Catlow v. Accident Compensation Commission

[1989] HCA 43
167 CLR 543

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(Judgment by: Brennan J, Gaudron J)

Catlow
vAccident Compensation Commission

Court:

Judges:
Brennan JDeane J
Dawson J

Gaudron JMcHugh J

Subject References:
Workers' Compensation (Vict.)
Accident compensation
Amount of compensation
Rate of pay for 'normal number of hours per week'
Whether actual hours worked or core hours fixed by industrial agreement
Whether number of hours 'fixed' by agreement
Accident Compensation Act 1985 (Vict.), s. 95.

Legislative References:
Interpretation of Legislation Act 1984 (Vict.) - s 35

Hearing date: 2 May 1989
Judgment date: 5 October 1989

Victoria

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Judgment by:
Brennan J
Gaudron J

Between September 1981 and 26 October 1985 Mr Catlow, the appellant, was employed by Australian Safeway Stores Pty. Ltd. at its Mulgrave warehouse in Victoria. Since 26 October 1985, Mr Catlow has been and remains totally incapacitated for work by reason of a compensable injury and entitled to payments of weekly compensation as for total incapacity pursuant to the provisions of ss.82 and 93 of the Accident Compensation Act 1985 (Vict.) ("the Act").

2. The Accident Compensation Commission is charged with the responsibility of administering the Accident Compensation Fund, paying compensation to persons entitled and performing the other functions specified in s.20 of the Act. The Commission applied to the Accident Compensation Tribunal pursuant to s.117(6) for a determination of the weekly payments of compensation to be paid to Mr Catlow. The compensation payable to Mr Catlow was in the form of weekly payments payable during the period of total incapacity: s.93(1) and (2). The amount of a weekly payment was fixed by s.93(4) which provides: "Subject to this section, a weekly payment to a worker shall be an amount equivalent to -

(a)

80 per cent of the worker's pre-injury average weekly earnings; or

(b)

$400 - whichever is the lesser." (The sum of $400 is subject to indexation.) the correct quantification of a worker's weekly payments. The phrase is defined by s.95(1) to mean:

(a)

the average weekly earnings during the 12 months preceding the relevant injury if the worker has been continuously employed by the same employer for that period; or

(b)

the average weekly earnings for the period less than 12 months preceding the relevant injury for which the worker has been continuously employed by the same employer - calculated at the worker's ordinary time rate of pay for the worker's normal number of hours per week."

The terms used in sub-s.(1) to define "the worker's pre-injury average weekly earnings" are themselves expounded by the succeeding sub-sections of s.95. In Mr Catlow's case, the relevant provision is sub-s.(3):

"For the purposes of sub-section (1) -

(a)

if an ordinary time rate of pay is fixed for the worker's work under the terms of the worker's employment and in addition a piece rate is payable the ordinary time rate of pay shall be deemed to be the sum of the ordinary time rate of pay and the average weekly piece rate payment received by the worker during the relevant period under sub-section (1);

(b)

if an ordinary time rate of pay is not fixed for the worker's work under the terms of the worker's employment, the ordinary time rate of pay shall be deemed to be the average weekly rate earned by the worker during the relevant period under sub-section (1); (ba) if the normal number of work hours per week is fixed in any industrial award applicable to a worker, the worker's normal number of hours per week in that work shall be deemed to be the number so fixed;

(c)

if a normal number of work hours per week is not fixed for the worker's work under the terms of the worker's employment, the normal weekly number of hours shall be deemed to be the average weekly number of hours worked by the worker during the relevant period under sub-section (1); and

(d)

if the worker is employed by more than one employer at the time of the injury, the worker's average weekly earnings shall be calculated -

(i)

if the worker works for one employer for at least the normal number of hours per week fixed in any industrial award applicable to the worker, with reference to that work;

(ii)

if there is no applicable industrial award but the worker works for one employer for at least the prescribed number of hours per week, with reference to that work;

(iii)

if the worker works for more than one employer for at least the normal number of hours per week fixed in any industrial award applicable to the worker, with reference to the work which yields the higher ordinary time rate of pay;

(iv)

if the worker works for one employer for at least the normal number of hours per week fixed in any industrial award applicable to the worker and for another employer for at least the prescribed number of hours per week with reference to the work which yields the higher ordinary time rate of pay;

(v)

if there is no applicable industrial award but the worker works for more than one employer for at least the prescribed number of hours per week, with reference to the work which yields the higher ordinary time rate of pay; or

(vi)

in any other case, by obtaining the worker's average ordinary time rate of pay for all work carried out by the worker for all the employers and applying that rate to the prescribed number of hours per week or to the total of the worker's normal number of hours per week whichever is the lesser; and

(e)

if the worker is a person who -

(i)

under section 6, 7 or 8 is deemed to be working under a contract of service; or

(ii)

under section 9 is deemed to be a worker - the worker's pre-injury average weekly earnings shall be calculated with reference to amounts payable to the worker and deemed to be remuneration under those sections less any part of those amounts attributable to the supply of capital or materials."

