FEDERAL COURT OF AUSTRALIA

Keen v Telstra Corporation Limited [2005] FCA 241

ADMINISTRATIVE LAW - Appeal from Administrative Appeals Tribunal – assessment of compensation – payment of benefits – Telstra liable for injury to applicant in 1991 – Applicant made involuntarily redundant in 1997 – applicant received redundancy payment and lump sum of superannuation – In 2000 applicant sought compensation for injury – Telstra determined applicant’s entitlement to compensation payable – Telstra applied ss 21 and 33 of Safety Rehabilitation and Compensation Act 1988 (Cth) – applicant appealed to Administrative Appeals Tribunal – Tribunal determined s 21 and s 33 applied – "retires voluntarily, or is compulsorily retired" expression of wide operation and comprehends involuntary redundancy – Redundancy pay not attributable to weeks of employment – redundancy pay not comprehended by s 33

WORDS AND PHRASES –"retires voluntarily, or is compulsorily retired", "salary wages or pay"

Administrative Appeals Tribunal Act 1975 (Cth) s 44

Safety Rehabilitation and Compensation Act 1988 (Cth) s 21, 33

Commonwealth Public Service Act 1922 (Cth), s 85, 86

Commonwealth Employees (Redeployment and Retirement) Act 1979 (Cth), s 19

Public Service Legislation (Streamlining) Act 1986 (Cth), s 76W

Archer v Comcare (2000) 101 FCR 30 cited

Dadeeton v Commissioner of State Taxation [2004] SASC 88 cited

Department of Defence v Human Rights and Equal Opportunity Commission (1997) 78 FCR 208 cited

Giannoulis v Email Superannuation Pty Ltd (1990) 33 IR 479 cited

Gullett v Gardner (1948) 22 ALJ 151 cited

O'Shea v Comcare (1993) 18 AAR 430 cited

Peacock v Human Rights and Equal Opportunity Commission (2003) 73 ALD 341 cited

1984 Termination, Change and Redundancy Case (1984) 8 IR 34 cited

LA-RAINE LESLEY KEEN v TELSTRA CORPORATION LIMITED

NSD 1331 of 2004

MOORE J

15 MARCH 2005

SYDNEY

THE COURT ORDERS THAT:

1.      The parties bring in short minutes of order giving effect to these reasons within 7 days.

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

REASONS FOR JUDGMENT

1                     This is an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") concerning an assessment of compensation under the Safety Rehabilitation and Compensation Act 1988 (Cth) ("the Act") arising from a claim by the applicant, Ms La‑raine Keen, for the payment of benefits by the respondent, Telstra Corporation Limited ("Telstra"), under Part II Division 3 of the Act.

Background

2                     The applicant was an employee of Telstra and its earlier manifestations between 6 April 1970 and 29 December 1997. The applicant sustained a neck and shoulder strain injury on 8 August 1991 while undergoing training. Telstra accepted liability for the injury on 2 October 1991. The injury was treated and the applicant resumed her usual duties. From time to time the applicant experienced recurrent pain from the injury.

3                     On 1 December 1997, Telstra wrote to the applicant saying it was unable to offer her continuing employment:

Following due consideration of your redeployment and retraining options within Telstra, I regret to inform you that the company is unable to offer you continuing employment. As a consequence of this, your employment with Telstra will cease close of business on 29 December 1997.

Telstra has appreciated your contribution to the company and as part of its commitment to the support of employees leaving the organisation, a range of career support services are available to you. If you wish to avail yourself of these services, you should contact your Line Manager.

On separation you will be provided with a Statement of Service and an Employment Separation Certificate which will be required by the Department of Social Security should you seek Social Security benefits.

Payment of your separation entitlements should be made within seven working days of your date of separation where practical. The exception to this will be your superannuation payments which will be organised by your superannuation scheme.

If you have any further queries regarding your separation please do not hesitate to contact your Line Manager.

The applicant received a redundancy payment in the sum of $104 828.55, calculated by reference to 80 weeks of her ordinary pay, and a superannuation lump sum of $252 557.60.

