Rizzi v Grazcos Co-Operative Ltd

[1981] HCA 37

HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Murphy, Aickin and Wilson JJ.

RIZZI v. GRAZCOS CO-OPERATIVE LTD

(1981) 153 CLR 669

28 July 1981

Workers' Compensation (N.S.W.)

Workers' Compensation (N.S.W.)—Compensation—Amount payable—Compensation based on worker's current weekly wage rate—Worker employed on piece work—Whether worker paid under an award fixing or providing for the fixing of a rate for a weekly or longer period—Workers' Compensation Act 1926 (N.S.W.), s. 9.

Decisions

July 28.
The following written judgments were delivered:-
GIBBS C.J., MASON, MURPHY AND AICKIN JJ. This is an appeal from a decision of the Supreme Court of New South Wales (Court of Appeal) allowing an appeal brought from the Workers' Compensation Commission. The appellant was employed by the respondent as a shearer. It is common ground that the appellant was employed on piece rates - i.e. he was paid at the rate fixed by cl. 14 of the Pastoral Industry Award 1965 (Cth), as amended for every 100 sheep shorn. He was not paid by the day or the week. On 7 September 1977 the appellant sustained an injury arising out of or in the course of his employment and as a result was totally incapacitated for work for a period exceeding twenty-six weeks. The appellant applied to the Workers' Compensation Commission for the determination of the liability of, and the amount of compensation payable by, the respondent, and on that application the Commission made an award by which it was ordered, inter alia, that the respondent should pay $214.20 from 9 September 1977 to 11 December 1977 and $216.95 from 12 December 1977 to 7 March 1978 on the basis of total incapacity. An appeal brought by the present respondent to the Court of Appeal was allowed, and the award was varied by substituting the figure of $144.57 for the figures $214.20 and $216.95 respectively. The present appeal is brought from that decision. (at p671)

2. The different results reached by the Workers' Compensation Commission and the Court of Appeal reflect a difference of opinion as to the effect and application of the provisions of s. 9(1) and (8) of the Workers' Compensation Act 1926 (N.S.W.) ("the Act"). Those sub-sections in their present form were inserted in the Act by the Workers' Compensation Rates (Amendment) Act 1977 (N.S.W.) whose provisions came into operation on 9 December 1977. Before that date, s. 9 of the Act provided that where incapacity for work had resulted from the injury the compensation payable by the employer should include a weekly payment during the incapacity which should not exceed 85 per cent of the worker's average weekly earnings for the previous twelve months if he had been so long employed by the employer, and if not then for any less period during which he had been in the employment. The Amendment Act of 1977 for the first time provided a different basis of compensation for the first twenty-six weeks of the incapacity from that payable during the remaining period of the incapacity. By s. 9(1)(a) of the Act it is now provided, inter alia, as follows:
"Subject to the provisions of this section and of sections 11 and 13, where total or partial incapacity for work results from the injury the compensation payable by the employer under this Act shall include:- (a) the worker's current weekly wage rate in respect of any period of incapacity which together with any other such periods (whether occurring before or after the date of assent to the Workers' Compensation (Rates) Amendment Act, 1977) of incapacity resulting from the one injury do not total more than 26 weeks, and, in respect of any subsequent period, a weekly payment in respect of the worker during the incapacity which shall not exceed 90 per centum of his average weekly earnings for the previous twelve months if he has been so long employed by the employer, but if not, then for any less period during which he has been in the employment of the same employer . . . "
The expression "the worker's current weekly wage rate" is defined by s. 9(8) which is in the following terms:

"Subject to subsections (10), (11) and (12), a reference in subsection (1) to the current weekly wage rate of a worker, being a worker who is incapacitated for work, whether totally or partially, and who, immediately before he was incapacitated - (a) was remunerated under an award fixing or providing for the fixing of a rate for a weekly or longer period - is, at any time during that incapacity, a reference to the rate of remuneration under that award at that time for 1 week in respect of the work being performed by him immediately before he was incapacitated; (b) . . . ; or (c) was remunerated otherwise than as referred to in paragraph (a) or (b) - is a reference to - (i) except as provided in subparagraph (ii), $144.57; or (ii) where another amount has been prescribed, that other amount."

Paragraph (b) of s. 9(8) deals with employees of the Crown or of a statutory body remunerated under a determination fixing or providing for the fixing of a rate for a weekly or longer period, and is not relevant to the present case. Sub-section (10) of s. 9 provides as follows:

"Subject to subsections (11) and (12), where the amount of a worker's current weekly wage rate, as determined under subsection (8), exceeds his average weekly earnings referred to in subsection (1)(a) a reference in subsection (1) to that worker's current weekly wage rate is a reference to those average weekly earnings."