3. To ascertain the application of s.95(3), it is necessary to state some of Mr Catlow's work history. By the terms of his employment he was required to work such hours as the employer required over and above the 72 "core hours" which, by an unregistered industrial agreement, employees of the employer were to work at ordinary rates of pay in every fortnight. Mr Catlow generally began earlier and finished later each day than the general warehouse staff and he worked on rostered days off and on Saturdays as his employer required. His remuneration for the hours of work in excess of the core hours of 72 per fortnight was at rates prescribed for overtime in the unregistered agreement. He was injured at work on 28 October 1984 and was off work on compensation between that date and the end of January 1985. He resumed work at the beginning of February 1985 and thereafter continued to work until 26 October 1985. Between the time that Mr Catlow resumed work in February 1985 and his ceasing work on 26 October 1985, he worked a total number of 1963.5 hours of which 664.5 were paid for at overtime rates, being in excess of the 72 core hours per fortnight. During the 12-month period before 26 October 1985, the ordinary weekly rate of pay for a week of 36 hours was $357 at the commencement of the period, $365.40 as from 13 April 1985 and $367.90 as from a date in August 1985. The Tribunal took the arithmetic average of these three amounts and, dividing that average by 36 to obtain an hourly rate, determined an "ordinary time rate of pay" for the purposes of s.95(1) to be $10.09 per hour. The Tribunal then determined the "normal weekly number of hours" pursuant to sub-s.(3)(c) to be the average weekly number of hours worked by Mr Catlow during the 12 months preceding 26 October 1985 including the period when Mr Catlow was off work between 28 October 1984 and 1 February 1985. By dividing the total hours worked (1963.5) by 52, the Tribunal determined the "normal number of hours per week" for the purposes of s.95(1) to be 37.76. Multiplying $10.09 by 37.76, the Tribunal determined Mr Catlow's average weekly earnings to be $381.

4. Mr Catlow and the Commission both appealed to the Full Court of the Supreme Court pursuant to s.68 of the Act. An appeal lies on questions of law only. The questions which were there argued and which remain alive for present purposes are two. First, whether "the worker's ordinary time rate of pay for the worker's normal number of hours per week" in s.95(1) refers to the amount payable to a worker in respect of the hours to be worked at the ordinary time rate of pay rather than an amount calculated by multiplying an ordinary time rate of pay per hour by the average weekly number of hours worked (the Commission's appeal); and, second, (assuming the answer to the first question is negative) whether the "normal number of hours per week" should have been calculated under subs.(3)(c) by dividing the total number of hours worked by Mr Catlow in the 12 months preceding 26 October 1985 by the number of weeks during which Mr Catlow was in fact working or in receipt of holiday pay (namely, 41) rather than by 52 (Mr Catlow's appeal). The Full Court allowed the Commission's appeal. However, the Full Court held that Mr Catlow's ordinary time rate of pay should not have been calculated at $10.09 per hour but should have been calculated by reference to a weighted average of the ordinary rates payable during the 12 months preceding 26 October 1985. Both parties now accept that a weighted average is the correct average for the purposes of s.95(1).

5. The Full Court held that the phrase "the worker's ordinary time rate of pay for the worker's normal number of hours per week" expressed a single concept, and did not import two factors which were to be multiplied. The Court held that the phrase "the worker's ordinary time rate of pay for the worker's normal number of hours per week" was not the product of two factors - ordinary time rate of pay and normal number of hours per week - but a composite concept in which "the worker's ordinary time rate of pay" is the rate of pay "for the worker's normal number of hours per week". The Commission's argument is that the rate referred to is not an hourly rate but the rate of pay for a normal working week in respect of which the ordinary time rate is payable.

