FEDERAL COURT OF AUSTRALIA

SUPERANNUATION Ð Superannuation Act 1938 (Tas) Ð Retirement Benefits Act 1970 (Tas) Ð Retirement Benefits Act 1982 (Tas) Ð whether employees of Hydro Electric Commission employed Òin a permanent capacityÓ Ð test for determining whether Wages employees and Temporary staff were so employed.

Federal Court of Australia Act 1976 (Cth), Part IVA.

Public Servants Retiring and Death Allowances Act 1925 (Tas).

Public Service Act 1923 (Tas), s 4.

Public Service Act 1973 (Tas), ss 4, 25(1), 25(2), 25(5), 30(1).

Superannuation Act 1938 (Tas), ss 3, 4, 7, 18(1), 18(3), 18(9), 18(10), 19(1), 20, 21, 28, 29, 30, 31, 43, 48(1).

Retirement Benefits Act 1970 (Tas), ss 2(1), 2AA, 21(1), 23(1), 24, 25(4), 26, 28A, 29, 62.

Retirement Benefits Act (No 2) 1974 (Tas).

Retirement Benefits Act 1982 (Tas), ss 3(1), 4, 5, 25(1).

Hydro-Electric Commission Act 1929 (Tas), ss 26, 27, 28, 29.

Hydro-Electric Commission Act 1944 (Tas), ss 15(a), 15(e), 16(1), 16(2).

Hydro-Electric Commission Rules 1952 (Tas), rr 30A(2), 30A(3), 38, 40(1), 40(2), 41.

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, cited.

Haines v Woy Woy Shire Council (1933) 11 LGR (NSW) 99, distinguished.

BARRY MULCAHY AND OTHERS v THE HYDRO-ELECTRIC COMMISSION

TG 16 of 1998

BURCHETT, DRUMMOND, SACKVILLE JJ

SYDNEY (HEARD IN HOBART)

10 DECEMBER, 1998

IN THE FEDERAL COURT OF AUSTRALIA
TASMANIAN DISTRICT REGISTRY	TG 16 of 1998

BETWEEN:

BARRY MULCAHY & others

AppellantS

AND:

hydro electric commission

Respondent

JUDGES:	BURCHETT, DRUMMOND, SACKVILLE JJ.
DATE:	10 DECEMBER, 1998
HEARD:	HOBART

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The appellant pay the respondentÕs costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
TASMANIA DISTRICT REGISTRY	TG 16 of 1998

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	BARRY MULCAHY & others APPELLANTS
AND:	HYDRO ELECTRIC COMMISSION RESPONDENT
JUDGES:		BURCHETT, DRUMMOND, SACKVILLE JJ
DATE:		10 DECEMBER 1998
PLACE:		SYDNEY (HEARD IN HOBART)

REASONS FOR JUDGMENT

THE COURT:

The Proceedings

All 194 appellants were formerly employees of the respondent, the Hydro-Electric Commission (ÒCommissionÓ). They had been employed by the Commission (to use its terminology) as Wages employees or Temporary Staff. Their employment was terminated as the result of retirement or retrenchment in the late 1980Õs or early 1990Õs. They claim that they were deprived, by actionable conduct and decisions of the Commission, of benefits under the Retirement Benefit Fund Scheme (ÒRBF SchemeÓ). The RBF Scheme is now administered under the Retirement Benefits Act 1982 (Tas) (ÒRBF Act 1982Ó), but was created by earlier legislation.

The RBF Scheme provides retirement benefits for ÒemployeesÓ of the State or its instrumentalities such as the Commission. In general terms, the relevant legislation has obliged persons Òemployed in a permanent capacityÓ by or on behalf of the State or its instrumentalities to join the RBF Scheme and to make contributions to it. As from 1974, a person Òwho is employed in a temporary capacityÓ by the State or its instrumentalities has been able to join the Scheme.

The appellantsÕ case at trial was that, although they had never been required to contribute to the RBF Scheme and had never elected to join the Scheme, they were ÒemployeesÓ for the purposes of the relevant legislation, since they had been employed by the Commission Òin a permanent capacityÓ. They relied on causes of action in contract and breach of statutory and other duties. Alternatively, the appellants claimed that if (contrary to their principal submission) they were temporary employees for the purposes of the relevant legislation, the Commission had wrongfully neglected to inform them of their right to elect to join the RBF Scheme and, in some instances, had positively misled them about their rights.

The proceedings were commenced as representative proceedings under Part IVA of the Federal Court of Australia Act 1976 (Cth). That procedure was found to be impracticable and was not pursued. The parties agreed, however, that six of the applicants were typical of the various categories of applicants whose employment commenced and terminated at different times. On 27 June 1997, a direction was made that the six selected applicants

ÒÉbe approved as being generally representative of all applicants in this matter and a trial on liability and damages be held concerning the selected applicants in a manner intended to bind all applicants and the respondent in respect of the principles applicable to liability save any differing personal circumstances of the other applicants.Ó

We refer to these six selected applicants as Òthe selected applicantsÓ. It appears that all were employed in the Construction Division of the Commission.