4                     In 2000, the applicant sought compensation under the Act for the neck and shoulder strain injury suffered in August 1991. On 6 March 2001, a delegate of Telstra determined the applicant was not entitled to weekly incapacity payments from 30 December 1997, the date of termination of employment, and a reconsiderations officer affirmed that decision. The applicant sought review of that decision by the Administrative Appeals Tribunal ("the Tribunal"). On 23 June 2003, the Tribunal set aside the decision of the delegate, ordering the matter be remitted to Telstra to determine the applicant's entitlement to compensation. An issue emerged about whether the Tribunal, in its decision, had preserved an agreement between the parties that the question of whether s 19 or s 21 of the Act was applicable would be left open. Telstra appealed. This Court dismissed the appeal after the Tribunal varied its decision under s 43AA of the AAT Act: see Telstra Corporation Ltd v Keen [2003] FCA 1440. The parties agreed in this matter that the effect of the Tribunal's findings were that the applicant was made involuntarily redundant on 29 December 1997.

5                     On 15 January 2004, a delegate of Telstra determined the amount of compensation payable to the applicant and applied ss 21 and 33 of the Act. The applicant sought review of that decision by the Tribunal. On 16 August 2004, the Tribunal determined that ss 21 and 33 of the Act applied and remitted the matter to Telstra to calculate the benefits to be paid to the applicant. On 10 September 2004 the applicant commenced these proceedings in this Court seeking review, by way of appeal, of the Tribunal's decision.

The decision of the Tribunal

6                     The parties agreed in the proceedings before the Tribunal that the applicant's normal weekly earnings for the purposes of s 8 of the Act were $1 311.03, the superannuation amount for the purposes of ss 4 and 21 was $183 397.75 and the superannuation contribution was $65.55 (the parties also agreed the superannuation scheme was a scheme for the purposes of s 4(1) of the Act). It was also accepted the applicant received her non-preserved superannuation entitlement within the meaning of s 21 and had not received her preserved superannuation entitlement. It was not in issue that the applicant was incapacitated before her employment with Telstra ended.

7                     Section 19 provides:

(1) This section applies to an employee who is incapacitated for work as a result of an injury, other than an employee to whom section 20, 21 21A or 22 applies.

(2) Subject to this Part, Comcare is liable to pay the employee in respect of the injury, for each week that is a maximum rate compensation week during which the employee is incapacitated, an amount of compensation worked out using the formula (…)

Section 21 provides:

(1) This section applies to an employee who, being incapacitated for work as a result of an injury retires voluntarily, or is compulsorily retired, from his or her employment at any time after the commencement of this section and, as a result of the retirement, receives a lump sum benefit under the superannuation scheme.

(2) Comcare is liable to pay compensation to the employee, in respect of the injury, in accordance with this section for each week after the date of the retirement during which the employee is incapacitated. (Emphasis added)

Section 33 provides:

(1) Where, in relation to a day in respect of which compensation is payable to an employee under section 19, 20, 21, 21A, 22 or 31, an amount or amounts are paid or payable to the employee by the Commonwealth or a licensed corporation by way of salary, wages or pay, the amount of compensation payable under that section in respect of that day shall be reduced by the amount, or the sum of the amounts, so paid or payable to the employee.

(2) In this section, a reference to an amount paid or payable to an employee by the Commonwealth or a licensed corporation does not include a reference to:

(a) an amount by way of pay in respect of a period of leave of absence granted, or in lieu of the grant of a period of leave of absence, under section 16 or 17 of the Long Service Leave (Commonwealth Employees) Act 1976, section 73 or 74 of the Public Service Act 1922 as in force before 20 December 1976 or section 7 or 8 of the Commonwealth Employees' Furlough Act 1943 as in force before that day;

(b) an amount by way of pay in respect of a period of leave of absence granted, or in lieu of the grant of a period of leave of absence, under regulations in force under the Naval Defence Act 1910, the Defence Act 1903 or the Air Force Act 1923;

(ba) an amount by way of pay in respect of a period of leave of absence, or in lieu of the grant of a period of leave of absence, in the nature of long service leave under a law of a State or Territory or an industrial award, determination, order or agreement;

(c) any amount that the employee is able to earn in suitable employment or any amount of earnings payable to an employee, being an amount that has been taken into account for the purposes of calculating the amount of compensation payable to the employee under section 19; or

(d) an amount of deferred pay within the meaning of Part III of the Defence Forces Retirement Benefits Act 1959 or of any provision of that Part.