6. The Commission supports the Full Court's construction of s.95(1) by reference to the course of parliamentary proceedings leading to the enactment of the Act, the verbal differences between the Act and earlier statutes which expressly took overtime payments into account and decisions of the Industrial Appeals Court of Victoria and of the Industrial Commission of New South Wales, together with some New Zealand decisions which interpreted "ordinary hours" or "normal hours" in differing statutory contexts as hours prescribed by industrial awards or agreements to be worked at ordinary rates of pay. These considerations, which are more fully stated by McHugh J., tend in favour of the Full Court's interpretation, but they are not conclusive. Apart from s.35 of the Interpretation of Legislation Act 1984 (Vict.), material relating to the evolution of the Act could not properly be taken into account at all: see Bitumen and Oil Refineries (Australia) Ltd. v. Commissioner for Government Transport [1955] HCA 1; (1955) 92 CLR 200 , at p 212; Commissioner for Prices and Consumer Affairs (S.A.) v. Charles Moore (Aust.) Ltd. [1977] HCA 38; (1977) 139 CLR 449 , at pp 457, 461,470,477-478; Wacando v. The Commonwealth [1981] HCA 60; (1981) 148 CLR 1 , at p 25; Hadmor Productions v. Hamilton (1983) 1 AC 191, at p 232. Section 35 of the Interpretation of Legislation Act provides, inter alia:

"In the interpretation of a provision of an Act or subordinate instrument -

(a)

...

(b)

consideration may be given to any matter or document that is relevant including but not limited to -

(i)

all indications provided by the Act or subordinate instrument as printed by authority, including punctuation;

(ii)

reports of proceedings in any House of the Parliament;

(iii)

explanatory memoranda or other documents laid before or otherwise presented to any House of the Parliament; and

(iv)

reports of Royal Commissions, Parliamentary Committees, Law Reform Commissioners and Commissions, Boards of Inquiry or other similar bodies."

This provision is extremely broad. Unlike s.15AB of the Acts Interpretation Act 1901 (Cth), s.35 does not restrict the purposes for which it is permissible to consider the extrinsic materials referred to in that section. Whether or not extrinsic material is considered in interpreting a statutory provision, it is clear that the meaning attributed to the statute must be consistent with the statutory text. If the meaning which would otherwise be attributed to the statutory text is plain, extrinsic material cannot alter it. It is only when the meaning of the text is doubtful (to use a neutral term rather than those to be found in s.15AB(1) of the Acts Interpretation Act), that consideration of extrinsic material might be of assistance. It follows that it would be erroneous to look to the extrinsic material before exhausting the application of the ordinary rules of statutory construction. If, when that is done, the meaning of the statutory text is not doubtful, there is no occasion to look to the extrinsic material. In our opinion, that is the present case. We do not propose, therefore, to consider matters preliminary to the enactment of the Act. Nor do we think that interpretations placed by tribunals and courts on words found in a different statutory context can be of much assistance in the interpretation of the critical phrases in s.95. Whatever tendency those decisions might have to support the Commission's argument, the judgments of Gibbs J. and Mason J. in Kezich v. Leighton Contractors Pty. Ltd. [1974] HCA 50; (1974) 131 CLR 362 , at pp 364-365,368-369, can be cited as tending in the opposite direction. We therefore turn, at least in the first instance, to the text of s.95.

7. Section 95(1) provides that the worker's pre-injury average weekly earnings are to be the "average weekly earnings" of the worker while employed by the same employer, whether for 12 months preceding the relevant injury or for a shorter period, "calculated" in the manner therein prescribed. The need for a calculation suggests that there are factors which, when brought into a mathematical exercise, yield the amount of "average weekly earnings" for the purposes of subs.(1). The factors might be those weekly earnings which, during the relevant period, yield an average or they might be the two factors imported by the phrases "ordinary time rate of pay" and "normal number of hours per week". In our opinion, the latter is the natural, if not the necessary, reading of s.95(1) and that construction is borne out by the structure of subs.(3). Sub-section (3) deals distinctly with the two factors referred to in sub-s.(1). It defines "(f)or the purposes of sub-section (1)" the first of these factors in pars (a) and (b) and the second of these factors in par.(c) - and, since an amendment in 1987, in par.(ba).

