Thompson and Comcare
[2002] AATA 733
•28 August 2002
CATCHWORDS – COMPENSATION – rate of compensation – normal weekly earnings – class of employee of which applicant member at date of injury – meaning of class – identification of class – whether that class of employee continues in existence – consequence of class of employee ceasing to exist – decision set aside – further consideration adjourned.
Safety, Rehabilitation and Compensation Act 1988 ss. 3, 5, 8, 9, 14 and 19;
Division 3 of Part II
Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001
Veterans' Entitlements Act 1986
Public Service Arbitration Act 1920 ss. 3, 4, 5 and 12
Conciliation and Arbitration Act 1904 ss. 4 and 132
Sovereign Life Assurance Co v Dodd [1892] 2 QB 573
Nordic Bank P.L.C. v. International Harvester Australia Ltd. and Anor. [1983] 2 VR 298
Hawk Insurance Company Limited [2001] EWCA Civ 241
In the matter of the Equitable Life Assurance Society and In the matter of the Companies Act 1985 [2002] EWHC 140 (Ch)
Shirley v Fisher Renwick Ltd [1943] 1 All ER 262
Re Spurr and Comcare (1999) 28 AAR 424
Bortolazzo v Comcare (1997) 75 FCR 385
DECISION AND REASONS FOR DECISION [2002] AATA 733
ADMINISTRATIVE APPEALS TRIBUNAL )
) S2002/12
GENERAL ADMINISTRATIVE DIVISION )
ReNEIL MICHAEL THOMPSON
Applicant
AndCOMCARE
Respondent
DECISION
Tribunal: Miss S A Forgie (Deputy President)
Date: 28 August, 2002
Place: Adelaide
Decision:The Tribunal:
1.sets aside the decision of the respondent dated 13 November, 2001;
2.substitutes, in part, for that decision a decision that:
(1)the class of employees of which the applicant was a member at the dates of his injuries was that class comprising carpenters employed by the Commonwealth and subject to the Public Service Arbitrator's determination at that date; and
3.adjourn further consideration.
(Sgd. SA Forgie)
S A FORGIE
Deputy President
REASONS FOR DECISION
On 15 January, 2002, the applicant, Mr Neil Michael Thompson, applied for review of a reviewable decision on the respondent, Comcare, dated 13 November, 2001. That reviewable decision affirmed an earlier determination dated 15 August, 2001 in which Comcare based Mr Thompson's normal weekly earnings on the salary of a carpenter at the GSO6 level as specified in the Certified Agreement of the Department of Finance and Administration ("DOFA"). The amount of that salary is $636.07. At the hearing, Mr Thompson was represented by Mr McRae of counsel and Comcare by Mr Cole of counsel. The facts were essentially agreed between the parties and the issue turned on the construction of s. 8(9) of the Safety, Rehabilitation and Compensation Act 1988 ("Act"). No oral evidence was led and reference was made to material to which I will refer later in these reasons.
THE ISSUE
The central issue in this case is the identification of the class of employees of which Mr Thompson was a member at the date of his injuries. That requires a consideration of the meaning of "class" in s. 8(9) of the Act and a consideration of the consequences, if any, of the Commonwealth's ceasing to employ carpenters to undertake work formerly undertaken by Mr Thompson.
BACKGROUND
As I have said, the facts were essentially agreed between the parties and I will set them out in the following paragraphs.
Mr Thompson, who was born on 17 July, 1958, commenced employment with the Commonwealth on 12 January, 1976 when he was employed as an apprentice carpenter by the then Department of Housing and Construction. He completed his apprenticeship on 11 January, 1980 and was then qualified as a carpenter in both the public and private sectors. He worked for the next four years or so and was promoted to the position of leading hand carpenter.
Mr Thompson has suffered two injuries within the meaning of the Act. The first was suffered on 30 July, 1984 during a journey to or from his employment and the second on 21 August, 1984 when he tore a muscle in his back during the course of his employment. Comcare accepted liability in respect of both injuries on 12 September, 1984 and 23 October, 1984 respectively. It has also accepted liability for numerous aggravations of those injuries. As a result of his injuries, Mr Thompson is partially incapacitated for work.
