The Secretary, Postmaster-General’s Department, has asked for advice upon the questions raised by a letter, dated the 26th February, 1924, from Messrs. Glynn, McEwin & Napier, Solicitors, Adelaide. The letter reads as follows:

We have been consulted by a number of officers formerly in the employ of the Post and Telegraph Department of South Australia and taken over by the Commonwealth when that Department was transferred pursuant to the Constitution.

We are instructed that under the Commonwealth Public Service Commissioner’s classification of the service, which became operative on the 1st July, 1904, our clients were prejudiced by the refusal of the annual increment to which they had been entitled under the State law.

We understand that this matter has been brought to the notice of previous Governments but without obtaining any redress, and our clients desire us to bring the matter under your notice with a view to a decision in a test case.

To make the point involved clear to you we might present the facts in relation to
Mr. A. B. C. Mr. C. was a classified officer in Class 5 and entitled to an annual increment of £10 up to the maximum of that Class viz. £210 per annum. On the 1st March 1901 the Department was taken over by the Commonwealth and Mr. C. was transferred to the Commonwealth service. He was paid the annual increment up to £200, but under the classification which became operative from the 1st July 1904, his salary was reduced to £185 per annum from 1st November 1905 and his right to any further increment under the State Act was repudiated.

On the 1st July, 1908 he was promoted by the Public Service Commissioner and from that time his salary was £210 per annum. He claims that from the 1st July, 1904 until the 1st July, 1908 he was entitled to the salary prescribed by State law and that this right was secured to him by the Constitution.

According to our instructions the amount involved in the case referred to, is the sum of £65; but it is of course the matter of principle with which we are primarily concerned.

The total amount involved is, we understand, in the neighbourhood of £6,000 to £7,000 and our clients desire to submit, for your consideration, that the claim is one which ought to be recognised, as a matter of good faith, as well as from the legal point of view.

They feel supported in this by recent decisions in the High Court, relating to compulsory retirement; but they are not desirous of incurring the expense of legal proceedings, if that can be avoided, and if the department felt inclined, without recognising legal liability, to make some concession in the matter we think that our clients would welcome any reasonable proposal.

The question of the payment of yearly increments under State law was submitted to this Department in 1903, when advice was requested upon the following questions:

1. Are officers in South Australia who have been transferred to the Commonwealth Service entitled under section 84 of the Constitution Act to the increments to which they would have been entitled under the South Australian Act?
2. If so, are any conditions attached to the granting of such increments, e.g. the recommendation of the Permanent Head and the Certificate of the Commissioner, and the money being made available by Parliament?

On the 26th June, 1903, Mr. Attorney-General Deakin advised upon these questions as follows:⁽¹⁾

1. Officers have no existing or accruing right to be exempt from the provisions of the Commonwealth legislation as to salary, classification, promotion, and increments. When a classification under the Commonwealth Public Service Act has been made, that classification will do away with the classification under State Acts and with its consequences as regards increments, etc., and the specification of a definite salary in the Appropriation Act would also negative the claim to a higher salary.

Until such classification, and assuming their salaries are not specified in the Appropriation Act, it may be that the South Australian officers are entitled to increments under the State Act, and it is advisable to act on the assumption that they are so entitled.

2. Any such right to increments is subject to the conditions laid down by the State Act, e.g., satisfactory proof of industry and good conduct. It is also subject to defeasance in accordance with sections 8 and 11 (of the State Act)–substituting the Governor-General for the Governor, and the House of Representatives for the House of Assembly.

On the 16th February, 1904, Mr. Attorney-General Deakin again advised as follows:⁽²⁾

But I am further of opinion that these officers–who before transfer had no ‘existing and accruing rights’ in respect of salary or increments, which could not be altered by the Parliament of South Australia–have now no rights in this respect which are not subject to alteration by or under the authority of an Act of the Commonwealth Parliament. In other words, the Commonwealth Parliament is a competent authority to vary the conditions of service of these officers. (See Commonwealth v. Bond, 1 C.L.R. at page 24).

I therefore think that upon classification under the Commonwealth Public Service Act 1902 these officers will become subject to the provisions of that Act as to salary and increments.

On the 3rd August, 1904, Mr. Attorney-General Higgins, in advising on the right to long-service increments of officers transferred from the Victorian Public Service, appeared to take a somewhat different view, as will be seen from the following extract from his opinion:⁽³⁾

In my opinion, officers of the Clerical Division of the Victorian Public Service who have been retained in the service of the Commonwealth are entitled, even after the recommendation of the Commissioner (which he terms his ‘classification’) has been approved by the Governor-General, to claim long-service increments as prescribed in the 3rd schedule to the (Victorian) Public Service Act, 1890.

