Robin Michael Ashford v the Corporation (Halliburton) Geophysical Services Inc No. SCGRG 93/104 Judgment No. 4837 Number of Pages 7 Workers' Compensation

[1994] SASC 4837

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA BOLLEN(2) PRIOR(3) AND DUGGAN(1) JJ

CWDS
Workers' compensation - assessment and amount of compensation - weekly earnings - Appeal by Workers Rehabilitation and Compensation Corporation - injured worker employed as a member of a seismic exploration crew on a roster basis to perform shift work - on most shifts the worker was required to work longer than eight hours - whether any component of overtime should be included in worker's entitlement to compensation - worker argued that he was required to work extended hours by way of normal hours of work. Consideration of Workers Rehabilitation and Compensation Act, 1986ss4, 36. Meaning of 'overtime" discussed and extent to which award provisions relating to overtime are to be taken into account in a particular case considered. Kesich v Leighton Contractors Pty Ltd (1974) 131 CLR 362 referred to. Workers Rehabilitation and Compensation Corporation v Harle (1994) 61 SASR 507 followed.

HRNG ADELAIDE, 7 November 1994 #DATE 8:12:1994

Counsel for appellant:     Mr J Rau

Solicitors for appellant: Johnston Withers

Counsel for respondent:    Mr K McCarthy QC with him Ms K Schulz

Solicitors for respondent: Phillips Fox

ORDER
Appeal dismissed.

JUDGE1 DUGGAN J The appellant suffered a work related injury whilst in the employment of the respondent. His right to income maintenance under the Workers Rehabilitation and Compensation Act, 1986 (the Act) is not challenged, but a dispute has arisen as to the amount to which he is entitled by way of weekly payments. The dispute concerns the amount of overtime which is to be included in the computation of the appellant's average weekly earnings, a calculation which is required as part of the determination of the appropriate level of income maintenance.

2. The appellant worked as a driver in a seismic exploration crew in remote parts of Australia. His roster required him to work for a period of six weeks followed by two weeks off. The number of hours worked in each shift varied, but with few exceptions the appellant worked longer than eight hours.

3. The award governing the appellant's conditions of work, the Drilling and Exploration Industry Award, 1991 stipulates that the ordinary hours of work should be 40 hours per week to be worked in daily periods of eight hours. Clause 13(a) of the award provides:
    "All time worked in excess of or outside the ordinary
    working hours prescribed by this award shall be paid for at
    the rate of time and a half ordinary rates for the first
    two hours and double the ordinary rate thereafter, such
    double time to continue until the completion of the
    overtime work."

4. The Act provides for a component of overtime in the calculation of a worker's entitlement to income maintenance. The relevant provisions are set out below. At the hearing before the Review Officer and on the appeal to the Workers Compensation Appeal Tribunal the respondent argued that any component of overtime to be included in the appellant's entitlement to compensation was to be determined by reference to the award provisions. However the appellant argued that he was required to work extended hours by way of normal hours of work. Accordingly overtime for the purposes of the Act was the time worked in excess of those extended hours.

5. A worker who suffers a compensable injury resulting in incapacity for work is entitled to weekly payments determined in accordance with the principles set out in section 35 of the Act. In order to assess the entitlement it is necessary to calculate the worker's "average weekly earnings" determined in accordance with s4. S4(8)(a) provides as follows:
    "For the purposes of determining the average weekly
    earnings of a worker -
    (a) any component of the worker's earnings attributable to
    overtime will be disregarded unless -
     (i) the worker worked overtime in accordance with a
     regular and established pattern; and
     (ii) the pattern was substantially uniform as to the
     number of hours of overtime worked; and
     (iii) the worker would have continued to work overtime in
     accordance with the established pattern if he or she had
     not been disabled."

6. Overtime is also referred to in s36(2)(bb) of the Act which states:
    "Subject to this Act, weekly payments to a worker who has
    suffered a compensable disability shall not be reduced
    unless -
    (bb) where the weekly payments include a component for
    overtime - the Corporation is satisfied that if the worker
    had continued in the work in which he or she was last
    employed before becoming incapacitated, he or she would not
    have continued to work overtime or the pattern of overtime
    would have changed so that the amount of overtime would
    have diminished."

7. After considering these provisions and the circumstances of the appellant's employment, the tribunal reached the conclusion that the amount of overtime for the purposes of the Act was to be calculated by reference to the terms of the award, thus rejecting the contrary view of the review officer. It was argued on appeal to this court that the decision of the tribunal should be set aside and that a finding should be made to the effect that the appellant's "usual hours" of employment were 70 hours per week and that the component of the appellant's earnings attributable to overtime comprised those hours which were in excess of such "usual hours".

