Wakeling v Qantas Airways Limited - [2010] NTCA 2

Wakeling v Qantas Airways Limited [2010] NTCA 2

PARTIES: WAKELING, PAUL

v
QANTAS AIRWAYS LIMITED

TITLE OF COURT:  COURT OF APPEAL OF THE NORTHERN TERRITORY
JURISDICTION:  CIVIL APPEAL FROM THE SUPREME COURT EXERCISING TERRITORY JURISDICTION
FILE NO:LA 12 of 2008 (20808628)
DELIVERED:  1 April 2010
HEARING DATE:  12 February 2010
JUDGMENT OF:  MARTIN (BR) CJ, SOUTHWOOD and MANSFIELD JJ
APPEALED FROM:  THOMAS J
CATCHWORDS:

WORKERS COMPENSATION – Calculation of normal weekly earnings – non-cash benefits – concessional airline travel not part of average gross weekly remuneration or normal weekly earnings
Fair Work Act 2009 (Cth) Pt 2.7
Workers Rehabilitation and Compensation Act (NT) s 49(1)(d)(ii)

Australasian Meat Industry Employees Union v Meat and Allied Trades Federation of Australia (Equal Pay Case) (1969) 127 CAR 1142
Chalmers v The Commonwealth of Australia (1946) 73 CLR 19
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297
G.H. Michell & Sons (Australia) Pty Ltd v Bockman (1994) 176 LSJS 377
Great Western Railway Company v Helps [1918] AC 141
Hastings Deering (Australia) Ltd v Smith (2004) 18 NTLR 1
Murwangi Community Aboriginal Corporation v Carroll (2002) 12 NTLR 121
National Wage & Equal Pay Case 1972 (1972) 147 CAR 172
NT Drilling Pty Ltd v McFarland [2004] NTSC 23
Public Transport Commission of New South Wales v Murray Moore (NSW) Pty Ltd (1975) 132 CLR 336
R v Postmaster General [1876] 1 QBD 658
Rofin Australia Pty Ltd v Newton (1997) 78 IR 78
Wilson v Lowery (1994) 4 NTLR 79
REPRESENTATION:
Counsel:
Appellant:A Wyvill SC
T Liveris

Respondent:  S Walsh QC
Solicitors:
Appellant:Ward Keller
Respondent:  Hunt and Hunt
Judgment category classification:    C
Judgment ID Number:  Sou1001
Number of pages:  19

IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Wakeling v Qantas Airways Limited [2010] NTCA 2

No. LA 12 of 2008 (20808628)
BETWEEN:

PAUL WAKELING

Appellant

AND:

QANTAS AIRWAYS LIMITED

Respondent

CORAM: MARTIN (BR) CJ, SOUTHWOOD and MANSFIELD JJ
REASONS FOR JUDGMENT
(Delivered 1 April 2010)
MARTIN CJ

I agree with the reasons for decision contained in the joint judgment of Southwood and Mansfield JJ.
SOUTHWOOD AND MANSFIELD JJ:
On 12 February 2010 the Court informed the parties that the Court would dismiss the appeal. Following are our reasons for decision as to why the appeal should be dismissed.
The issue
The principal issue in this appeal is: does the value of the difference between the price of the reduced airfares the appellant received from the respondent during the 12 months immediately preceding his work injuries and the market price of the airfares form part of his average gross weekly remuneration within the meaning of the definition of “normal weekly earnings” in s 49(1) of the Workers Rehabilitation and Compensation Act (NT)[1] and, in particular, within subparagraph (d)(ii) of that definition? In our opinion it does not. The appellant’s access to concessional airline travel was merely an incidental benefit or perquisite of his employment.
The appellant’s claim
The appellant suffered two compensable…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] NTCA 2
Decision Date: 1 April 2010

CaseChat Overview and Summary

The case of Wakeling v Qantas Airways Limited involves a dispute between the appellant, a former employee of Qantas Airways Limited, and the respondent, Qantas Airways Limited. The appellant, who was employed as an airline services operator, claimed that the value of concessional airline travel benefits he received should be included in the calculation of his normal weekly earnings for the purposes of determining workers compensation following a work-related injury. The Work Health Court was tasked with determining whether these concessional airline travel benefits should be included in the calculation of the appellant's normal weekly earnings.

The primary legal issue before the court was whether the concessional airline travel benefits provided to the appellant and his nominated beneficiaries should be considered part of his normal weekly earnings for the purposes of calculating workers compensation. This involved interpreting the definition of "normal weekly earnings" under the relevant legislation and determining whether such benefits constituted remuneration for services rendered.