Sub-sections (11) and (12) are not material. (at p672)

3. The question in the present case is whether the appellant was, as the Commission held, "remunerated under an award fixing or providing for the fixing of a rate for a weekly or longer period", so that his current weekly wage rate is to be determined by the application of par. (a) of s. 9(8), or whether, as the Court of Appeal held, the case falls within par. (c) of that sub-section. (at p672)

4. The appellant was remunerated under the Pastoral Industry Award. That award provides for the remuneration of various classes of persons employed in the pastoral industry. Clause 10 provides that before the commencement of work for which certain employees including shearers have been engaged, the employer and the employee shall sign a written agreement in the prescribed form. The terms of the agreement are not material, but they suggest that what is contemplated is an engagement commencing on a specified date and continuing until the shearing is completed. Clause 10(e) provides that the minimum rates to be paid by employers to employees under any such agreement shall be those prescribed in the award. The rates for shearers are prescribed by cl. 14 which so far as material provided as follows:

"(a) The minimum rates for shearing shall be:- If 'not found' - (i) For flock sheep (wethers, ewes and lambs), by machine - $58.71 per 100. (ii) For rams (other than special stud rams) and ram stags - double the rate for flock sheep. (iii) For stud ewes and their lambs - one and a quarter times the rate for flock sheep. (iv) For double-fleeced sheep - one and one-third times the rate prescribed appropriate to the class of sheep. (v) For hand shearing - 7 1/2% additional to the rate for each class of sheep. (vi) If a shearer is required to provide his own stud combs he shall be paid 25% additional to the rate for each class of sheep. (vii) For special studs - as agreed. If 'found' - The rates prescribed above less $27.49 per week. Engagement by the day - $43.95 per day if 'not found', $36.72 per day if 'found'."

These provisions may be contrasted with those of cll. 16 and 18, which expressly provide minimum weekly rates for shed hands and shearing cooks. Formerly, cl. 71 provided a minimum wage for all adult males employed under the award, but that provision has been repealed. Clause 20 of the Award provides inter alia as follows:

" . . . the ordinary working hours of shearers and crutchers shall be forty per week, and shall be worked in two-hour runs between the hours of 7.30 a.m. and 9.30 a.m., 10 a.m. and noon, 1 p.m. and 3 p.m., 3.30 p.m. and 5.30 p.m. on Monday to Friday inclusive or such other hours, not exceeding eight on any day from Monday to Friday inclusive, as may be agreed between the employer and a majority of the shearers or crutchers at any particular shed."

Clause 44(a) provides as follows: "At the commencement of shearing the employer or his agent shall appoint a certain day upon which he shall in each and every week, if so required, pay to the employee, or on the employee's order, the amount due over and above one week's earnings." (at p673)

5. The argument of Mr. McAlary, for the appellant, was that the Amendment Act of 1977 effected an important change in the basis of assessment of compensation, in that before the amendment the compensation was based on the actual average weekly earnings of the injured workman, whereas after the amendment the compensation in respect of the first twenty-six weeks of incapacity was based, in the case of a workman falling within s. 9(8)(a), on the rate of remuneration fixed by the award, whether the workman had been paid at that rate or not. Further, he submitted that s. 9(8)(a) does not refer only to an award which specifically fixes a weekly rate and that it includes an award which provides a means of calculating a weekly rate, and that in the present case the award, which fixes a daily rate for shearers employed by the day (cl. 14) and provides for a forty-hour week to be worked over five days (cl. 20), provides a means of calculating a weekly rate. Finally he submitted that it did not matter that in fact the appellant was not engaged by the day, because s. 9(8)(a) is concerned with the question whether the award fixes or provides for the fixing of a rate for a weekly or longer period, and not with the question whether the worker actually received that rate. (at p674)

6. Mr. Sperling, who appeared for the respondent, on the other hand submitted that cl. 20 of the award has no application to a shearer engaged by the day, and that in any case that clause does not prohibit a shearer from working more than five days a week, and that the award does not make it possible to calculate a weekly rate for such a shearer. He submitted that even if it were possible to calculate a weekly rate, it would not follow that the award either fixes or provides for the fixing of a rate, which, he said, means that the award must either specify a weekly rate, or require a weekly rate to be struck for the purpose of the award. In any case, he submitted that even if the award did fix or provide for the fixing of a weekly rate, that rate was not in respect of work being performed by the appellant who was employed on piece work and was not engaged by the day. (at p674)

