Peisley and Telstra Corporation Limited
[2005] AATA 929
•2 November 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 929
ADMINISTRATIVE APPEALS TRIBUNAL )
) No A2003/368
GENERAL ADMINISTRATIVE DIVISION ) Re CHRISTOPHER PEISLEY Applicant
And
TELSTRA CORPORATION LIMITED
Respondent
DECISION
Tribunal Justice Downes, President
Mr J.W. Constance, Senior Member Dr M.D. Miller AO, Member
Date26 September 2005
PlaceCanberra
Decision Within 14 days of the publication of these reasons the parties are requested to file a minute of an agreed draft decision in accordance with the principles set out.
Each party has leave to request that this application be listed for further directions (including directions as to costs) if necessary.
..............................................
ADMINISTRATIVE APPEALS TRIBUNAL )
) No. A2003/368
GENERAL ADMINISTRATIVE DIVISION )Re:CHRISTOPHER PEISLEY
Applicant
And:TELSTRA CORPORATION LIMITED
Respondent
DIRECTION [2005] AATA 929
TribunalMr JW Constance, Senior Member
Date2 November 2005
PlaceCanberra
The Tribunal directs the Registrar, pursuant to sub-s.43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application:
1. delete the following paragraphs of the Decision:
“In accordance with section 42C(1) of the Administrative Appeals Tribunal Act 1975 the parties have reached agreement as to the terms of a decision of the Tribunal that is acceptable to the parties.
The terms of the agreement have been reduced to writing, signed by of on behalf of the parties and lodged with the Tribunal.
The Tribunal is satisfied that a decision as agreed between the parties and set out below is within the powers of the Tribunal and that it is appropriate to make a decision without holding a hearing of the proceedings.
THE TRIBUNAL DECIDES in accordance with section 42(2) of the Administrative Appeals Tribunal Act 1975, that:”
2. insert in lieu thereof:
“THE TRIBUNAL DECIDES in accordance with section 43 of the Administrative Appeals Tribunal Act 1975, that:”
................................................................... Senior Member
CATCHWORDS
COMPENSATION – calculation of compensation pursuant to section 19 of the Safety, Rehabilitation and Compensation Act 1988 – Applicant’s normal weekly earnings should include an allowance for overtime – additional work was “overtime” – additional work was “required” – additional work was carried out “on a regular basis” -
Words and phrases – “required to work overtime on a regular basis”
Safety, Rehabilitation and Compensation Act 1988 (Cth) – ss 8(1), 8(2), 19
Comcare Australia v Pires [2005] FCA 747
Re Zarb and Comcare (1997) 48 ALD 718
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297
Bortolazzo v Comcare (1997) 75 FCR 385
REASONS FOR DECISION
26 September 2005 Justice Downes, President
Mr J.W. Constance, Senior Member
Dr M.D. Miller AO, Member
1. Mr Peisley has applied for a review of a decision of Telstra as to the manner of calculating the compensation he should be paid for loss of earnings consequent upon an injury at work.
2. The parties have agreed that the correct calculation depends upon a determination of 3 issues:
1)was certain work done by Mr Peisley outside normal hours correctly characterised as “overtime” work;
2)was Mr Peisley “required” to work overtime; and
3)was overtime worked by Mr Peisley “on a regular basis.”
3. For the reasons set out we have decided that all of the additional work performed by Mr Peisley is properly classified as overtime and that Mr Peisley was required to work overtime on a regular basis.
FACTS
4. The parties have filed an agreed statement of facts[1] and unless otherwise stated our findings are based on this agreed statement. Some additional evidence was called by each party and where findings are based on this evidence it will be specifically referred to. We are satisfied as to the facts on the balance of probabilities.
[1] Exhibit C.
5. Mr Peisley is 53 years of age. By October 2002 he had been employed by Telstra for over 30 years and held the position of installer/repairer. On 29 October 2002 Mr Peisley injured his right shoulder at work; Telstra accepted liability to compensate Mr Peisley for the loss suffered as a result of that injury.
