Webster v Hobart City Council
[2003] TASSC 129
•2 December 2003
[2003] TASSC 129
CITATION: Webster v Hobart City Council [2003] TASSC 129
PARTIES: WEBSTER, Alan Ross
v
HOBART CITY COUNCIL
TITLE OF COURT: SUPREME COURT OF TASMANIA (FULL COURT)
JURISDICTION: APPELLATE
FILE NO/S: FCA 56/2003
DELIVERED ON: 2 December 2003
DELIVERED AT: Hobart
HEARING DATES: 31 October 2003
JUDGMENT OF: Crawford, Evans and Blow JJ
CATCHWORDS:
Workers Compensation – Assessment and amount of compensation – Weekly earnings – Tasmania - Overtime – Meaning of "a requirement of the worker's contract of employment".
Workers Rehabilitation and Compensation Act1988 (Tas), s70(2)(ab)(i).
Aust Dig Workers Compensation [211]
Employment Law – The contract of service and rights, duties and liabilities as between employer and employee – Miscellaneous matters – Other matters – Terms of contract – Optional overtime scheme – Express term that employee would work overtime when rostered.
Aust Dig Employment Law [44]
REPRESENTATION:
Counsel:
Appellant: R M Grueber
Respondent: I L Hallett
Solicitors:
Appellant: Ogilvie Jennings
Respondent: Page Seager
Judgment Number: [2003] TASSC 129
Number of Paragraphs: 15
Serial No 129/2003
File No FCA 56/2003
ALAN ROSS WEBSTER v HOBART CITY COUNCIL
REASONS FOR JUDGMENT FULL COURT
CRAWFORD J
EVANS J
BLOW J
2 December 2003
Orders of the Court
That the appeal be allowed.
That the orders made on 10 June 2003 and 19 August 2003 upon the respondent's appeal from the determination of the Workers' Rehabilitation and Compensation Tribunal be set aside, and that appeal be dismissed.
Serial No 129/2003
File No FCA 56/2003
ALAN ROSS WEBSTER v HOBART CITY COUNCIL
REASONS FOR JUDGMENT FULL COURT
CRAWFORD J
2 December 2003
I agree with the reasons for judgment of Blow J and with the orders he proposes should be made.
File No FCA 56/2003
ALAN ROSS WEBSTER v HOBART CITY COUNCIL
REASONS FOR JUDGMENT FULL COURT
EVANS J
2 December 2003
I have had the benefit of reading the reasons for judgment prepared by Blow J; I agree with them and the orders he proposes.
File No FCA 56/2003
ALAN ROSS WEBSTER v HOBART CITY COUNCIL
REASONS FOR JUDGMENT FULL COURT
BLOW J
2 December 2003
The appellant is an employee of the respondent. He was injured in the course of his employment and commenced to receive weekly payments of compensation pursuant to the Workers Rehabilitation and Compensation Act 1988 ("the Act"). He had been working overtime regularly. His overtime earnings were taken into account in calculating the weekly payments that he received. Subsequently he returned to work, but his injury prevented him from returning to overtime work. For a time, he continued to receive weekly payments of compensation attributable solely to the loss of his overtime earnings. The respondent considered that it was not obliged to continue to make weekly payments on that basis, and applied to the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") for a review of the weekly payments. The Tribunal, constituted by its chief commissioner, dismissed that application. The respondent employer appealed. The learned primary judge quashed the determination of the Tribunal and made orders reducing the appellant's weekly payments so as to exclude the overtime component. The appellant is aggrieved by those orders, and has appealed, seeking the restoration of the Tribunal's determination.
Under the Act, s69, an incapacitated worker's weekly payments are calculated by reference to the "normal weekly earnings" of the worker. The computation of normal weekly earnings is governed by s70, which commences as follows:
"70 ¾ (1) For the purposes of section 69, a reference to the normal weekly earnings of a worker shall be construed as a reference to the normal weekly earnings of the worker as determined by subsection (2).
(2) The normal weekly earnings of a worker shall be determined in accordance with the following provisions:¾
(a)in computing normal weekly earnings, regard is to be had to the principle that, subject to this Act, a worker should receive no more than the worker would have received if the worker had continued in the worker's usual employment;
(ab)in computing normal weekly earnings, any component of the worker's earnings attributed to overtime or excess hours is to be disregarded unless ¾
(i)the overtime or excess hours was or were a requirement of the worker's contract of employment; and
(ii)the worker worked overtime or excess hours in accordance with a regular and established pattern and in accordance with a roster; and
(iii)the pattern was substantially uniform as to the number of overtime or excess hours worked; and
(iv)the worker would have continued to work overtime or excess hours in accordance with the established pattern if the worker had not been incapacitated;
…".
