CATCHWORDS Appeal from Administrative Appeals Tribunal — meaning of involuntary retirement in sub-section 58(3) of the Superannuation Act 1976 - Retrenchment - Abolition of Position -— Whether a person who refuses to accept an 'offer of alternative employment on abolition of his position can be said to have retired involuntarily per sub-section 58(3) Commissioner for Superannuation v. Christopher Bayley VG No. 21 of 1979 Coram: Smithers, Keely and Lockhart Ju. Melbourne . "42 November 1979. a Bie tee Ses wuu wawcuwwos anc neloo Tone Nene aon vem tne AUEE ane kee we ear eh le ef vet ews L "a aE ERO eA ook owen yeaa ale hie tA ot peel ote rma nnentatnntnneeine ee es rt rs areas a ala nthe bg Mia 4 IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISTON VG No. 21 of 1979 VICTORIA DISTRICT REGISTRY BETWEEN: COMMISSIONER FOR ' "SUPERANNUATION . Plaintiff " -FSAND CHRISTOPHER BAYLEY . Defendant *. : ORDER Judges Making Order: Smithers, Keely and Lockhart JJ. -_Date of Order: 42 November 1979 Where Made: Melbourne The Court orders that: The appeal be dismissed with costs including the costs ,-of the respondent's application before the Honourable Mr. Justice Keely on the 14th June 1979. - & IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION VG No. 21 of 1979 VICTORIA DISTRICT REGISTRY } . BETWEEN: COMMISSIONER FOR SUPERANNUATION Plaintiff AND: CHRISTOPHER BAYLEY Defendant Coram: Smithers, Keely and Lockhart JJ. 12 November 1979 REASONS FOR JUDGMENT Smithers J.: In relation to this appeal I have had the advantage of reading the judgment of my brother Lockhart and would express my agreement therein. I also make the following observations. The solution of the problem raised in this appeal depends on the construction of 558(3) of the Superannuation Act 1976 (the Act), That sub-section appears in Part V of the Act which is headed "Eligible Employees Benefits" and more particularly in Division 2 thereof which is headed "Early Retirement Benefit". Section 58 so far as immediately relevant is in the following terms:- "(1) For the purposes of this Act, a person shall be deemed to have ceased to be an eligible 'employee by reason of early retirement if the , person is deemed by sub-section (2) to have retired voluntarily, or by sub-section (3) -to have retired involuntarily.... (3) Where, before a person who is an eligible employee attains the age of 60 years, he ceases to be an eligible employee by reason that - _(a) ... (b) he is retrenched ... (c) ... {d) except in the case of a temporary employee - his position or office ceases to exist, whether by reason of its being abolished or otherwise; or (e) ... the person shall, for the purposes of this Act, be deemed to have retired involuntarily." Section 3(1) of the Act provides a definition of eligible employee and so far as immediately relevant it is in the following terms:- i "Eligible employee" means ~ ! (a) ... a (b) a person who is a permanent employee; (c) ... ' (d) ... (e) ... (£) ..6. a ae ee By the same sub-section "permanent employee" is defined as follows, namely:- "permanent employee" means — (a) a person who is an officer for the purposes of the Public Service Act; and (b) any other person employed by the Commonwealth or by an approved authority in a permanent capacity." and s.3(3) deems persons to be eligible employees in certain circumstances, namely:- "Where a person ceases to be an eligible employee and immediately after so ceasing, again becomes an eligible employee, he shali, for the purposes of this Act, be deemed not to have so ceased." Other sections which may usefully be referred to include s.62(2) which on the Administrative Appeal Tribunal's construct- ion of 8.58(3) would have enabled the defendant to elect for an amount equal to three and one half times the amount of his accumulated basic contributions and s.80 pursuant to which on the plaintiff's construction the defendant's only entitlement arises namely jan entitlement limited to return of his accumulated contributions, In early 1977 the Public Service Board informed the defend— "ant(respondent who was then a permanent employee with the Common- wealth Bureau of Roads (the Bureau) that a decision had been made by the Government that 29 June 1977 would be the last day of the Bureau's operations as a statutory authority and that his employ- ment therewith would terminate on that day. On 24 May 1977 the Board made an offer, to expire on 28June 1977, to the respondent,of an appointment to a position in the Public Service to take effect "from the day immediately following the day on which you cease duty with the Commonwealth Bureau of Roads", At that stage it was the intention of the Government to terminate the existence of the Bureau pursuant to the Commonwealth Bureau of Roads (Repeal) Act 1977 which on 20 June 1977 was proclaimed to come into operation on -30 June 1977. It is clear that from 24 May 1977 until 28 June 1977 the respondenthad the option of taking up a position as a permanent employee of the Commonwealth in the Public Service which would commence on the day after his existing employment with the Bureau was terminated. By virtue of the Commonwealth Bureau of Roads (Repeal) Act the Bureau ceased to exist on 29 June 1977. Had the respondent taken up the offer of new employment he would as a permanent employee of the Commonwealth have been an eligible employee within the meaning of that expression in the Act, It is not clear that if he had taken up the new employment there would not have been a period of time, perhaps of minimum length, between the termination of his employment with the Bureau and the commencement of his employment with the Commonwealth during which he would not have been an eligible employee for the purposes of the Act. .of the Bureau on 29 June he ceased to be a permanent employee 5. It was clear however, that if the respondentrejected the offer of new employment and the Government adhered to its expressed intention to terminate the existence of the Bureau on 29 June the respondent's position with the Bureau would be abolished on that day and that he would thereupon cease to be an eligible employee. The respondentrejected the offer of the nev appointment. On and prior to 29 June he was an eligible employee by virtue of his permanent employment with the Bureau and as a result of the termination of the existence ' within the meaning of s.3(1) of the Act and thereby ceased to be an eligible employee. It is said that although his position was abolished and that he thereby ceased to be an eligible employee on 29 June, it having been within his power to continue in relevant permanent employment and thereby continue to be an eligible employee within the meaning of the Act, he ceased to be an eligible employee on 29 June by reason that he had elected to reject permanent employment in the employment which he had been offered and not by reason of the abolition of his positionwith the Bureau, or certainly not only by reason of such abolition. It is said therefore that when he ceased to be an eligible employee on 29 June such cessation was not, in the words of s,58(3) of the Act, by reason that his position ceased to exist,but that such cessation occurred by reason of his refusal to take up the new appointment or at least that his refusal was a reason for such cessation, It is said that in either case it cannot be said that he ceased to be an eligible employee by reason that his position was abolished within the meaning of s.58(3) of the Act. It is certainly true, in a sense, that the respondent ceased to be an eligible employee on 29 June 1977 by reason of his rejection of the offer of new employment. It is arguable that had he accepted that employment there would have been no gap between the termination of his employment with the .Bureau and the commencement of his employment with the Commonwealth (see Prowse v. McIntyre (1961) 111 C.L.R. 264 and Robertson v. the Commissioner for Taxation (1952 )86 C.L.R.) 463. It was also contended in the alternative that if there would have been any such gap then s.3(3) of the Act was applicable and thereby, notwithstanding such gap the respondentwould by statutory fiction be deemed not to have ceased to be an eligible employee between the termination of his employment with the Bureau and the commencement of his employment with the