Quality Lodges International Pty Ltd v Bibby and Kelm (No 2) No. Scciv-01-933

QUALITY LODGES INTERNATIONAL PTY LTD
v BIBBY and KELM [No 2]
[2002] SASC 147

PERRY J. This matter involves an application by Quality Lodges International Pty Ltd (“Quality Lodges”) for judicial review. I published reasons for judgment on 12 April 2002 in which I indicated the nature of the order which I proposed to make. However, for reasons which I will come to, on that day I postponed the making of the order until I had received further submissions.
The review sought is in the nature of certiorari to quash an order of the Dispute Resolution Committee (“the DRC”), being a committee established under the Vocational Education, Employment and Training Act 1994 (“the Act”). The decision the target of the application related to the purported termination by Quality Lodges of contracts of training which it had entered into with the second and third respondents (“Bibby and Kelm”).
Part of the order of the DRC which Quality Lodges sought to be reviewed, was in terms that the respective contracts of training entered into with Bibby and Kelm be “cancelled effective from 21 March 2000”, and that the two employees be paid by Quality Lodges an amount to be calculated:
“... on the basis of the employment contract ... such payment to represent the full salary and entitlements of [each claimant] for the period 21 March 2000 to 21 November 2000.”
Later, in circumstances which I explain in my earlier reasons, DRC varied the period over which the calculation of an amount to be paid to Mr Bibby should extend so as to substitute Friday 15 September 2000 for 21 November 2000.
At the same time, DRC notified the parties that it did not consider it appropriate to calculate the actual amount to be paid to Bibby and Kelm:
“... as the specific circumstances of the entitlements [wages, leave etc] were not known to the DRC. It is suggested that in consultation with your client you establish what you believe to be the appropriate amount.”
In my earlier reasons for judgment I indicated that it was inappropriate for DRC to approach the matter in that way, and that it should fix the quantum of the monetary amount to be paid, after arming itself with the best evidence which it could obtain relevant to that question. I stated [para 149]:
“It will be incumbent upon the DRC to seek and obtain such evidence as is available to satisfy it as to when it was that Bibby and Kelm resumed employment, if that was the case, and in any event, to fix the date of cancellation in accordance with the approach which I have indicated above, and to calculate the wages which they would have been expected to earn between 20 March 2000 and the effective date of cancellation of the contracts.”
At the same time, I pointed out that a question arose as to how the calculation of wages should be approached.
In its decision, as I have indicated, the DRC ordered payment of an amount to be calculated “on the basis of the employment contract” representing the “full salary and entitlements” of the two claimants for the period in question.
Strictly, the wording of that order departed from the words in the Act which define the powers of the DRC. The powers of the DRC which it may exercise in a matter such as this, are defined in the Act as follows:
“40(1)..........
(2)..........
(3)The Disputes Resolution Committee must inquire into a matter referred to it under this section, and may, if it thinks fit, by order, exercise one or more of the following powers:
(a)it may reprimand a party in default;
(b)it may suspend a person from his or her employment under a contract of training for a period not exceeding four weeks commencing on a date specified in the order;
(c)it may confirm or revoke a suspension imposed under subsection (7) and, in the event of revocation, order the employer to pay any wages that would, but for the suspension, have been payable under the contract;
(d)it may extend the term of a contract of training;
(e)it may cancel a contract of training as at the date specified in the order;
(f)it may order a party to the contract to pay such wages or take such other action that, in the opinion of the Committee, he or she is required to take under the contract or under this Part;
(g)it may excuse a party to the contract from performing one or more of his or her obligations under the contract;
(h)it may order that, for the purpose of computing the period of training that has been served by a trainee, a specified period or periods be excluded;
(i)it may order an employer not to employ any trainees in addition to those named in the order without the approval of the Committee;
(k)it may make any consequential orders that the Committee thinks necessary or expedient.” (emphasis added)
In my earlier reasons, I drew attention to the fact that the power of DRC to order a party to make a payment, apart from the reference to payment of wages in s 40(3)(c) in the event of revocation of a suspension, which is not relevant for present purposes, is limited by the words in s 40(3)(f) “to pay such wages etc”.
I went on to point out that it was arguable that the word “wages” could not support an order for payment of an amount by way of compensation for a failure to provide accommodation or meals.
The issue arose as the terms of the employment contract were defined by a letter of engagement dated 7 December 1999, which I refer to in the earlier reasons, and which specified what was described as a “joint commencing annual salary” of $35,000 “on a live-in basis, including all duty meals”.[1]
[1] Quality Lodges International Pty Ltd v Bibby and Kelm Judgment No [2002] SASC 116, para [20].
As I had not heard argument from counsel on the construction to be placed on the word “wages” in s 40(3)(f), on delivery of my earlier reasons, I refrained from making an order disposing of the application at that stage. Instead, I adjourned the matter over to enable written submissions to be made on the point.
Both counsel agreed that it was unnecessary for me to hear further oral submissions on the matter, and that written submissions would suffice, on the footing that I would then publish further reasons and make a final order.
Counsel on both sides have put forward written submissions dealing with this aspect of the matter, in the course of which they cited various authorities.