7. The statement that in the assessment of compensation under s. 9(1) for the first twenty-six weeks of the incapacity the worker's actual earnings are no longer relevant is not correct; if the worker's current weekly wage rate calculated under s. 9(8) exceeds the average weekly earnings, the latter earnings are to be taken to be the worker's current weekly wage rate (s. 9(10)). However, that consideration is not crucial, because it is clear that the question whether the case of an incapacitated worker falls within par. (a) depends on the effect of the provisions of the relevant award. It may be mentioned that s. 9(8) is given an extended operation by s. 9(9), which provides that in certain circumstances where a worker is not remunerated in respect of the work performed by him under an award fixing or providing for the fixing of a rate for a weekly or longer period the worker shall be deemed to be remunerated under an award of that kind. The provisions of s. 9(9) have no direct application to the present case, but they support the view that the provisions of s. 9(8) should not be narrowly construed. (at p675)

8. In our opinion an award fixes a rate for a weekly period even if it does not name the money sum payable for a week's work. To fix a weekly rate, in the ordinary meaning of that expression, includes to prescribe a standard by the application of which the sum payable for a week's work can be calculated or ascertained definitely: cf. Fraser Henleins Pty. Ltd. v. Cody (1945) 70 CLR 100, at p 128 . For example, an award which provided for payment of a minimum daily rate, and then provided that five days should be worked each week, would fix a weekly rate, for that rate would be capable of precise calculation. An award would provide for the fixing of a weekly rate if it prescribed a means by which a weekly rate could be determined, even if the rate could not be definitely ascertained from the award itself. We are not called on to consider the validity of a provision of the latter kind if contained in a Commonwealth award. (at p675)

9. The question in the present case then comes down to this: does the Pastoral Industry Award provide a means by which a weekly rate for the remuneration of shearers can be calculated or ascertained definitely? The award prescribes a daily rate, and then provides that ordinarily shearers shall work on five days each week. In our opinion cl. 20 applies to shearers engaged by the day - its provisions are expressed to apply to shearers generally, and seem no less appropriate to shearers engaged by the day than to those engaged on piece work. It is obvious that a shearer engaged on a property of any size will normally be expected to stay for the duration of the shearing, and the agreement mentioned in the award supports this view; engagement by the day refers to the basis of payment rather than to the term of the engagement. The provisions of cl. 44(a), requiring payment of the amount due over and above one week's earnings, and the provision in cl. 14 for a weekly deduction in the case of shearers engaged on piece work on a "found" basis, indicate that it was contemplated that an engagement would be likely to last for more than a week. It is true that cl. 20 does not require a shearer engaged by the day to work for five days, nor does it expressly forbid him to work for more than five days, in a week. But since it provides that ordinarily work will be done on five days in a week it is possible, by multiplying the specified daily rate by five, to ascertain with certainty the amount payable to a worker engaged by the day for an ordinary week's work. Paragraph (a) of s. 9(8) must refer to a rate for a weekly period during which ordinary hours are worked, for if it did not it would be rarely possible to find an award which fixed a weekly rate, since in most cases awards provide for the payment of overtime; s. 9(11) recognizes this and excludes overtime from consideration. In our opinion the Pastoral Industry Award does fix a rate for a weekly period within the meaning of s. 9(8)(a). (at p676)

10. Of course it is necessary, if s. 9(8) is to apply, that the weekly rate shall be "in respect of the work being performed by" the worker immediately before he was incapacitated. Thus in the present case it would not be enough that the appellant was remunerated under an award which fixes a rate for a weekly period in respect of the work being performed by shed hands or shearing cooks, because that was not the work performed by the appellant. However, this requirement is met in the present case, because the rate is fixed in respect of the work being performed by shearers. It is no answer to say that the rate is fixed only in respect of the work performed by shearers engaged by the day, and that the appellant was not so engaged, because the work performed by a shearer engaged by the day is the same as that performed by a shearer engaged on piece work - only the basis of remuneration is different. (at p676)

11. The short question in the case is one on which different minds might well reach different conclusions, but in our opinion the case falls within par. (a) rather than par. (c) of s. 9(8). It was not suggested in argument that s. 9(10) applies, and the evidence shows that the appellant's average weekly earnings in fact exceeded the current weekly wage rate calculated under par. (a). (at p676)