Commonwealth, But it is a question whether the possible preservation of the respondent's status as an eligible person by his acceptance of the new appointment is really relevant to the problem which arises under s.58(3) of the Act. ween eee ek wns Nate eek oe a8 Ae see ke me Looking at the provisions of the Act in general the basis of the scheme established is seen to be that the duties and rights of a participant in the scheme depend upon the existence or the cessation of his status as an eligible employee. But existence of that status depends upon the existence of relevant employment. It is an eligible employee who must contribute to the fund (see s.45) and entitlements arise when the participant ceases to be an eligible person (see Part V). In other words contributions must continue to be paid by the participant in the scheme —-while he is in relevant employment and he becomes entitled to benefits when relevant employment ceases. It is the effect of ss.55, 58, 66 and 80 that once a person finally ceases to be an eligible employee then some entitlement accrues to him. The reason or cause of the termination of the relevant employment which brings the status of being an eligible employee to an end is only important for the purpose of measuring the extent of the participant's entitlement, In each of the sections mentioned above an entitlement ' arises upon cessation of the status of being an eligible employee but it varies according to the manner in which the employment upon which it depended came to an end whether by death, retirement on request, resignation, invalidity or otherwise. Those provisions of these sections which refer to the manner in which eligibility ; was lost are actually referring to the manner in which the relevant employment was lost. One does not suffer retirement from a state of being an eligible person but from employment. One does not resign from a state of being + eee an eligible person but from employment, per Shylock:- "You take my house when you do take the prop that doth sustain my house." The use in those sections of the expression "ceases to be an eligible employee" is but a convenient method of achieving in a few words what would otherwise require lengthy and complicated verbiage to cover the various kinds of employment which are comprehended within the meaning of "eligible employee" as defined in s.3 of the Act, termination of any of which may give rise to an entitlement, - It is the purpose of all these provisions to prescribe the criteria according to which the extent of the entitlement of a participant may be determined when he finally ceases to be an eligible employee. They look forward to that occasion and when it arrives the only relevant question is, what was the reason for the cessation? The answer is that it depends upon the way in which the employment upon which the existence of the status had theretofore depended came to an end. It we re re re ee ee ee is basically this consideration which underlines the following passage in the reasons for judgment of the majority of the members of the Tribunal, R.K. Todd and W. J. Smith:- "The fact is that the applicant did cease to be an eligible employee, and that his position with the Bureau did cease to exist. It seems incontrovertible that the reason, as a matter of law, why he ceased to be an eligible employee was that the position the holding of which had given rise to the eligible employment had ceased to exist. No other cause of cessation of eligible employment was necessary. In other words, we think that the words "by reason that" connote a casual link, in terms of legal result, between the cessation of eligible employment and the cessation of existence of the office." Reading s.58(3) in the light of the foregoing it seems clear that it is to be construed as providing that where, before a person who is an eligible employee attains the age of 60 years, he ceases to be an eligible employee by reason that the employment by virtue of which, while it lasted, he had been an eligible employee, has come to an end by reason of one of the circumstances set out in paragraphs (a) to (e) of the sub-section the person shall for the 'purposes of the Act be deemed to have retired involuntarily. So construed there is no room for the suggestion that a state of being an eligible employee might have been preserved by -the acceptance of some particular employment offered by the Commonwealth is of any significance. Section 58(3) takes effect when two things happen, namely, when a ee ae 10. bd someone ceases to be an eligible employee because of the termination of the relevant employment and when the termin-~- ation of that employment resulted from one of the cir- cumstances, specified in paragraphs (a) to (e) thereof, It would be a matter for surprise that under the scheme an employee whose position is abolished by the Commonwealth should be deprived of the entitlement otherwise arising thereon by the simple expedient of the Commonwealth offering him a permanent position, at any level, at any place, on any terms and which he is under no obligation to accept. That this was appreciated by the appellant was _reflected in the submission made both before the Tribunal and before this Court, namely that in some way the nature of the terms and conditions of the employment offered to and regected by the respondentwere relevant, It was urged that the terms and conditions of the employment actually offered were substantially the same as those of the respondent's employment with the Bureau and therefore reasonable for alternative employment. But if the section is to be -construed as the appellant would suggest the attractiveness or the reverse of the new employment would be quite irrelevant, The only necessary feature of the proffered alternative employment would be that it was permanent employ~ ment with the Commonwealth or an authorised authority. It was put that the section was to be construed by reference to there being discernable in the Act the concept 11. of a Commonwealth "umbrella". The suggestion was that ' employment with an authorised statutory authority and with : the Public Service of the Commonwealth were covered by the umbrella, so that as long as employment in some sphere under the umbrella was available the failure to take up that employment was a factor by reference to which the status of eligible employee would continue notwithstanding ' 7 the involuntary loss of employment in a statutory authority and even although that loss occurred by that authority being abolished, There is no validity in this but it appears to have influenced those departmental officials -who were required to assess the respondent'sentitlements under the Act. Thus in the reasons for refusing a reconsideration of the Commissioner's decision dated 6 October 1978 the statement appears that "the offer by co the Public Service Board of employment in the Department } ; of Transport with no change in status or duties amounts to a continuation of employment." Such a view ignores the essential character of the defendant's employment with the ' Bureau, namely, that employment with the Bureau was employment | with an independent legal entity with its own separate legal personality. It ignores that the proposed employment was with a stranger to that employment. It ignores also that there were significant differences between ' = eA the terms of the new employment and those of the old. The terms of the Public Service Board memorandum A are relevant, namely:- ee ne ee en - oeeee- He e - _ ee wee ec eee eee ee - - _ eee ae, o 12. a . 2. The Board has made offers of employment to all staff of the Bureau, These offers are on the basis that the positions to which the Bureav staff will be appointed are identical in terms of duties and classification to those occupied by the staff at present and those positions are located in Melbourne. 