8. The words "ordinary time" are plainly adjectival, qualifying "rate of pay". If the phrase "for the worker's normal number of hours per week" did not express a separate factor but were merely an adjectival phrase qualifying "rate of pay", the entire phrase would be tautologous. Even if the entire phrase be understood as descriptive of a weekly rate of pay (as the Commission contends), the weekly rate must simply be the amount payable to the worker for all the normal number of hours worked, however ascertained, but leaving out of account any payments or loadings which are not "ordinary time" rates. Reading sub-ss. (1) and (3) together, however, the entire phrase comprehends both a rate (to which pars (a) and (b) of sub-s.(3) relate) and the normal number of hours per week (to which par.(c) - and latterly par.(ba) - of sub-s.(3) relate). As the provisions of sub-s.(3) apply "(f)or the purposes of sub-section (1)", whenever one of the paragraphs of sub-s.(3) applies to the circumstances of the case, the meaning which is given to a phrase in sub-s.(1) which appears in a paragraph of sub-s.(3) is the meaning which that paragraph prescribes. Thus the construction of s.95(1) is governed by the provisions of sub-s.(3). Paragraphs (a), (b), (ba) and (c) of sub-s.(3) apply in every case in which the respective conditions which introduce each of those paragraphs are satisfied. There is no ground for denying their application to any case which falls within them. It is impermissible to construe sub-s.(1) without reference to sub-s.(3) and, in the light of that construction, to read down sub-s.(3) so as to deny its application to cases which otherwise fall within it. That would invert the true process of construction.

9. The Commission places some reliance on par.(d) of s.95(3) to show that the "normal number of hours per week" are the hours to be worked under an award for the ordinary time rate of pay and not the hours normally worked by a particular worker which might include overtime hours. Paragraph (d) governs cases where the worker is employed by more than one employer at the time of the injury. Sub-paragraphs (i), (ii), (iii), (iv) and (v) prescribe the work (that is, the work done for one employer) by reference to which the calculation under s.95(1) is to be made. The language of these sub-paragraphs suggests that the legislature assumed that, whenever an industrial award applied to a worker, the "normal number of hours per week" would be fixed by the award. These sub-paragraphs are followed by subpar.(vi) - "in any other case" - which requires the "worker's average weekly earnings" to be calculated by applying the "ordinary time rate of pay for all work carried out ... for all the employers" to the lesser of the prescribed number of hours (that is, 35: reg.5) or the "total of the worker's normal number of hours per week". Even if par.(d) on its true construction were to exclude overtime hours worked by a worker from being taken into account in cases falling within its terms, the difference in language between par.(c) ("fixed ... under the terms of the worker's employment") and par.(d) ("fixed in any industrial award applicable to the worker") precludes the translation of any policy derived from par.(d) to par.(c). In any event, we do not construe par.(d) as excluding overtime hours. Subparagraphs (i) to (v) do no more than identify the work by reference to which the s.95(1) calculation is to be made and we would read the condition of their application as being either the working of the normal number of hours fixed by an applicable award or the working of at least the prescribed number of hours. A worker who works for those hours is a "full-time worker" as defined by s.5(1): "a worker ... employed for at least the normal number of hours fixed in any industrial award applicable to the worker or if there is no applicable award the prescribed number of hours". (It may be noted that "normal number of hours" in this definition does not appear in a context which refers to the rate of pay for those hours.) The dichotomy in that definition is reproduced precisely in sub-pars (i) and (ii). Of course, the dichotomy is not literally complete for there may be an "industrial award applicable to the worker" which does not fix the normal number of hours. There are few if any awards which do. But, unless the dichotomy is complete in relation to those who are in fact in full-time employment, s.93(7) of the Act, which confers benefits on those who have been predominantly full-time workers, would not cover workers who are in fact in full-time employment under industrial awards which do not fix a normal number of hours. That would be an absurd anomaly. In our opinion, there is no such anomaly: the phrase "if there is no applicable award" covers the case where there is an award which applies to the worker but which does not fix the normal number of hours as well as to workers who work for at least the prescribed number of hours per week under an industrial agreement or simply under the terms of their employment. So construing the definition of "full-time worker" and sub-pars (i) and (ii) of s.95(3)(d), the dichotomy between the two classes of full-time workers is complete. Therefore, an employee who is employed under an award which does not fix the normal number of hours and who works for at least the prescribed number of hours per week for one employer is a "full-time worker" and, if his case falls under par.(d), it falls under sub-par.(ii). His case does not fall under sub-par.(vi) which seems to be designed for cases where a worker works for less than 35 hours for two or more employers. The normal number of work hours per week in a case falling within par.(d)(ii) is ascertained under or consistently with par.(c): that is, either "under the terms of the worker's employment" (by contract) or otherwise by the formula contained in par.(c). For these reasons, the provisions of par.(d) do not require the language of par.(c) to be construed otherwise than in accordance with its natural meaning.