12. For these reasons we would allow the appeal and restore the order of the Workers' Compensation Commission. (at p676)

WILSON J. The law in New South Wales relating to workers' compensation (Workers' Compensation Act 1926, as amended) was further amended in 1977 to provide that, for the first twenty-six weeks of incapacity, the worker should receive weekly payments measured not as formerly had been the case by reference to his average weekly earnings but by the "current weekly wage rate". The meaning of this concept was elucidated by new provisions which were inserted into s. 9 of the principal Act. It is sufficient for the purposes of this case to set out part of s. 9(8), as follows:
" . . . a reference in subsection (1) to the current weekly wage rate of a worker, being a worker who is incapacitated for work, whether totally or partially, and who, immediately before he was incapacitated -
(a) was remunerated under an award fixing or providing for the fixing of a rate for a weekly or longer period - is, at any time during that incapacity, a reference to the rate of remuneration under that award at that time for 1 week in respect of the work being performed by him immediately before he was incapacitated; (b) . . . ; or (c) was remunerated otherwise than as referred to in paragraph (a) or (b) - is a reference to -

(i) except as provided in subparagraph (ii), $144.57; or

(ii) where another amount has been prescribed, that other amount." (at p677)

2. It appears that the purpose of this change to the law is to compensate during the first six months of incapacity all workers engaged in the same type of work under an award with a weekly payment of the same amount. This amount is to be the "current weekly wage rate" fixed or provided to be fixed by the award. Under the previous system, the amount of the weekly payment would vary from worker to worker by reference to actual earnings and allowances in respect of dependants. (at p677)

3. The appellant was engaged as a shearer by the respondent. In September 1977 he suffered compensable injury as a result of which he was totally incapacitated for a period extending beyond twenty-six weeks. A question has arisen as to whether he is entitled to receive the "current weekly wage rate" referred to in par. (a) of s. 9(8), or that prescribed in par. (c)(i). It is common ground that the latter will be the appropriate figure unless the appellant "was remunerated under an award fixing or providing for the fixing of a rate for a weekly or longer period". (at p677)

4. The appellant claims that s. 9(8) is the provision which applies to him. At first instance, the Workers' Compensation Commission (Judge McGrath) upheld the claim. The respondent appealed to the Court of Appeal of the Supreme Court of New South Wales (Reynolds, Hutley and Samuels JJ.A.). Their Honours unanimously allowed the appeal. The matter now comes to this Court by special leave. (at p677)

5. At the time of his accident the appellant was working under the Pastoral Industry Award. The award recognizes several different classifications of workers other than station hands, including shearers/crutchers, shed hands, woolpressers and cooks. Clause 10 obliges both the employer and employee, before the commencement of work for which the employee has been engaged, to sign a written agreement. The schedule to the award sets out the form of Agreement appropriate to each classification of workers. Clause 10(e) provides that the minimum rates of remuneration to be paid by employers to employees shall be those prescribed in the award. Clause 14 prescribes the minimum rates for shearing. A base rate is struck per 100 flock sheep (wethers, ewes and lambs), by machine, with addition of varying percentages to cater for rams, stud ewes and their lambs, double-fleeced sheep, and hand shearing. In addition to this method of payment by piece work, the clause prescribes a figure "per day" under the heading "Engagement by the day". Clause 15 exhibits a similar remuneration structure for crutching. On the other hand, minimum rates per week are provided for shed hands, woolpressers, and cooks (cll. 16, 17 and 18). Clause 20 deals in Section A with the hours of work of shearers and crutchers. It is convenient to set out portion of the clause, as follows:

"(a) . . . the ordinary working hours of shearers and crutchers shall be forty per week, and shall be worked in two-hour runs between the hours of 7.30 a.m. and 9.30 a.m., 10 a.m. and noon, 1 p.m. and 3 p.m., 3.30 p.m. and 5.30 p.m. on Monday to Friday inclusive or such other hours, not exceeding eight on any day from Monday to Friday inclusive, as may be agreed between the employer and a majority of the shearers or crutchers at any particular shed." (at p678)

6. In the course of the argument, a number of difficulties arising in the construction of s. 9(8) were canvassed by counsel. Mr. Sperling, for the respondent, argued that because immediately before he was incapacitated the appellant was engaged in shearing on a piece work basis of remuneration, it was immaterial whether or not it could be said that other shearers were remunerated on a basis which might by a process of calculation yield a weekly wage rate. On the other hand, Mr. McAlary, for the appellant, submitted that the method of remunerating the particular worker was irrelevant. The purpose of the amendment in 1977 was to disregard for the first six months of incapacity the particular earnings of the worker, and to equalize the amount of the weekly payment for all workers engaged in the same work under an award by adopting the criterion of the current weekly wage rate. That rate was to be found in the award, not in the circumstances of the worker. I would resolve this issue in favour of the appellant. In this respect, it seems to me that the opening words of par. (a) are quite unambiguous. They require that the worker be remunerated under an award which fixes or provides for the fixing of a rate for a weekly or longer period in respect of the work performed by him. So long as the worker is remunerated under an award which contains such a provision, the provision itself need not be shown to apply to him. In other words, he may be remunerated on the basis of piece work, but so long as the award permits other persons employed on the same work to be remunerated on the basis of a rate for a weekly or longer period, then the terms of the paragraph are satisfied. (at p679)