I rely on section 84 of the Constitution, which prescribes that any such officer ‘shall preserve all his existing and accruing rights’. I take the right to increments as an accruing right. It will probably be urged that this section of the Constitution means merely that the officer shall enter the Commonwealth service with all his rights, but that these rights are subject to be taken away or altered by Act of the Commonwealth Parliament. I do not think that this gives proper weight to the word ‘preserve’ or to the evident object of the section to allay apprehensions. But even if this argument should be upheld, I am of opinion that the re-enactment (in effect) of section 84 of the Constitution in section 60 of the Commonwealth Public Service Act indicates that the Commonwealth Parliament had no intention of interfering with these rights.

Questions concerning the rights of transferred officers have been considered by the High Court on three occasions. In Bond v. The Commonwealth of Australia 1 C.L.R. 13 Griffith, C.J. held that ‘the existing rights of the plaintiff (an officer transferred from the Victorian Public Service) at the time of the transfer included a right to be continued in the service of the State until his engagement was lawfully terminated, and a right to continue to receive a salary at the then existing rate until that rate was lawfully reduced by a competent authority’. His Honour stated, however, that it was not necessary to consider the question as to what authority, if any, was competent to reduce the rate, because it was not suggested that any action had been taken by any competent authority to make the reduction.

In Cousins v. The Commonwealth 3 C.L.R. 529 the facts were somewhat similar, but in this case the salary of the plaintiff had been reduced in pursuance of the re-classification of his office under the Public Service Act 1902. He claimed a higher rate of salary by virtue of a Victorian Act passed four days before the Commonwealth came into existence, and after the Constitution Act had been assented to and the proclamation published bringing it into operation. The Court decided this case mainly upon the construction of the Victorian Act, treating it as a temporary provision to last only until altered, but in the judgment of Griffith, C.J. at page 540, the following statement appears:

That being so, the only right which the plaintiff took over was the right to receive his existing salary until lawfully reduced, and it was competent for the Commonwealth Parliament to reduce it.

Taken by itself, this statement would appear to constitute a dictum in favour of the jurisdiction of the Commonwealth Parliament to pass legislation reducing the salaries received by transferred officers at the time of transfer, but the Court appears to have based its decision on two grounds, namely, on that quoted above and on the ground that the Victorian Act was ‘to be construed as intended to be a merely temporary provision to fix the status of these officers when transferred to the Commonwealth Government, and the operation of which would then be exhausted’. It is clear, however, that in this case the Court took a different view from that suggested by Mr. Attorney-General Higgins in regard to the construction of the Public Service Act 1902. The view taken by the Court is stated at pages 541 and 542, as follows:

It is said that one of his existing rights is the right to retain his salary until otherwise dealt with by law. But the same Act which contains that provision, also contains provisions for dealing with the salaries of these officers, for putting them into divisions and grades, and for fixing their salaries according to such divisions and grades; and I think that section 60 cannot be construed as excepting these persons from the Act. I think that any such construction would be quite inconsistent with the first provision of section 84 of the Constitution that they shall be subject to the control of the Executive Government of the Commonwealth, and the provisions of section 52, which gives the Commonwealth Parliament exclusive power to make laws for the peace, order and good government of the Commonwealth with respect to ‘matters relating to any department of the Public Service, the control of which is by this Constitution transferred to the Executive Government of the Commonwealth’. They have exclusive power to make the laws, and they have made laws dealing with all persons in the service; and the result is that, if regulations have been made, as is alleged, fixing his salary at £138 a year, then the plaintiff is not entitled to a salary of more than £138 a year.

The third case in which the rights of transferred officers were considered by the High Court was Le Leu v. The Commonwealth 29 C.L.R. 305. The question at issue in this case was whether the Commonwealth could dispense with the services of an officer transferred from the South Australian Service upon his reaching the age of 65 years. The Court held that age, apart from incapacity, was not a ground for removal of an officer under the State law; that the right to remain in the Service was an ‘existing right’ enjoyed by the transferred officers in question at the time of transfer; and that this right was preserved by section 60 of the Public Service Act.

In regard to the construction of the Public Service Act, the Court took a similar view to that expressed in Mr. Attorney-General Higgins’s opinion (quoted above) and expressly dissented from the judgment of the High Court in Cousins’s case.

The view of the majority of the Court (Knox, C.J., Gavan Duffy, J., Rich, J., and Starke, J.) is expressed at page 313 as follows:

We think section 60 may and should be regarded as dealing specially with the rights of transferred officers and that other provisions of the Act which would be inconsistent with the provisions of that section, if they were read as applying to transferred as well as to appointed officers, should be construed as inapplicable to transferred officers so far as may be necessary to avoid inconsistency. … It follows from what we have said, that we respectfully dissent from the judgment in Cousins’s case so far as it rests on the opinion there expressed as to the effect of the Commonwealth Public Service Act.