The trial Judge, after a lengthy hearing, concluded that none of the selected applicants had been Òemployed in a permanent capacityÓ by the Commission for the purposes of the relevant legislation. His Honour also rejected their alternative case, based on the CommissionÕs alleged failure to advise them of their rights as temporary employees and its alleged misleading and deceptive conduct. His Honour, in a supplementary judgment, found that there was no basis for finding that the personal circumstances of the remaining 188 applicants took any of them outside the reasons for rejecting the claims of the selected applicants. Accordingly, the trial Judge dismissed the claims of all 194 applicants and ordered them to pay the CommissionÕs costs.

The appellants have abandoned that part of the Notice of Appeal which challenged the trial JudgeÕs rejection of their alternative case. The only challenge now made to the decision of the trial Judge is that his Honour erred in finding that the selected applicants had never been employed in a permanent capacity by the Commission for the purposes of the relevant legislation. The appellants also say that, even if the trial JudgeÕs finding is correct, the personal circumstances of 26 of their number are such that they are not covered by the ruling.

The parties have agreed that, if the appeal is upheld on the principal challenge mounted by the appellants, the proceedings should be remitted to the trial Judge. This would enable his Honour to determine issues he did not have to decide, having regard to his finding that the selected applicants were not employed in a permanent capacity by the Commission and were therefore not ÒemployeesÓ within the legislation. The parties have not agreed on the precise form of remittal order that would be appropriate, but nothing presently turns on that question.

The Selected Applicants

The selected applicants were employed by the Commission for periods ranging from eight to forty years. Three were initially engaged as Wages employees and were subsequently appointed to the Staff of the Commission. The remaining three were engaged as Wages employees, but were never appointed to the Staff of the Commission.

In accordance with the practice of the Commission to which we refer later, nothing was expressly said to any of the six selected applicants at the time of their respective engagements as Wages employees as to whether they were to be engaged in a temporary or permanent capacity. Each of the three selected applicants subsequently appointed to the Staff of the Commission received a letter advising that his appointment had been Òclassified as temporaryÓ and that the appointment could be terminated on two weeks notice. This, too, was in accordance with the CommissionÕs long-standing practice, whereby Staff employees were classified either as Permanent or Temporary.

By way of illustration, Mr Cooper was one of the three selected applicants who remained a Wages employee. His Honour made the following findings about Mr CooperÕs employment history:

ÒMr Peter Cooper was employed by the [Commission] from 2 August 1976 until 16 April 1992. He was interviewed at Tullah by Mr Mulcahy and started a week later as a Machine Borer/Operator. He signed a labour engagement form in the following terms:

ÔHYDRO-ELECTRIC COMMISSION

No 71957

LABOUR ENGAGEMENT

DUPLICATED TO

EMPLOYMENT OFFICE

Date 2-8-76

Surname COOPER Returned Soldier or SailorÉÉÉÉÉÉÉ

Christian Names PETER WILLIAM Occupation MACH BORER

Address 176 PARKER ST DÕPORT Previous Employer RENISON BELL

Date of Birth 25-3-39 Trade UnionÉÉÉÉÉÉÉÉÉÉÉÉÉ..

Single or Married, or Widower M Selected for Work at ~~TULLAH~~ ANTHONY

Name and Address

Nearest Relative ÔWÕM. COOPER 176 PARKER STREET DÕPORT

Engaged by W.I.O. EmployeeÕs Signature P W Cooper

EmployeeÕs Identity No. 035 075 Car Fare Docket No. P.T.O.

Entered Employment Card byÉÉÉÉ Date [illegible] 1976.Õ

From 1976 until 1986 Mr Cooper was based at Tullah, from 1986 until 1990 at Crotty and from then until his retrenchment in 1992 he returned to Tullah. Throughout his time at the [Commission] he transferred from dam site to dam site as directed and worked on tunnels and roadworks. He was involved in any work which involved drilling and blasting. He said that it was not until he received redundancy documents that he noticed his employment had been classified as temporary/full-time by the [Commission]. Nothing was said when he was engaged as to whether his employment was temporary or permanent or limited for a fixed project or a fixed period of time.Ó

Again by way of illustration, Mr Mulcahy was one of the three selected applicants who was appointed to the Staff of the Commission. The findings concerning Mr Mulcahy were as follows:

ÒMr Barry Mulcahy was employed by the [Commission] from 19 March 1956 to 5 July 1991. On 25 August 1956 he was appointed to Staff. His memorandum of appointment dated 22 August 1956Éadvised of his appointment

Ôto the temporary Staff of this Commission as a Timekeeper/Clerk in the Secretarial Branch at WayatinahÉ. Until you are otherwise notified, your appointment is classified as temporary and as such is subject to termination by two weeksÕ notice in writing by either party.Ó

Mr Mulcahy started work with the [Commission] as a Time Keeper at Wayatinah until 1967 when he was transferred to Strathgordon. He continued to work as a Time Keeper. In 1976 he was transferred to Tullah as a Senior Time Keeper and in about 1978 was promoted to Assistant Industrial Officer. In 1982 he was transferred to Queenstown and was responsible for industrial relations on the King scheme. In 1984 he was made Works Industrial Officer after the retirement of Mr Claude Taplin and in 1988 became Senior Industrial Officer in charge of the [CommissionÕs] West Coast Construction workforce on both the King and Anthony schemes. He held this position until his retirement on 5 July 1991.