The appellant contends that his overtime was a requirement of his contract of employment within the meaning of s70(2)(ab)(i). The respondent contends that it was not. The learned primary judge held that it was not. It was common ground that the matters listed in s70(2)(ab)(ii), (iii) and (iv) were all established in the appellant's favour.
Counsel for the appellant submitted that if a worker is expected by his or her employer to work overtime, or has a moral obligation to his or her employer to work overtime, then the overtime is a requirement of his or her contract of employment within the meaning of s70(2)(ab)(i), even if the worker has no contractual obligation to work overtime. It is true that, as a general rule, workers compensation legislation, as beneficial legislation, should be given an interpretation favourable to the class of persons intended to be benefited thereby, namely injured workers: Wilson v Wilson's Tile Works Pty Ltd (1960) 104 CLR 328 at 335. However the interpretation of the words "a requirement of the worker's contract of employment" suggested by counsel for the appellant is simply inconsistent with those very plain words, and is not an interpretation that Parliament could conceivably have intended. There is no reason not to give those words their ordinary meaning. A requirement of a worker's contract of employment is a requirement imposed by one or more contractual terms. The provisions in s70(2) as to overtime are the result of that subsection having been amended by the Workers Rehabilitation and Compensation Reform Act 1995, s48. Before that amendment, s70(2)(a) required amounts paid for overtime always to be included in computing average weekly earnings. The provisions introduced by the amendment, including s70(2)(ab), were not intended to benefit workers, but to reduce their entitlements in favour of insurers, and perhaps employers. The result might be seen as arbitrary, and unfair to incapacitated workers who have routinely worked overtime otherwise than pursuant to requirements of their contracts of employment, including those who have been required to work overtime pursuant to a provision in an industrial award. But it is clear that Parliament intended to draw such an arbitrary distinction. The words of the amending Act must be given an interpretation that promotes the purpose or object of that Act: Acts Interpretation Act 1931, s8A(1). The purpose or object of the amending Act was to reduce workers' rights. It follows that s70(2)(ab)(i) must be interpreted as precluding overtime from being taken into account in computing a worker's normal weekly earnings except when a worker has worked overtime pursuant to a requirement contained in the terms of his or her contract of employment. Such an interpretation gives the words of s70(2)(ab)(i) their ordinary literal meaning, whereas the interpretation contended for on behalf of the appellant does not.
Counsel for the appellant relied on a decision of the Australian Industrial Relations Commission known as The Working Hours Case (PR072002, 23 July 2002) as authority for the proposition that, in the area of industrial law, it is recognised that a requirement to work overtime can exist despite the lack of a contractual obligation to work overtime. It may very well be that, in the area of industrial law, it is generally recognised that employers sometimes have the practical ability to compel employees to work overtime without having any contractual right to compel them to do so. However s70(2)(ab)(i) relates only to "a requirement of the worker's contract of employment". Those words are not wide enough to include a non-contractual "requirement" to work overtime, even if such requirements are recognised for the purposes of industrial law. Counsel for the appellant also relied on a reference in The Workings Hours Case, at par278, to "the well established right of an employer to require an employee to work reasonable overtime". With great respect to the Commission, I am not sure what sort of right they were referring to, nor how it was considered that any such right was well established. I am unaware of any case law suggesting that such a right is well established at common law. There was certainly no evidence before the Tribunal suggesting the existence of a well established practice whereby the respondent or a council could require any of its employees to work reasonable overtime. It follows that no such right existed at common law unless it did so by virtue of an express term or an implied term in the appellant's contract of employment.
Counsel for the appellant submitted that his client's contract of employment included an implied term that he was obliged to work reasonable overtime if required by the respondent to do so. The requirements for the implication of a contractual term are as set out in the following passage from BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283:
"(1) it [the implied term] must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract."
The respondent accepted that workers in the position of the appellant were not required to work overtime. A number of them did not work overtime. I think it must follow that the implication of the suggested term was not necessary to give business efficacy to the appellant's contract of employment, and that the suggested implied term is not so obvious that it goes without saying. The learned primary judge held that the contract contained no such implied term, and I agree with him.
However, in my view, the evidence before the Tribunal permitted a determination in the appellant's favour on the basis that he worked overtime pursuant to an express term of his contract of employment. No submission to that effect was put to the Tribunal or to the learned primary judge. The question whether the contract included an express term pursuant to which the appellant was required to work overtime falls within the scope of the grounds of appeal that the learned primary judge was required to consider, and within the scope of ground 2 of the notice of appeal to this Full Court. Counsel for the respondent did not claim that his client would suffer any prejudice that would warrant the appellant not being permitted to rely on the existence of an express term. The facts as to the arrangements between the parties in relation to overtime were fully explored at the hearing before the Tribunal. In those circumstances, I think it is appropriate for this Full Court to consider whether the determination of the Tribunal should be restored upon the basis that the appellant's overtime was worked pursuant to a requirement contained in an express term of his contract of employment. In my view no injustice will be done by allowing the appellant to raise the point of law as to an express term, and the raising of that point of law should therefore be allowed.