A number of the authorities deal with the meaning to be attributed to the word “wages” in various statutory contexts. A good deal of caution must be exercised in placing any reliance upon observations made in cases of that kind, as frequently they relate to specific definitions set out in the statutes in question. Even if that is not so, different statutory contexts may nonetheless operate to colour the meaning to be attributed to the word.
While accepting, for the reasons which I have given, the need for caution, I have nonetheless been considerably assisted by two decisions of Wilcox CJ, sitting in the Industrial Relations Court of Australia.
In May v Lilyvale Hotel Pty Ltd,[2] Wilcox CJ had occasion to address the question of the amount of compensation to be paid to an employee whose employment had been terminated unlawfully within the meaning of the Industrial Relations Act 1988 (Cth). Section 170EE(3) of the Act provided that in determining the amount of compensation to be paid to an employee whose employment had been unlawfully terminated:[3]
“... the Court is to have regard to the remuneration that the employee would have received, or would have been likely to have received, if the employer had not terminated the employment ....” (emphasis added)
[2] (1995) 68 IR 112.
[3] Ibid 115.
In the course of his decision in that case, Wilcox CJ observed:[4]
“Plainly, the word ‘remuneration’ was chosen, for s 170EE(3), in order to denote a concept other than wages. Non-monetary benefits are not wages: see Ardino v Count Financial Group Pty Ltd.[5] But they fall within the concept of remuneration.”
[4] Ibid 116-117.
[5] (1994) 1 IRCR 221 at 228-229; 57 IR 89 at 94-95; (1994) 126 ALR 49.
In Ardino v Count Financial Group Pty Ltd, Wilcox CJ had regard to other provisions in the Industrial Relations Act 1988 which concerned the meaning to be attributed to the words “relevant wages”. The expression was defined in s 170CD(4) of the Act to mean “... the total amount of the wages that the employee received, or was entitled to receive, from the employer in respect of” certain stated periods of employment. In the course of his judgment in that case, Wilcox CJ said:[6]
“I agree with counsel that the definition of ‘relevant wages’ is concerned only with payments that are wages, strictly so-called. I do not think it includes payments made by an employer on behalf of an employee pursuant to a binding antecedent obligation, whether statutory or contractual. ........
In relation to non-pecuniary benefits, I cannot see how they can ever be regarded as ‘wages’ for the purpose of the definition. The word ‘wages’ is not defined by the Industrial Relations Act, so in s 170CD it bears it ordinary meaning. The Shorter Oxford English Dictionary defines ‘wage’ as:
A payment to a person for service rendered; now esp the amount paid periodically for the labour or service of a workman or servant. Freq pl.
The Macquarie Dictionary gives the primary meaning of ‘wage’, noting that it is often plural, as ‘that which is paid for work or services, as by the day or week; hire; pay’. I think these definitions’ emphasis on payment makes it difficult to argue that benefits that do not take the form of money payments are ‘wages’.”
[6] Ibid 54-55.
Other authorities which confirm a similar approach to the definition of the word “wages” are Terry Shields Pty Ltd v Chief Commissioner of Payroll Tax[7] and Hargraves v National Safety Council of Australia Ltd.[8]
[7] (1989) 98 ALR 559.
[8] (1997) 77 FCR 272.
In Rofin Aust Pty Ltd v Newton,[9] the full bench of the Australian Industrial Relations Commission (Williams SDP, Acton DP and Eames C) observed:[10]
“Prior to the amendments made to the Act by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) (the WROLA Act), the ‘salary cap’ for the purposes of excluding non-award employees from the operation of the termination of employment provisions was expressed in terms of ‘relevant wages’. The term now used is ‘remuneration’, a term which denotes a broader concept than salary or wages. ‘Remuneration’, in our view, is properly defined as the reward payable by an employer to an employee for the work done by that employee in the course of his or her employment with that employer. It is a term that is confined neither to cash payments nor, necessarily, to payments actually made to the employee. It would include non-pecuniary benefits and payments made on behalf of and at the direction of the employee to another person out of moneys otherwise due to that employee as salary or wages.”
[9] (1997) 78 IR 78.
[10] Ibid 80-81.
In his submission, Mr Armour of counsel for Bibby and Kelm referred to two cases under the Workers Rehabilitation and Compensation Act 1986 (SA). He submitted that the cases were examples of the fact that “the term ‘wages’ has been defined to mean something much wider than just salary”.
In the first of them, Cleggett v Coca Cola Amatil,[11] Gilchrist DP observed:[12]
“The Act, like its predecessors, provides for the payment of weekly payments to compensate disabled workers for the duration of their incapacity. The amount of that payment is reckoned by reference to the worker’s average weekly earnings. But, the problem is, not all earnings take the form of a monetary payment. Remuneration can take a variety of forms. These may include, access to cheap loans, payment of school fees, hospital insurance, medical benefits, entertainment allowances, accommodation and the provision of a company vehicle for private use. If the provision of such a benefit is in substitution for wages that would otherwise be payable, it forms part of the earnings of the worker and therefore ought to feature in the assessment of weekly payments. That, is a well established principle of worker’s compensation.”