In 1990, a General Service Officer classification ("GSO") was introduced in the Commonwealth Public Service. It was intended to replace approximately 1,760 classifications in employment relating to physical work or technical assistance or requiring trade skills. GSO had ten levels from GSO1 to GSO10. It is agreed between the parties that Mr Thompson's classification was GSO6.
Mr Thompson was transferred to the Department of Administrative Services ("DAS") and, more specifically, to Asset Services, which was a Division of DAS. That department was later amalgamated with another and the resulting department was known as the Department of Finance and Administration ("DOFA"). Mr Thompson continued to be employed in Asset Services by DOFA as a leading hand carpenter until 17 September, 1997. He was then paid at increment Level 4, which was the highest level of remuneration within the GSO6 classification. On that day, he was involuntarily retrenched from his employment when Asset Services was abolished.
The work previously undertaken by Assets Services was contracted out to private enterprise after 17 September, 1997. In particular, it was contracted out to a company called Asset Services Pty Limited ("the private company"). That company employed a number of people, who had previously been employed by Assets Services, to carry out that work. Mr Thompson sought employment with the company but his application was declined. He believes that his application would have been successful had he not suffered incapacity as a result of his injuries.
On 1 December, 1997, employees of DOFA received salary increases of 3% following the negotiation of the Department of Finance and Administration Certified Agreement 1997-1999 ("1997-1999 certified agreement"). The agreement came into force on 10 February, 1998 and was expressed to remain in force until 30 June, 1999. It provided for employees of DOFA to receive a further 3% increase with effect from 9 July, 1998. That agreement provided for a position in DOFA to be translated to a new broadband structure, which it described as an APS Classification Structure (see clause 2 and Schedule 1). There was some discussion as to whether a GSO Level 6 translated to an APS Level 2 or to an APS Level 3. His normal weekly earnings were increased as a result of the 1997-1999 certified agreement. The nominal expiry date of 30 June, 1999 has passed but the 1997-1999 certified agreement has not been replaced by another certified agreement or terminated.
Since 1997, those who were employed by the private company have received wage increases in accordance with the Asset Services (Maintenance) NSW, Qld, SA, NT, WA and Tas Enterprise Agreements 1998 and 1999.
LEGISLATIVE BACKGROUND
Section 14 of the Act provides that, subject to Part II, Comcare is liable to pay compensation in accordance with it in respect of an injury suffered by an employee if that injury results in death, incapacity for work or impairment. In so far as incapacity is concerned, it is the subject of Division 3 of Part II. Putting to one side specific exceptions with which are not relevant in this case, s. 19 sets out the general proposition that:
"… Comcare is liable to pay to the employee in respect of the injury, for each week that is a maximum rate compensation week during which the employee is incapacitated, an amount of compensation worked out using the formula:
NWE - AE
where:
AE is the greater of the following amounts:(a)the amount per week (if any) that the employee is able to earn in suitable employment;
(b)the amount per week (if any) that the employee earns from any employment (including self-employment) that is undertaken by the employee during that week.
NWE is the amount of the employee's normal weekly earnings." (s. 19(2))
Section 19(2A) of the Act goes on to define a "maximum rate compensation week" in terms of its being a week in which an employee's incapacity prevents him or her from working his or her normal weekly hours either because of inability to work at all or to work at the level at which the employee worked before the injury. The remaining provisions of s. 19 are not relevant in this case.
Sections 8 and 9 specify the manner in which an employee's normal weekly earnings are to be calculated. Prior to its being amended by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001 ("repealing Act"), s. 8 of the Act provided:
"Normal weekly earnings
(1) For the purposes of this Act, the normal weekly earnings of an employee (other than an employee referred to in subsection (2)) before an injury shall be calculated in relation to the relevant period under the formula:
(NH x RP) + A
where:
NH is the average number of hours worked in each week by the employee in his or her employment during the relevant period;
RP is the employee's average hourly ordinary time rate of pay during that period; and
A is the average amount of any allowance payable to the employee in each week in respect of his or her employment during the relevant period, other than an allowance payable in respect of special expenses incurred, or likely to be incurred, by the employee in respect of that employment.