The court found that the concessional airline travel benefits were not part of the appellant's normal weekly earnings. The presiding magistrate and Thomas J both held that the benefits were gratuitous and not a contractual obligation of the employer. The benefits were subject to unilateral variation, change, suspension, or termination by the employer, and therefore did not form part of the appellant's remuneration for services rendered. The court emphasised that remuneration must be a reward for work done in a particular week, and the airline travel benefits were a reward for accumulated service, not for work done in any specific week. Consequently, the court ruled that these benefits should not be included in the calculation of the appellant's normal weekly earnings for the purposes of determining workers compensation.

As a result of this decision, the court upheld the respondent's assessment of the appellant's normal weekly earnings, which excluded the value of the concessional airline travel benefits. The appeal was dismissed, and the respondent's determination of the appellant's normal weekly earnings was affirmed.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The appellant claims the total value of the concessional airline travel he received during the 12 months immediately preceding his second work injury[2] was $52,278.40 and the total value of the concessional airline travel received by his nominated beneficiaries during the same period was $44,090.80. If these amounts are taken into account his normal weekly earnings are $2,780.60 made up of $1,853.25 non-cash remuneration and $927.35 weekly wages.The factual background At all material times the appellant was employed by the respondent as an airline services operator in Darwin. He started his employment in Darwin on 23 July 1994. It was terminated on 5 December 2007 due to his incapacity for work. During the course of his employment with the respondent, the appellant took advantage of concessional airline travel benefits which the respondent made available to its workers and their nominated eligible beneficiaries. The concessional airline travel was provided in accordance with the respondent’s document entitled Qantas Policy Manual Volume 2 Human Resources Policies – Concessional Travel[3]. On 20 April 2002, the appellant injured his right knee and on 1 October 2006, he injured his left knee. Both injuries occurred during the course of his employment. He made claims for workers compensation for each injury which were accepted by the respondent. The appellant has continued to have access to reduced price airfares provided by the respondent after he became incapacitated for work after his second injury and also after his employment was terminated by the respondent and from time to time he has availed himself of this benefit. Under the Qantas Policy Manual he will continue to have access to these benefits for the next 12 years due to the length of his service with the respondent. A dispute arose between the appellant and the respondent as to the quantum of weekly benefits of compensation payable to the appellant under the Act in respect of the injury he sustained on 1 October 2006. For the purpose of calculating the quantum of payments of weekly benefits, the respondent assessed the appellant’s normal weekly earnings as at the date of his second injury to be $927.35 which was the appellant’s weekly wage. The dispute was heard by the Work Health Court. The presiding magistrate determined the dispute over normal weekly earnings in favour of the respondent. His Honour held the appellant’s access to concessional airline travel for himself and for his nominated eligible beneficiaries did not form part of his “normal weekly earnings”. The respondent acknowledges that, as a result of the work injury the appellant sustained on 1 October 2006, the appellant was and remains totally incapacitated for work. In the Work Health Court the appellant also claimed that his total incapacity was the result of his earlier work injury, but neither the presiding magistrate nor Thomas J addressed that issue. It is not relevant for the purposes of this appeal The presiding magistrate’s reasons for decision