3. These positions have been established to bring staff into the Public Service. In the future a new organisation amalgamating the two Bureaux will be established. It is possible that not all the existing positions in each Bureau will be re- created in the amalgamated organisation, Normal re-deployment action will be undertaken and the possibility that some staff will be retrenched must therefore be acknowledged, 4, There is also the possibility that the staff will be asked to transfer to Canberra at some time in the future. Normal arrangements for such transfers will apply including 12 months notice of the move. 5. The Board considers in those circumstances that the offers of employment under the Public Service Act constitute suitable alternative employment. Refusal to accept such an offer would prima facie amount to voluntary separation from Commonwealth Government employment in respect of which no redundancy benefits would be. payable." The conclusion contained in the last sentence is not ain accordance with the law of contract or with any of the provisions of any of the statutes relied upon. It proceeds on the erroneous basis that in some way there was -an obligation on the appellant to accept the proffered employment, There was none, Having regard to the foregoing the correct view is that when s,58(3) refers to a person who ceases to be an eligible person by reason of the termination of his employment in circumstances specified in paragraphs (a) to (e) of that 15. sub-section the reference is to a person who has ceased to be an eligible person by reason of the employment by virtue of which he had theretofore been an eligible person has come to an end. It follows that the rejection of the offer of alternative employment in the public service after the termination of the respondent's employment with the Bureau is not a relevant consideration in the application to the respondentof the provisions of -s.58(3) The appeal should therefore be dismissed with costs. fcr wee OE TE SE PO TE Ta | 7 i Joga te yl he tretise G2) 4 ~ p Pes ee Der et A et eee or the Perel ace Judpciom kerri «2 the 4 | Horevable Ma. jusths Smother | - 5 S 4 , i Ez oa { 4 Associste 42 J * , j 1 Ed Died: 12-11-77 i ' of SOS ees See eerie | ae ee oe a ee ee Sena - Saree Sy . pe te ee A ee ee te IN THE FEDERAL COURT OF AUSTRALIA GENERAL DIVISION V No. 21 of 1979 ey VICTORIA DISTRICT REGISTRY BETWEEN: COMMISSTONER FOR SUPERANNUATION Plaintiff AND: CHRISTOPHER BAYLEY Defendant ° REASONS FOR JUDGMENT CORAM: SMITHERS, KEELY AND LOCKHART JJ. 12 NOVEMBER 1979 At Melbourne KEELY J. The facts, correspondence and statutory provisions relevant to this appeal from a decision of the Administrative Appeals Tribunal are set out in the reasons for judgment of Lockhart J. together with the three questions arising for consideration. Because of the opinion which I have formed as to the second and third of those questions I do not find it necessary to express any opinion as to the first question, namely, whether the defendant Bayley was "retrenched" within the meaning of s.58(3)(b) of the Superannuation Act 1976 - a question which the Administrative Appeals Tribunal did not decide. 'The second question is whether the defendant's position or office had ceased "to exist, whether by reason of its being abolished or otherwise" within the meaning of s.58(3)(d) of the Superannuation Act 1976. Mr J. D. Phillips Q.C. on behalf of fee Ge ee eee ee -~2- the plaintiff contended that the defendant was employed by the Commonwealth Bureau of Roads under an "engagement, arrangement or contract entered into by or on behalf of the Bureau as a party and in force immediately before the commencing day" of the Commonwealth Bureau of Roads (Repeal) Act 1977 (the 1977 repealing Act). He contended that, by virtue of the provisions of s.8 of the 1977 repealing Act, the engagement, arrangement or contract was continued in force and had "effect, on and after the commencing day, as if .. the Commonwealth were substituted for the Bureau as a party to the engagement, arrangement or contract".: I am unable to accept the plaintiff's contention that the provisions of s.8 of the 1977 repealing Act have the effect in law that a person employed by the Bureau would have the Commonwealth substituted as his employer irrespective of his wishes as an employee. S.8 should not be construed as having such an effect unless the words clearly require such a construction. The use of the words "engagement, arrangement or contract" in the section are not intended in my opinion to include the appointment of officers or the engagement of employees on terms and conditions of service determined by the Bureau with the approval of the Public Service Board under ss.18 and 19 of the Commonwealth Bureau of Roads Act 1964. Having rejected the argument based upon s.8 of the 1977 repealing Act, it follows that in my opinion the position or office of the defendant ceased to exist upon the commencement of the 1977 repealing Act. sae t. - 4 : erred ln ee om tree ti en Lie La, wee The third question is whether the defendant ceased "to be an eligible employee by reason that ..- his position or office (ceased) to exist, whether by reason of its Leing abolished or otherwise" within the meaning of s.58(3)(d) of the Superannuation Act 1976. I agree with Lockhart J. that, although the words "by reason that" require the existence of a causal connection between the position or office ceasing to exist and the person ceasing to be an eligible employee, it is not necessary that the fact of the position or office ceasing to exist be the sole or dominant cause of the person ceasing to be an eligible employee. I have come to the conclusion that the defendant ceased - -to be an eligible employee "by reason that" his position or office had ceased to exist. In arguing for the contrary view ' Mr Phillips 'sought to rely upon the fact that the defendant had failed to accept the offer made by the Public Service Board, dated 24 May 1979, that he might "elect to be appointed to an office in the Australian Public Service in the Department of Transport as a Clerk Class 9 with effect from the day immediately following the day on which (you) cease duty with the Commonwealth Bureau of Roads". He contended that if the defendant had accepted that offer he would never have ceased to be an eligible emplovee, relying on the principle that a day is to be considered an indivisible wnit of time. ' i} nt oo ne - ton maw ee sae we ne te ee -~ 2 6 oe ' Terr mewemee eeR On me nn he cae ete mt et A eed peren eee I agree with the reasons given by Lockhart J. both tot ee ee in expressing the opinion that that principle has no » application to the provisions of the Superannuation Act wv 1976 relating to this appeal and in expressing his opinion as to the purpose of 's.3(3). I agree with the orders proposed by Lockhart J. Me nnn I certify thet this and the three preceding pages aie a true copy of the Rersous fo. Judgment heicin of the Torozrabl> Biz. Justice Kel > fee WOK Dated: 12~tt-~70 ae A ak ey, Nerae Eee ae iibmitadtniatenemneneend a " . ~ SOT IT Tt ene + ~e en eo "a we oe a ee ee ee es a IN THE FEDERAL COURT OF AUSTRALIA GENPRAL DIVISION V No. 21 of 1979 VICTORIA DISTRICT REGISTRY BETWEEN : COMMISSIONER FOR SUPERANNUATION Plaintiff AND CHRISTOPIIER BAYLEY Defendant REASONS FOR JUDGMENT CORAM: SMITHERS, KEELY AND LOCKHART JJ. 12 November 1979 At Melbourne LOCKHART J. This is an appeal from a decision of the Administrative Appeals Tribunal in its General Division made on 11 May 1979 setting aside the decision of the Commissioner for Superannuation ("the appellant") made on 13 January 1978 and confirmed upon reconsideration under s. 154 of the Superannuation Act 1976 ("the Act") that the benefit payable to Christopher Bayley ("the respondent")out of the Superannuation Fund established by the Act on his ceasin employment with the Commonwealth Bureau of Roads ("the Bureau") on 20 June 1977 was an amount equal to his accumulated contributions. The Tribunal decided that the entitlement of the respondent should be determined upon the basis of his being deemed to have retired involuntarily within the meaning of s. 58 (3) of the Act so that the benefit payable to him is an amount equal to 34 times his accumulated contributions. Before turning to the facts I should mention one preliminary matter. . 