Sun Alliance Insurance Ltd v Scott
[1991] TASSC 93
•18 October 1991
86/1991
List "A"
COURT: SUPREME COURT OF TASMANIA
CITATION: Sun Alliance Insurance Ltd v Scott [1991] TASSC 93; A86/1991
PARTIES: SUN ALLIANCE INSURANCE LTD
CUTHBERTSON BROS PTY LTD
v
SCOTT, Nigel Lionel
FILE NO/S: LCA 84/1991
DELIVERED ON: 18 October 1991
JUDGMENT OF: Zeeman J
Judgment Number: A86/1991
Number of paragraphs: 15
Serial No 86/1991
List "A"
File No LCA 84/1991
SUN ALLIANCE INSURANCE LTD & CUTHBERTSON BROS PTY LTD
v NIGEL LIONEL SCOTT
REASONS FOR JUDGMENT ZEEMAN J
18 October 1991
This is an appeal from a determination of the Workers Compensation Commissioner made in July 1991 whereby he dismissed an application by the appellants that a weekly payment of workers' compensation, being made to the respondent, be reduced pursuant to the provisions of s88(2)(a) of the Workers Compensation Act 1988 ("the Act") or, alternatively, under s69(8) of the Act. It was common ground before the learned commissioner that at all relevant times, the respondent was a worker within the meaning of the Act employed by the second appellant and that the first appellant was the licensed insurer of the second appellant.
Upon the hearing of the application the learned commissioner was told that the parties agreed on a number of facts. Those agreed facts were expressed as follows:
1On or about 6 September 1989 the respondent was employed by the second appellant.
2It was agreed that the respondent would work 16 hours per week for the second appellant.
3On or about 8 September 1989 the worker alleges that he was injured in the course of his employment with the second appellant.
4On or about 8 September 1989 the respondent made a claim for workers' compensation against the second appellant.
5The first appellant is the second appellant's workers' compensation insurer.
6The first appellant has paid the worker compensation for the alleged injury at a rate calculated pursuant to the Tanning Industry Award 1987 ("the Award") applicable to a full time labourer since 8 September 1989 to date.
7At all material times, other than when being paid workers' compensation, the respondent was employed and paid pursuant to the terms of the Award.
The agreed facts were expressed rather inelegantly. It was made clear before the learned commissioner and before me that some of them were not intended to be taken literally and that the first two paragraphs in fact ought to be construed as meaning the following:
1On or about 6 September 1989, the second appellant engaged the respondent as a labourer.
2At the time that the respondent was so engaged it was agreed between him and the second appellant that he be employed for eight hours on each of the Wednesday and Friday of each week.
The way in which the case was conducted before the learned commissioner was that it was common ground that the appellants had been paying to the respondent weekly compensation at a rate equivalent to the wage which would have been payable to the respondent had he been a labourer in the full time employ of the second appellant but that the appellants asserted that the obligation was to pay the respondent at the rate equivalent to the wages payable to a labourer who worked for sixteen hours each week. I should say at once that the provisions of s69(8) and (9) of the Act can have no application to this matter. Assuming that those provisions could be relevant in circumstances such as the present (as to which I express no view) the jurisdiction conferred by those subsections is incapable of being exercised unless there is evidence of the then current weekly earnings of workers of the same grade or classification as the respondent. There was no such evidence before the learned commissioner.
I will assume that a reference under s88(1) is the proper mechanism to deal with the case of an employer who asserts that from the outset he has paid weekly compensation at a rate in excess of that to which a worker is entitled. The present review was sought for the purpose of reducing the payment to an amount which, on the appellants' case, was the amount in which the payment should have been made from the outset. In the light of the conclusions which I have reached, I do not need to consider whether s88(1) is available for this purpose.
I should say at once that the learned commissioner's finding that the respondent was not specifically employed to work a sixteen hour week as a term of his contract of employment was not open to him, even if there was some suggestion in the evidence to that effect. The effect of the agreed facts was that the parties were agreed that the respondent's contract of employment provided that he would work for eight hours on each of two days in each week. Regardless of what may have been suggested in evidence, the parties having put agreed facts before the learned commissioner, it was not open to him to find as a fact something which was at variance with those agreed facts. The ground of appeal which relies on this error is made out but I do not consider that anything turns on it.