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The respondent acknowledges that, as a result of the work injury the appellant sustained on 1 October 2006, the appellant was and remains totally incapacitated for work. In the Work Health Court the appellant also claimed that his total incapacity was the result of his earlier work injury, but neither the presiding magistrate nor Thomas J addressed that issue. It is not relevant for the purposes of this appeal The presiding magistrate’s reasons for decision Before considering the facts in this case the presiding magistrate considered the law. His statements about the law may be summarised as follows. Under s 64 and s 65 of the Act, the amount of compensation payable to an injured worker is based upon the workers loss of earning capacity. A worker’s loss of earning capacity is the difference between his normal weekly earnings as defined in the Act and what he or she is reasonably capable of earning in a week in work he or she is capable of undertaking after he or she has been injured. Accordingly, a worker’s loss of earning capacity is to be assessed on a week by week basis. The Act establishes an income maintenance scheme. It does not establish a scheme that provides for compensatory damages. While the definition of normal weekly earnings in s 49(1) in the Act provides a number of formulae for calculating a worker’s normal weekly earnings the underlying principle is that a worker’s normal weekly earnings are to be calculated in accordance with a worker’s gross weekly remuneration. A worker’s remuneration may include non-cash benefits. It is the full sum for which the worker is engaged to do the work in question. Remuneration is pay for services rendered or work done. It is something a worker receives for his labour. Remuneration is properly defined as the reward payable by an employer to a worker for the work done by that employee in the course of his employment. It is something the expense of which has to be born by the employer in order to procure a worker’s labour. Remuneration involves precisely the same consideration as earnings. If the service is not rendered a worker’s remuneration ceases. The nexus between remuneration as a reward for services rendered is the fundamental cornerstone of the employment contract. The concept of normal weekly earnings is focused upon what a worker receives in cash or benefits each week as a reward for the labour that he or she puts in during the week. If a benefit is truly gratuitous, even if it is long standing, it does not become part of a person’s weekly remuneration. The presiding magistrate found the appellant’s access to concessional travel benefits was not part of his remuneration. It was a truly gratuitous benefit which had no real nexus to the appellant’s labour. The access to concessional airline travel was subject to unilateral variation, change, suspension and even termination by the respondent. The presiding magistrate found the appellant’s terms of employment with the respondent were covered by the Transport Worker’s Union (Qantas Airways Limited) Enterprise Bargaining Agreement VI[4]. The enterprise bargaining agreement is a comprehensive document which purports to cover all situations that may arise during a worker’s employment and makes provision for it. It sets out: how the employment may be terminated; the entitlement to various types of leave; the types of employment and the conditions which attach to each; hours and days of work; shift work conditions; the applicable wages for various levels and types of workers; the frequency of paying wages; extra allowances payable; and penalty rates. The enterprise bargaining agreement provided fair and reasonable remuneration to the appellant for the work he did for the respondent.

Ratio Decidendi

Legal Principle Established

As the respondent did not formally challenge the competency of the appeal, it was appropriate in this instance to hear the appeal. It is sufficient to observe that the contention of the appellant on the competency of the appeal was not clearly incorrect.Remuneration Of relevance to this appeal, s 49 of the Act states:normal weekly earnings, in relation to a worker, means: (a)subject to paragraphs (b), (c) and (d), remuneration for the worker's normal weekly number of hours of work calculated at his or her ordinary time rate of pay; Subparagraph (d)(ii) states:(d) where: (ii)subject to paragraph (b) or (c), the worker is remunerated in whole or in part other than by reference to the number of hours worked,the average gross weekly remuneration which, during the 12 months immediately preceding the date of the relevant injury, was earned by the worker during the weeks that he or she was engaged in paid employment. In the context of the above provisions of the Act remuneration is pay for services rendered[6]. It is whatever consideration a worker receives or earns in return for his service[7]. That such is the case is established by the decisions of this Court in Murwangi Community Aboriginal Corporation v Carroll[8] and Hastings Deering (Australia) Ltd v Smith[9]. In Murwangi Community Aboriginal Corporation v Carroll the Court stated:In our view there can be little doubt that the remuneration of the worker in this case is not limited to the wages paid to the worker but extends to include benefits of other kinds received by the worker in respect of services rendered for or behalf of the employer. The identified non-monetary benefits form part of the reward for work done and services rendered and therefore comprise “remuneration … earned by the worker…”.[10] In the same case the Court went on to approve the following statement of the Australian Industrial Relations Commission in Rofin Australia Pty Ltd v Newton[11]:‘Remuneration’, in our view, is properly defined as the reward payable by an employer to an employee for the work done by the employee in the course of his or her employment with the employer. It is a term that is confined neither to cash payments nor, necessarily payments actually made to the employee.The reasons for decision of Thomas J Consistent with the presiding magistrate’s findings of fact, Thomas J held there was nothing in the enterprise bargaining agreement to the effect that the concessional airline travel referred to therein comprised part of the appellant’s terms of employment or was contractually binding on the respondent. The appellant’s access to the concessional airline travel was at the sole discretion of the respondent and not part of the contract of employment. Her Honour agreed with the findings of the presiding magistrate that: 95.There is no evidence to suggest that Ex W1 [the enterprise bargaining agreement] by itself does anything other than provide a fair and reasonable remuneration to the worker for the work that he did with the employer.96.Accordingly Ex W2 [the Qantas Policy Manual], in my view, stands alone. It is an additional benefit that the employer affords to its employees. There was no evidence to suggest that Ex W2 was a negotiated document. On its face it purports to be a unilateral reward system that the employer generously makes available to employees who have remained for over 12 months. It is subject to unilateral variation, change, suspension or even termination by the employer (although some of these steps might be unpopular). It is a reward for accumulated service, not a reward for work done in any particular week.