(2) Where an employee is required to work overtime on a regular basis, the normal weekly earnings of the employee before an injury shall be the amount calculated in accordance with subsection (1) plus an additional amount calculated in relation to the relevant period under the formula:
NH x OR
where:
NH is the average number of hours of overtime worked in each week by the employee in his or her employment during the relevant period; and
OR is the employee's average hourly overtime rate of pay during that period.
(3) Where an employee was, at the date of the injury, employed by the Commonwealth or a licensed corporation in part-time employment or unpaid employment, any earnings of the employee from any other employment shall, for the purposes of this section, be treated as earnings of the employee from his or her employment by the Commonwealth or the licensed corporation.
(4) Where, because of the shortness of the relevant period, it is impracticable to calculate the normal weekly earnings of an employee before an injury under subsection (1) or (2), the normal weekly earnings of the employee before the date of injury shall be taken to be the normal weekly earnings before that date of another employee performing comparable work, being normal weekly earnings from employment by the Commonwealth or a licensed corporation and calculated under subsection (1) or (2), as the case requires.
(5) Where, because of the shortness of the relevant period, the normal weekly earnings as calculated in relation to the relevant period under subsection (1) or (2) would not fairly represent the weekly rate at which the employee was being paid in respect of his or her employment before the injury, the normal weekly earnings before the date of the injury shall be calculated in relation to such other period as Comcare considers reasonable for the purpose of arriving at an amount that does fairly represent the weekly rate at which the employee was being so paid.
(6) Subject to this section, if the minimum amount per week payable to an employee in respect of his or her employment by the Commonwealth or a licensed corporation at the date of the injury is increased, or would have been increased if the employee had continued in that employment, because of:
(a)the attainment by the employee of a particular age;
(b)the completion by the employee of a particular period of service; or
(c) the receipt by the employee of an increase in salary, wages or pay by way of an increment in a range of salary, wages or pay applicable to the employee or to his or her office, position or appointment;
the normal weekly earnings of the employee before the injury, as calculated under the preceding subsections, shall be increased by the same percentage as the percentage by which that minimum amount per week is increased, or would have been increased, as the case may be.
(7) Subject to this section, if:
(a)an employee continues to be employed by the Commonwealth or a licensed corporation after the date of an injury; and
(b)the minimum amount per week payable to the employee in respect of that employment is increased because of the promotion of the employee;
the normal weekly earnings of the employee before the injury, as calculated under the preceding subsections, shall be increased by the same percentage as the percentage by which that minimum amount per week is increased.
(8)Subject to this section, where:
(a)the employment of an employee is of a kind referred to in subsection 5(4) or (6) or subsection (3) of this section; and
(b)the employee is not receiving earnings from any other employment at the date of the injury;
the normal weekly earnings of the employee before the injury shall be an amount determined by Comcare to be the amount per week that the employee would have been able to earn at the date of the injury (including any amount in respect of overtime worked on a regular basis) if he or she had engaged in suitable paid employment.
(9) If the minimum amount per week payable in respect of employees included in a class of employees of which the employee was a member at the date of the injury is increased or reduced on or after that date as a result of:
(a)the operation of a law of the Commonwealth or of a State or Territory; or
(b)the making, alteration or operation of an award, order, determination or industrial agreement, or the doing of any other act or thing, under such a law;
the normal weekly earnings of the employee before the injury, as calculated under the preceding subsections, shall be increased or reduced by the same percentage as the percentage by which that minimum amount was so increased or reduced, as the case may be.
(10) If the amount of the normal weekly earnings of an employee before an injury, as calculated under the preceding subsections, would exceed:
(a)where the employee continues to be employed by the Commonwealth or a licensed corporation-the amount per week of the earnings that the employee would receive if he or she were not incapacitated for work; or
(b)where the employee has ceased to be employed by the Commonwealth or a licensed corporation-whichever is the greater of the following amounts:
(i) the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date of the injury;
(ii) the amount per week of the earnings that the employee would receive if he or she had continued to be employed by the Commonwealth or the licensed corporation in the employment in which he or she was engaged at the date on which the employment by the Commonwealth or the licensed corporation ceased;
the amount so calculated shall be reduced by the amount of the excess."