Section 69(1)(a)(ii) is determinative of the respondent's weekly rate of compensation, as there is no suggestion that an amount calculated by reference to s69(1)(a)(i) would be greater. The critical question in this appeal is what is the meaning of the expression "the ordinary time rate of pay of the worker (as expressed by reference to a week) for the work in which he was engaged immediately before the period of incapacity", in relation to a worker, such as the present respondent, who is employed as a part time worker. The meaning of this expression has been the subject of a number of recent judgments, albeit in somewhat different contexts.
In Johns Perry Hayward Pty Ltd v Greaves (No 2) No 13/1991 ([1991] Tas R 20), Wright J was concerned with the case of a worker who worked on a casual basis without any predetermined hours or days during or upon which he worked and whose employment was not governed by any industrial award or agreement. His Honour said at pp5, 6:
"It is plain that there may be difficulties in determining an 'ordinary time rate of pay' for a worker who is employed as Mr. Greaves was in the present case. There was no industrial award by which his remuneration was fixed and he was free (within limits) to work as many hours per week as he chose at the one rate of $20 per hour. One might also contemplate difficulty in assessing an appropriate amount in respect of the travelling time component to be included when using this alternative formula. One may ask, 'if the worker had not worked at all during the 12 month period immediately before the day on which his compensable accident occurred, how would his entitlement have been calculated under s69(1)(a)(ii)?' Assume he was injured two hours after commencing employment. How would one 'express' his ordinary time rate of pay 'by reference to a week'?
It is not possible to say a week for such purposes is necessarily one of 35, 38 or 40 hours as he was free to work as many hours as he wished but it seems to me that such apparent difficulties would be overcome by applying the views of Cozens–Hardy MR in Anslaw v Cannock Chase Colliery Co Ltd (1909) 2 BWCC 361 at p363 where he suggested that in such circumstances a week should be taken as being an aggregate of time, whether days or hours, amounting to a week reckoned at the working time constituting the normal week for the particular employment in question. This same concept underlies the calculation of average weekly earnings provided for in s70(2)(b) and is not inconsistent with the approach to be perceived in s69(3). It is perhaps surprising that specific statutory provision has not been made for calculating 'ordinary time' rates of pay where the injured employee has been at work less than a week but I think that Cozens–Hardy MR's approach is plainly correct."
Those observations were obiter because his Honour was dealing with an appeal against a determination on the part of the workers' compensation commissioner as to what was the relevant rate of weekly compensation calculated in accordance with s69(1)(a)(i) and it was not suggested that s69(1)(a)(ii) was relevant.
I had occasion to consider s69(1)(a)(ii) in White v FAI General Insurance Co Ltd & Anor, No 29/1991. In that case the worker was one who, at least on one view of the evidence, had been employed to work a week consisting of a number of hours greater than that which might conventionally be considered to be a normal working week, i.e. in the range of 35 or 40 hours. The evidence before the learned commissioner in that case was silent as to the precise terms of the appellant's employment and I made no final determination as to the basis upon which that appellant was to be paid, instead ordering that the matter be remitted for rehearing by another commissioner. Primarily I was concerned with the meaning to be attributed to the words "ordinary time rate of pay". I expressed my conclusions as follows (at p13):
"I conclude that the meaning to be expressed to the expression 'the ordinary time rate of pay of the worker (as expressed by reference to a week)' is to be determined by reference to a week constituting the basic hours fixed by the terms of the employment to the extent that they are not to be remunerated at penalty rates. If in the present case the appellant had agreed to work for 56 hours per week at a rate of $1,000.00 per week, assuming that the Chief Industrial Officer's calculations correctly demonstrate that that would not offend the provisions of any relevant award, then the sum of $1,000.00 would be the ordinary time rate of pay expressed by reference to a week. If, on the other hand, the appellant contracted to work for 56 hours per week, leaving this entitlement to remuneration to be determined by reference to the relevant award, then, assuming that the award provided that all hours in excess of 38 in any one week were to be remunerated at penalty rates, the ordinary time rate of pay by reference to a week ought to be taken as the basic hourly rate of pay multiplied by 38."
Nothing I said in that case ought to be construed as suggesting that where a worker is a part time employee, the week referred to in the section is to be equated with the number of hours in a week for which the worker is engaged to work. Particular difficulties arise in attempting to apply the provisions of s69(1)(a) to casual workers of the type considered in Johns Perry Hayward Pty Ltd v Greaves (No 2) (supra). Those difficulties do not arise in a case such as the present.