20/2 mee ee ER AO, Be eee Be er ee A ee An application was made to the court by the appellant for various directions including an order that the appeal] be heard by a full court of this court. On 14 June 1979, Keely J. ordered that the matter be listed before a full court of the court for the purpose of hearing that application. That application was heard by a full court constituted by Smithers J., Keely J. and myself. The application was not opposed by the respondent. We decided that we would hear the appeal which we then did. The facts are in a narrow compass. The respondent commenced employment with the Bureau on 9 February 1970 as a permanent employee. He remained in that employment until the end of June 1977. He was then a principal transport planner class 9. The Bureau was constituted under the Commonwealth Bureau of Roads Act 1964 as a body corporate with powers usually given to a statutory corporation including power to engage employees: ss. 5 and 18. The terms and conditions of service of employees engaged by the Bureau were determined by the Bureau, but with the approval of the Public Service Board: s. 19. Employees of the Bureau were not officers for the purposes of the Public Service Act 1922 (to which I shall refer as "the Public Service Act"). The circumstances in which the respondent's employment with the Bureau ceased are important. The Commonwealth of Australia decided that the Bureau and another Government body, the Bureau of Transport Economics, be amalgamated to form a new Bureau of Transport Economics. To give effect to that decision, the Commonwealth Bureau of Roads Act 1964 was repealed by the Commonwealth Bureau of Roads (Repeal) Act 1977 (Act No. 27 of 1977 (to which I shall refer as "the 1977 Act") which came into operation on 30 June 1977, being the date fixed by proclamation pursuant to s. 2. On 30 June 1977, the property of the Bureau was vested in the Commonwealth which also assumed its liabilities: s.5 In the result, the Bureau ceased to exist and the respondent ceased to be an employee of the Bureau. He remained an employee of the Bureau until it ceased to exist. The Public Service Act was amended by the Public Service Acts Amendment Act 1975 (Act No. 40 of 1975) (to which i shall refer as "the 1975 Act") which introduced division 9F titled "Transfer of Other Persons to the Service", That division ~ provided that the Governor-General may, by declaration pubiished in the Gazette, declare that the division shall apply in relation to a class of persons specified in the declaration, being persons who are employed by an Australian authority otherwise than under the Public Service Act: s. 81 ZN (2). It is agreed that a declaration was published in the Gazette pursuant to the lastmentioned provision and that the respondent is a person included in the relevant class specifie! in the declaration. A "declared class of persons" means a class of persons specified in a declaration under sub-section (1) or (2) of s. 81 ZN: see s. 81 ZN (1). Sections 81 ZP, 81 ZQ and 81ZR provide:- "81 ZP. (1) The Board may, by notice in writing addressed to a person who is included in a declared class of persons, inform the person ~- (a) that he may elect to be appointed to the Service: or LS ees A ne ne at ee oa (b) that he may elect to be employed in the Service in a specified Department. "(2) An election in pursuance of a notice given under sub-section (1) shall be made in writing addressed to the Board and shall be delivered to the Secretary of the Board within the period of 21 days after the date of the notice or within such further period as the Board, within that period of 21 days, allows. "(3) A notice under sub-section (1) shail include particulars of the proposed appoint ment or employment." "81 ZQ" Where a person elects, in pursuance of a notice given under section 81ZP, to be appointed to the Service, the Board may (notwithstanding any other provision of this Act except paragraphs (a) and (c) of section 34) appoint him accordingly." "81 ZR. (1) Where a person elects, in pursuance of a notice given under section 81 ZP, to be employed in the Service in the Department specified in that notice, the Board may authorize his employment accordingly. "(2) Sub-sections (1) and (2) of section 82 do not apply in relation to any employment authorized by the Board under sub-section (1) of this section." The acting secretary of the Public Service Board wrote to the respondent in these terms on 24 May 1977:- "As you are aware the Government has decided -that the Commonwealth Bureau of Roads and the present Bureau of Transport Economics are to be amalgamated to form a new Bureau of Transport Economics. The new Bureau will be staffed under -the Public Service Act and in accordance with the normal practice staff from the Bureau of Roads will be transferred to the Australian Public Service under Division 9F of the Public Service Act. To ensure that staff from the Bureau of Roads and the present Bureau of Transport Economics are on equal footing when the amalgamation occurs it has been decided that staff from the Bureau of Roads should transfer to the Public Servace at their substantive level in the Bureau of Roads. Staff associations ~have been informed of this approach. The wee /5 a em Board has agreed to provide sufficient positions to enable Bureau of Roads staff to be appointed or employed at their substantive levels. A review of the staffing and establishment needs for the new Bureau is currently being conducted but as an interim measure staff will be appointed to or employed in the specially provided positions. Depending on the staffing needs of the new organisation it may be necessary for a number of staff to be redeployed to other areas in the Department of Transport or other departments. No guarantees can therefore be given that staff of either Bureau will remain in their present ! positions but every effort w1i11 be made to place staff redeployed in positions at their substantive levels. The purpose of this letter is to inform you that you may elect to be appointed to an office 1n the Australian Public Service in the Department of Transport as Clerk Class 9 with effect from the day immediately following the day on which you cease duty with the Commonwealth Bureau of Roads. Your commencing salary will be the same as that to which you would have been entitled - in your substantive position in the Commonwealth Bureau of Roads. Under Section 81ZS of the Public Service Act you will continue to receive salary at the rate to which you would have been entitled had you remained in your former employment, at least until the staffing of the new organisation is resolved. Alli other conditions of employment will be those provided by or under the Public Service Act and Regulations. If you -have any specific queries on conditions you should contact Mr. Ezard, Department of Transport, Melbourne (telephone 6158514). An election in pursuance of this notice must be in writing and must be delivered to the address shown within twenty-one days of the date of this notice. To simplify administration, 1t is suggested that if you wish to accept this officer you compiete the attached form of election and return it to Mr, Ezard, Department of Transport, Melbourne, within the twenty-one day period." An office circular No. 46/1977 was sent to all staff of the Bureau on 20 June 1977 in these terms:- +../6 "REPEAL OF THE BUREAU'S ACT The Chairman has now received advice confirming that the Commonwealth Bureau of Roads (Repeal) Act 1977 has been proclaimed to come into operation on the 30th June, 1977. This means that the last day of the Bureau's operations is the 29th June, 1977. (sed. ) R. F. McCormack R. F. McCormack Secretary" The respondent wrote to the secretary of the Bureau on 24 June 1977,so far as relevant,in these terms:- "rT have noted the advice to the Acting Chairman in Office Circular 46/1977 regarding the last day of the Bureau's operations being the 29th June, 1977, and am somewhat uncertain of the implications for me. Should I take Office Carcular 46/1977 as notice of the intention of the Bureau - to unilaterally terminate my services as of the close of business on the 29th June 1977? If this 1s the case, I must express my disappointment at the apparent lack of regard for staff in this matter; one might have expected a more personal approach from the Bureau." -The -secretary replied to the respondent by letter of 27 June 1977 which, so far as relevant, is in the following -terms:-— "] am writing to reply to your letter of the 24th June which I received this afternoon, the 27th June. First, the only purpose of Office Circular No. 46/1977 was to advise staff that, as the Act to repeal the Bureau's Act had been Proclaimed to come into operation on the 