(Emphasis added)

8                     The operation of several of these provisions was considered by a Full Court in Archer v Comcare (2000) 101 FCR 30 at [8]:

Division 3 of Pt II of the Compensation Act prescribes the rate of compensation that is payable to an incapacitated employee. The principal sections in that Division are ss 19, 20, 21 and 21A. In each section there is a formula by reference to which the amount of compensation is to be calculated. An incapacitated employee who continues in his employment is entitled to weekly compensation under s 19. The amount of compensation payable is a percentage of the employee's normal weekly earnings. If a pension under a superannuation scheme is "payable" to the incapacitated employee, the amount of compensation must be reduced: see s 19(3A). The word "payable" means due and immediately payable and is not a reference to a debt which may be debitum in praesenti solvendum in futuro. The words of s 19 show that "payable" means "presently payable". Section 20 applies to an incapacitated employee who is no longer in employment and "receives a pension under a superannuation scheme". The amount of compensation to which this employee is entitled is reduced by reference to the pension received by the employee. Section 21 applies to an incapacitated employee who is no longer in employment and "receives a lump sum benefit under a superannuation scheme". The compensation that is payable to this employee is reduced by reference to the lump sum benefit. Finally, s 21A is concerned with an incapacitated employee who is no longer in employment and who receives both a pension, and a lump sum benefit, under a superannuation scheme. Both benefits must be brought to account for the purpose of calculating the weekly compensation that is payable to the employee.

9                     The issues before the Tribunal were whether the applicant's entitlement to weekly payments of compensation was to be calculated under s 19 or s 21 and whether s 33 applied to those payments. The Tribunal determined the applicant's entitlement to weekly payments of compensation was to be calculated under s 21.

10                  The Tribunal next addressed whether s 33 applied to the calculation of the applicant's payments. The Tribunal viewed the object of s 33 as preventing double compensation being paid by the Commonwealth to an employee and that characterising the redundancy payment as compensation did not prevent the payment also being characterised as "salary, wages or pay" for the purposes of the section. The Tribunal noted at [56] and following:

There are no authorities on the point in issue. The purpose of the provision is to prevent double compensation being paid by the Commonwealth to the employee, as in the case of ss 20 , 21 and 131. Accepting [counsel for the applicant's] submission that the redundancy payment is "compensation" does not prevent the payment also being "salary, wages or pay" for the purpose of s 33. Rather its supports that conclusion. As "compensation" for being made redundant, the employer pays "salary, wages or pay" for a certain period, calculated on the length of service.

In my opinion the redundancy payment was "an amount paid or payable by an employer to an employee for labour or personal services" and was "made pursuant to an agreement between the employer and the employee" and hence was "salary, wages or pay" within the meaning of s 33. The agreement was the AOTC Redundancy Agreement which set out the framework of entitlements (section 7).

The Tribunal then considered the operation of s 33 at [65] and following:

Section 33 operates when on a particular day both compensation must be payable, and also an amount or amounts by way of salary, wages or pay, must be paid or payable. The question follows, for which days was the redundancy payment "paid or payable"? In my opinion it is for the period calculated in accordance with the redundancy agreement and specified in the print-out on page 535 of Exhibit R1, that is 80 weeks from the date of redundancy.

To take the total redundancy payment and deduct that amount from the compensation payable does not accord with the language of the provision as it does not give effect to the requirement that the salary, wages or pay be paid or payable "in relation to a day in respect of which compensation is payable". Further, the nature of "salary, wages or pay" paid or payable "in relation to a day in respect of which compensation is paid". The provision takes into account that various sums meeting the description "salary, wages or pay" may be payable in relation to a particular day.