The manner in which a "relevant period" is determined is the subject of s. 9 of the Act. Although subject to variation in certain circumstances, the relevant period in the context of calculating an employee's normal weekly earnings is the latest period of two weeks before the date of the injury during which he or she was continuously employed by the Commonwealth or a licensed authority (s. 9(1)). Sections 5(4), (5) and (6) do not apply to Mr Thompson.
Section 8(9) was repealed by the repealing Act and re-enacted together with ss. 8(9A), (9B), (9C) and (9D) with effect from 1 October, 2001. They provide:
"(9) The normal weekly earnings of an employee before the date of the employee's injury, as calculated under the preceding subsections, must, while the employee continues to be employed by the Commonwealth or a licensed corporation, be increased or reduced by the relevant percentage.
(9A) For the purposes of subsection (9), relevant percentage means the same percentage as the percentage of increase or reduction in the minimum amount per week payable in respect of employees included in a class of employees of which the employee was a member at the date of the injury as a result of:(a)the operation of a law of the Commonwealth or of a State or Territory; or
(b)the making, alteration or operation of an award, order, determination or industrial agreement or the doing of any other act or thing, under such a law.
(9B) The normal weekly earnings of an employee before injury, as calculated under subsections (1) to (8) and as increased or reduced under subsection (9) must, if the employee has ceased, or ceases, to be employed by the Commonwealth or a licensed corporation, be further increased, with effect from each indexation date in relation to that cessation, by reference to the percentage of increase (if any) of an index that is prescribed for the purposes of this subsection over the year ending on the 31 December preceding each such indexation date.
(9C) For the purpose of subsection (9B), the indexation date, in relation to a cessation of employment, is:(a)the 1 July next following:
(i) the date on which this Act receives the Royal Assent; or
(ii) the date of that cessation of employment;
whichever last occurs; and
(b)each subsequent 1 July.
(9D) For the purpose of subsection (9B), the regulations may specify the manner of calculating the further increase referred to in that subsection by reference to the movement of the index that is prescribed for the purposes of that subsection."
CONSIDERATION
Mr McRae submitted that Mr Thompson was at all material times from the date of his injury until 17 September, 1997 a member of a class of employees comprising carpenters employed by the Commonwealth. On behalf of the respondent, Mr Cole submitted that Mr Thompson was employed as a GSO6 with DOFA at the time of his injury. As that would have translated, he further submitted, to an APS Level 2 pursuant to the 1997-1999 certified agreement, that is the class of employee to which he belongs.
I have begun my consideration with asking what is meant by the expression "class of employees" used in s. 8(9). It is not defined and, while the word "employee" is defined, the word "class" is not. I will start first with the word "employee". It is defined in the Act. Section 5(1) sets out that it means:
"(a) a person who is employed by the Commonwealth or by a Commonwealth authority, whether the person is so employed under a law of the Commonwealth or of a Territory or under a contract of service or apprenticeship; or
(b)a person who is employed by a licensed corporation." (ss. 3(1) and 5(1))
Section 5(1A) goes on to prescribe the circumstances in which a person is taken to be employed by a licensed corporation. The remaining provisions of s. 5 refine the definition. For example, those occupying specific positions, such as the Commissioner of the Australian Federal Police (s. 5(2)(a)) and members of Parliament (s. 5(8)(a)) and members of specific groups, such as the Defence Force (s. 5(2)(b)), are taken to be employed by the Commonwealth. Some, such as veterans for whom provision is made for the payment of a pension under the Veterans' Entitlements Act 1986 (s. 5(10)) are excluded.
The ordinary meanings of "class" are various as is apparent from the dictionary definitions, the more relevant of which are:
"… 2 A set of students or scholars taught together; a course of instruction for a group of students; a meeting of students for instruction. M16. b All college or school students of the same standing. N. Amer. L17. 3 gen. A division according to grade or quality. E17. 4 gen. A group of people or things having some attribute in common. …" The New Shorter Oxford English Dictionary, 1993).