30th June 1977, the last day of the Bureau's operations would be the 29th June 1977. I was referring, as I felt all members of the staff ~would have realised, to the last day of the Bureau's operations as a Statutory Authority. ; we /7 ee ee ne ne ve ee ee ee et In these circumstances I see no grounds for H you to read anything else into Office Carcular No. 46/1977 particularly, again as you and other members of the staff are aware, as staff have been offered appointment to positions in the new Bureau of Transport Economics which is to continue the Bureau's functions. Any further advice I can give you will depend on whether you accept the offer to join the Public Service and I believe you have until 5.00 p.m. today to do so. If you do not accept the offer then I have no alternative but to arrange for your final pay to be available to you as soon as possible after the close of business on the 29th June. (I shall do everything possible to arrange for ' payment to be available during the afternoon of the 29th but at this very late stage I am doubtful that the necessary arrangements can be made)." The respondent wrote to the secretary on 28 June 1977 in the following terms:- "Thank you for your letter of 27 June 1977 . seeking to clarify the purpose of Office , Circular No. 46/1977. The letter has, however, served to further confuse me. On the one hand you state that the only purpose of the Circular was to notafy staff that the last day of operation of the Statutory Authority known as the Bureau of Roads is to be the 29th June 1977. On the other hand you make reference to my final pay being made up. If the Bureau does not intend to act unilaterally to terminate my services then I see no reason to make up my final pay. TI have always found my conditions of service -~with the Bureau to be quite satisfactory ' and have no desire to leave the service of the Bureau. I assume, since you indicate that nothing else should be read into Office Circular No. 46/1977, that I should report for duty as normal on the 30th June 1977." : The secretary replied to the lastmentioned letter ' on 29 Jume 1977 in these terms:- ..-/8 - ee en meee ae oe ee le "With reference to your letter of the 28th June (received today) I propose not toa argue the points you have raised. All I am prepared to say 1s that as you have decided, voluntarily, not to accept the offer of appointment to the Public Service you should not report for duty on the 30th June. The facts are that on and from that date no authority exists for you to be given work or to be paid becase the Bureau, your present employer, will have gone out of existence and because the Department of Transport (the Bureau of Transport Economics) will have no authority, in view of your decision, from the Public Service Board (the employing authority for the Public Service including the Department of Transport) to employ you. It was for these reasons that, as I advised you, I had no alternative but to arrange your final payment to the close of business today, the 29th June." Section 3 (1) of the Act defines an "eligible employee", so far as relevant, as follows:- "Eligible employee" means (a) a person who is an officer for the purposes of the Public Service Act}; and (b) any other person employed by the Commonwealth or by an approved authority 1n a permanent capacity, but does not include a part-time employee who is not an approved part-time employee." ha The same section defines "permanent employee" in these terms:- 1 "Permanent employee" means ' (a) a person who is an officer for the purposes of the Public Service Act; and (b) any other person employed by the Commonwealth or by an approved authority 00/9 in a permanent capacity, but does not include a part-time employee who is not an approved part-time employee;" When the Act commenced on 1 July 1976, the respondent became an "eligible employee" within the meaning of s. 3 of the Act as, immediately before the commencement of the Act, he was an employee for the purposes of the superceded Act, and had continued to be such an employee: see paragraph (a) of the definition of "eligible employee", He was also a "permanent employee" in that he was a "person employed...by an approved authority in a permanent capacity." The Bureau was an "approved authority." ~ The appeliant decided that the respondent should receive only a return of his contributions under the Act pursuant to s. 80, The respondent applied for a reconsideration of the appellant's decision under s. 154%. The appellant reconsidered the matter but confirmed his earlier decision. 'The respondent applied to the Administrative Appeals Tribunal for a review of the appellant's decision which, by a majority, set aside the appellant's decasion and decided that the respondent should receive a lump sum benefit equal to 34 times his contributions, a benefit prescribed by s. 62 (2) of the Act. Those are the facts. It 158 necessary to set out some of the provisions of the Act to understand the respondent's case that he is entitled to the larger benefit. Section 59 provides that where a person ceases to be an eligible employee by reason of early retirement, then, if «2/10 ee ee ee oe teen Meee ~10— the person does not make an election under s. 62, he is entitled to certain retirement benefits specified in the section. Section 62 (1) and (2) provide:- "62. (1) Where a person who ceases to be an eligizble employee by reasm of early retirement is deemed, by sub-section 58 (3); to have retired involuntarily, the person may, not later than 1 month after his last day of service, elect by notice in writing to the Commissioner, that, in lieu of pension and lump sum benefit being payable under section 59, a lump sum benefit be paid under sub- section (2) of this section and, where he had paid supplementary contributions, an additional lump sum benefit 1n accordance with sub-section (3) of this section. . (2) Where a person makes an election under sub- section (1) of this section, the person is entitled, in lieu of pension and lump sum benefit to which, but for the election, the person would be entitled under section 59, to payment of a lump sum benefit of an amount equal to 3$ times the amount of his accumulated basic contributions." It is common ground that the respondent elected by notice in writing to the appellant that a lump sum benefit be paid to him under sub-section (2) of s. 62. Section 58 provides, so far as relevant:- "58. (1) For the purposes of this Act, a person shall be deemed to have ceased to be an eligible employee by reason of early retirement if the person 1s deemed by sub-section (2) to have retired voluntarily, or by sub-section (3) to have retired involuntarily." "(3) Where, before a person who is an eligible employee attains the age of 60 years, he ceases to be an eligible employee by reason that -- (a) if his minimum retiring age is less than 60 years and he has attained that minimum retiring age — he is retired, otherwise than at his own request; (b) he is retrenched, he is retired under woefl -11- section 20 of the Public Service Act or he is retired otherwise than under that Act on a ground similar to the ground on which persons may be retired under section 20 of the Public Service; (c) in the case of the holder of a statutory office - the term of his appointment to that office has expired and, notwithstanding that he was eligible for re-appointment to 'that office and desired to be so re-appoanted, he was not re-appointed; (ad) except in the case of a temporary employee - his position or office ceases to exist, whether by reason of its being abolished or otherwise; or {e) he is retired under section 67 of the Public Service Act or his employment or appointment is terminated otherwise than under that Act on a ground similar to a ground specified in that section, the person shall, for the purposes of this Act, be deemed to have retired involuntarily." The questions that fall for determination are:- 1. Whether the respondent was retrenched: s. 58 (3) (b)s Re Whether the respondent's position or office ceased to exist, whether by reason of its being abolished or otherwise: s. 58 (3) (a); -and 3. If either 1. or 2. 