Accordingly, for the purpose of s 33 of the Act, I find that the redundancy payment in this case is referable to the first 80 weeks after redundancy.

The Tribunal set aside the decision of the delegate of Telstra and remitted the matter to Telstra for further calculation of the applicant's entitlements.

The applicant's submissions

11                  The following is the gravamen of the applicant's submissions concerning s 21. The Tribunal erred by not determining, first, whether the applicant's involuntary redundancy was "compulsory retirement" for the purposes of s 21 and, secondly, whether the payment received by the applicant from the superannuation scheme was as a result of the applicant's injury or incapacity.

12                  In relation to the first error, the applicant submitted the Tribunal did not consider arguments concerning the meaning of "compulsory retirement". The applicant submitted that s 21 applies where a person either voluntarily retires or is compulsorily retired and does not apply where the person is made redundant. The applicant submitted the Tribunal was required to determine whether the applicant's involuntary redundancy constituted compulsory retirement for the purposes of s 21 and whether a payment received upon retrenchment was comprehended by s 21.

13                  The applicant submitted the Tribunal overlooked the applicant's submissions about whether the applicant's involuntary redundancy was compulsory retirement for the purposes of s 21. This was apparent from the Tribunal's reasons for decision at [32]:

I understand these authorities to be cited to support the argument that Ms Keen did not retire because of incapacity but was "involuntarily retired".

In summary Mr Vincent's argument is that

(a)       having determined that the superannuation benefit paid to Ms Keen is properly characterised as being for an involuntary retirement rather than for incapacity;

(b)       there is no causal link between the "incapacity" and the "involuntary retirement", only a temporal link,

(c)        the superannuation benefit received was not a "lump sum" received as a result of the retirement and therefore s 21 does not apply.

Counsel for the applicant submitted in these proceedings, the Tribunal misunderstood the applicant's submissions and did not make findings of fact or refer to evidence concerning whether the applicant's redundancy amounted to "compulsory retirement" or determine whether at law redundancy constituted "compulsory retirement". The Tribunal, as a result, failed to deal with a substantial issue worthy of serious consideration and on which the decision turned. Further, in failing to make findings bearing on whether the applicant's involuntary redundancy amounted to compulsory retirement, the Tribunal failed to comply with s 43(2B) of the AAT Act.

14                  The applicant submitted the Tribunal also failed to comply with s 43(2B) of the AAT Act by omitting to make findings concerning whether the applicant received her superannuation as a result of her retirement. The Tribunal's reasons for decision did not disclose evidence or material upon which a finding that the applicant was compulsorily retired and received her superannuation benefit as a result of her retirement was based. Moreover, the Tribunal was required to determine whether the applicant was entitled to the superannuation lump sum payment as a result of the termination of her employment or the injury or incapacity. The applicant submitted the superannuation lump sum payment received by the applicant on termination of her employment was as a consequence of her retrenchment and that no portion of the payment was as a consequence of her injury or incapacity.

15                  In relation to s 33, the applicant submitted that at law, a redundancy payment is not salary, wages or pay, but rather is compensation for dismissal (for loss of transferable credits and inconvenience and hardship imposed upon employees) and is not earnings. The applicant submitted the Tribunal erred when determining the meaning of, first, "salary, wages or pay" and, secondly, in determining the defining characteristics of a day identified in s 33(1) when the compensation payable can be reduced.

Telstra's submissions

16                  Telstra submitted the Tribunal was correct in concluding ss 21 and 33 applied. Telstra submitted the purpose of s 21 was to prevent double compensation or overcompensation and the section should be construed having regard to that purpose. Telstra submitted the words "retires voluntarily, or is compulsorily retired" comprehend the varied instances in which employment may cease. The word "retirement" is a reference to the cessation of employment. Telstra submitted the facts as found by the Tribunal were sufficient to enliven s 21, the applicant had ceased employment and was in receipt of a lump sum benefit under the superannuation scheme. Telstra also submitted the provision required no causative link between the incapacity and the payment under the superannuation scheme.