The majority of the Court held that Parliament had not, on the proper construction of the Commonwealth Public Service Act, purported to interfere with the rights of the plaintiff as they existed at the time of his transfer, and that it was therefore unnecessary to decide whether power existed to do so under the Constitution, but the following passages in regard to the matter appear in the separate judgment delivered by Higgins, J.:

So far as I am personally concerned it must not be inferred that, even if there were no section 60, the plaintiff would not retain his right of tenure by virtue of section 84 of the Constitution; and, in my opinion, there is nothing in the decision of Cousins v. The Commonwealth, when closely examined, against the view that under section 84 the right of tenure is preserved from interference on the part of the Commonwealth. Under that section the transferred officer is to ‘preserve all his existing and accruing rights’. Counsel for the Commonwealth urges that this means no more than that the officer is to pass over to the Commonwealth having all existing, etc. rights, and that these rights can be varied or withdrawn by an Act of the Commonwealth—enacted as to the Department under section 52.

This exclusive power conferred on the Commonwealth Parliament by section 52 as to transferred Departments is conferred ‘subject to this Constitution’; and section 84 is part of the Constitution. Moreover this reading does not give its full force to the word ‘preserve’. The preservation must be against the Commonwealth; and it is unlimited in time. ‘Preserve’ is not a technical word; but it certainly implies retain, keep intact or unimpaire …

As for the case of Cousins v. The Commonwealth, I cannot find that in it the late Chief Justice has either assumed or stated that the Commonwealth Parliament has power, notwithstanding section 84, to alter or take away the rights, existing or accruing, which a transferred officer had at the transfer of his Department. That case turned upon a peculiar Victorian Act, passed four days before Federation. The construction which the Court put upon that Act was that it contained ‘a merely temporary provision to fix the status of these officers when transferred to the Commonwealth Government, and the operation of which would then be exhausted’ …

There is no explanation that I can conceive of the elaborate consideration given in Cousins’s case to the meaning of the Victorian Act if the late Chief Justice and Barton and O’Connor, J.J. thought that the Commonwealth Parliament had power to lower the transferred officer’s salary whether the operation of the Act had been exhausted or not. Indeed, it seems rather to have been taken for granted that if the Act were meant to be permanent or indefinite in its operation the salary could not have been reduced.

The last case in which the rights of transferred officers were considered by the High Court was that of Lucy v. The Commonwealth (decided in 1923 but not yet reported).⁽⁴⁾ In this case the facts were similar to those in Le Leu’s case, and the High Court was asked to determine what remedies the plaintiff was entitled to, assuming that he had been wrongfully dismissed from the Public Service. There are passages in the judgments of Knox, C.J., and Isaacs, J., which give some indication of the views held by them in regard to the question now under consideration. The following passage appears in the judgment of the Chief Justice:

In my opinion the right which was preserved to the plaintiff by section 84 of the Constitution was a right to be employed in the public service of the Commonwealth during his life subject to removal or dismissal for some cause specified in the State Acts, at a salary to be fixed in accordance with the law of the Commonwealth, but not less than the salary, in this case £270, to which the plaintiff would have been entitled under the State law had he remained in the public service of the State.

Isaacs, J., took the view that in order to determine the amount of damages it was necessary to determine what were the ‘existing and accruing’ rights at the date of transfer. In regard to these rights he says:

They neither increased or diminished as the years went on. Their actual results were of course dependent in many cases upon time. But given the ‘time’ element, then subject to one consideration, the money result could be worked out. That one consideration is not really legal but is one which ought to be and as I understand was conceded by the Crown, namely, that any condition dependent merely on industry and conduct of the officer, or on the general discretion of the Government, should be taken to be fulfilled. Such conditions are only ‘reserved’ discretion for undeserving cases, and ought to be understood in that sense …

Now what were his (Lucy’s) ‘existing and accruing’ rights guaranteed to him as on March 1, 1901. He had a salary of £220 a year, rising (let us assume) to £270 in 5 years.

It would appear from these passages that Isaacs, J., considered that increments payable in accordance with the State Act were ‘guaranteed’ by section 84 of the Constitution.

In the two last mentioned cases the Court does appear to take the view that the Parliament has no power to interfere with the existing and accruing rights of transferred officers, though it has refrained, when discussing the effect of section 84 of the Constitution, from attempting an exhaustive definition of those rights.

Having regard to the dicta set out above, however, I am of opinion, though not without doubt, that the right to increments as fixed by State law is an existing or accruing right within the meaning of section 84 of the Constitution, and that it cannot be interfered with by or under legislation of the Parliament of the Commonwealth.

I am further of opinion that if the question were now submitted to the High Court, the Court would hold that the Public Service Act 1902—1918 did not authorise any reduction of the salaries to which transferred officers were entitled under State law at the date of transfer (apart, of course, from reduction for misconduct or incapacity).

[Vol. 21, p. 130]

(1) Opinion [Vol. 3, p. 383] not published.

(2) Opinion [Vol. 4, p. 146] not published.

(3) Opinion [Vol. 4, p. 300] not published.

(4) (1923) 33 CLR 229.