1s answered in the affirmative, whether the respondent ceased to be an eligible employee by reason that he was retrenched or by reason that his position or office ceased to exist, I turn first to the question whether the respondent was retrenched. The word "retrench" has received little judicial consideration, In a decision of the Industrial «2/12 -12- Commission of New South Wales in the "Preference of Employment Case" reported in the Law Book Company's Industrial Arbitration Service, Current Review June 1977 at para.Y76 thear Honours said at p. 230:- "Pinally there are limitations in connection with retrenchment flowing from the connotation of that term. That was a matter in dispute. For the employers 1t was said that "retrenchment" meant reducing the number of persons employed for a reason such as slackness of trade and that the word was not apt to ianclude termination of employment by way of dismissal for misconduct or by way of retirement at retiring age or because of an employee becoming permanently incapacitated for work, but it was argued on behalf of the Labor Council that "retrenchment" referred to termination of employment by an employer for any reason. In our opinion "retrenchment" connotes cutting down or reducing for some cause pertaining to the employer's business or enterprise and is not a term apt to deal with termination of employment for reasons peculiar to an employee. We think that the meaning contended for by the employers is the correct one and that, accordingly the section limits the absolute preference which is to be -given on termination of employment to termination by way of retrenchment in that sense." In the matter of Federated Miscellaneous Workers! Union and Adelaide Milk Supplier Co-Operative Limited, a decision of the Commission in Appeal Session in South Australia, reported in C.C.H. Australian Industrial Law Review Volume 21 No. 3 (7 February 1979) a comparison was -made between the words "retrenchment" and "redundancy". The Shorter Oxford English Dictionary defines the verb "retrench", so far as relevant, asi- "2, To cut off, 3. To cut down, reduce, diminish; esp. to curtail (one's expenses) py the exercise of economy 1625. To do away with (an item of expense) 1647." -+-/13 a + ae nae -13- Webster's New World Dactionary of the American Language defines "retrench", in its transitive sense, as: "1. To cut down or reduce (esp. expenses); curtail. 2. To cut off or out;" Whether "retrenchment" connotes termination of employment by an employer for any reason or for some reason pertaining to the employer's business and not for reasons peculiar to a particular employee, it is not necessary to decide. In my opinion, whatever else the word may mean, it is not apposite to describe the termination of the respondent's employment by an Act of Parliament, namely the 1977 Act, which brought to an end the existence of the employer and the relationship of employer and employee. Accordingly, in my opinion the respondent was not retrenched. I turn to the second. question, whether the respondent's position or office ceased to exist, whether by reason of its being abolished or otherwise, within the meaning of s. 58 (3) (d). Before the Tribunal it was conceded by the appellant that the answer to this question should be in the affirmative. Mr. Phillips Q.C., who appeared with Mr. Henshall for the appellant before this court, contended that the respondent's position and office did not cease to exist by reason of s. 8 of the 1977 Act which provides:- 230/14 "8, An engagement, arrangement or contract entered into by or on behalf of the Bureau as a party and in force immediately before the commencing day continues in force notwithstanding the repeal of the repealed Act but that engagement, arrangement or contract has effect, on and after the commencing day, as if -- (a) the Commonwealth were substituted for the Bureau as a party to the engagement, arrangement or contract; and (vb) any reference in the engagement, arrangement or contract to the Bureau were (except in relation to matters that occurred before that day) a reference to the Commonwealth." Other relevant sections of that Act are ss. 5 and 10 which provide as follows:- "5, On the commencing day -- (a) any rights, property or assets that immediately before that day were vested in the Bureau are, by force of this section, vested in the Commonwealth; and (vb) the Commonwealth becomes, by force of this section, liable to pay and discharge any debts, liabilities or obligations of the Bureau that existed immediately before that day." "10. Where, immediately before the commencing day, procecdings to which the Bureau was a party were pending in any court, the Common- wealth is, by force of this section, substituted for the Bureau as a party to the proceedings." It was contended by Mr. Phillips Q.C. that, as the respondent was engaged as an employee by the Bureau, that was an engagement, arrangement or contract entered into by the Bureau in force immediately before the commencing day and, therefore, was continued 1n force .-./15 whine ane te ee tlt die kee oe ee ee 8 PR ~15= by s. 8 and had effect after the commencing day as if the Commonwealth were substituted for the Bureau as the respondent's employer. Division 9F of the 1975 Act governs the transfer of persons employed by an Australian authority (as that expression 1s defined by s. 81 ZM (1) ) to the Public Service. Those persons may elect to be appointed to the Public Service or to be employed therein in a specified department, Following such election the 'Public Service Board may appoint those persons to the Public Service or to be employed therein in the department specified in the notice of election. The Division is intended to facilitate the transfer of persons employed by a State, a State authority or a Commonwealth authority to the Commonwealin Public Service where the Commonwealth has decided to establish a new department or to re-organise or amalgamate existing departments or authorities, In each case, the person concerned has the right to decide for himself whether he becomes a member of the Commonwealth Public Service. Such membership is not thrust upon him against his will. Yet the contentions of the appellant would have it otherwise, for a person employed by the Bureau would automatically, by operation of s. 8 of the 1977 Act, cease to be an employee of the Bureau and have the Commonwealth as his new employer regardiess of his wishes. + -/16 et Se i tte ennai ae a pant ay ~~ ne ~16= This apparent Act and Davision 9F in is construed, as in my including contracts of the Bureau and its empl A further reas of s. 8 is that the pos Service generally is re conflact between s. 8 of the 1977 the 1975 Act is avoided if s. 8 opinion it should be, as not service or engagement between | oyees or officers. on in support of this construction ition of an officer of the Public gulated by the terms of the Public Service Act, not by contracts of service or engagement between the Commonwealth or the Public Service Board and ' -the persons concerned. If s. 8 had the meaning and effect contended for by the appellant, the Commonwealth would find itself with former employees of the Bureau as its own employees, the relationship being governed by contract and the terms of employment would be those that previously appliec between the Bureau and the employees. Those employees would be employed by the Commonwealth in a Government department yet stand outside the Public Service Act in important aspects. In my opinion s. 8 is a savings provision intended to keep on foot engagements, arrangements or contracts betweer the Bureau and persons or corporations but does not apply to contracts of service between the Bureau and its staff. No other reasons were advanced by the appellant to support the contention that the position or office of the respondent did not cease to exist upon the commencement of the 1977 Act. Accordingly, in my opinion, the position or office 226/17 ~17- of the respondent ceased to exist upon the commencement of the 1977 Act. It is not necessary to decide whether what ceased to exist was the position or the office of the respondent. It may have been e1ther or both. I turn to the third question, whether the respondent ceased to be an eligible employee by reason that his position or office ceased to exist. The appellant contended that for a person to cease to be an eligible employee by reason that his position or offace ceased to exist (s. 58 (3) (ad) ) the former must