8. The word "overtime" is not defined in the Act. Nevertheless it is necessary to determine its meaning as used in the Act and an industrial award, whatever its effect on the relationship between employer and employee, cannot dictate the meaning to be given to statutory concepts concerned with the computation of compensation. This was the view expressed by the High Court in Kezich v Leighton Contractors Pty Ltd (1974) 131 CLR 362. In that case compensation under the Workers' Compensation Act, 1912 (W.A.) provided for compensation in an amount equal to the weekly earnings of the worker. "Weekly earnings" were defined as meaning:
    "The amount of the ordinary wage or salary (including any
    over award payment) the worker would have received for the
    ordinary hours he would have worked, if he were not
    incapacitated for work as a result of the injury."

9. The appellant's employment in that case was subject to an industrial award which provided that "the ordinary working hours shall be 40 in a week to be worked in five days" but the High Court held that the appellant was entitled to receive weekly compensation calculated by applying to the number of hours he would ordinarily have worked each week the rate of pay, including overtime, that he would ordinarily have received in respect of those hours. Gibbs J said (p364):
    "The Act deals with the compensation payable to workers
    generally; it is not confined in its operation to any
    particular trade. Moreover, although most workers within
    the meaning of the Act are no doubt employed in accordance
    with the terms of an industrial award, that is not a
    condition of the employer's liability to pay compensation.
    It would not be legitimate to construe the schedule by
    placing upon the words 'ordinary hours' the meaning which
    they may happen to bear in an industrial award governing
    employment of a particular kind. The meaning of the Act
    cannot be determined by reference to the provisions of the
    Building Construction Employees and Builders' Labourers'
    Award, 1973. Indeed, even if it could be established that
    many industrial awards use the phrase 'ordinary hours' and
    that wherever it appears in any award it has the same
    meaning, that would not justify referring to a multitude of
    unrelated documents by different authors as an aid to the
    construction of a statute. What has to be determined is
    the meaning that those words have in the Act and since the
    words 'ordinary hours' are common English words they
    should, in accordance with established principles of
    statutory construction, be understood in their natural
    meaning unless the context otherwise requires."

10. However, that is not to say that conditions of employment and the manner in which they are expressed in a relevant award are completely irrelevant in determining the manner in which the Act is to operate in a particular case. In Workers Rehabilitation and Compensation Corporation v Harle (1994) 61 SASR
507 this court was required to consider the meaning to be given to the word "overtime" in the context of the claim for compensation under the Act in that case. The worker was employed on a casual basis with various employers as a boiler-maker. On one of these assignments he agreed to work from 6.00 pm to 6.00 am seven days per week until the job was completed. He suffered a compensable disability while working on the assignment.

11. The court upheld the view of the tribunal that the worker was not engaged in working any overtime. He had agreed to work an extended number of hours by way of normal hours. It was not established that any award applied to the worker's employment on the assignment but the court held that if any award conditions relating to overtime had been in existence they would not have affected the result in the circumstances of that case.

12. In his helpful judgment in which Mullighan J concurred, Perry J made the following observations concerning Kezich's case (p518):
    "While it is true that in Kezich the court was concerned
    with the meaning of the expression 'ordinary hours' and not
    with the meaning of the word 'overtime', the case must be
    accepted as authority for the proposition that in a context
    such as that in which the word 'overtime' appears in the
    Act, the meaning to be attributed to the word is not to be
    confined to the meaning which the word may have in the
    context of a relevant industrial award.
    However, I do not understand Kezich to mean that the terms
    of an award are irrelevant. In many instances, there will
    not be a formal contract of employment, and the only
    content to be given to the contract of employment will be
    drawn from the terms of the relevant industrial award. In
    such cases, and where the relevant award does define what
    is to constitute overtime, it seems to me that it would be
    wrong for the court, in giving effect to the word
    'overtime' in s 4 of the Act, to ignore any such
    definition.
    If, as I have indicated, the terms of employment are not
    defined other than by reference to a relevant award, I do
    not see it as inconsistent with the scope and purpose of
    the Act, and in particular the mechanism for the
    calculation of average weekly earnings, that regard should
    not be paid to such a definition.
    To do so is not to pursue the impermissible process of
    regarding the definition of the word 'overtime' as governed
    by the meaning attributed to it in a particular award. The
    award is used simply to give content to the contract of
    employment. That contract then becomes a matter to be
    taken into account in determining whether, for the purposes
    of the Act, the worker should be regarded as working
    overtime or not. I use the expression 'take into account'
    as it is the ordinary hours actually worked, not the
    ordinary hours provided for in a particular award or
    contract, which is important. But in many instances,
    probably most cases, there will be no difference between
    the normal hours of work provided in the contract of
    employment (which in turn may simply reflect the terms of
    the relevant award) and the normal span of hours ordinarily
    worked. Where there is a difference, it must be the actual
    span of hours ordinarily worked to which regard must be
    paid, rather than any award prescription, or the provisions
    of a contract based on the award.
    While it is true that the Act applies to workers in
    whatever trade they may be employed, it does not follow
    that the word 'overtime' will have a constant meaning in
    the sense that it will necessarily be of application to
    time spent at work in excess of a fixed number of hours.
    It seems to me that in order to give the word a meaning in
    any particular application, it is necessary first to have
    regard to the worker's normal hours of employment, which
    may vary considerably between one trade and another, and
    between one worker and another.
    For the reasons which I have given, where the relevant
    award provides that hours worked in excess of a stated
    number of hours is to be regarded as overtime, this will
    commonly be determinative of the meaning of the word
    'overtime' for the purposes of s 4 of the Act. However, it
    would not be determinative of that question if a particular
    worker, notwithstanding the terms of the award, is engaged
    upon the basis that he would normally work for a span of
    hours different from the normal hours of work contemplated
    by the award. A worker who is engaged on such terms could,
    in my opinion, successfully contend that, notwithstanding
    the terms of the award, his normal hours of work were
    defined specifically by the actual arrangement entered into
    with the employer."

