 2010 to the week ended 23 May 2010. However, counsel for Border Express at the hearing said that the application for review related to a closed period from the date of injury, namely, 3 May 2008 until Mr Menz ceased working on 13 August 2010. This concession contradicted the letter from Border Express dated 30 July 2010 which stated that the reconsideration was confined to the pay periods referred to in that letter, namely, 28 February 2010 to 23 May 2010. The Tribunal has accepted the concession given that there are several applications by Mr Menz before the Tribunal, and with the aim of limiting further disputation on this issue. Its reasons are couched accordingly.Whether an amount payable for a Rostered Day Off (RDO) is an ‘allowance’ for the purposes of section 8 of the Act Section 8 of the Act provides that the calculation of NWE for the period is based on the average number of hours worked (NH), the average hourly ordinary time rate of pay (RP) and ‘the average amount of any allowance payable to the employee in each week…other than an allowance payable in respect of special expenses’. Allowances ‘arise directly from and are a recompense for the particular labour and/or service provided by the employee’.[4] Although the RDO is certainly recompense for Mr Menz’s labour, it is not an amount which he receives in addition to his normal salary ‘for such things as conditions encountered during service, special qualifications, special duties and so on’.[5] It is akin to a ‘paid leisure day’ earned simply as a result of working at the person’s normal work for a set period.[6][4] Re Zarb and Comcare (1997) 48 ALD 718 at [53].[5] Re Sutton and Comcare (1996) AATA 168 at [12].[6] Steggles Pty Ltd v Vandenberg (1987) 163 CLR 321. See also Re Pike and Linfox Australia Pty Ltd [2011] AATA 378.