10. So construed, par.(c) of sub-s.(3) applies to Mr Catlow's case. The terms of Mr Catlow's employment, though providing for his working of overtime each week, did not "fix" "a normal number of work hours per week". As that condition of the application of the formula in par.(c) was satisfied, "the normal weekly number of hours" for the purposes of sub-s.(1) is deemed to be the average weekly number of hours worked by Mr Catlow during the 12 months preceding the relevant injury.

11. Mr Catlow's normal number of hours is therefore to be ascertained by dividing the total number of hours worked by him during the 12 months preceding 26 October 1985 by the number of weeks in that "relevant period". The divisor in this calculation is in controversy. The Commission submits that the divisor should be 52; Mr Catlow submits it should be 41 (the number of weeks during which Mr Catlow was actually working or receiving holiday pay).

12. Paragraph (c) of s.95(3) enacts a formula for determining the normal number of hours; it does not simply define what are in fact the normal number of hours for which a worker worked. The "average" of which par.(c) speaks is an average "during the relevant period", and the average "per week" must therefore be ascertained by dividing the total number of hours worked during that period by the number of weeks in that period. In Mr Catlow's case, the period is, or was assumed to be, "12 months preceding the relevant injury": s.95(1)(a). The divisor is therefore 52. It was not argued that a worker who is off work on compensation is not, during that period, "continuously employed by the same employer". Sub-section (1B), which was inserted in 1987 after the Tribunal had determined Mr Catlow's case, may or may not be consistent with this result. It provides:

"For the purposes of sub-section (1), a worker's average weekly earnings shall be calculated by dividing the sum of amounts payable to the worker calculated at the worker's ordinary time rate of pay for the normal number of hours per week by the number of weeks during which the worker actually worked or was on annual, sick or other paid leave."

If the period spent by Mr Catlow away from work on compensation prior to 1 February 1985 is treated as "other paid leave", the divisor under sub-s.(1B) would be 52; if it is not so treated, the divisor would be 41. It may be noted that the number of weeks which answer the description in sub-s.(1B) may differ from the number of weeks in the relevant period under par.(c) unless weeks which do not answer the description do not fall within the relevant period. It is not necessary nor is it desirable to attempt to construe sub-s.(1B) in this case. That should await a case, if earlier clarifying legislation does not resolve the problem, where sub-s.(1B) and sub-s.(3)(c) both apply to the case and would yield different results. The problem does not arise in this case, for sub-s.(1B) was not in operation when the Tribunal made its determination. As s.68(1) limits the appeal to the Full Court to questions of law raised during the proceedings before the Tribunal, the appeal does not extend to a question of law arising from legislation coming into force after that time. The Full Court is required to determine the question of law raised on an appeal under s.68(1) as the Tribunal ought to have decided it. This shuts out any change of law between the Tribunal's determination and the appeal: per Lord Wright in New Brunswick Ry. Co. v. British and French Trust Corporation (1939) AC 1, at p 32. Therefore the law which fell for consideration by the Full Court did not include amendments to the Act made after the Tribunal made its determination.

13. From this discussion, it follows that Mr Catlow's pre-injury average weekly earnings should have been calculated under s.95 as follows:

The Tribunal should first have ascertained the ordinary time rate of pay to which Mr Catlow was entitled during the "relevant period" which is, or is assumed to be, 12 months. The appropriate means of doing this was to take a weighted average, not an arithmetic average. So much is now agreed. But there is no agreement on whether the weighted rate should be calculated by reference to the whole of the relevant period, that is, 12 months. In our view, it is the ordinary time rate during the whole of that period which is to be ascertained and that requires the inclusion of the period during which Mr Catlow was off work on compensation. From the figures provided to us, the weighted average of ordinary time rates for 36 hours work taken over 52 weeks is $362, slightly less than that calculated by the Tribunal. That rate should have been applied to the quotient obtained by dividing the number of hours worked by Mr Catlow during the 12 months preceding 26 October 1985 (namely, 1963.5) by 52. As Mr Catlow's normal number of hours per week was 37.76, his true average weekly earnings were $379.70.

Except for the weighting of the average hourly rate, that is the calculation made by the Tribunal. It arrived at an average weekly earnings figure of $381.

14. The appeal should be allowed, the judgment of the Full Court set aside and in lieu thereof the Commission's appeal to that Court should be allowed in part and Mr Catlow's appeal to that Court should be allowed in part. The determination of the Tribunal should be set aside and in lieu thereof it should be determined that Mr Catlow's pre-injury average weekly earnings were $379.70. The appellant should have two-thirds of his costs both here and in the Full Court.