17                  In support of the above construction, Telstra referred to the second reading speech:

This Bill will also seek to reduce the unreasonable costs associated with work-related injuries by introducing measures to prevent the double dipping by employees using sick leave payments or superannuation entitlements while on compensation. For example, many employees who have been retired on invalidity grounds under the current legislation enjoy benefits under both compensation and superannuation schemes at a rate considerably in excess of their previous income. Special transitional provisions relating to the combined superannuation and compensation benefits payable to employees who have been invalided out of employment are contained in the Bill.

Telstra submitted that long standing authority supported a finding that s 21 applied to the present case: O'Shea v Comcare (1993) 18 AAR 430 and Archer v Comcare. In O'Shea v Comcare the Deputy President preferred a construction of the words "compulsorily retires" that included retrenchment or involuntary redundancy.

18                  In relation to s 33, Telstra submitted the purpose of the section is again to prevent double compensation or overcompensation. Section 33 applies to payments that are notionally salary, wages or pay. The AOTC Redundancy Agreement ("the Agreement"), the industrial agreement under which the applicant was paid her redundancy pay, identifies the circumstances in which a redundancy may occur and prescribes the benefits. Benefits under that Agreement are calculated by reference to a number of weeks pay for each completed year of continuous service (see cl 7 of the Agreement). Thus, the redundancy payment is "salary, wages or pay". This construction of s 33 is supported by the second reading speech and it would be difficult to conceive of other circumstances where s 33 would apply. Had s 33 not applied to reduce the compensation payable during the first 80 weeks of incapacity, the applicant would receive full compensation payments at the same time as receiving full payments under the Agreement, receiving twice the weekly pay had she remained in work.

The appeal and its disposition

19                  As discussed above, the applicant challenges the Tribunal's determination that s 21 was applicable and also that s 33 was applicable. The applicant also contends the Tribunal failed to address a submission made about the operation of s 21 and, in so doing, failed to make relevant findings of fact. Telstra submits that the Tribunal made no such errors.

20                  It is convenient first to dispose of the contention that the Tribunal failed to address a submission made by the applicant concerning the applicability of s 21. It may be, having regard to the Tribunal's reasons, that it did not fully appreciate the nature of the argument that may have been put about the section. However, ultimately this does not matter. In these proceedings the applicant has developed an argument that s 21 does not apply. For reasons set out below, I do not accept this argument. Whether s 21 applies or not does not depend on any particular facts concerning the termination of the applicant's employment with Telstra. Specifically, it does not matter that the applicant was not paid superannuation entitlements on the basis that she was entitled to a lump sum because of total and permanent invalidity, which is one specific fact pointed to by counsel for the applicant.

21                  The Tribunal was correct in finding that s 21 applies to the applicant for the following reasons. The section speaks of a person who "retires voluntarily, or is compulsorily retired". It has been said that the word "retired" prima facie refers to resignation or voluntary withdrawal from an appointment or employment: see Gullett v Gardner (1948) 22 ALJ 151 at 154. But context can suggest some different meaning: see Giannoulis v Email Superannuation Pty Ltd (1990) 33 IR 479 and plainly the word has a wider meaning given the reference to "compulsorily retired". Indeed it has also been said that in ordinary usage, "retirement" has a number of shades of meaning: see Dadeeton v Commissioner of State Taxation [2004] SASC 88. In Dadeeton the Full Court of the Supreme Court of South Australia determined that there had been a "retirement" of a trustee (for the purposes of state stamp duty legislation) whether the retirement was voluntary or involuntary and the word comprehended removal from the office of trustee.

22                  In the present case, the expression appears in legislation concerning public sector employees. As early as 1922 notions of voluntary and involuntary retirement were manifest in legislation concerning Commonwealth public servants. Section 85 of the Commonwealth Public Service Act 1922 (Cth) provided:

(1) Every officer having attained the age of sixty years shall be entitled to retire from the Commonwealth Service if he desires so to do; but any such officer may (unless retired as hereinafter provided) continue in the Service until he attains the age of sixty-five years.

