Tasmanian Steamers Pty Ltd v Lang

Tasmanian Steamers Pty Ltd was charged with breaching a federal award by failing to pay Vincent Lang the full minimum rate of cash wage prescribed. Lang alleged that the company had deducted an amount for State wages tax, resulting in him receiving less than the award minimum. The company argued that the deduction was lawful under New South Wales legislation.

The High Court was required to determine whether the provisions of the New South Wales Special Income and Wages Tax (Management) Act 1936, which authorised employers to deduct tax from employee wages, were inconsistent with the federal award made under the Commonwealth Conciliation and Arbitration Act 1904-1934. Specifically, the court had to consider if the deduction of tax by the employer, before paying the employee, amounted to a breach of the award's requirement to pay the minimum rate of cash wage.

A majority of the High Court, comprising Latham C.J., Rich, Starke, and McTiernan JJ., held that the New South Wales legislation was not inconsistent with the federal award. The Court reasoned that the federal award prescribed a minimum rate of cash wage, but did not prevent the application of State taxation laws to those wages. The deduction of tax was seen as a mechanism for collecting a State tax, and not as an interference with the industrial relations or the substance of the award itself. The Court emphasised that the award did not create an obligation to pay wages free from all deductions, and that State laws could operate on wages determined by federal awards, provided there was no direct inconsistency.

The Court found that the employer had discharged its obligation under the award by paying the balance of the wages after the lawful deduction of the State tax. Therefore, the magistrate's determination that the company had breached the award was held to be erroneous in point of law. The appeal was allowed, and the conviction was set aside.