"… 1. a number of persons, things, animals, etc., regarded as forming one group through the possession of similar qualities; a kind; a sort. 2. any division of persons or things according to rank or grade. …" (The Macquarie Dictionary, 1997, 3rd edition)
Although the word "class" has been described as "vague" (Sovereign Life Assurance Co v Dodd [1892] 2 QB 573 at 583 (Court of Appeal per Bowen LJ), it is a word to which meaning has been ascribed in various contexts. In the context of the construction of wills, for example, it has been said that:
"A gift to a class … is a gift to a set of persons all filling one common character, or holding some definite position, and a gift to a number of residuary legatees does not thereby constitute them a class. Where there is a gift to children as tenants in common, the members of the class not being ascertained until the death of the testator. In the same way a gift to executors as such, being made to them in that capacity, is a gift to them as a class, and on the death of one of the persons named in the testator's lifetime, his share will not lapse, but go to the survivors." (Re Chaplin's Trust (1863) 12 WR 147 at 148 per Page Wood V-C)
The word "class" has also been given some attention in the context of compromises or arrangements between a corporate body and its creditors, or any class of them, or between a corporate body and its members, or any class of them. It was in such a context that Bowen LJ considered its meaning in Sovereign Life Assurance Co v Dodd:
"The word 'class' is vague, and to find out what is meant by it we must look at the scope of the section, which is a section enabling the Court to order a meeting of a class of creditors to be called. It seems plain that we must give such a meaning to the term 'class' as will prevent the section being so worked as to result in confiscation and injustice, and that it must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest." (page 583)
In ascertaining the boundaries of a "class" in the context of compromises and arrangements in the corporate context, regard must be had to the consequences of determining those boundaries at one point or another. Determine the boundaries too widely and the legitimate concerns of dissentients may not be heard. Determine them too narrowly and so require there to be separate meetings of the classes and a minority group may gain a power of veto. In considering a provision giving him power to order a meeting of creditors or a class of creditors, Bowen LJ said in Sovereign Life Assurance Co v Dodd:
"What is the proper construction of that statute? It makes the majority of the creditors or of a class of creditors bind the minority; it exercises a most formidable compulsion upon dissentient, or would-be dissentient, creditors; and it therefore requires to be construed with care, so as not to place in the hands of some of the creditors the means and opportunity of forcing dissentients to do that which it is unreasonable to require them to do, or of making a mere jest of the interests of the minority." (pages 582-583)
The same issue was considered from a different view point by Lush J in Nordic Bank P.L.C. v. International Harvester Australia Ltd. and Anor. [1983] 2 VR 298:
"It is appropriate that creditors who share an interest vis-à-vis the company which places them in a position distinct from that of other creditors and so dissimilar as to make it impossile (sic) to consult together with a view to their common interest should be allowed to make a separate decision. To break creditors up into classes, however, will give each class an opportunity to veto the scheme, a process which undermines the basic approach of decision by a large majority, and one which should only be permitted if there are dissimilar interests related to the company and its scheme to be protected. The fact that two views may be expressed at a meeting because one group may for extraneous reasons prefer one course, while another group prefers another, is not a reason for calling two separate meetings." (page 301)
In analysing these cases, Chadwick LJ said in the matter of Hawk Insurance Company Limited [2001] EWCA Civ 241 (Pill, Chadwick and Wright LJJ):
"The answer, therefore, which Lord Justice Bowen may be taken to give to the question … 'are the rights of those who are to be affected by the scheme proposed such that the scheme can be seen as a single arrangement; or ought it to be regarded, on a true analysis, as a number of linked arrangements?' is clear enough. The scheme proposed may be regarded as a single arrangement with those creditors whom it is intended to bind if, but only if, the rights of those creditors are not so dissimilar as to make it impossible for them to consult together with a view to their common interest. If the rights of those creditors whom the scheme is intended to bind are such as to make it impossible for them to consult together with a view to their common interest, then the scheme must be regarded as a number of linked arrangements. In the latter case it will be necessary to have a separate meeting of each class of creditors; a class being identified by the test that the rights of those creditors within it are not so dissimilar that as to make it impossible for them to consult together with a view to their common interest." (paragraph 26)
This was expanded upon by Lloyd J In the matter of the Equitable Life Assurance Society and In the matter of the Companies Act 1985 [2002] EWHC 140 (Ch):
"… The Court of Appeal also said that the question of classes can only be answered in the context of analysing both the rights which are to be released or varied under the scheme and also the new rights which the scheme gives, by way of compromise or arrangement, compared to those rights which are to be released or varied. Moreover, different legal rights at the first stage of the analysis do not automatically mean separate classes, and likewise different outcomes at the second stage do not automatically require separate classes." (paragraph 47)
In the context of workers' compensation legislation, the expression "class of employment" was considered in Shirley v Fisher Renwick Ltd [1943] 1 All ER 262 by Scott LJ:
"The phrase 'class of employment' … is, I think, equivalent to a description of the kind of trade or industry in which a workman is engaged and receives his remuneration. There are many such 'classes' of employment in such industry. There are many classes of engineers. Each of the various 'trades' in engineering would no doubt constitute a 'class of employment'. But if a man is still carrying on his same trade or profession the fact that greater risks are at one time involved in it than at another does not take him out of the 'class of employment' in which he was previously spending his professional or trade life. I, therefore, think that an increase of risk is no distinction of 'class'." (page 264)
In summary, the authorities point to the need to identify a class by reference to features or qualities that are common to those in a group and which give them their common interest in a subject matter. Not all features or qualities are relevant in identifying a class. They must be features or qualities that ensure that attainment of the purpose of the legislation in which the word is used.