Mr MulcahyÕs work as a Time Keeper involved observing and recording work done and keeping records thereof. He described this as

Ôthe first line of communication for many workers for many things, checking entitlements annual and sick leave, ordering meals and picking up cribs, explaining rates and allowances.Õ

When he became Works Industrial Officer he was responsible for hiring, firing and disciplining the construction workforce. In his affidavit he deposed:

ÔThe great bulk of staff on construction sites, myself included, were always considered to be temporary staff and therefore could not participate in the RBF Scheme.Õ

ÉÓ

As has been noted, the trial JudgeÕs rejection of the selected applicantsÕ alternative claim has not been contested on the appeal. Nonetheless, it is appropriate to note that his Honour found that all six of the selected applicants, despite their evidence to the contrary, were aware of the RBF Scheme during the time they were employed by the Commission. Two of the applicants had consciously elected not to join the RBF Scheme, despite knowing that temporary employees were entitled to join. His Honour found that none of the other selected employees would have elected to contribute to the RBF Scheme, even if they had been given complete information about the Scheme. His Honour took into account, among other factors, that joining the RBF Scheme had substantial drawbacks, as well as benefits, for employees of the Commission. The drawbacks included the statutory obligation to make substantial contributions to the Scheme, limited benefits in the case of resignation before retiring age and the loss of non-contributory entitlements otherwise available to Wages employees and Temporary Staff. It was for this reason that union representatives consistently resisted the notion that Wages employees and Temporary staff should be required to join the RBF Scheme or its predecessor, the Superannuation Fund.

The Legislation

The following outline of the relevant Tasmanian legislation draws on the detailed analysis of the trial Judge.

The 1925 Act

The Public Servants Retiring and Death Allowances Act 1925 (the Ò1925 ActÓ) provided for public servants to receive retirement and death allowances out of Consolidated Revenue. The scheme was non-contributory and applied, subject to certain specific exceptions, to persons employed Òin any position or capacity in the Public ServiceÓ: s 2. No distinction was drawn between persons employed in a temporary or permanent capacity.

At the time, the 1925 Act was enacted, employment in the Public Service of Tasmania was governed by the Public Service Act 1923 (Tas). The Public Service Act 1923 expressly contemplated that persons might be temporarily employed in the Public Service, in accordance with the Regulations (see s 4, definition of ÒOfficerÓ). It follows, as the trial Judge pointed out, that the benefits available under the 1925 Act were not confined to permanent employees. In other words, the 1925 Act contemplated that temporary employment in the public sector could last a full working life and attract retirement benefits.

Superannuation Act 1938

The Superannuation Act 1938 (Tas) (ÒSuperannuation Act 1938Ó) partly, but not entirely, superseded the non-contributory scheme of retirement and death allowances for public servants established by the 1925 Act.

The Superannuation Act 1938 established the Superannuation Fund, to be administered by the Superannuation Fund Board: ss 4, 7. The Fund was to be composed of all Òcontributions of employees under [the] ActÓ, all payments by the Treasurer as provided by the Act and income from investments: s 4. Except as otherwise provided in the Act, every ÒemployeeÓ under retiring age was required to contribute to the Fund: s 18(1).

Originally, the legislation provided that the contributions of an employee appointed after the commencement of the Act were to commence Òfrom the time of his [the employeeÕs] appointmentÓ: s 18(3). Later amendments provided that contributions were to commence from the date the Board received a medical certificate certifying that the employee was in good health: s 18(9), (10). Contributions were to be made by deduction from the employeeÕs salary: s 19(1). The contributions were to be in respect of a number of units determined by the employeeÕs salary, subject to certain minimum requirements: ss 20, 21.

Part V of the Superannuation Act 1938 provided for pensions and benefits. Pensions were payable either when the employee reached the age for retirement or retired early on the ground of Òinvalidity not due to his own faultÓ: s 28. A qualified pension was payable upon compulsory retirement or upon voluntary retirement on reaching age 60 (male) or 55 (female): s 29. Contributions were repayable, but without interest, upon termination of employment for any cause other than death or termination of employment in circumstances attracting a pension under ss 28 or 29: s 30. On the death of an employee, a pension was payable to any widow (Pt V Div II) and children (Pt V Div III). Otherwise, death before retirement resulted in contributions being refunded to the employeeÕs personal representative or to such person as the Board might determine, again without interest: s 31.

The key term in the Superannuation Act 1938 was ÒemployeeÓ. The definition in s 3 (as amended in 1951) was as follows:

ÒÕemployeeÕ means any person of or over the age of fifteen years employed in a permanent capacity by or on behalf of the State in any department or branch of any of the services of the State or any undertaking carried on by or on behalf of the State, and includes any officer, the term of whose appointment is fixed by lawÉbut excepting any person Ð

(a) whose employment is of a casual or temporary nature;

(b) who is not required by the terms of his employment to give his full time to his duties;

(d) who is remunerated by fees, allowances, or commission only;

(e) É; or

(f) whose appoint is honorary,

and excepting also the judges of the Supreme Court and the members of the Police ForceÉÓ. (Emphasis added.)

