Great Western Railway Company v Helps
[1918] A.C. 141(Judgment by: Lord Dunedin (including background))
Between: Great Western Railway Company - Appellant
And: Helps - Respondent
Judges:
Lord DunedinLord Atkinson
Lord Parker of Waddington
Lord Sumner
Lord Parmoor
Subject References:
WORKMEN'S COMPENSATION
Assessment
Earnings of Railway Porter
Tips
Legislative References:
Workmen's Compensation Act, 1906 (6 Edw. 7, c. 58) - Sched. I., par. 1 (b)
Case References:
Penn v. Spiers & Pond, Ld. approved - [1908] 1 K. B. 766
Judgment date: 30 November 1917
Judgment by:
Lord Dunedin (including background)
For the purpose of assessing the compensation payable under the Workmen's Compensation Act, 1906, to a railway porter who has sustained injuries by accident arising out of and in the course of his employment, gratuities or "tips" received by him from passengers whom he has assisted in the execution of his duties, where the practice of giving and receiving tips is open and notorious and is sanctioned by the railway company, are included in his earnings.
Decision of the Court of Appeal affirmed.
Appeal from an order of the Court of Appeal affirming an award of the judge of the Bath County Court under the Workmen's Compensation Act, 1906.
The respondent was employed by the appellants, the Great Western Railway Company, as a passenger porter at their station at Bath. On September 23, 1916, he sustained injuries by accident arising out of and in the course of his employment. His average weekly wages amounted to 1l. 5s. 10d. In addition he received gratuities or "tips" from passengers on the railway amounting on the average to 12s. a week. The respondent claimed that the amount which he received in tips should be taken into account in arriving at his average weekly earnings for the purpose of compensation under the Act; that his average weekly earnings in the employment were accordingly 1l. 17s. 10d., and that the compensation to which he was entitled during the period of total incapacity should be calculated at the rate of 18s. 11d., i.e. 50 per cent. of 1l. 17s. 10d. a week. The appellants contended that the average weekly earnings of the respondent in their employment amounted to 1l. 5s. 10d. and no more, and they admitted liability to pay the respondent 50 per cent. of that sum, namely, 12s. 11d.
On January 5, 1917, the respondent filed a request for arbitration for the purpose of having this question determined.
The facts found by the learned county court judge were as follows: Up to January 1, 1913, there was a rule by which the porters of the Great Western Railway Company were bound forbidding them to take tips. That rule was rescinded on that date and the following rule was substituted for it:
"No servant of the company is allowed to solicit gratuities from passengers or other persons."
The taking of tips by porters on the Great Western Railway had been going on practically unrestricted for years and the giving and receiving of tips had been open and notorious, and the learned judge found as a fact that this practice had been sanctioned by the company. The amount of wages which a man in any particular grade received was not affected by the tips he might obtain from travellers. There were three different classes of station on the line: first class, second class, and third class - Paddington was a first-class station and Bath a second-class station - and the man's wages depended, not upon the amount of tips he received, but upon the station at which he was located. The bigger the station the more wages he received and the more tips, but tips were not taken into consideration when a man was put at one or other of the stations. Upon these facts the learned county court judge held that this case was covered by Penn v. Spiers & Pond, Ld., [F1] and that the tips received by the respondent were earned in his employment, and he awarded him compensation on this basis. This award was affirmed by the Court of Appeal (Lord Cozens-Hardy M.R., Bankes L.J., and Warrington L.J.).
Nov. 29, 30. Schiller, K.C., and Cotes-Preedy, for the appellants. This is really an appeal against Penn v. Spiers & Pond, Ld., [F1] by which the Court of Appeal thought themselves bound. Knott v. Tingle Jacobs & Co., [F2] which is very shortly reported, simply followed Penn v. Spiers & Pond, Ld. [F1] and carries the matter no further. Tips received by a railway porter are no part of his earnings, but are voluntary gratuities contributed by the passengers using the railway, and unless they expressly or impliedly form part of the contract of employment, as where they are taken into account in fixing the remuneration, they ought not to be taken into consideration. "Earnings" under the Workmen's Compensation Act means the money for which the man is engaged to work: Abram Coal Co. v. Southern; [F3] Midland Ry. Co. v. Sharpe. [F4]
The primary object of the Act is to compensate for loss of wages, and its language points to a payment as the result of the contract of employment. Nothing forms part of a man's earnings unless it is received by him under and by virtue of his contract of employment. It follows that tips are not earnings where the contract of employment is made independently of that consideration. Here the tips are not made part of the wages, and the larger the station the higher the wages, although the tips are greater at a large station than at a small one. In Williams v. Owners of S.S. Maritime [F5] the Court, in considering the question of remuneration under the Act, declined to take into account ex gratia payments.