The context in which the word "class" is used in this case is the calculation of an employee's normal weekly earnings for the purpose of calculating his or her entitlement to payments of compensation for an incapacity. In calculating Mr Thompson's normal weekly earnings, the starting point is to calculate his normal weekly earnings before the injury. In general terms, that calculation is made with regard to matters specific to him and to his employment in the two weeks of continuous employment with the Commonwealth before the injury. Those matters are the average number of hours that he worked in his employment, his average hourly ordinary time rate of pay and the average of certain allowances paid to him in the relevant period. That amount is then increased if certain events occur or would have occurred had he continued in that employment. Those events include his attaining an increase in salary by way of an increment applicable to him or to his office, position or appointment or his being subsequently promoted. They also include the events specified in s. 8(9) of the Act and that brings me to the issue in this case.
Section 8(9) moves from circumstances that are particular to an employee and to his employment, office, position or appointment to circumstances that affect a class of employees of which he or she was a member at the date of the injury. It moves from the average hours he or she worked and the amount he or she was actually paid for those hours together with any allowances to the percentage increase or decrease that applies to those in a class of employees of which he or she was a member at the date of the injury.
Once his normal weekly earnings have been calculated according to ss. 8(1) to (9), s. 8(10) returns to circumstances pertaining to the particular situation of the employee while, at the same time, requiring a hypothetical assessment to be made. As Mr Thompson has ceased to be employed by the Commonwealth, the hypothetical assessment that must be made is the amount of the earnings that he would have received had he continued to be employed by the Commonwealth in the employment in which he was engaged at the date of his injury. As Deputy President Blow said in Re Spurr and Comcare (1999) 28 AAR 424:
"… s 8(10)(b) requires a decision-maker, in assuming that an employee would have continued to be employed by the Commonwealth in the employment in which that employee was engaged, first to assume that the employee would have continued in the same occupation and at the same level, and then consider what circumstances resulting in the payment of allowances, overtime or the like would have existed from time to time. …" (page 428)
Returning to the particular word "class" with which I am concerned, its context provided by s. 8 is one of normal weekly earnings and so of remuneration. It would follow that the common interests of those comprising the "class of employees of which the employee was a member at the date of the injury" must be those who had a common interest in the amount of remuneration paid to them. The particular features that identify such persons may change over the years. So, for example, there may be instances in which persons with such a common interest may be identified by the type of work that they perform, the qualifications that they hold, the category or level of position that they hold or any combination of these or other features. It is imperative, though, that the regard is had to features that identified those who had a common interest in remuneration at the relevant time. The relevant time is the date of the injury. That may lead to some practical difficulties in that the structure of the Commonwealth Public Service has changed over time and many functions have been out sourced. For all that, it is not an impossible task.