Although ÒemployeesÓ (as defined) were generally no longer entitled to benefits under the non-contributory scheme operated under the 1925 Act, those benefits continued to apply to certain long term employees who elected to retain them: s 48(1). Such persons could not be Òcompelled or permittedÓ to contribute under the 1938 Act. By an amendment to the Superannuation Act 1938 made in 1943, an employee who was rejected on medical grounds as a contributor under the Superannuation Act 1938 could continue to receive benefits under the 1925 Act: s 43. Since temporary employment in the public sector was outside the definition of ÒemployeeÓ in the Superannuation Act 1938, temporary employees of the Commission continued to be entitled to non-contributory benefits under the 1925 Act.

Retirement Benefits Act 1970

The Retirement Benefits Act 1970 (Tas) (ÒRBF Act 1970Ó) introduced a new scheme, to be administered by the Retirement Benefits Fund Board. The definition of ÒemployeeÓ was very similar to that in s 3 of the Superannuation Act 1938, and like the earlier definition, excluded a person Òwhose employment [was] of a casual or temporary natureÓ: s 2(1).

The RBF Act 1970 provided for existing contributors to the Superannuation Scheme to elect to transfer to the Retirement Benefits Fund (ÒRBFÓ). A person who became an employee after the appointed day (1 July 1971) was obliged to contribute to the RBF: s 21(1). Contributions were payable by deduction from salary: s 24. Contributions of a new employee (that is, an employee who was not a transferred contributor) were to commence Òfrom the day on which he was appointed to the position by virtue of which he is an employeeÓ or the date the appropriate medical certificate was received, whichever was the later: s 23(1).

Contributions were to be 5.5 per cent of salary or, at the election of the employee, 2.75 per cent: s 25(4). A pension was payable where a contributor retired on attaining retirement age or elected to retire within five years of attaining that age, or retired on the ground of invalidity not due to his own fault: s 26. The annual pension on retirement was to be one sixtieth of the employeeÕs average salary in the three years preceding retirement, multiplied by the number of years of service: s 26. ÒServiceÓ was defined to mean the period during which the person contributed to the Fund: s 2(1). On resignation before retiring age, contributions were refundable, but without interest: s 29.

Rights and benefits for contributors ceased to accrue under the 1925 Act after the appointed day. Moreover, the 1925 Act did not apply to a person who became an employee on or after the appointed day, save for those unable to satisfy medical requirements: s 62.

The 1974 Amendments

The Retirement Benefits Act (No 2) 1974 inserted s 2AA into the RBF Act 1970. Section 2AA introduced a right of election for persons who were not employees (as defined), but who were employed in a temporary capacity. It provided as follows

Ò2AA(1) A person who is not an employee, but is employed in a temporary capacity, may elect to become a contributor if during the past 12 months he has been continuously employedÉin a temporary capacity and a certificate is issued by the appropriate authority, in accordance with this section, stating that he is likely to remain in employment for at least 3 years.

(4) On the making by a person of an election under this section he shall be deemed to become an employee within the meaning of this Act and to remain such an employee so long as he is employed in a temporary capacity or as an employee.

(5) For the purposes of this section a person shall be deemed to be employed in a temporary capacity if he is employed in such circumstances that, had he been so employed in a permanent capacity, he would have been an employee within the meaning of this ActÉÓ.

An employee who became a contributor by virtue of s 2AA was not to be entitled to benefits on retirement unless he or she had completed three yearsÕ service: s 28A.

It will be seen that s 2AA plainly contemplated that a person could be employed in a temporary capacity, yet be likely to remain in employment for at least three years. The section also contemplated that some persons employed in a temporary capacity would remain employed until their retirement.

Retirement Benefit Act 1982

The RBF Act 1982 replaced the RBF Act 1970. The definition of ÒemployeeÓ was more complex than in the earlier legislation, but was essentially similar. Section 3(1), as originally enacted defined ÒemployeeÓ to mean

Òa person who has attained the age of 15 years and who is

(a) employed in a permanent capacity under the Public Service Act 1973;

(b) employed in a permanent capacity by the [Commission];

ÉÓ.

The exclusion of temporary employees is contained in s 4:

ÒThis Act does not apply to Ð

(a) É

(b) a person Ð

(i) whose employment is of a casual or temporary nature (not being a person to whom paragraph (k) of the definition of ÔemployeeÕ in section 3(1) relates [i.e. student nurses at certain specified hospitals].

ÉÓ.

Other sub-paragraphs under (b) cover much the same categories as those excluded in earlier Acts, such as persons employed as agents or who are remunerated by fees or commission only and Commonwealth superannuation contributors.

The RBF Act 1982 continued the right of election conferred by s 2AA of the RBF Act 1970, the relevant provisions being re-enacted as s 5 of the RBF Act 1982.