In Skailes v. Blue Anchor Line [F6] Fletcher Moulton L.J. in his dissentient judgment, speaking of remuneration under the Act, said that that meant remuneration under the contract, and he discriminated between remuneration and average weekly earnings, whereas the other members of the Court said that remuneration was the same thing as earnings. If, as is submitted, he was right in saying that remuneration meant remuneration under the contract of employment, and the majority were right in saying that remuneration and earnings were synonymous terms, the appellants are entitled to succeed. One of the objects of the Act is that the employer may know the liability which he has to provide against, and he cannot know the amount of tips received by his workmen. The Legislature never intended to impose upon the employer such a vague liability as this.
Holman Gregory, K.C., and Wethered, for the respondent, were not called on.
Lord Dunedin -
My Lords, this is an exceedingly clear case. The facts are simple. The respondent was a passenger porter at a station at Bath, and in his usual avocation as a porter he was in the habit of getting, tips from passengers; he was injured in the course of his employment by an accident arising out of his employment, and it is not denied that he is entitled to compensation; but the controversy between the parties is whether, in estimating this compensation, there is to be taken into account, not only the weekly wage which he gets from the company, but also such sum as represents his average takings in this matter of tips.
My Lords, it was only a few weeks ago that I had occasion in this House, in the case of the Woodilee Coal Co., [F7] to point out that compensation which is directed to be paid by the employer to a workman who is injured by accident arising out of and in the course of his employment under s. 1 of the Workmen's Compensation Act has its natural meaning - that is to say, something that is to be paid which makes up for the loss that the man has sustained. It is quite true that the full measure of the compensation is afterwards cut down by several rules, because the compensation which is directed to be paid under the first section is not compensation in general, but is compensation in accordance with the First Schedule, and when we go to the First Schedule we find certain things which, so to speak, cut down the compensation. But when we go to the First Schedule we find a set of rules there for the computation which has the phrases "earnings," and "average weekly earnings," and it is upon a computation based upon earnings and average weekly earnings that a sum is arrived at. The whole point, therefore, is, do these tips fall within the statutory expression of "earnings"? If you were to ask a person in ordinary common parlance what this porter earned, the answer would be: "Well, I will tell you what he gets; he gets so much wages from his employers, and he gets on an average so much in tips."
My Lords, it has been sought in the argument addressed for the appellants to limit the meaning of "earnings" to what the workman gets by what I may call direct contract from his employers. The simple answer is that the statute does not say so; it uses the general term "earnings" instead of the term "wages" or the expression "what he gets from his employer," and as a matter of fact the employer, in a case where there is a known practice of giving tips, obviously gets the man for rather less direct wages than he would if there was not that other source of remuneration to the man when he is in his post. More than that, in this case the employer is absolutely party and privy to the whole arrangement. The learned arbitrator found as a fact
"That the giving and receiving of these tips has been open and notorious. I find as a fact that they have been sanctioned by the employers."
Now that fact found by the arbitrator could only be challenged on one of two grounds - either if it was founded upon some erroneous legal proposition which underlay it, or if it was a fact which had no evidence in the case to support it. It is quite obvious that neither of those objections can be stated in this case against the finding, and therefore the finding rules. The result is that these tips are part of the man's ordinary earnings.
My Lords, I entirely go with the decision of the Court of Appeal in the case of Penn v. Spiers & Pond, Ld., [F8] which was decided in 1908, and I would especially also commend the very careful limitation that is laid down in that case by the Master of the Rolls where he says:
"To avoid misconception, we desire to state that nothing in this judgment extends to 'tips' or gratuities
- (a)
- which are illicit;
- (b)
- which involve or encourage a neglect or breach of duty on the part of the recipient to his employer; or
- (c)
- which are casual and sporadic and trivial in amount."
There is here, as I have already pointed out, a direct finding which shows that (c) is excluded in this case.
As regards the subsequent case of Skailes, [F9] not only do I find that the majority of the Court adhered to the judgment in Penn, [F10] but the dissentient member of the Court, Fletcher Moulton L.J., dissents not because he does not agree with Penn - indeed he was a party to that judgment himself - but because, the question there being upon s. 13, what was the true meaning of "remuneration," he held that "remuneration" and "earnings" were not synonymous terms, whereas the other learned judges held that they were.
My Lords, I think the appeal should be dismissed.