Rothmans Distribution Services Ltd v Full Court of the Industrial Court of New South Wales

Rothmans Distribution Services Ltd (Rothmans) appealed to the Court of Appeal of New South Wales against a decision of the Full Court of the Industrial Court of New South Wales. The dispute concerned the interpretation of a clause within a registered industrial award, specifically clause 10(a) of the Milk Carters (State) Award, which dealt with the payment of a disability allowance. Rothmans had sought to deduct this allowance from the wages of employees who were absent from work due to illness, a practice that was challenged by the employees.

The central legal issue before the Court of Appeal was whether the disability allowance, as stipulated in clause 10(a) of the Milk Carters (State) Award, was payable to employees during periods of absence from work due to sickness. This required the court to determine the nature of the allowance and whether it was intended to be a payment for work performed or a payment that accrued irrespective of attendance at work.

The Court of Appeal, in its reasoning, focused on the wording of clause 10(a) and the established principles of award interpretation. It held that the allowance was not a payment for work done, but rather a component of the employee's ordinary remuneration that accrued during the employment relationship. The court applied the principle that unless an award clearly provides otherwise, payments that are part of an employee's ordinary wage are generally payable during periods of authorised absence, such as sickness. Consequently, the court found that Rothmans was not entitled to deduct the disability allowance from the wages of employees absent due to illness.