CATCHWORDS
COMPENSATION - Commonwealth employees - overtime no longer available in the work in which employees engaged prior to injury - catering attendants no longer entitled to overtime payments - calculation of applicants' net weekly earnings as if they had not been incapacitated - whether calculations should include overtime - underlying structure, purpose and policy of Safety Rehabilitation and Compensation Act
Safety, Rehabilitation & Compensation Act 1988 (Cth) ss 8,9,14 and 19
McDermot v Owners of SS Tintoretto [1911] AC 35
Re Warren v Comcare 40 ALD 737
Wilson v Wilsons Tileworks (1960) 104 CLR 325
re: Bernadette Bortolazzo and Joyce Margaret Saffron v Comcare Australia
(No. VG 866 of 1995
Judge: Heerey J
Date: 12 June 1997
Place: Melbourne
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY No.VG 866 of 1995
GENERAL DIVISION
B E T W E E N:
BERNADETTE BORTOLAZZO and
JOYCE MARGARET SAFFRON
Applicants
- and -
COMCARE AUSTRALIA
Respondent
JUDGE: Heerey J
DATE: 12 June 1997
PLACE: Melbourne
MINUTES OF ORDER
The Court orders that:
The appeal is dismissed with costs, including reserved costs.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY No VG 866 of 1995
GENERAL DIVISION
B E T W E E N:
BERNADETTE BORTOLAZZO and
JOYCE MARGARET SAFFRON
Applicants
- and -
COMCARE AUSTRALIA
Respondent
JUDGE: Heerey J
DATE: 12 June 1997
PLACE: Melbourne
REASONS FOR JUDGMENT
Constituted by Mrs Joan Dwyer Senior Member, Ms L S Rodopoulos and Mr R C Gillham Members.
These appeals from the Administrative Appeals Tribunal raise a question as to the interpretation of s 8(10)(a) of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the Act).
Section 14 of the Act imposes a liability on the respondent to pay compensation in accordance with the Act in respect of an injury suffered by an employee if the injury results in, amongst other things, incapacity for work. Section 19 provides a mechanism for assessing that compensation. One of the concepts used in that provision is that of the normal weekly earnings (NWE) of the employee. Sections 8 and 9 provide the formulae for determining NWE. It is not necessary to set out these provisions in detail. Suffice it to say that where an employee is required to work overtime on a regular basis, NWE will take into account overtime: s 8(2). Section 8(10)(a) which is at issue in the present case provides as follows:
(10) If the amount of the normal weekly earnings of an employee before an injury, as calculated under the preceding sub-sections, 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) ...
the amount so calculated shall be reduced by the amount of the excess.
Evidence and Findings
The applicants Mrs Bernadette Bortolazzo and Mrs Joyce Saffron were for many years employed by the Commonwealth at the Army Mess at Puckapunyal. Mrs Bortolazzo was employed as a Cook GSO 3 and Mrs Saffron as a Catering Attendant GSO 2. They worked on a shift-work roster of approximately 12 hours a day for seven days a fortnight. Penalties applicable to that shift-work substantially increased their salaries above the base salary. As at March 1994 the position was (some of the figures being approximate):
Base Salary Gross Salary including
penalty
Mrs Bortolazzo $17,000 $30,000
Mrs Saffron $15,805 $26,000
Both applicants suffered compensable injuries, Mrs Bortolazzo in 1989 and Mrs Saffron in 1992. Both applicants continued to be employed by the Commonwealth after the dates of their respective injuries and continued that employment up to the date of the Tribunal's decision.
As part of a government privatisation program, SERCO Limited won an Australia-wide contract to take over all Army Messes. As a consequence the Mess at Puckapunyal ceased to be run by the Department of Defence in February 1994. SERCO then commenced to run the Mess with its own staff. All staff at Puckapunyal were paid their normal rates of pay, including penalties, until 11 March 1994.
From that date, catering attendants employed by the Department of Defence at Puckapunyal ceased to be paid penalty allowances. There were no longer any duties which required shift work. In the case of the applicants there was a reduction in compensation payments from 11 March 1994 because their compensation was thereafter based on salary applicable to their GSO 3 and GSO 2 levels respectively, but without shift penalty.
As
at 11 March 1994 there were approximately 140 positions affected at
Puckapunyal, approximately 30 to 40 of which were catering employees. The vast majority of those catering employees
accepted a redundancy offer. Some of
those who took redundancy then became employees of SERCO, but others obtained unrelated
work or left the workforce. For those
who did not have many years of service it was better not to take the redundancy
package. Those employees had a statutory
entitlement to work on for between seven to thirteen months, depending
on their length of employment before they were actually terminated and declared
redundant.
The evidence as to what happened to GSO 2s and GSO 3s who had been employed as catering staff and who stayed on rather than take the redundancy offer was described in the following terms by the Administration Manager for Puckapunyal, Mr Bailey:
One of the objectives of the Commercial Support Program literally wiped out all of those positions within Puckapunyal, we had no equivalent positions into which we could place them, effectively, so they were left with a couple of alternatives. One, was to transfer lower down - to accept a downgrade into a lower position - which some did. One was to re-train them - which we did - so that they could seek alternative employment and a different classification - which some did. And others, through re-training efforts, were promoted to higher level GSO positions.