6. Following the injury Mr Peisley continued working on a restricted basis, one such restriction being that he could not work overtime. However in calculating Mr Peisley’s wage loss arising from the injury Telstra did not take into account overtime worked prior to the injury. The reason for this was that in Comcare’s view Mr Peisley had not been required to work overtime on a regular basis.
7. Sub-section 8(2) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) provides for the calculation of compensation to include an allowance for overtime which an employee is required to work on a regular basis. We set out the details of the statutory provision later in these reasons. The parties have agreed that the period 1 August 2002 to 23 October 2002 inclusive is the relevant period for which overtime records are to be considered.
8. At the relevant time Mr Peisley’s employment was governed by the terms of the Infrastructure Service and Wholesale Enterprise Agreement 2000[2] and the Infrastructure Services 2002/2005 Enterprise Agreement.[3] Under these agreements Mr Peisley’s “ordinary hours” are defined as “36 ¾ hours per week, worked between 7am and 7pm, Monday to Friday.” Each agreement contained a provision that Telstra may require an employee to work reasonable overtime.
[2] Exhibit A.
[3] Exhibit B.
9. Mr Peisley gave evidence which was not challenged and which we accept, that prior to his being injured he worked hours additional to his ordinary hours in 3 different situations. These were:
1)work after ordinary hours when extra time was needed to finish a job;
2)weekend work; and
3)recall work.
10. If Mr Peisley was working on a repair job which he could not finish within his ordinary hours he telephoned his team leader to inform him of this and, if he was prepared to continue working on the job, he obtained his team leader’s authorisation to continue the job on overtime. Mr Tosti, Area Service Manager for Telstra, gave evidence that Telstra required its staff to obtain this authorisation, even if the authorisation had to be given retrospectively in the event that the employee was late in making the request. We accept this evidence. Mr Tosti did not suggest that Mr Peisley had been late in requesting authorisation for the overtime the subject of this claim.
11. Mr Peisley also worked nearly every Saturday as a result of having been contacted by his team leader (usually on the previous Wednesday) and asked if he wished to do Saturday work. Mr Peisley normally agreed to the request each time it was made.
12. The third situation in which Mr Peisley worked additional hours was when he worked on recall. This situation arose when Mr Peisley was not at work and he was called by Telstra to work on a particular repair job which was sufficiently urgent to warrant work outside ordinary hours.
13. In each situation it was Mr Peisley’s choice to undertake the additional work when the need arose. He was never directed to do overtime to which he had not agreed. The work done on recall was paid at a rate different to the other types of additional work.
14. The following schedule sets out the additional work done by Mr Peisley in the relevant period.
Dates
Overtime Worked
Recall worked
1.8.02 – 7.8.02
2.5
10.75
8.8.02 – 14.8.02
5.5
-
15.8.02 – 21.8.02
5
-
22.8.02 – 28.8.02
10.5
29.8.02 – 4.9.02
2
5.9.02 – 11.9.02
5
12.9.02 – 18.9.02
11
2.33
19.9.02 – 25.9.02
3
26.9.02 – 2.10.02
11
1.33
3.10.02 – 9.10.02
1
10.10.02 – 16.10.02
15
17.10.02 – 23.10.02
3.5
5
TOTAL
75 hours
19.41 hours
STATUTORY FRAMEWORK
15. Section 19 of the Act provides for payment to an injured employee to compensate for loss of income caused by an injury. This payment is based of the concept of “normal weekly earnings.”
16. Sub‑section 8(1) of the Act provides for the calculation of normal weekly earnings in accordance with a formula whereby the average number of hours worked per week is multiplied by the average hourly ordinary time rate of pay. To this amount is added the average weekly amount of any allowances. This calculation is done on figures for a “relevant period” to be determined in accordance with the Act.
17. Sub‑section 8(2) provides:
“Where an employee is required to work overtime on a regular basis, the normal weekly earnings of the employee before an injury shall be the amount calculated in accordance with subsection (1) plus an additional amount calculated in relation to the relevant period under the formula:
where:
NH is the average number of hours of overtime worked in each week by the employee in his or her employment during the relevant period; and
OR is the employee’s average hourly overtime rate of pay during that period”
ISSUES
18. The issues for us to decide are:
1)whether, when Mr Peisley was doing work on “recall” during the relevant period he was working “overtime” within the meaning of sub-section 8(2) of the Act;
2)whether Mr Peisley was “required” to work overtime during the relevant period within the meaning of sub-section 8(2); and
3)if “yes”, whether Mr Peisley was required to do so “on a regular basis” within the meaning of sub-section 8(2)?