Although there are some differences, the general structure of the scheme established by the RBF Act 1982 is similar to that created by the RBF Act 1970. In particular, the contributions are to commence on the day the employee is appointed to the office or position by virtue of which he or she is an employee: s 25(1). It is not necessary to canvass the differences between the two enactments.

The CommissionÕs Operations

The Legislation

The Commission was established as a body corporate by the Hydro-Electric Commission Act

1929 (Tas) (ÒHEC Act 1929Ó). The Commission was to have the management and control of the StateÕs hydro-electric works and the existing Hydro-Electric Department: s 26. The powers of the Commission included the following (s 27):

Ò27. It shall be lawful for the Commission for and on behalf of the State to Ð

i. Construct, operate, manage, control, and generally carry on the State hydro-electric works, and carry on and conduct any business whatsoever relating to the generation, transmission, distribution, and sale of electrical energy, and carry out any purpose in relation thereto which the Commission may deem desirable in the interests of the State;

v. Appoint, discharge, and determine the salaries, remuneration and allowances of all officers, clerks, workmen, and servants whom the Commission may deem necessary to carry on the State hydro-electric works, or otherwise for carrying out the purposes of this Act; but all officers, clerks, workmen, and servants in the service of the Department immediately prior to the constitution of the Commission under this Act shall be continued in the employ of the Commission on the terms of their respective appointments.Ó

No new hydro-electric works were to be constructed unless and until the moneys therefor had been voted by Parliament: s 28. Before any vote was submitted to Parliament for any new hydro-electric works, the Commission was required to furnish a report to the Minister providing details as to the works and their estimated cost: s 29.

The HEC Act 1929 was repealed and replaced by the Hydro-Electric Commission Act 1944 (Tas) (ÒHEC Act 1944Ó). The HEC Act 1944 contained provisions substantially identical to ss 27, 28 and 29 of the HEC Act 1929: see HEC Act 1944, ss 15(a),(e), 16(1), (2).

The Commission and its predecessor Department constructed about 30 hydro-electric dams over a period of 80 years from 1914. However, its construction workforce in the years 1963 to 1992 varied from a peak of 2,434 in 1968 to a low of 767 in 1992. While most of the selected applicants had long periods of service, the Commission experienced a high turnover of staff. From 1961 to 1992, the average turnover was 39 per cent per annum, and was probably higher among the construction workforce.

The CommissionÕs Personnel

The HEC Act 1944 provided for a Commission consisting of one Commissioner and three Assistant Commissioners. Employees were categorised as Wages (or Award) employees, or as Staff. Staff could either be Permanent or Temporary.

A person could only be appointed to the Staff of the Commission with the approval of the Commissioner. Staff employees were required to sign a Head Office engagement form. The CommissionÕs Rules provided for probationary appointments: see, for example, The Hydro-Electric Commission Rules 1952 (Ò1952 RulesÓ), r 38; Hydro-Electric Commission Rules 1978 (Ò1978 RulesÓ), r 37. Persons appointed to the Permanent Staff received a letter notifying them that their appointment was probationary and was terminable on one monthÕs notice. Upon confirmation of appointment by the Commissioner after the period of probation, subject to a satisfactory medical examination, Permanent Staff were required to contribute to superannuation. They received a letter to that effect.

As his Honour observed, Permanent Staff, despite their designation, did not enjoy security of tenure. The Rules provided that all appointments of Permanent Staff were terminable on one monthÕs notice by the Commission: Hydro-Electric Commission Rules 1929 (Ò1939 RulesÓ), r 30A; 1952 Rules, r 41; 1978 Rules, r 40(1).

The appointment of Temporary Staff could be terminated on two weeksÕ notice (1939 Rules, r 30A(2)), or on such notice as the instrument of appointment specified: 1952 Rules, r 41(2); 1978 Rules, r 40(2). In fact, letters of appointment for Temporary Staff always specified two weeks as the period of required notice. The letters advised the employees that their employment was to the Temporary Staff of the Commission.

Within the Construction Division of the Commission, professional staff such as engineers, geologists and surveyors, were generally classified as Permanent Staff. The Temporary Staff generally consisted of supervisors, foremen and tradesmen. Staff employees enjoyed privileges not available to Wages employees, such as more generous sick leave and annual leave entitlements. Staff and Wages employees were housed separately on site and had separate messes. As his Honour remarked, Òthe organisational structure had a vaguely military appearanceÓ. Staff employees, Permanent and Temporary, received an annual salary which was reviewed annually. Wages employees were paid fortnightly at an hourly rate.

The appointment of a Wages employee did not require approval or confirmation by a Commissioner. A Wages employee did not sign a Head Office engagement form and did not receive any standard form letter on engagement. The services of a Wages employee could be terminated on one weekÕs notice, either by reason of the Rules (1939 Rules, r 30A(3)), or because their Labour Engagement Forms (such as the one signed by Mr Cooper) specified that the engagement was on a weekly basis.

The CommissionÕs Policies

In 1943, the Commission adopted a policy that members of Temporary Staff were to be Òeligible for classification as permanentÓ for the purposes of membership of the superannuation fund when they had completed four yearsÕ service, or if absent on defence leave, had completed three yearsÕ service. It appears that this policy continued until it was regularised by the 1974 amendments to the RBF Act 1970.