be caused by the latter. It was contended that the abolition of the respondent's position or office was the occasion of his ceasing to be an eligible employee but not its cause. The cause was the failure of the respondent to accept the Commonwealth's offer of alternative employment. The respondent did not dispute that the abolition ' of his position or office must be the cause of his ceasing in fact to be an eligible employee; but contended that 1t was/the cause. The phrase "by reason that" and the similar phrase "by reason of" have been considered judicially in various ' contexts, sometimes in conjunction with other words such as "or in pursuance of", Generally, the phrase has been con- strued so as to require a causal connection between two or more things: see Izzard v. Universal Insurance Co. Ltd. 1937 A.C. 7733 Baker v. Provident Accident and Whitecross Insurance Co. Limited 1939 2 All E. R. 690; Vandyke v. Fendei 1970 2 Q.B. 292 especially per Lord Denning at p. 306; «2/18 a et ~-18— and Nottingham v. Aldridge 1971 2 Q.B.D. 739. Mr. Phillips Q.C. referred to the decision of the High Court in Reseck v. PF. C. of T. (1975) 133 C.L.R. 45 and the decision of a full bench of this court in McIntosh v. F. C. of T. (1979) 79 A.T.C. 4325 where the meaning of the phrase "in consequence of" appearing in s. 26 (ad) of the Income Tax Assessment Act 1936 was discussed and held to include payments caused by the retirement of the taxpayer but not to be confined to such payments. ' Mr. Phillips Q.C. distinguished those cases upon the ground that the phrase "an consequence of" requires" less of a causal connection than the phrase "by reason that".' In my opinion the phrase where appearing in s. 58 (3) of the Act does require a causal connection between the position or office ceasing to exist and the person ceasing to be an eligible employee. In my opinion it is'not necessary that the occurrence of any one or more of the events specified ' in paragraphs (a) to (e) of sub-section (3) of s. 58 {including the position or office of a person ceasing to exist under paragraph (a) ) be the sole or dominant cause of a person's ceasing to be an eligible employee. It is sufficient if 1t be one of the causes: see Reseck's Case (supra) per Gibbs J. at p. 51 and Vandyke v. Fender (supra) per Lord Denning M.R. at p. 306. 222/19 ~19- Nothing turns on this question in the present case as it is the appellant's contention that there was no causal link whatever between the abolition of the respondent's position or office and his ceasing to be an eligible employee. It is common ground that the respondent ceased to be employed by the Bureau at the end of 29 June 1977 and that his right to elect to be appointed to the Commonwealth Public Servace expired on or before 28 June 1977. The evidence is not clear as to precisely when the right to elect ceased. It may have been as early as 14 June 1977 or as late as 28 June 1977. Both parties conducted the appeal on the basis that nothing turned on the precase date, it being agreed that, whenever it was, it was before the date when the respondent ceased to be employed by the Bureau namely, 29 June 1977. The appellant contended that the respondent was a "permanent employee" within the meaning of that expression in s. 3 (1) of the Act in that he was employed by an approved authority (see the definition of that expression in s. 3 (1) ), namely the Bureau, 1m a permanent capacity; and that he would have continued to be a permanent employee 1f he had elected to be appointed to the Public Service. It was his failure to exercise that right of election that caused him no longer to be a permanent employee. It mattered not, so the argument went, what period of time elapsed between: . the expiration of the right to elect and the abolition of his ' position or office. Mr. Phillips Q.C. contended thai the Act was one to provide superannuation for persons employed ' 22-/20 0 5° ee -20- by the Commonwealth or approved authorities, that it assumed there would be, from time to tame, transfers of personnel between departments of the Commonwealth and transfers from approved authorities to the Commonwealth and vice versa. The Act was not intended to enable a person to obtain 34 times his accrued contributions merely because he chose not to move from an approved authority to the Commonwealth when he had the right to do so. The appeliant contended that if the respondent had elected to be appointed to the Public Service, he would never have ceased to be a permanent employee because he would have been employed by the Bureau until the end of 29 June and thereafter by the Commonwealth. Mr. Phallips Q.C. -relied on the principle that a day is in general to be considered an indivisible unit of time and that "the beginning of a day 1s nothing but the end of the day before, and the end of the day is nothing but. the beginning of the next"; see Prowse v. McIntyre (1961) 111 C.L.R. 264 per Kitto J. at p. 274, Mr. Patterson Q.C., who appeared with Mr. Kimm for the respondent, contended that the principie that a day is in general to be considered an indivisible unit of time has no application to the Act because of sub-section (3) of s. 3 which provides:— "(3) Where a person ceases to be an eligible employee and, immediately after so ceasing, again becomes an eligible employee, he shall, for the purposes of this Act, be deemed not to have so ceased." 200/21 t ee eae eeenle Rett ne ame en eh oe wee ~21- Mr. Patterson Q.C. contended that sub-section (3) _was intended to apply to all cases where a person ceases to be an eligible employee, albeit momentarily, and immediately thereafter again becomes an eligzble employee, and that the present case is but one such instance, Mr. Phallips Q.C. contended that sub-section (3) has no application to the present case, where the respondent never ceased to be a permanent employee, because of the principle as to a day being an indivisible unit of time. He contended that' sub-section (3) applies to cases where a person ceases to be an eligible employee and again becomes one, provided he does so "immediately" thereafter. He contended that "immediately" does not necessarily mean instanter; but rather has a meaning which may vary from case to case, sometimes allowing a gap in time of hours, days or weeks. In sub~section (3) it has the meaning of "within a reasonably short space of time" in all the circumstances. In support of his contention, Mr. Phillips Q.C. referred to the definition of the words "ammediately" and "forthwith" in Stroud's Judicial Dictionary and Butter-— worth's Words and Phrases Legally Defined; Permanent Trustee t Company of New South Wales Limited v. D'Apice & Ors. (1967- 1968) 118 C.L.R. 105; and Dorsman v. Nichol (1978) 20 A.L.R. 231. Mr. Phillips Q.C. contended that sub-section (3) is a deeming provision merely used for more abundant caution to put beyond doubt a particular construction that otherwise might be uncertain. He relied on St. Aubyn v. Attorney-General 1952 A.C. 15 per Lord 12/22 A +: — ewe = am, o te nen ls ce AAS Se eo -22-— Radcliffe at p. 53 and Hunter Douglas Australia Pty. Limited v. Perma Blinds (1969-1970) 122 C.L.R. 49 per Wandeyer J. at pp. 65-67. A deeming provision may be included in an inter- pretation section in a Statute for the purpose of extending the meaning of a defined term to something it would not mean in ordinary parlance: see St. Aubyn v. Attorney-General (supra) and Hunter Douglas Australia Pty. Limited v. Perma Blinds (supra) at the pages mentioned earlier. In my opinion this is the purpose of sub-section (3). It is ' intended to ensure that a person does not lose his status as an eligible employee merely because he ceases to be one and later becomes one again, provided the gap in time 1s not unreasonably large. It is designed to cover all cases where a person has a particular position or holds a particular office and ceases to do so, but "immediately" thereafter takes another position or offace, in each case being a person' who satisfies the statutory denotation of a "permanent employee." It matters not whether the interval of time is a second, a day, or a week provided the person again becomes an eligible employee "immediately" after ceasing to be one. The general rule that a day is an indivisible unit of time has no application to the provisions of the Act relating to this appeal. It follows that if the respondent had elected to be appointed to the Public Service, he would have ceased to be an eligible employee upon the abolition of his position or office and immediately thereafter again become an .