REASONING
When Mr Peisley was working on “recall” was he working “overtime” within the meaning of sub-section 8(2)?
19. Mr Peisley gave evidence, which we accept, that “recall” was work carried out after normal hours when urgent repair work was needed. He would be telephoned and requested to do the work as the need arose. This work was paid at a higher rate than other work done outside ordinary working hours. “Ordinary hours” are defined in the Agreements as “36 ¾ hours per week, worked between 7am and 7pm, Monday to Friday.”[4]
[4] Exhibits A & B.
20. Nether the Act nor the Enterprise Agreements define “overtime.” However the term is commonly understood to be work performed outside an employee’s normal working hours and we are of the view that this is a proper interpretation of the term as used in the Act. This is supported by the following definition from the Macquarie Dictionary:
“time during which one works before or after regularly scheduled working hours.”
21. Telstra has put the proposition that “recall” hours should not be characterised as “overtime” as they may involve hours of work that are not necessarily “before” or “after” scheduled working hours ie. “recall” hours may be worked on a day on which the employee has not otherwise worked or may be worked on a day before a day on which the employee is not required to work. It was also put that “recall” work could be done during a period of leave and was paid for at a different rate than work designated as “overtime” in the Agreements. We cannot agree that the question of what is or is not overtime falls to be determined by whether or not the employee has otherwise worked on the particular day or on the day before or after. To our minds work carried out outside normal hours will always be overtime. Telstra does not dispute that time worked on Saturday is overtime even though no other work is done on that day or the following day. Time worked on a “recall” basis should not be treated differently.
22. In Comcare Australia v Pires[5], the Federal Court held that in applying the formula to determine normal weekly earnings as set out in sub-section 8(1), overtime hours are not included. This decision, with which we respectfully agree, makes it clear that overtime hours are to be included only under sub-section 8(2). Previously, overtime hours had been included as part of calculations under sub-sections 8(1) as well as 8(2).[6] It is in this context that we consider the correct interpretation of sub-section 8(2), both as to the meaning of “overtime” and of “required”.
[5] [2005] FCA 747.
[6] The earlier approach followed the reasoning in Re Zarb and Comcare (1997) 48 ALD 718.
23. There is no dispute that work done on recall was not part of Mr Peisley’s ordinary hours. Looking at the sub‑sections in context the only reasonable interpretation is that recall work falls to be taken into account under sub-section 8(2). If this was not the case an injured employee who had been required to work on recall on a regular basis would not be compensated for the loss of this work in the event of injury.
24. For the purposes of sub-section 8(2) any work done outside the normal hours of work is overtime. The employee’s normal hours and the work which properly falls outside normal hours is a question of fact to be determined in each case.
25. There was some suggestion during argument that the recall hours and pay rates should be treated differently to the hours and rates of other overtime when applying the formula in sub-section 8(2). In our view there is no justification for this approach as it would fail to follow the clear meaning of the words of the section. In Mr Peisley’s case the hours of all overtime (ie. the overtime worked in each of the 3 situations set out in paragraph 9 of these reasons) and the average rate of all that overtime should be used in applying the formula referred to.
Was Mr Peisley “required” to work overtime during the relevant period?
26. As stated in paragraph 22 of these reasons we should interpret “required” in sub-section 8(2) in the context of the interpretation of sub-section 8(1) as set out in Comcare Australia v Pires.
27. The parties have urged on us 2 distinct interpretations of “required”. Mr Peisley argues that overtime is “required” when Telstra has a need for the work to be done and that the most appropriate dictionary definition of the verb “to require” is “to impose a need or occasion for”[7].