In the case of Mr Thompson he was, as I have found, a leading hand carpenter at the time of both injuries in 1984. At that time, he occupied a position in the Department of Housing and Construction but his remuneration, and that of others in the Department, was not determined by virtue of negotiation between the Department and those who occupied positions in it. It was determined under the Public Service Arbitration Act 1920 ("PSA Act"). In general terms, under that legislation, the Public Service Arbitrator determined all matters submitted to him relating to conditions or employment of officers and employees of the Public Service (PSA Act, s. 12(1)). An "organization" within the meaning of the Conciliation and Arbitration Act 1904 ("CA Act") was entitled to submit a claim to the Public Service Arbitrator relating to the conditions of employment of its members (PSA Act ss. 12(2) and 3(1)). Such an "organization" was an organisation registered pursuant to the CA Act (CA Act, s. 4(1)). Among those who could be registered was an association with no fewer than 100 members in or in connection with any industry (CA Act, s. 132(1)(b)). Section 4 of the PSA Act, provided that:
"Employees in the Public Service, or in any division, class, grade or branch thereof, or in any calling, service, handicraft, occupation, or vocation in the Public Service, or in any division, class, grade, or branch thereof, shall be deemed to be employees in an industry within the meaning of the Conciliation and Arbitration Act 1904-1950."
An association of less that one hundred employees in an industry was also provided for in the PSA Act. Provided its membership comprised three-fifths of all the persons who were employees in that industry in the Public Service, it was entitled to be registered as an organisation under the CA Act (PSA Act, s. 5).
Based on various determinations made by the Public Service Arbitrator under the PSA Act between 13 May, 1982 and 18 May, 1984, I have found that the Amalgamated Society of Carpenters and Joiners of Australia ("the Society") and others submitted a claim to the Public Service Arbitrator at some time before 13 May, 1982. The respondents to that claim were the Public Service Board and others. It appears from the later Determinations No. 525 of 1982 dated 13 October, 1982 and No. 243 of 1983 dated 15 June, 1983 that the other respondents included the Department of Housing and Construction, the Minister for Education and Youth Affairs and the Department of Territories and Local Government. The Society's claim was to vary Determination No. 212 of 1965 - Rates of Pay of Physical, Technical and Drafting Grades. Its claim was successful and the Public Service Arbitrator varied a number of salary rates including those for a Carpenter and/or Joiner. That determination was varied on several subsequent occasions either by a claim made by the Society alone or in conjunction with other organisations. For the purposes of this case, the last relevant date on which it was amended, and this time on the basis of a claim made alone by the Society, was 18 May, 1984 (Determination No. 115 of 1984).
It is clear from s. 4 of the PSA Act that employees could have chosen to group themselves for the purposes of pursuing their common interests regarding remuneration by virtue of a range of features. Broadly grouped, those features related to the nature of their work on the one hand and to their position and location in the Public Service. Based on Mr Thompson's being a carpenter and based on their being a then current determination of the Public Service Arbitrator relating to carpenters across a range of Departments in the Public Service, I am satisfied that Mr Thompson belonged to a class of employee at the time of his injury comprising carpenters who were employed by the Commonwealth in the range of departments or agencies named in the determination or their successors. They were the employees who had a common interest in their remuneration and, indeed, they were the employees who banded together under the Society to pursue those interests with the Public Service Arbitrator. They, I find, form the class of employees of which Mr Thompson was a member at the date of his injuries in July and August, 1984.
I accept that most of the professional work of a carpenter is no longer performed by employees in Commonwealth employment but is contracted out to private enterprise. What is the effect of that change? It seems to me that it cannot alter the answer that I have given to the question asked by s. 8(9). Changing conditions do not change the class to which Mr Thompson belonged at the time. Do they require a new class to be found? That seems to be the consequence of Mr Cole's submission for he has chosen as the class those who belonged to the class comprising carpenters at the GSO6 level. I do not think that can be right in this case. Apart from the fact that the GSO structure did not come into being until after the dates of Mr Thompson's injuries, the class to which Mr Thompson belonged was not circumscribed by levels, grades or positions or, apart from the proviso that he or she belonged to a department or agency named in the determination, by the particular department to which a carpenter belonged. Section 8(9) does not permit a change of class. What it requires is the class to be identified, as I have done, and then to determine whether there has been a percentage variation in the minimum amount payable in respect of employees included in that class. So long as there are employees who still come within the class, it does not matter that Mr Thompson's particular position in the Public Service no longer exists or that there are no longer standard salary scales for members of the Public Service.