(2) If any officer continues in the Service after he has attained the age of sixty years, he may at any time before he attains the age of sixty-five years be retired from the Service by the Board, or, in the case of an officer of the First Division, by the Governor-General.

This section clearly contemplated both voluntary and involuntary retirement between the ages of 60 and 65.

23                  Section 86 provided:

When an officer has attained the age of sixty-five years and in the opinion of the Board it is desirable in the interests of the Commonwealth that the officer should continue in the performance of the duties in his office, and the officer is able and willing to do so, the Board may direct the officer to continue in his office for a fixed time not exceeding twelve months, otherwise every officer on attaining sixty-five years of age shall retire from the Service.

This section contemplated compulsory retirement at age 65. It is compulsory in the sense that by operation of the section (but subject to Board direction) an officer is retired from the Service: see generally Department of Defence v Human Rights and Equal Opportunity Commission (1997) 78 FCR 208 at 215 and Peacock v Human Rights and Equal Opportunity Commission (2003) 73 ALD 341.

24                  However, s 20 provided:

If at any time the Board finds that a greater number of officers is employed in any Department or Branch of a Department than is necessary for the efficient working of that Department or Branch, any officer whom the Board finds is in excess may be transferred to such other position of equal classification and salary in the Service as the officer is competent to fill, and if no such position is available the officer may be transferred to a position of lower classification and salary. If no position is available for the officer the Board may retire him from the Public Service.

It can be seen that s 20 used the word "retire" when referring to the dismissal or termination of an officer by the Board of Commissioners in what would, in a contemporary context, be described as a redundancy situation. These notions of voluntary and compulsory retirement were repeated in the Commonwealth Employees (Redeployment and Retirement) Act 1979 (Cth). Division 2 (entitled "Compulsory Retirement") of Part III (entitled "Retirement of Employees") of that Act contained s 19 which authorised a Permanent Head to "retire" an employee (including an officer) when, in effect, they could no longer be usefully employed in the Australian Public Service (or specified statutory authorities). Similar provisions were enacted in the Public Service Legislation (Streamlining) Act 1986 (Cth) including s 76W which enabled a Departmental Secretary to "retire" an officer who was excess to requirements.

25                  Having regard to this legislative history and the scope of the legislation regulating "retirement" in the Australian Public Service in force at the time the Act was enacted, namely 1988, it is difficult to avoid the conclusion that the expression "retires voluntarily, or is compulsorily retired" was intended to have a wide operation and to include circumstances where an employee was dismissed from employment because the employee was redundant. This would be so even if the applicant's employment was not directly affected by this legislation at the time she was made redundant. Once the width of the expression is recognised, it follows it comprehends any person to whom the Act applies even if that person's employment was not then directly regulated by legislation dealing with termination (including redundancies) in the Australian public sector.

26                  I now consider the question of whether s 33 applied to the applicant. It is to be recalled that the applicant received a redundancy payment of $104 828.55 and the Tribunal characterised this as "salary, wages or pay" for the reasons quoted at [10] above.

27                  A convenient starting point in characterising the payment for present purposes is the agreement conferring the entitlement to redundancy pay. Clause 7 of the Agreement provided the following entitlements:

7. ENTITLEMENTS

7.1 AOTC has agreed to a new benefit framework on the basis that;

(i) a comprehensive process for handling situations of redundancy in AOTC in the future is essential to achieving a restructuring of the telecommunications industry and to union acceptance of that restructuring, and

(ii) AOTC unions have agreed to all other elements of this proposal, and

(iii) AOTC unions and the ACTU have given a firm commitment not to seek flow of the arrangements elsewhere.