The evidence suggests that the Commission considered each individual case to determine whether the Temporary employee should be appointed to the Permanent Staff. The Commission took into account factors such as the length and quality of service provided by the employee, the expected duration of the CommissionÕs then current construction programs and the need to retain the services of the employee in connection with those programs.

The Commission was clearly conscious of the difficulties in drawing a line between permanent and temporary employment. Its internal documents also reveal acute concern about the industrial implications of reclassification. They record that representatives of unions had protested at the prospect of Temporary Staff or Wages employees being obliged, against their will, to become contributors to superannuation. The trial Judge rejected the present appellantsÕ contention that the Commission had deliberately sought to avoid its obligations under the RBF Scheme, by deliberately misclassifying as temporary employees persons in fact employed in a permanent capacity. His Honour made this finding:

Òthe [Commission] made a genuine attempt to grapple with the problems posed by the inherently unpredictable nature of its construction activity and the strenuous objection of much of its workforce to compulsory membership in what was, for many, a not particularly attractive or suitable scheme. And this is so notwithstanding that there is an indication that, on the other hand, some did want to join. The obvious solution would be to give temporary employees a choice Ð which is what Parliament did by introducing the 1974 amendment.Ó

The Trial JudgeÕs Reasons

The trial Judge observed that the expression Òa personÉemployed in a permanent capacityÓ comprised ordinary English words. While there were slight differences in the drafting of the relevant definitions in the Superannuation Act 1938, the RBF Act 1970 and the RBF Act 1982, none of these was significant. Each definition treated the concepts of permanent and temporary employment as mutually exclusive.

Counsel for the applicants had argued that the relevant test for determining whether a person was employed in a permanent capacity was whether the work of each applicant was an integral part of the ordinary and regular administration of the Commission. On this argument, since construction of dams and other works by the Construction Division was part of the ordinary and regular administration of the Commission, those employed to do such work were employed in a permanent capacity.

The trial Judge rejected the argument. The case did not involve the permanency of a position or of a particular office, but the nature of a personÕs employment. His Honour identified three criteria relevant to determining whether a person was Òemployed in a permanent capacityÓ, as that expression had been used in the relevant legislation.

á First, the test was to be applied at the date of engagement, or at any subsequent stage where there had been an express or implied agreement to vary the nature of the employment. (Although his Honour referred only to an Òexpress agreementÓ, Mr Tree, who appeared with Mr Cooper for the appellants, accepted that the reasons, read in context, show that his Honour intended to refer to an express or implied agreement.) The argument that employment, initially in a temporary capacity, could change over time in a gradual, evolutionary way, was inconsistent with the RBF Scheme. Membership of the Scheme imposed an obligation on each member to make contributions in accordance with a statutory formula. The commencement of that obligation had to be readily determinable. Under the relevant legislation, the obligation of an employee to contribute to the RBF Scheme was triggered by his or her ÒappointmentÓ.

á Secondly, the criterion for determining whether an employee was employed in a permanent capacity was objective. His Honour agreed with the applicants that the parties could not contract out of the statute, for example by agreeing that a person employed for a fixed term of one month should be regarded as employed in a permanent capacity. However, he said that Òsubstantial deference must be given to the express and implied terms of the contract [made by] the partiesÓ. What the Court was ultimately concerned with was a question analogous to that stated by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, at 352, namely,

Ònot the Ôactual intentions, aspirations or expectations of the parties before or at the time of the contractÕ but what is, objectively determined, the genesis and object of the transaction.Ó

á Thirdly, lengthy service was not necessarily indicative of employment in a permanent capacity. For example, the 1925 Act, as affected by the Superannuation Act 1938 and the RBF Act 1970, applied mainly to temporary employees, yet it assumed that in the ordinary case no benefits would be available for them until retirement at age 60.

After considering the CommissionÕs policies as to permanency and the employment history of each of the selected applicants, the trial Judge reached the following conclusion:

ÒI am not persuaded that any of the applicants were employed in a permanent capacity within the meaning of the applicable legislation, either on their initial engagement or any time thereafter. I accept that there was a subjective intention on the part of at least some of the applicants that they would remain in employment indefinitely for a period which might be very lengthy, or indeed all their working life. Nevertheless, on their initial engagement, which for the reasons already mentioned, I regard as the relevant point in time, the [Commission] was not an organisation which could be said to carry on the business of dam construction on a continuous and indefinite basis. Parliamentary approval was required for each new project. For many years the political reality may have been that such approval was likely to be something of a formality. The first time a [Commission] proposal failed to win speedy Parliamentary approval was in 1979-1980 when the Lowe Government initially rejected the Gordon below Franklin scheme and proposed legislation for a different scheme, the Gordon above OlgaÉ. Nevertheless, the very nature of the [CommissionÕs] operations meant that its construction workforce could only be utilised from one Parliament-approved project to the next. The correspondence to which I have referred, particularly that in the 1970s, shows that the senior management of the [Commission] were acutely conscious of this. In this and in other respects the applicantsÕ case involves a trenchant attack on the ethical conduct of the [Commission].