[7] Macquarie Dictionary
28. Telstra’s argument is that the interpretation adopted in the Zarb decision is correct. In Zarb Deputy President Burns said that “…..the ordinary everyday meaning of ‘required’ [in this context] is the imposition, by the employer in an authoritative fashion, of an obligation upon the employee to work overtime on a regular basis.”[8] Deputy President Burns went on to say that to interpret “required” to mean that the employer “needed” someone to work overtime would be to render the word “required” superfluous.
[8] At p.727, para 34
29. It is important that the provisions of a particular section of an Act be interpreted in the context of the whole Act and in particular the surrounding provisions dealing with the same subject. In Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 304 Gibbs CJ said:
“Of course, no part of a statute can be considered in isolation from its context – the whole must be considered.”
In this case sub-section (2) of section 8 is to be interpreted in the context of the whole section. Since the decision in Comcare Australia v Pires, the only source of compensation for loss of overtime earnings which is available to an injured employee is sub-section 8(2).
30. It is also necessary to interpret sub‑section 8(2) in the context of beneficial legislation. Referring to this Act, in Bortolazzo v Comcare (1997) 75 FCR 385, Heerey J stated at 388:
“I accept the submission of counsel for the applicants that the Act is social legislation which ought to be construed, in the event of ambiguity, liberally in favour of injured employees: McDermot v Owners of SS Tintoretto [1911] AC 35, Wilson v Wilsons Tileworks (1960) 104 CLR 328 at 335. But a liberal interpretation is one thing, rewriting the statute is another.”
31. Taking into account the above principles, the provisions of sub‑section 8(2) should be interpreted broadly but within its context and without straining the ordinary meaning of the language used.
32. In sub-section 8(2) “required” appears in the expression “[w]here an employee is required to work overtime…...” It is clear that it is the employee that is the subject of the requirement, not the overtime. The Act does not refer to an employee who works “required” overtime. For this reason we do not accept the interpretation put forward by Mr Peisley. We also agree with Telstra’s argument that the sub-section is referring to the individual employee concerned, not employees in general. To interpret the provision to apply whenever the employer has a need for its employees in general to do overtime would be an unjustified assault on the ordinary meaning of the English language.
33. In ordinary usage the verb “to require” connotes the imposition of some degree of compulsion. The Macquarie Dictionary [9] includes the following definitions:
“2. to call on authoritatively, order, or enjoin (a person, etc.) to do something: to require an agent to account for money spent.
6. to place under an obligation or necessity.”
“Enjoin” means “to order or direct.”
[9] Revised Third edition.
34. Telstra argued that overtime is voluntary for employees of Telstra. On the evidence before us this is correct in the sense that the decision of an employee to make himself or herself available for overtime is a matter of individual choice. Telstra also argued that Mr Peisley was not directed or ordered to work overtime in the relevant period. Again, in the sense that Mr Peisley chose to make himself available to work overtime, this is correct.
35. However Telstra’s argument falls into error in concentrating on the decision of Mr Peisley to make himself available to work overtime rather than on the agreement between Mr Peisley and Telstra which gave rise to his working overtime on each occasion within the relevant period. In each situation in which Mr Peisley worked overtime he did so as a result of a specific agreement to do so. In the case of work done after hours he telephoned his supervisor and obtained his authorisation to continue. In the case of weekend work, this was done as a result of an earlier agreement, usually made the previous Wednesday. “Recall” overtime was worked as a result of Mr Peisley and Telstra having previously agreed that Mr Peisley would be available to do this work within a particular period if called upon or merely because of his assent when he was asked.
36. The crucial element in each of these situations is that on each individual occasion on which overtime was worked it was as a result of an agreement between the parties. Once an agreement to do the work was in place Mr Peisley was no longer simply a volunteer but was the subject of an agreement to do the work. It was the existence of this agreement, whether or not it amounted to a binding contractual obligation, which brought about Mr Peisley’s working of overtime and thus brings it within the normal usage of “required” referred to in the preceding paragraphs. The moment both Telstra and Mr Peisley agreed that he would undertake the work, he was required to undertake the work.