- /23 =-23- eligible employee upon his being appointed to the Public Service, and therefore deemed not to have ceased to be an eligible employee. The appellant's case assumes that the right of election conferred by Division 9F of the 1975 Act was a right which, once exercised 1n accordance with that Division, inevitably leads to appointment to the Public Service. This involves reading the word "may" in s. 81 2Q as having a compulsory meaning. Whether the word "may" is used in a facultative or compulsory sense depends on the context in which it appears. It is no answer to the question to say that "may" means "shall", As Windeyer J. said in Fanance Facilities Pty. Limited v. F. C. of T. (1970-1971) 127 CLR 106 at p.134:- "While Parliament uses the English language, the word "may" in a statute means may", In Ward v. Williams (1954-1955) 92 C.L.R. 496 Dixon C.J., Webb, Fullagar, Kitto and Taylor JJ. said at pp. 505 and 506;:- "In considering the correctness of this interpretation it is necessary to bear steadaly in mind that 1% is the real intention of the legislature that must be ascertained and that in ascertaining it you begin with the prima facie presumption that permissive or facultative u expressions operate according to their ordinary natural meaning. "The authorities clearly indicate that 1t lies on those who assert thai the word "may" has a compulsory meaning to show, as a matter 1 of construction of the Act, taken as a whole, that the word was intended to have ! such a meaning" -- per Cussen J.: Re Gleeson (1907) V.L.R. 368, at p. 373. "The : meaning of such words is the same, whether _there is or it not a duty or obligation of 2k wen ate edi 8 ee are to use the power which they confer. They are potential, and never (in themselves) significant of any obligation. The question whether a Judge, or a public officer, to whom a power is given by such words, is bound to use it upon any particular occasion, or in any particular manner, must be solved aliunde, and, in general, it is to be solved from the context, from the particular provisions, or from the general scope and objects, of the enactment conferring the power" -- per Lord Selborne: Julius v. Bashop of Oxford (1880) L.R. 5 A.C. 214, at p. 235. One situation in which the conclusion is justified that a duty to exercise the power or authority falls upon the officer on whom it 1s conferred is described by Lord Cairns in his speech in the same case, His Lordship spoke of certain cases and said of them "(they) appear to decide nothing more than this: that where a power is deposited with a public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a. defanition is supplied by the Legislature of the conditions upon which they are entitled to call for its exercise, that - power ought to be exercised, and the Court will require it to be exercised" (1880) LR. 5 A.C.w, at pe. 225. In my opinion the exercise of a right of election is but a condition precedent to the appointment by the Public Service Board to the Public Service of a person formerly employed by an approved authority, such as the Bureau. If the Commonwealth intends that an approved authority 1s to cease to exist and its functions carried on by the Commonwealth, Division 9F will ensure the smooth transfer of personnel from the authority to the Public Service; but only of those people who elect to be appointed to the Public Servace. There may be any number 22/25 of reasons why the Public Service Board should have the right to decide who will and who will not be accepted as members of the Public Service. The context in which the word "may" appears in s. 812Q, and 81 ZR does not rebute the prima facie presumption that 1t is to operate according to its ordinary and natural meaning as a facultative expression. it follows that, if the appellant's case were founded merely on the word "may" having a compulsory meaning, as the right of election is merely a right to be considered for appointment to the Public Service, the appellant would be constrained to argue that the cause of the respondent's ceasing to be an eligible employee was his faalure to exercise a right which was but a condition precedent to his appointment by the Public Service Board to the Public Service. In my opinion this emphasises the fallacy inherent in the appellant's contention that it was the respondent's failure to elect that caused the cesser of his status as an eligible employee. However the appellant proceeded to contend that, on the assumption that the word "may" where appearing in s. 81 ZQ, was used 1n a facultative sense, the evidence established that the Public Servace Board had undertaken to appoint to the Public Service, employees of the Bureau who duly exercised their right of election under Davision 9F. The appellant relied in particular upon the letter from the Acting Secretary of the Board of 24 May 1977. The contrary was not contended. In my opinion the evidence establishes the correctness of this contention. So I have proceeded on .../26 -- - a - . oe ee me yee - eee ee ee ~26— the basis that, on the facts of this case, if the respondent had elected to be appointed to the Public Service, he would in fact have been appointed thereto by the Public Service Board. In my opinion, the respondent ceased to be a permanent employee, and therefore an eligible employee, , because his employment ceased to exist on 29 June 1977 with the abolition of his position or office. His non- exercise of the statutory right of election afforded by Division 9F of the 1975 Act played no causative role whatever in his ceasing to be a permanent employee. He ceased to be a permanent employee when he was no longer employed by the Bureau. The abolition of the respondent's position or office was more than the occasion for his ceasing to be a permanent employee. The respondent wished to continue in the employ of the Bureau; but both the Bureau and the respondent's office and position were abolished by Act of Parliament. It was the operation of the 1977 Act which led to the respondent's ceasing to be a person employed by an approved authority. The fact that the respondent had a ' statutory right of election under Division 9F of the 1975 ' Act and that he chose not to exercise 1t, cannot be the source of his ceasing to be an cligible employee. The definition of "permanent employee" looks to the ' person in his employment. It is intended to encompass a wide range of persons under Commonwealth aegis, whether officers of the Public Service or employees of the Commonwealth or of an approved authority,in a permanent capacity. Once a person , ceases to answer the description of a permanent employee «22/27 - a ee ee mA ne cat Ee dr a NTI pee ee -27- that is sufficient to remove him from the definition, subject to the provisions of sub-section (3) of s. 3. For these reasons, in my opinion, the respondent 1s deemed to have retired involuntarily within the meaning of s. 58 (3) and dcemed to have ceased to be an eligible employee by reason of early retirement under s. 58 (1) and therefore, having made an election under s. 62 (1), to be entitled to payment of a lump sum benefit of an amount equivalent to 34 times the amount of his accumulated contributions. The appeal should be dismissed. The appellant should pay the respondent's costs of the appeal and of the application before Keely J. on 14 June 1979. I certéy that ts and the no Hench - Fea, (£6) preccd ng pacts avo a 'uc cory ti the Reasons for Juc'gment herein ef his lenour Dated. 12-— 11-7 Mr. Justice Lockhart. + od CATCHWORDS wv we eee ote . Po aan CREW ALU RE aS WEIN Sh ER Sa Appeal from Administrative Appeals Tribunal ~ meaning of involuntary retirement in sub-section 58(3) of the Superannuation Act 1976 - Retrenchment - Abolition of Position - Whether a person who refuses to accept an ' offer of alternative employment on abolition of his position ; can be said to have retired involuntarily per sub-section 58(3) - ~ vow Commissioner for Superennuation v. Christopher Bayley VG No. 21 of 4979 Coram: Smithers, Keely and Lockhart JJ. Melbourne * 12 November 1979.