Section 46 of the Civil Service Act 1862 No. 160 (State of Victoria) reads as follows:

Where any officer has served for a less period than ten years if he be constrained from infirmity of body or of mind to leave the service the Governor-in-Council may grant to him such gratuity as he may think fit not exceeding in any case the amount of one month’s pay at his then rate of salary for each year of service.

In 1901 claims for gratuities under section 46 of the above Act equal to nine months’ pay in lieu of pensions, were received by the Commonwealth Government from two Victorian State Officers of the newly transferred Customs Department. The Attorney-General advised:

The intention seems to be that officers not entitled to superannuation allowances should receive gratuities, and in cases where a pension would practically be useless, it has been the practice out of consideration for the officer to give a gratuity of nine months’ pay notwithstanding that the period of service may have been upwards of ten years. I am of opinion that this practice is in accordance with law... The gratuity should be paid in the first instance by the Commonwealth. The amount corresponding to his term of service with the State should then be charged against the State.⁽¹⁾

In a further opinion (6th August 1901) the Attorney-General stated:

I have noticed the difference in the phrasing of paragraphs 2 and 3 of section 84.⁽²⁾ The former relates to the abolition of office only; the latter to retirement in the ordinary course. Apparently the word ‘gratuity’ was included in the first instance because officers might be dispensed with under section 84 who had no absolute statutory rights to any compensation, though they might have prescriptive rights to gratuities which were allowed by the law of the State. But I think that the word ‘retiring allowance’ (which is used in the latter and not in the former paragraph) is wide enough to include gratuities allowed on retirement.⁽³⁾

Gratuities (section 46 Act No. 160) have been paid by the Commonwealth Government in accordance with this opinion but the Victorian State Government has intimated:

1. That it would not in future, in view of the opinion given by the State Law Officials and the established practice of the Government, accept any liability in connection with the payment of these gratuities except in such cases as the State Treasurer may approve before payment to the individual concerned.
2. That it cannot agree with the contention ‘that the State is legally liable for a portion of gratuities granted by the Commonwealth to transferred officers on their retirement’.

The State Crown Solicitor states in opinion dated the 7th September 1921 ‘that, if the matter were litigated, my view is that the State has a complete answer, but if as a matter of administration the State authorities consider that, though technically not liable, morally the claim that they should contribute is not unreasonable, clearly they would be entitled to make it a condition that before they are asked to contribute they should be consulted as to whether the case is one for granting the concession not legally binding, as they contend, under the terms of section 84 of the Constitution Act.’

‘For administrative purposes’, says the State Crown Solicitor, ‘I think that the ruling of the late Mr. Justice Higinbotham, Attorney General, is to be accepted as good law, that section 46 of Act No. 160 before referred to applies as well to an officer with ten years’ service as to one with less, but even so it does not follow that there is any obligation on the State to bear any portion of the liability to pay in respect of the officer with more than ten years’ service unless the obligation is expressly imposed by the terms of the Commonwealth Constitution Act’.

But the State practice, it seems, has been for over fifty years to pay the gratuities and this the State Crown Solicitor appears to uphold as good law for the State though not for the Commonwealth.

As to whether a gratuity to A.B. who retired through ill health after attaining the age of sixty years should be voted or paid from Special Appropriations, the State Crown Solicitor advised the Under Treasurer as follows:

The question is whether there is anything in the fact which brings this payment within a Special Appropriation by the Legislature. If the matter were raised for the first time I should have said that there was no special appropriation, but ever since Mr Higinbotham gave his ruling that officers under Act 160 who were more than 10 years in the service were entitled to the benefit of Sec. 46 of that Act, I think it must be accepted that such officers are so entitled, and, if so, that the payment here is a Special Appropriation. The practice has been ever since the ruling referred to was given, to pay without providing the money on the estimates, and the practice is justified on the assumption that the opinion referred to is right.

The ruling referred to was given on the 28th July, 1865.

In its correspondence with the State Government the Commonwealth Treasury has cited sections 70 and 84 of the Commonwealth Constitution Act and the case of New South Wales v. The Commonwealth 6 C.L.R., p. 214 to support its contention that the payment of gratuities as referred to were legally payable and within the sole discretion of the Commonwealth. In the case cited section 60 of the Public Service Act 1895 (N.S.W.) (59 Vict. No. 25) was under notice. The section reads:

If the services of any person permanently employed in the public service shall be dispensed with by the Board under the provisions of this Act otherwise than for an offence then—...

2. If such person shall have been employed in the public service before and at the date of the commencement of this Act but shall not be a contributor, to the said Superannuation Account, such person shall receive a gratuity not exceeding one month’s pay for each year of service from the date of his permanent appointment, and a fortnight’s pay in respect of each year of temporary service; such gratuity to be calculated on the average of his salary during the whole term of his employment and to be payable only in respect to service prior to the commencement of this Act.

An officer (C.D.) of the Postal Department of the public service of New South Wales, who on transfer of the department to the Commonwealth was retained in the service of the Commonwealth, was afterwards called upon to retire under the provision of section 65 of the Commonwealth Public Service Act 1902 and so became entitled by virtue section 84 of the Constitution to a gratuity calculated in accordance with the scale provided by section 60 sub-section ii. of the New South Wales Public Service Act 1895, and it was held, that the discretion conferred by section 60 sub-section ii. of the New South Wales Act as to the amount of the gratuity was vested in the Governor-General by virtue of section 70 of the Constitution. The Treasury appears to be in error in taking the view (A3/17/14) that (in the case cited) the question ‘whether a “gratuity” paid to an officer on his retirement from the Commonwealth Public Service is a “retiring allowance” under section 84 of the Constitution’, was decided in the affirmative by the High Court. As to apportionment, the gratuity in the case in question was held to have been expenditure ‘incurred solely for the maintenance or continuance as at the time of transfer’ of the department within the meaning of section 89 sub-section ii(a) of the Constitution, and was, therefore by virtue of that sub-section and section 93 of the Constitution wholly chargeable against the State. As to section 84 Higgins J. raised the query whether a gratuity in the case of compulsory retirement comes within the provision for apportionment between State and Commonwealth in that section.

My advice is desired on the legal aspect of the payment of the gratuities.

Having regard to the strict wording of the section, I am of opinion that the practice of paying gratuities under Act No. 160 is justified rather as a matter of administration as laid down by the ruling of the late Mr. Justice Higinbotham than of strict law. The very justness of the claims under section 46 of the Act No. 160 has no doubt contributed to a liberal interpretation thereof and to the general belief in the Service that the long established practice of paying gratuities was founded on specific statutory enactment which, as it appears, is not the case. It is pointed out in the correspondence that officers of transferred Departments in the Commonwealth Service with pension rights under Act No. 160 must have had at least 40 years’ service and must be few in number, and that it is anticipated only a very small proportion of these officers will apply for gratuities in lieu of pensions.

There is much, therefore, to be said in favour of the late Mr Justice Higinbotham’s view that having regard to the spirit of the Act and to its obvious intention to make the privileges of retiring officers proportioned to their length of service an officer might reasonably be allowed to waive the privilege intended to be conferred in respect of his service over ten years and that he might accordingly be granted a gratuity under
section 46 of Act No. 160.

The spirit of the Act is further evidenced (sec. 49) by the specific direction that nothing in the Act should be taken to prevent the Governor from recommending to Parliament any addition to any superannuation allowance or gratuity in consideration of any special services rendered by the officers entitled thereto or of any other unusual circumstances.

[Vol. 19, p. 325]

(1) Opinion [Vol. 1, p. 207] not published.

(2) Of the Constitution.

(3) Opinion not found.