The evidence before the Tribunal was that the respondent operated an overtime roster system. A manager employed by the respondent, Mr Dillon, gave evidence that the roster system had been introduced following a restructuring that occurred in 1994. There was unchallenged evidence that the appellant had worked for the respondent since about September 1982. Mr Dillon gave evidence that there was a strong feeling from the workforce that they desired routine overtime work to be shared amongst the permanent workforce, and that he made a commitment to do that, requesting "a surety that the guys within the workforce are there to do it". He said, "… we had a bit of a commitment there, us to give them plenty of notification about what we required them to do and the expectation was that they be ¾they be there to do that work unless something unforeseen such as sickness or something interfered." He went on to give evidence to the effect that rosters are now drawn up in advance for six-month periods, and that an employee wishing to swap a roster commitment with a colleague as the result of illness, family commitments, or social commitments, may do so "if they can do a switch that everyone's happy with". Management approval must be sought and would ordinarily be forthcoming. He referred to this arrangement as a "committed arrangement". He said that there were a small number of employees who were on no overtime rosters, and that they could not be forced to work overtime.
The appellant gave evidence to the effect that employees were obliged to work overtime when rostered to do so; or to find someone to replace them, that it would be necessary to get in touch with management to verify that a replacement was acceptable; and that replacement by someone already working in the roster system was usually acceptable.
The learned chief commissioner made the following finding in relation to that system:
"Once a decision was made by a worker to join the roster, a personal obligation was imposed to perform on the date for which he had made the commitment and the worker was obliged to arrange for a substitution if he was unable to work on a rostered day, such substitution was required to be approved by the worker's supervisor."
In that sentence, the learned chief commissioner did not go so far as to say that the "personal obligation" referred to was a contractual obligation. In my view it was open to him on the evidence to conclude that, by the time of the appellant's injury, it had become a term of his contract that, if he elected to participate in an overtime roster, he would work overtime whenever rostered to do so, except when he arranged for a substitute who was approved by his supervisor. The learned chief commissioner did not make a finding as to whether the contract of employment contained such a term.
The working of paid overtime by the appellant and his colleagues was a matter of some importance for the respondent Council. Following the introduction of the overtime roster system, the respondent was dependent upon the appellant and his colleagues for the carrying out of important functions, such as the operation of its tip at weekends. The evidence as to the proposing of the overtime roster system to the respondent's employees should properly be regarded as evidence of the making of an offer. The evidence of the acceptance of that system by most affected employees should be regarded as the acceptance of that offer. Consideration was involved, in that it was agreed that employees would provide their labour to the respondent when rostered, and that the respondent would pay them for their overtime. The parties surely did not intend that all the rostered workers would have the legal right to absent themselves from work on a sunny Saturday, nor that the respondent would have the right to decide without notice that the tip would not operate one Saturday, send its workers away when they reported for work, and not pay them for their attendance. Clearly the parties intended to enter into legal relations. All the relevant evidence compels the conclusion that, at the time of the introduction of the overtime roster system, by agreement, the parties varied the appellant's contract of employment so that it has since contained terms to the effect that (i) he may elect to participate in each overtime roster; and (ii) if he elects to participate in an overtime roster, he will work overtime whenever required to do so by that roster, unless he arranges a substitute approved by his supervisor. I think it follows that the appellant's overtime was "a requirement of the worker's contract of employment" within the meaning of s70(2)(ab)(i). There is no reason why the word "requirement" should not be interpreted as including a contingent requirement, as distinct from an unconditional requirement. A requirement that only operates in one particular situation (eg, where a worker has volunteered to join an overtime roster) is nevertheless a requirement. Such an interpretation of s70(2)(ab)(i) accords with the principle that the words of an enactment should be given their ordinary literal meaning. Although the purpose or object of the 1995 amending Act was to reduce workers' rights, I do not think the Acts Interpretation Act, s8A(1) warrants interpreting the word "requirement" in s70(2)(ab)(i) as meaning "unconditional requirement", since that would unduly strain the language of that subparagraph, and involve "reading in" an extra word unnecessarily and inappropriately.
The learned chief commissioner reached the correct result when he decided to dismiss the respondent employer's application, even though he did not base his determination on this line of reasoning. I would allow the appeal, set aside the orders of the learned primary judge, and dismiss the respondent's appeal from the determination of the Tribunal.
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