13. As to the meaning of the word "overtime" as used in the Act, Perry J said (p519):
    "Absent any particular terms of the contract of employment
    which might provide otherwise, the word 'overtime' should
    be given its ordinary meaning, namely, the time spent
    working beyond a worker's normal hours of work. I use the
    word 'normal' rather than the word 'regular', which latter
    word appears in the citation to which I have referred from
    the decision of the Tribunal in Ettridge, to avoid the
    difficulty which might arise where overtime is regularly
    worked. By using the expression 'overtime', the
    legislative intent implicit in s 4 is that there be a
    distinction drawn between normal (as in the sense of
    'ordinary') hours of work and hours worked beyond those
    normal hours.
    In some cases it might well be that although the normal
    hours of work are defined either by express agreement or by
    reference to an award, there is a regular arrangement
    pursuant to which at certain times overtime is worked, that
    is, hours beyond the normal hours of work. In such
    circumstances, if there was to be a regular and established
    pattern pursuant to which the overtime was worked,
    s 4(8)(a) would be of application to bring the overtime back
    into the calculation of average weekly earnings. If there
    was not such a regular pattern, the overtime would be
    excluded.
    I accept that there may be a fine line dividing situations
    in which there is an express agreement to work an extended
    number of hours by way of normal hours of work beyond the
    normal hours worked in a particular industry, and an
    agreement that a worker regularly work overtime. But in my
    opinion, the difference is clear, although its application
    to particular factual circumstances may give rise to some
    difficulty."

14. In my view the definition of "overtime" which was held to be appropriate in Harle's case, namely, the time spent working beyond a worker's normal hours of work, is applicable also in the present case. Furthermore it is convenient to consider the facts of the present case in the light of the distinction drawn in Harle's case between "situations in which there is an express agreement to work an extended number of hours by way of normal hours of work beyond the normal hours worked in a particular industry, and an agreement that a worker regularly work overtime" (p519).

15. I come then to apply these principles to the facts of the present case. Mr Craddock, a manager employed by the respondent, was called to give evidence before the review officer. He agreed that the appellant was required to work generally at least 10 hours a day. He said that hours worked in excess of 8 hours were paid as overtime. He said he thought that the conditions of employment mentioned "something around about an average 10 hour day". No conditions of employment were tendered or referred to in their terms and there is doubt on the evidence as to whether there were any stated conditions of employment apart from the award conditions.

16. The appellant gave the following evidence:
    "Q. Were you required to work every day?
    A. Yes.
    Q. How many hours were you required to work on each of the
    days that you were on?
    A. It would be - very rare occasions I worked under 11
    hours a day."

17. A schedule prepared by the appellant of hours worked from January 1986 to February 1988 was tendered before the review officer. It gives details of the number of hours worked on each day. The schedule does not establish a pattern of "normal hours" worked. Instead it discloses considerable variation in the hours worked on particular shifts. The most commonly worked period was 11 hours. A 10 hour shift was worked on only 22 occasions and the spread of hours ranged from four hours on one occasion to 24 hours on another.

18. Apart from the terms of the award there is no evidence that the appellant was employed to work a set or "normal" number of hours on each shift and, as I have said, the history or hours worked does not support any such proposition. On the other hand the award appears to reflect the understanding of the parties and the basis upon which the appellant was employed, namely, that the ordinary hours of work consisted of a daily period of eight hours with overtime commencing at the expiration of each such period. It follows that the quantum of the weekly payments should be calculated in accordance with this reasoning.

19. For these reasons it is my view that the appeal should be dismissed.

JUDGE2 BOLLEN J I agree with Duggan J that "the definition of 'overtime' which was held to be appropriate in Harle's case (1994) 61 SASR 507, namely, the time spent working beyond a worker's normal hours of work, is applicable also in the present case". I agree, too, that there was no evidence which established a pattern of "normal hours". The only conclusion open is, in my opinion, "the ordinary hours of work consisted of a daily period of eight hours with overtime commencing at the expiration of each such period", as Duggan J has said.

2. I, therefore, agree that the appeal should be dismissed.

JUDGE3 PRIOR J I agree with the reasons published by Justice Duggan. The appeal should be dismissed.