37. We find support for this interpretation in the fact that Parliament chose to make the relevant period for calculation of normal weekly earnings the relatively short period of the latest 2 weeks prior to the injury (subject to variation in certain circumstances).[10] This indicates that the intention of the sub-section is to take into consideration the basis upon which specific instances of overtime was worked rather than a consideration of whether overtime was required in a more general sense, such as a result of an implied term in the contract of employment.
[10] Section 9.
38. We disagree with the reasoning of Deputy President Burns in Re Zarb and Comcare for the same reasons that we have rejected Telstra’s argument. Their decision should no longer be followed.
39. The interpretation we have placed on “required” does not render the word superfluous. Its inclusion in the sub-section means that an injured employee who has previously done work outside ordinary working hours without the agreement of his/her employer cannot claim compensation based on that overtime. It is not uncommon for employees to start work earlier than required by their contracts of employment and/or work later than required purely as a matter of choice and without any request that they do so by their employers. Although this work is outside normal hours and therefore “overtime” there is truly no obligation on the employee (contractual or otherwise) to undertake the work. As the work is not “required” the employee cannot claim compensation for this time in the event of his/her being injured.
40. Both Counsel have referred us to the Second Reading Speech in relation to the Act. In our view the correct interpretation of sub‑section 8(2) is clear and there is no need to resort to the Speech to assist in understanding the meaning of the legislation. In any event the Speech refers to “rostered” overtime. It has not been suggested, nor would it be a reasonable interpretation, that sub‑section 8(2) be limited to overtime worked as a result of allocation of workers from a roster. The Speech does not assist us in this instance.
Was Mr Peisley required to work overtime “on a regular basis” within the meaning of sub‑section 8(2)?
41. The agreed statement of facts in this matter records that Mr Peisley worked some overtime during each of the weeks which make up the agreed relevant period. Mr Peisley argued that this of itself indicates that he has worked overtime on a regular basis. Counsel for Mr Peisley has referred us to the following definition of ‘regular” in the Concise Oxford Dictionary (6th ed.):
“3. acting, done, recurring, uniformly or calculably in time or manner, habitual, constant not capricious or casual, orderly, (regular working…)”
42. We accept Mr Peisley’s argument. We are satisfied that in the relevant period Mr Peisley worked overtime recurrently and uniformly. On the facts of this case the working of overtime in each week in the relevant period (which spans 12 weeks) of itself amounts to working of overtime “on a regular basis.”
43. Telstra again urged us to adopt the reasoning of Deputy President Burns in Re Zarb and Comcare. At paragraph 42 of the decision Deputy President Burns said:
“The tribunal is of the view that “regular” means a uniform or symmetrical pattern over time which can be described as usual or customary. To establish whether the overtime of an employee occurs on a “regular” basis, one would look to the overtime worked during the relevant period to determine whether the pattern is “uniform or symmetrical”.”
The Tribunal then considered the hours worked and concluded that whilst there was a reasonably high volume of overtime worked during the relevant period there was no uniform or symmetrical pattern to the overtime.
44. We do not agree with this reasoning. It is the requirement to work overtime that must be regular. The interpretation adopted in Zarb looks to determine whether the periods of overtime are regular in length yet the Act does not require “regular overtime.” This is made clear by the use of the phrase “on a regular basis” referring to the requirement to work rather than the hours worked on any particular occasion. We add that even if the approach of Deputy President Burns was correct we conclude that the schedule of overtime worked shows regular overtime in all categories.
DECISION
45. Within 14 days of the publication of these reasons the parties are requested to file a minute of an agreed draft decision in accordance with the principles set out.
46. Each party has leave to request that this application be listed for further directions (including directions as to costs) if necessary.
I certify that the 46 preceding paragraphs are a true copy of the reasons for the decision herein of Justice Downes, President, Mr J.W. Constance, Senior Member, and Dr. M.D. Miller AO, Member
Signed: .....................................................................................
AssociateDate/s of Hearing 2 August 2005
Date of Decision 26 September 2005
Counsel for the Applicant Ms Lorraine Walker
Solicitor for the Applicant Pamela Coward & Associates
Counsel for the Respondent Mr John Wallace
Solicitor for the Respondent Sparke Helmore
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