In the terms of s69(1)(a)(ii), the rate of pay is that which is "for the work in which the worker was engaged immediately before the period of incapacity". The first step must therefore be to identify that work. That work was that of a labourer in an industry governed by the provisions of the Award. The expression "ordinary time rate of pay" clearly adopts a form of terminology which for many years commonly has been found in industrial awards. The expression is used in contradistinction to rates not described as ordinary time rates, being rates which reflect some form of loading by reason of factors such as the fact that the hours worked are in excess of basic hours, or are hours worked at times other than usual times. In industrial awards such rates have commonly been referred to as penalty rates. For many years it has been common for industrial awards to fix a basic number of hours for the working week (in recent times commonly between 35 and 40 hours per week) and to provide that that basic number of hours is to be remunerated at a certain minimum rate. At the same time such awards have provided that if a worker is required to work for hours in excess of the basic hours then the additional hours are to be remunerated at an hourly rate greater than that applying to the basic hours. The statutory provision is to be construed upon the basis that when it uses expressions commonly and notoriously found in industrial awards and industrial agreements then those expressions are to be given the meanings which they have acquired in such awards and agreements by reason of long usage.
What is ordinary time is to be determined by reference to the express terms of the contract of employment (at least to the extent that such terms are lawful as not being in breach of any relevant industrial award or industrial agreement) but only if that contract provides for what can be described as a week's work and for that week's work to be remunerated at a basic rate of pay whether by reference to an hourly, weekly or other periodic rate. Where the contract of employment does not provide for this in express terms (and it rarely will) or where the provision it makes does not deal with what can be described as a week's work, then recourse must be had to the provisions of any relevant industrial award or agreement. A contract of employment whereby a worker is employed for eight hours on each of two days in each week leaving it to the relevant award to determine the relevant remuneration, does not in express terms provide for an ordinary time rate of pay expressed by reference to a week. The actual amount paid or required to be paid to a worker for the work he performs during the course of a week cannot be determinative of the relevant rate of compensation unless it can be said that the work done during that week amounts to a week's work. Two days' work during the course of a week does not amount to a week's work. In White v FAI General Insurance Co Ltd & Anor (supra) there was no question but that the worker was engaged to do a full week's work. The dictum of Cozens–Hardy MR in Anslaw v Cannock Chase Colliery Co Ltd [1909] 1 KB 352, referred to by Wright J in Johns Perry Hayward Pty Ltd v Greaves (No 2) (supra), might be thought to support the proposition that the respondent's "week" for the purposes of s69(1)(a)(ii) is a period of 16 hours. However that case is distinguishable because it was concerned with determining the "average weekly earnings" of a worker, so that the actual earnings of the worker in each of a number of weeks was relevant.
The ordinary time rate of pay of the respondent (as expressed by reference to a week) for the work in which he was engaged is to be determined by an objective consideration of the provisions of the Award. It provides that the basic working week of a labourer consists of 38 hours and that that working week is to be remunerated at a particular rate. The parties are agreed that the weekly compensation being paid to the respondent is equal to that weekly award rate. That rate is the relevant rate for the purposes of s69(1)(a)(ii). It matters not whether the respondent was required to or was accustomed to work ten hours or sixty hours in each week. His ordinary time rate of pay expressed by reference to a week remains the same. It is the basic weekly rate provided for by the Award. The rate is not determined by reference to the hours normally worked by the respondent but by reference to the rate payable for a week's work whether or not what the respondent was required to do could be said to be a week's work. In all cases where a worker is remunerated pursuant to the provisions of an award which provides for a basic working week to be remunerated at a particular rate, that rate will be the rate for the purposes of s69(1)(a)(ii) of the Act. The relevant ordinary time rate of pay is one expressed by reference to a week in the objective sense and not by reference to the hours normally worked by the particular worker during the course of a week. The appellants relied on Kezich v Leighton Contractors Pty Ltd (1974) 131 CLR 362, but that case does not assist them as it turns on the construction of a quite different statutory provision.
The reasons which I have so far expressed deal with all grounds of appeal other than the final ground which complains of a failure on the part of the learned commissioner "to apply the principle that a worker should not receive, during a period of incapacity, weekly payments greater than the payment the worker would have received if he had worked in his employment during the relevant period." There is no such general principle. It is a principle limited by s69(10) of the Act to references under s69(8). I have already concluded that there was no evidence before the learned commissioner upon the basis of which he could have determined a reference under s69(8) in favour of the appellants.
No basis existed for the learned commissioner to interfere with the rate of weekly compensation being paid to the respondent. Notwithstanding that he made an error in finding a fact contrary to the agreed statement of facts, the conclusion reached by the learned commissioner was correct. The appeal will be dismissed.
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