Mr Bailey produced a schedule showing the earnings of a number of catering attendants and occupiers of other positions who had remained employed by the Department of Defence after 11 March 1994. That schedule is as follows:
Employee A - GSO2 - Catering Attendant
When this employee ceased work in a mess in March 94 and was then redundant, he was retrained and in December 94, through his own efforts, promoted on merit to a GSO3 Storeman position.
Pay Day Pay Day
1-3-94 24-3-94
$774.40 wages $774.40 wages
$331.88 penalties no penalties
Employee B - GSO2 - Catering Attendant
When the mess closed in March 94 and this employee was then redundant she was retrained until August 94. She was then promoted on merit to a clerical position (Administrative Service Officer Grade 2) in Darwin.
Pay Day Pay Day
24-2-94 10-3-94
$823.74 wages $823.74 wages
$251.38 penalties no penalties
Employee C - GSO2 - Catering Attendant
When the mess closed in March 94 and this employee was redundant he was retrained and ultimately promoted on merit to a clerical position (Administrative Service Officer Grade 2) in January 95 at Puckapunyal.
Pay Day Pay Day
10-3-94 24-3-94
$823.74 $823.74
$112.40 no penalties.
GSO 2 and GSO 3 attendants like Mrs Bortolazzo and Mrs Saffron who remained employed at Puckapunyal and did not take the redundancy payment were not paid penalty rates but only their base salary. Redundancy payments were only open to people who were "fit for and at work" and who had been at work for a qualifying period of two months. Therefore the package was not available to Mrs Bortolazzo and Mrs Saffron.
The finding which the Tribunal made was that Mrs Bortolazzo and Mrs Saffron would not have been paid penalties above their base salaries after 11 March 1994 if they were not incapacitated for work.
The Tribunal's Decision
The Tribunal discussed a number of other Tribunal decisions and in particular Re Warren 40 ALD 737 (1995). The Tribunal concluded that:
... the normal weekly earnings of Mrs Saffron and Mrs Bortolazzo, calculated as required by s 8(1) of the Act to include shift penalties, would exceed the amount per week of the earnings that Mrs Saffron and Mrs Bortolazzo, who continued to be employed by the Commonwealth, would receive if they were not incapacitated for work. On the evidence we are satisfied that the applicants, if they were not incapacitated for work, would not have received shift penalties after 10 March 1994, because there were no duties or catering attendants GSO 2 or GSO 3 which required shift work.
...
We find that the amount of normal weekly earnings of Mrs Saffron and Mrs Bortolazzo as calculated under s 8(1) is required by s 8(10)(a) to be reduced by the amount by which it exceeds the amount per week of the earnings that Mrs Saffron and Mrs Bortolazzo would have received after 10 March 1994 if they were not incapacitated for work. We find further that if they had not been incapacitated for work after 10 March 1994 Mrs Saffron would have received a salary of a GSO 2 without shift penalties and Mrs Bortolazzo would have received the salary of a GSO 3 without shift penalties.
Accordingly the decision was affirmed.
Conclusion
In my opinion the Tribunal was correct in its construction of s 8(10)(a). The applicants' construction would require a reading into s 8(1)(a) of something like "in the employment in which he or she was engaged at the date of injury".
I accept the submission of counsel for the applicants that the Act is social legislation which ought to be construed, in the event of ambiguity, liberally in favour of injured employees: McDermot v Owners of SS Tintoretto [1911] AC 35, Wilson v Wilsons Tileworks (1960) 104 CLR 328 at 335. But a liberal interpretation is one thing, rewriting the statute is another.
Moreover, the construction for which the respondent contends is consistent with the structure and purpose of the Act. The provision of compensation is to operate from week to week; see for example the detailed formulae in s 19. The underlying policy is that an injured employee should not be worse off during the period of incapacity as a result of work-related injury. However, it follows conversely that the injured employee should not be better off.
I do not doubt for a moment that the sudden termination of regular penalty payments would create great hardship for people like Mrs Bortolazzo and Mrs Saffron. Financial commitments and lifestyle would be drastically affected. The figures already quoted in this judgment make that clear enough. Nevertheless, most terms and conditions of employment do not include a permanent right to overtime. Had they not been injured, Mrs Bortolazzo and Mrs Saffron would from 11 March 1994 have suffered the reduction in income as a result of the cessation of overtime work. The Act does not place them in any better position because they were not working at that date but in receipt of compensation.
The appeal will be dismissed with costs, including reserved costs.
I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment of the Honourable Justice Heerey.
Dated:
Associate
Appearances
Counsel for the applicant: Mr P J Coish
Solicitor for the applicant: Ryan Carlisle Thomas
Counsel for the respondent: Ms J Bonsey
Solicitor for the respondent: Australian Government
Solicitor
Date of hearing: 1 - 2 May 1997