[11] (1995) A 156/1995.
[12] Ibid 4-5.
However, under the Workers Rehabilitation and Compensation Act 1986, consideration of which provides the context for those observations, the relevant payments to disabled workers are described as “income maintenance”, which falls to be calculated by reference to “weekly earnings” or “notional weekly earnings”.[13]
[13] See s 35, and the definition of “notional weekly earnings” in s 3(1).
In the passage which I have just cited, Gilchrist DP refers to “average weekly earnings” as well as to “remuneration”. While he also refers to “wages that would otherwise be payable”, it is clear that his observations do not relate to “wages” strictly so-called. The relevant word in the Act there in question is “earnings”.
The same comment may be made about the other case under the Workers Rehabilitation and Compensation Act 1986 to which Mr Armour made reference. This was Phillis v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (O’Brien Glass Industries Ltd).[14] In that case, the Full Bench of the Workers Compensation Tribunal[15] dealt with a dispute concerning the calculation of the worker’s “average weekly earnings”. In the course of their judgment they said:[16]
“... the focus of the enquiry has to be to identify whether the allowance [a ‘pager’ allowance paid in consideration of the employee being on call] is paid in exchange for the sale of the worker’s skill and labour. If it is, then subject to s 4(8)(b) such amount is to be included in the assessment of the worker’s average weekly earnings.
[14]    [1999] SAWCT 64 (22 June 1999).
[15]    President Judge Jennings, Deputy President Judge Cawthorne and Deputy President Acting Judge Gilchrist.
[16]    Ibid at page 8.
In Cleggett v Coca Cola Amatil (supra), Gilchrist DP referred to the judgment of Cozens-Hardy LJ in Great Northern Railway Co v Dawson,[17] where the latter said:
“It must, I think, upon the authorities, be taken to be a fallacy that the wages in money are necessarily to be the measure of the worker’s earnings for the purposes of the Act. It cannot be doubted, for instance, that, if a workman is, in addition to his wages in money, allowed to occupy a house belonging to his employer, the value of that occupation must generally be considered as part of his earnings, because the necessary inference would be that, but for this privilege, the amount of his wages in money would be higher.”
[17] [1905] 1 KB 331 at 334-335.
As to that dictum, I make the same comment; Cozens-Hardy LJ was referring to quantification of the worker’s “earnings” and not to “wages” as such.
After considering the authorities referred to by counsel and to their submissions, I have reached the conclusion that the clear weight of authority is in favour of the view that ordinarily the meaning of the word “wages” does not extend to include non-pecuniary benefits.
The only remaining questions are whether or not there is anything in the Act which should lead to the conclusion that another meaning is intended, and if not, whether there are any other provisions of the Act pursuant to which an order could be made for the payment of monetary compensation for loss of the benefit of the provision of accommodation or meals.
As to the first point, the Act does not define “wages”. Furthermore, the word “wages” in s 40(3)(f) is not used in conjunction with any other words or phrases which might suggest a more expanded meaning.
In all the circumstances, there is no reason why it should not be given its ordinary and natural meaning.
As for the second point, I do not think that the words “or take such other action” in s 40(3)(f) are apt to identify a power to order payment of the kind in question. Indeed, I doubt that those words are apt to identify a power to order any payment. But even if they were to be so construed, if it was intended to confer a power of the kind suggested by Mr Armour, one would expect to see it expressed by use of a word other than “wages”, or by using other words in conjunction with it, such as “wages or other remuneration or benefit” or the like.
Mr Armour drew attention to s 40(3)(k), pursuant to which the committee may make “any consequential orders” that the committee “thinks necessary or expedient”.
I do not think that the ambit of the power conferred by those words would extend to a matter of substance, which would have the effect of conferring a further unspecified power, as opposed to an order facilitating the exercise of one or more of the specific powers conferred in the preceding subparagraphs.
Mr Armour put a further argument, based on the terms of the Motel (South Australia) Award. Assuming that award to be applicable to the employment of Bibby and Kelm, as to which he did not refer to any evidence, he submitted that, excluding any allowance for food and accommodation, the weekly rate of earnings of his clients at a joint salary of $35,000 would be less than the lowest category in the award. He went on to submit:
“... it would be unconscionable and contrary to public policy to interpret the Act to provide a wage to the employees significantly less than provided by the lowest grade of the award.”
With respect to him, the argument is untenable. The meaning of the word “wages” in the Act cannot be governed or affected by the terms of an industrial award. If it should be the case that his clients were not paid in accordance with the award, as to which there is no evidence, that might have other consequences. But all that the DRC can properly have regard to for present purposes are the wages payable under the contract of training.
Accordingly, I hold that the DRC does not have power to order Quality Lodges to make a payment to Bibby and Kelm, other than a payment for such wages as might be payable “under the contract” for such period as the committee might think fit.
I formally order that in the case of both Bibby and Kelm, the orders for cancellation of the contracts and payment of wages be quashed, and that the matter be referred back to the DRC further to consider the effective date of cancellation and the calculation of the monetary payment to be made by way of wages in accordance with these reasons and the reasons published on 12 April 2002.

[2002] SASC 147

2 May 2002