The Director-General of the Department of Health has forwarded me the following memorandum for advice:

Under a determination issued by the Public Service Arbitrator on 22 June 1921, the salaries of Medical Chief Quarantine Officers and Quarantine Officers were adjusted on a definite scale. The salaries of Chief Quarantine Officers were fixed at &pound900 per annum with increments of &pound50 advancing to &pound1100 at the discretion of the Permanent Head.

On the preparation of the Estimates for the current year provision was made for an increment of &pound50 to three of the Chief Quarantine Officers, viz. the Chief Quarantine Officer, Brisbane, Chief Quarantine Officer, Laboratories, and the Chief Quarantine Officer, Victoria.

On 21 June, prior to the publication of the Estimates, the Public Service Commissioner was informed that in accordance with the discretionary powers vested in myself as Permanent Head, by the Arbitrator, it was proposed to grant increases of &pound50 each to the officers above mentioned, and the Public Service Commissioner was asked, in view of the terms of the award, for a direction as to whether these increases were payable from 1 July without awaiting the passing of the Estimates.

The Public Service Commissioner replied on 13 July that the increments proposed should be paid from 1.7.22 without awaiting the passing of the Estimates, provided that funds were available or could be made available.

On the publication of the Estimates it appeared that the increase of &pound50 provided in the case of these three officers had been struck out, but that &pound50 additional had been provided in the Item 'Cost of Living Allowances etc' in each of the Divisions concerned.

The Secretary to the Treasury was then informed (on 22 August) that, in accordance with the discretionary powers vested in myself as Permanent Head, increments of &pound50 each had been granted to the three officers mentioned to operate from 1 July 1922. It was however pointed out that on the Estimates presented to the House of Representatives the increments had been omitted but that an equivalent amount had been provided in the Item 'Cost of Living Allowances' in each of the three Divisions of the Estimates concerned, and, as these amounts had no explanation in other directions, it was asked whether the amounts had relation to the increments in question, or whether, in view of the terms of the award the Treasurer would find the necessary funds for the payment of these increments provided by the award as from 1 July 1922.

A reply was received from the Treasury dated 8 September stating that the reduction in the salaries in question was made in view of the Cabinet decision that no increases of salary were to be provided for the current year for senior officers, and that in the circumstances the Treasurer was not prepared to find the funds necessary to pay these increments.

In view of the terms of the determination of the Arbitrator and of the facts, viz.: that the determination was not objected to by Parliament, that the payment of increments is at the discretion of the Permanent Head, that provision was actually made in the draft Estimates forwarded to the Treasury, that the amounts in question were apparently transferred by the Treasury to another Item of the Estimates within the same Division, I should be glad to be favoured with your advice on the position in view of The Treasurer's refusal to provide money to pay the officers concerned the increments in question.

It would appear that the determination of the Arbitrator not having been objected to by Parliament when it was issued, the terms of the determination must now be honoured by the Treasury.

The Public Service Arbitrator has, under the Arbitration (Public Service) Act 1920, power to make a determination which is not in accord with the laws of the Commonwealth and unless such determination is disapproved by Parliament it has binding effect.

The determination in question conferred upon the Permanent Head of the Health Department a discretion to grant to certain officers annual increments within specified limits.

When the Permanent Head exercises the discretion the increment granted becomes part of the salary of the officer concerned.

The increments so granted cannot be legally paid until the money has been appropriated by law and the failure to provide in the Appropriation Act for the payment of the increases has the result that the officers cannot be paid their full salary.

In the case submitted, however, it appears doubtful whether the Permanent Head has actually granted the increments as contemplated by the award.

The mere inclusion in Estimates supplied to the Treasury of the amounts of proposed increments does not amount to such a grant.

The notice to the Public Service Commissioner of 21 June was an intimation of an intention not of an accomplished fact.

On 22 August the Treasury was informed that the Permanent Head had granted to three officers increments of &pound50 each as from 1 July 1922.

For the purposes of the award I think a decision made and expressed by the Permanent Head to grant an officer an increment may be effective although no written record is made of the decision. A written record is obviously desirable as evidence of the grant.

The information given to the Treasury on 22 August was as to a matter of fact-that increments had been granted. But it does not appear how or when this had been done; and I am, therefore, unable to advise whether what was done amounted to the grant of an increment.₍₁₎

[Vol. 19, p. 311]

(1) See also Opinions Nos 1280, 1287.