Opinion Number. 1466


Transferred officers Commonwealth officers transferred to State: existing and accruing rights: rights defeasible by State law: emergency measures: reduction in salary, unemployment levy, unpaid leave, increased hours: whether infringement of any existing or accruing right

Key Legislation


The Commissioner of Taxation

The Commissioner of Taxation has forwarded me the following memorandum for advice:

Ex-Commonwealth officers transferred to State Taxation Department, N.S.W.

The following is a copy of a question asked in Parliament today:

  1. Is it a fact that the transferred Commonwealth officers now in the Taxation Department of New South Wales are faced with:
    1. 10% reduction in salary;
    2. 3d. in the £1 unemployment levy;
    3. two weeks off duty without pay; and
    4. increased hours.
  2. Is it a fact that the Commonwealth Government pays half the salary of those officers?
  3. Is it a fact that the State Government of New South Wales is endeavouring to force the Commonwealth Government to concur in the above decreases and impositions?
  4. Is there any infringement of rights enjoyed by these officers prior to their transfer?

The following is a copy of the answers given in the House to the question:

    1. If the present Bill before the Parliament of New South Wales becomes law, the former Commonwealth officers who were transferred to the State Taxation Department will become subject to a reduction of £8.6, 8 per cent in their salaries.
    2. The transferred officers would be subject to the unemployment levy of 3d. in the £. Every Commonwealth officer resident in New South Wales will be subject to the same levy.
    3. and (d) It is understood by the State Commissioner of Taxation, Sydney, that the New South Wales Government has intimated that officers will be rationed in their work to the extent of two weeks off duty without pay per annum, and an increase of half an hour per day from Monday till Friday inclusive each week in their hours of duty.
  1. Yes.
  2. Nothing is known of this.
  3. The State Commissioner of Taxation is unable to advise on this matter, as it is a question of law to be decided having regard to the terms of the agreement between the Commonwealth and State Government for the collection of Federal Income Tax in New South Wales by the State authorities. The question will be referred to the Attorney-General’s Department for consideration.

I attach copy of the Agreement dated 31st July, 1923, between the Commonwealth and the State of New South Wales regarding the assessment and collection of Federal and State Income Tax by the State Government.

Clause 4 of the agreement sets out the position of Commonwealth officers transferred to the State.

Attention is particularly invited to Clause 4(b) which reads:

(b) Subject to this agreement each officer so transferred –

  1. shall be subject in all respects to the laws of the State regulating the Public Service; and
  2. without prejudice to the last preceding clause shall preserve all his existing and accruing rights and shall be required to continue to contribute to the Superannuation Fund …

If the State Government’s proposal to ration the work, to increase hours and to reduce pay is carried out, it is obvious that the ex-Commonwealth officers will not be enjoying the same rights as prior to their transfer. The question then arises as to whether the proposed action of the State Government would constitute an infringement of the terms of the Agreement on account of the loss to be suffered by the ex-Commonwealth officers concerned. I should be glad if you would kindly favor me with your advice on this point.

It is assumed that the 10% reduction in salary; the requirement that 2 weeks off duty shall be taken without pay; and the increase in hours are matters provided or to be provided by a law of the State of New South Wales regulating the Public Service.

The agreement with the State of New South Wales under which the officers were transferred expressly states in clause 4 that each officer transferred shall be subject in all respects to the laws of the State regulating the Public Service.

The existing and accruing rights of transferred officers are preserved, but without prejudice to the operation of any law of the State regulating the Public Service. Accordingly, any existing and accruing right which a transferred officer might otherwise invoke is liable to abolition by force of any such law of the State.

I am therefore of the opinion that the proposals above mentioned do not amount to an infringement of any existing or accruing right which the officer might have in the absence of the State law.

The tax of 3d. in the £ on income from employment, which is payable by all persons employed by an employer as defined in the Prevention and Relief of Unemployment Bill of the State of New South Wales is payable by transferred officers employed by the State, and is not in my opinion an infringement of any rights preserved to those officers.

[Vol. 24, p. 624]