I do not think that criticism is warranted. In cases where applicants or other employees were expressly designated as temporary, I do not think that was from any desire of [Commission] management to avoid its lawful obligations. Moreover, one cannot ignore, any more than the management could, the fact that many of the workforce, for good reason, did not want to be anything other than temporary.Ó

Although Mr Tree at one point in his argument suggested otherwise, we do not interpret this passage as meaning that his Honour applied, as a test of permanency of employment, whether the Commission was or was not carrying on the business of dam construction on a continuous basis. Rather, his Honour was explaining why the Commission employed its construction workforce on the basis and terms it adopted. The principles he applied were those we have already summarised.

Reasoning

Preliminary

The appellants relied on the same argument on the appeal as they had put to the trial Judge. Mr Tree, on their behalf, submitted that the correct test of whether an employee of the Commission had been employed in a permanent capacity, for the purposes of the relevant legislation, was whether the position he held formed an integral part of the ordinary, regular undertaking of the Commission and had no definite time limit to its existence. For this reason, so it was argued, the trial Judge had applied a wrong test in deciding that none of the selected applicants was employed in a permanent capacity.

It is important to appreciate the limited scope of the argument relied on by the appellants. Mr Tree emphasised that it was the role played by the particular employee within the CommissionÕs undertaking that determined whether or not he was employed in a permanent capacity. The terms of appointment were not material, except that an express temporal limitation on the employment, such as an appointment for a short fixed term, could be taken into account.

Mr Tree did not advance any alternative test for determining whether an employee was employed in a permanent capacity. He specifically accepted that if the test upon which he relied was not the appropriate test, the trial Judge could not be said to have fallen into error. Nor did he suggest that the trial Judge had failed to apply correctly the test articulated in the judgment. For example, the appellants did not contend that some or all of the selected applicants had become employed in a permanent capacity after the date of their initial engagement, by reason of a change in the express or implied terms of their contracts of employment. It follows that the only issue on this aspect of the case is whether the test advanced on behalf of the appellants is the correct test for determining whether the selected applicants were employed in a permanent capacity by the Commission.

The Test Suggested by the Appellants

Mr TreeÕs approach to the construction of the expression ÒemployedÉin a permanent capacityÓ was not entirely consistent throughout the argument. However, in substance he drew a sharp distinction between the expression Òemployed in a permanent capacityÓ in the definition of ÒemployeeÓ (for example, in s 3(1) of the RBF Act 1982) and the expression ÒemploymentÉof a casual or temporary natureÓ in the exceptions to the definition (for example, in s 4(b) of the RBF Act 1982). He submitted that the first expression refers to work performed by the employee, while the second refers to the express or implied terms of the contract of employment. According to Mr Tree, the significance of the distinction is that the capacity in which a person is employed is to be determined by reference to the nature of the work performed by that person, independently of the terms of the contract of employment (except where the employee was engaged on a short term contract). By contrast, in determining whether a personÕs employment is of a casual or temporary nature, it is permissible to consider the express or implied terms of the contract of employment. Mr Tree relied on the decision of Street J in Haines v Woy Woy Shire Council (1933) 11 LGR (NSW) 99 to support his argument.

In our opinion, the trial Judge was correct in rejecting the appellantsÕ argument. Our reasons are similar to those of the trial Judge and can be stated briefly.

First, the wording of the relevant legislation does not support the dichotomy upon which the appellants relied. The Shorter Oxford English Dictionary (3rd ed) relevantly defines ÒcapacityÓ as ÒPosition, condition, character, relationÓ. The same source relevantly defines ÒnatureÓ to mean

ÒThe essential qualities of a thing; the inherent and inseparable combination of properties essentially pertaining to anything and giving it its fundamental character.Ó

These definitions do not support the contention that the test of whether a person is employed in a permanent capacity focuses on the nature of the work performed, while the test of whether a personÕs employment is of a casual or temporary nature focuses on the terms of the contract of employment. The wording of the legislation is consistent with the approach taken by the trial Judge. As his Honour said, the Superannuation Act 1938, the RBF Act 1970 and the RBF Act 1982 all treat ÒpermanentÓ and ÒtemporaryÓ as mutually exclusive concepts. No particular significance should be attached to the use of the word ÒcapacityÓ in the definition and the word ÒnatureÓ in the exception.

Secondly, as became clear in oral argument, it is difficult to maintain the dichotomy upon which the appellantsÕ argument insisted. At the outset of his argument, Mr Tree contended that the terms of appointment could largely be ignored when deciding whether an employee was employed by the Commission in a permanent capacity. However, he acknowledged that the fact that the parties had expressly agreed that the employee would be engaged for a short term was a material consideration on the question of permanence. Mr Tree appeared to accept that this would be so even if the work performed by the short-term employee was integral to the ordinary and regular administration of the CommissionÕs program. He did not explain why, given that certain terms of appointment could be taken into account on the question of permanency, others were simply to be ignored. For example, it is hard to see why provisions allowing appointment to be terminated on short notice, or expressly designating the appointment as temporary, should be entirely disregarded.