7.2 The agreed benefit framework is;

(i) four weeks pay for each completed year of continuous service up to five years,

(ii) three weeks pay for each completed year of continuous service thereafter, plus a pro-rata payment for each completed month of continuous service since the last completed year of continuous service,

(iii) for employees over fifty years of age, four weeks pay for each year of service beyond fifty years of age, including pro-rata adjustment for each completed month of continuous service since the last completed year of continuous service,

(iv) the minimum sum payable under these arrangements, including any payment in lieu of notice (four weeks), to be eight weeks salary and the maximum to be eighty-four weeks salary,

(v) the sum payable to an employee under these arrangements not to exceed the sum of salary that would be payable were the employee to continue in employment until the maximum retiring age.

7.3 For the purpose of calculating any payment under Sub-clause 7.2:

(i) where an employee has, during fifty per cent or more of pay periods in the twelve months immediately preceding the date on which the employee receives notice of retrenchment been paid an allowance for shift work, the weekly average (calculated over a year) amount of shift allowance received during the twelve month period shall be counted as part of 'weekly salary';

(ii) other allowances, being allowances in the nature of salary, may be included with the approval of AOTC.

(iii) where an employee has been acting in a higher position for a continuous period of at least twelve months immediately preceding the date on which the employee receives notice of retrenchment, the salary level shall be the employee's salary in such higher position at that date;

It can be seen that redundancy pay is to be calculated by reference to years of service and, differentially, a nominated number of weeks pay is payable for years of continuous service up to a maximum of 84 weeks salary.

28                  Redundancy pay is compensation for the loss of a job. Generally, the longer an employee has been in employment the greater the payment because the loss is viewed as correspondingly greater. That gives rise to calculations based on one or a number of weeks pay for one or a number of years service. But it does not follow that it is a payment, even notionally, for particular weeks of employment even though described as pay. The rationale for such payments is apparent from the decision of the Australian Conciliation and Arbitration Commission in the 1984 Termination, Change and Redundancy Case (1984) 8 IR 34 in which the Commission said:

Having regard to the other aspects of our decision and having regard to what we have said about the existence of, and reason for, unemployment benefits we do not believe that the primary reason for the payment of severance pay relates to the requirement to search for another job and/or to tide over employee during a period of unemployment.

Furthermore we do not believe that it is appropriate, having regard to the equity considerations and the fact that we are prepared to make the redundancy provisions effective in all cases of redundancy no matter what the cause, to have regard to the third consideration refute referred to by CITCA.

We prefer the view that the payment of severance pay is justifiable as compensation for non-transferable credits and inconvenience and hardship imposed on employees. In this respect we agree with the conclusions contained in the CITCA Report but would indicate, at this stage, that in fixing the quantum we have been prepared to take into account the standards established in recent decisions of this Commission and the State Industrial Tribunal.

It is clear from earlier passages in this decision that the non-transferable credits the Commission was speaking about were "credits" that had been built up during the employment, such as accrued benefits like sick leave a long service leave, loss of seniority and loss of the employer's contribution to pension or superannuation.

29                  It is a mistake, in my opinion, to treat, as the Tribunal apparently did, the number of weeks pay payable under cl 7.25 of the Agreement as notionally attributable to weeks of employment immediately prior to the employee being made redundant or, perhaps, for a period of weeks following the redundancy. I accept s 33 is concerned with situations where it might be thought that the employee, but for the operation of the section, would receive a double payment. But if redundancy pay is not paid (even notionally) for a week or weeks during a period when the employee might be paid compensation, then no question of double payment would arise. In my opinion the redundancy pay was not comprehended by s 33 and the Tribunal erred in concluding it was. Neither party sought to rely on s 33(2). However, it appears that the various payments referred to are, either, payments referable to specific days, weeks or months (when leave is taken or for a period in which leave could have been taken but was not) ((a), (b), (ba)), amounts that would have been paid for days worked ((c)) or (in so far as my research indicates) payments for work done where the payments are deferred (except in relation to apprentices) ((d)). The exclusion of these various classes of pay for periods worked or which might have been worked provides some limited support for the view that s 33(1) is concerned only with payments of that type.

30                  The matter should probably be remitted to the Tribunal to be reconsidered according to law though the parties are to consider what orders should be made to give effect to these reasons. While the applicant has succeeded on only one of two points argued, she should have her costs.

Associate:

Dated: 15 March 2005