7. Attention was also directed to the distinction, if any, between "the fixing of a rate" and "providing for the fixing of a rate". In Fraser Henleins Pty. Ltd. v. Cody (1945) 70 CLR 100, at p 128 , Dixon J. discussed the meaning of "fix" in relation to a price-fixing law. He said:

"It may be conceded, and, indeed, it appears to have been decided, that a bare power to 'fix' a price cannot be validly exercised without naming a money sum, or prescribing a certain standard by the application of which it can be calculated or ascertained definitely."

Cf. also, Ex parte McMillan; In re Craig (1944) 45 SR (NSW) 229 . The attention of the Court was drawn to these cases, but apart from the requirement of certainty as an attribute of the process of "fixing", I am unable to derive any assistance from them. (at p679)

8. As at present advised, I incline to the view that, in the context of s. 9(8) of the Act, an award fixes a rate for a weekly or longer period when it expressly declares a figure to be such a rate. If by a process of calculation based on materials which are found in the award it is not only possible but necessary for the purposes of the award to arrive at a rate for a weekly or longer period, then I would think it appropriate to describe the award as "providing for the fixing of" such a rate. For such a description to be apt, the award must contemplate the fixation of the resultant figure as a wage rate. It may also be appropriate to describe an award as providing for the fixing of a rate for a weekly or longer period when it is geared to take account of a decision of a particular kind which is to be made by some named person or body, such as the Conciliation and Arbitration Commission when resolving a national wage case, or some other industrial authority. (at p679)

9. However, in the light of the decision to which I have come on the central issue, it is not necessary for me to express a concluded view on this aspect of the case. (at p679)

10. The real difficulty confronting the appellant is to establish that the Pastoral Industry Award is an award which fixes or provides for the fixing of a rate for a weekly or longer period as a means of remunerating a shearer. As I have said, it is not to the point that this appellant was not remunerated in such a way, so long as the award contemplates that some shearers may be so remunerated. It is clear that the award does not expressly contemplate a rate for a weekly or longer period for shearers. Apart from payment by piece work, it contemplates only engagement by the day. Mr. McAlary seizes on that provision and seeks to link it with cl. 20, which prescribes the ordinary working hours for a shearer at eight hours per day for five days per week, Monday to Friday. But it seems to me that cl. 20 can only apply to shearers who are engaged at piece work rates, because they are the only shearers whose engagement is otherwise than from day to day. "Engagement by the day" is a term which clearly signifies a contract of employment which is limited to that day. If the employment continues on the same basis on the following day then there must be an entirely fresh engagement covering that day, and only that day. There is no suggestion that the term has a special meaning in the pastoral industry. On the contrary, the Court was informed by counsel that the concept of engagement by the day is reserved for those occasions when there are insufficient sheep to occupy a shearer for a full day with the result that the piece work rates fail to provide a sufficient return. There is no evidence of such a practice, and I do not think I am entitled to take judicial notice of the number of sheep which a competent shearer would deal with in an average day. I therefore confine myself to the award itself. In that regard, however, it is noteworthy that shearers and crutchers are the only workers under the award for whom there is provision for engagement by the day, with no provision for a weekly rate. In the case of shed hands, woolpressers and cooks, provision is made for weekly rates. The absence of a weekly rate for shearers must be taken to be a deliberate and appropriate response to the manner in which the industry functions. (at p680)

11. The test, then, is whether the appellant, having been engaged in the work of shearing immediately before he was incapacitated, was remunerated under an award fixing or providing for the fixing of a rate for a weekly or longer period. He was remunerated under an award which fixed rates both for piece work and for engagement by the day. The award does not contemplate the remuneration of a shearer by reference to a rate for a weekly or longer period. To postulate that there may be a succession of engagements by the day over a period of a five-day week, by reason of which the daily rate could be multiplied five times would not in my opinion enable it to be said that the award fixes or provides for the fixing of a rate for a weekly period. (at p680)

12. I therefore come to the conclusion, with respect, that the Court of Appeal was correct. I would dismiss the appeal. (at p680)

Orders

Appeal allowed with costs.

Order of the Supreme Court of New South Wales (Court of Appeal) set aside and in lieu thereof order that the appeal to that court be dismissed with costs.