Thirdly, the appellantsÕ argument is difficult to reconcile with either the terms of the relevant legislation or the effective operation of the RBF Scheme established by that legislation. As the trial Judge pointed out, the legislation provided for an employeeÕs contributions to the Scheme to commence from the time of appointment, or the date of receipt of the relevant medical certificate. This is a clear indication that the legislation contemplated not merely a defined date at which an employee was required to contribute to the Scheme, but a date referable to the employeeÕs appointment (or to a medical examination consequent on that appointment).

At a more general level, the RBF Scheme and its predecessor under the Superannuation Act 1938 was intended to be funded, at least in large measure, by compulsory contributions from ÒemployeesÓ. It is difficult to see how the Scheme could be administered effectively if the event triggering an obligation to contribute was something other than appointment to the Permanent Staff, or a readily identifiable event consequential on such an appointment. On the appellantsÕ approach, it would be necessary to assess from time to time the nature of the work performed by all temporary employees in order to judge whether the work should be re-classified as an integral part of the ordinary and regular administration of the CommissionÕs program. The application of such an uncertain criterion would create substantial practical difficulties. It would also require retrospective adjustments to be made to the contributions (and, in some cases, benefits), depending on the date from which the reclassification was deemed to have occurred. This cannot have been the intention of those drafting the legislation providing for superannuation and, later, the RBF Scheme.

Fourthly, the Superannuation Act 1938, the RBF Act 1970 and the RBF Act 1982 applied not merely to persons employed by the Commission, but to members of the Tasmanian Public Service. At all material times, detailed legislative provisions governed appointments to the Public Service. For example, the Public Service Act 1973 (Tas) (ÒPublic Service ActÓ) required all appointments to be made by the Governor on the recommendation of the Public Service Board (s 25(1)). Except where specifically permitted by the Public Service Act, every appointment of an ÒofficerÓ (that is, a person employed in any capacity, but excluding Òa person temporarily employedÓ (s 4)) in the first instance had to be on probation (s 25(2)). After the period of probation, the appointment was either to be confirmed or annulled (s 25(5)). Provision was specifically made for temporary appointments, where the Board was satisfied that temporary assistance was required in a particular area (s 30(1)).

These provisions demonstrate that the classification of public servants as permanent or temporary employees depended on an elaborate appointment process. In order for the relevant legislation to apply sensibly to members of the Tasmania Public Service, it is clear that the terms of appointment would have to be given considerably more weight than allowed by Mr TreeÕs suggested test.

Fifthly, as the trial Judge pointed out, legislation such as the 1925 Act and the 1974 amendments to the RBF Act 1970 contemplated that persons could be employed by the Commissioner in a temporary capacity, yet be employed for lengthy periods until the date of their retirement. There is therefore nothing odd in the notion that persons could be employed by the Commission for many years, yet not be regarded as employed in a permanent capacity.

Finally, we agree with the trial Judge that Haines v Woy Woy Shire Council is of no assistance in the present context. The issue in that case was whether an appointment to the position of ÒAÓ grade clerk constituted Òan appointmentÉto any permanent position in the service of the CouncilÓ. The test formulated by Street J was concerned with the permanency or otherwise of the position of ÒAÓ grade clerk, not whether particular persons were employed in a permanent capacity.

It follows that the appellants have failed to establish that the trial Judge applied an incorrect test in determining that none of the selected applicants was employed in a permanent capacity for the purposes of the relevant legislation.

Were Some Employees in a Different Position?

After the trial Judge delivered judgment on 2 June 1998, the applicants filed written submissions asserting that the personal circumstances of some of the applicants took them outside the findings made by his Honour in respect of the selected applicants. The submissions related to 26 former Wages employees who had worked as linesmen or maintenance workers. It was submitted that the employment of these workers did not depend on Parliamentary approval of dam projects, since they were engaged in distribution of electricity and the maintenance of vehicles.

The trial Judge rejected this submission. He held that it would be Òquite unrealisticÓ to construe the contract between the Commission and the wages employees as intended to make those workers permanent employees simply because they were not, initially at least, to be involved in dam construction.

The submissions to the trial Judge, repeated to this Court, rest on the misconception identified earlier, namely, that his Honour applied, as a test of permanency of employment, whether the Commission was or was not carrying on the business of dam construction on a continuous basis. In fact the trial Judge applied the test set out in his judgment and which we have already upheld. It was for this reason that his Honour rejected the submissions made on behalf of 26 of the appellants. He was correct to do so.

Conclusion

The appeal should be dismissed, with costs.

I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of the Honourable Justices Burchett, Drummond and Sackville

Associate:

Dated: 10 December 1998

Counsel for the Applicant:	Mr P Tree and Mr S Cooper

Solicitor for the Applicant:	Messrs Ogilvie McKenna

Counsel for the Respondent:	Mr S Estcourt QC and Mrs K Bennett

Solicitor for the Respondent:	Butler McInyre & Butler

Date of Hearing:	23 & 25 November 1998

Date of Judgment:	10 December 1998

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