Section 8(9) is by reference to a more general standard of percentage change in remuneration and not by reference to particular levels of remuneration. Section 8(10)(b) brings it back to the particular position occupied by Mr Thompson. It requires an assumption to be made that he would have continued to be employed by the Commonwealth in the employment in which he was engaged at the date of his injuries and a further assumption to be made that he would have continued in the employment in which he was engaged at the date his employment ceased. There must then be a calculation of what he would have earned in those two situations. Perhaps at the time that the provision was drafted, it was assumed that the employee had left Commonwealth employment but it is equally applicable where the Commonwealth has terminated the employment because the position or the department or agency no longer exists. It limits the amount calculated as the normal weekly earnings so that an injured employee cannot be better off financially as a result of being incapacitated (see Bortolazzo v Comcare (1997) 75 FCR 385 at page 388, per Heerey J).
It is the context of s. 8(10) that the disagreement regarding the translation of a GSO6 to an APS Level 2 or an APS Level 3 becomes relevant. Comcare has taken Mr Thompson's position to translate to an APS Level 2. Mr Thompson takes the position that it translates to an APS Level 3 as he was paid at the highest increment level (Level 4) of a GSO6. To be paid at an APS Level 2 would lead to a diminution in remuneration, he submitted. This was a matter raised at the hearing and was the subject of a subsequent letter from Mr Thompson and forwarded by his solicitors after the hearing. It was not a matter fully argued at the hearing as that focused on the class of employees to which Mr Thompson belonged at the date of his injury. Although arguably raised by the reviewable decision, I do not consider that I should take it any further without proper argument. It may be that this can be resolved between the parties or be further argued at a later time for I am not able to resolve the central issue on the material available to me.
That central issue relates to the class of employees to which Mr Thompson belonged at the date of his injuries. The membership of that class may have shrunk but it is not apparent whether the class itself has shrunk out of existence. The range of departments or agencies covered by the determinations of the Public Service Arbitrator is not apparent from the documents I have been given. It was suggested that there are carpenters employed by the Joint House Department. Although I am unable to find a reference to them as such either in the extract of the Joint House Department Certified Agreement 1999-2000 I was given at the hearing or in the full text, that does not mean that they are not employed. I have found a reference to carpenters in the full text I have obtained of the Defence Employees Certified Agreement 2001-2002 and the Defence Employees Certified Agreement 2002-2003. If carpenters now employed in the Joint House Department, the Department of Defence, or any other Commonwealth agency or their predecessors, were covered by the Public Service Arbitrator's determinations, then they continue to be members of the class of employees to which Mr Thompson belonged at the date of his injuries. Regard must be had to the percentage changes in their salaries pursuant to s. 8(9). If there are no longer any members of the class of employees, then s. 8(9) effectively has no operation for there can be no percentage change.
I have concluded, therefore, that further enquiries need to be made to ascertain the departments or agencies in which carpenters are employed by the Commonwealth and to ascertain whether they were previously covered by the Public Service Arbitrator's determination. Should there be more than one department or agency and should the percentage variation in the level of normal weekly earnings paid to those employees vary, there will need to be further consideration given to the matter. I will, therefore, adjourn the matter so that the parties can make enquiries and gather together relevant material to address this issue.
For the reasons that I have given, I:
1.set aside the decision of the respondent dated 13 November, 2001;
2.substitute, in part, for that decision a decision that:
(1)the class of employees of which the applicant was a member at the dates of his injuries was that class comprising carpenters employed by the Commonwealth and subject to the Public Service Arbitrator's determination at that date; and
3.adjourn further consideration.
I certify that the thirty-seven preceding paragraphs are a true copy of the reasons for the decision herein of
Miss S A Forgie (Deputy President),(sgd. P. Paczkowski)
Signed: …………………..………………..
Paul Paczkowski Associate
Dates of Hearing 22 July, 2002
Date of Decision 28 August, 2002
Counsel for the Applicant Mr McRae
Solicitor for the Applicant Langsfords Lawyers
Counsel for the Respondent Mr Cole
Solicitor for the Respondent Sparke Helmore
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