SUPERANNUATION CLAIM

Nelson Evening Mail, Volume LXXII, 13 December 1938, Page 3

SUPERANNUATION CLAIM

BASIS OF PAYMENT CASE OF EX-RAILWAYMAN QUESTION OF LAW INVOLVED WELLINGTON, This Day. A dispute over the basis upon which the superannuation of a retired railway servant was computed came before the Supreme Court in Wellington yesterday. The case, which was concerned primarily with the interpretation of section 116 of the Government Railways Act, 1926, was stated to be of considerable importance to some hundreds of superanuitants. Before the Chief Justice (Sir Michael Myers) George Potticary Holland, retired railway servant, Petone, proceeded against the Government Railways Superannuation Fund Board. Mr F. C. Spratt appeared for plaintiff, and the Solocitor-General (Mr H. H. Cornish, K.C.), with him Mr F. W. Aitkin, for defendant. Plaintiff in his statement of claim, said that he retired from the railways service on 3rd July, 1937, having served 40 years. On 17th March, 1932, he was promoted to foreman, grade 5, subgrade 1, the salary payable according to the classification list then in force being £355 a year. At the time of his promotion the salary was subject to a 10 per cent, reduction under section 6 of the Finance Act, 1931, and was accordingly £319 10s; and on Ist April, 1 2, was reduced by a further 10 per cent, to £287 11s, under section 7 of the National Expenditure Adjustment Act, 1932. On 17th March, 1933. plaintiff was promoted another subgrade. The salary payable was then £3BO. but under the statutory provisions had been reduced to £307 16s. All salaries reduced were successively restored by the Finance Act of 1934, 1935 and 1936. The salary payable to plaintiff from Ist April, 1934, was £323 4s; from Ist August. 1935, £347 9s; and from Ist July, 1936, £3BO. DECLARATION SOUGHT Plaintiff claimed to be entitled to a superannuation allowance as from 3rd July, 1937, at the rate of £253 7s a year, an amount based on the rate of salary he was entitled to at the time of his retirement. The board had paid him £233 2s a year, and denied his right to receive an allowance at any higher rate. A declaration was sought that plaintiff was entitled to £253 7s a year, and judgment for £2O 5s a year, payable monthly from 3rd July, 1937, that the board had withheld. Mr Spratt said that as the facts in the pleadings were admitted neither side proposed to call evidence. The whole case depended upon the true construction of the statute. If a man was in receipt of, say, £360 a year at the time of his retirement and had served the full 40 years, he was entitled to two-thirds of that sum as superannuation. That was the general principle, but there was a proviso that if a man had served in a grade lower than that he held at the time of his retirement within three years prior to his retirement, his pay was averaged for the three years. During the three years immediaately prior to his retirement plaintiff, along with every other member of the railway service, had had restored the ! "cuts” made during the depression. He maintained that he had served in the one grade during the last three years of his service, but the board contended that his increments in salary were equivalent to promotion from one grade to another. The Solicitor-General: We don’t put j it quite that way. Mr Spratt: That is the way it ap- j pears to me on the pleadings. “A BONE OF CONTENTION” “Weren't these cases similar to this

before the cuts” inquired his Honour during the hearing of legal argument. Mr Aitken replied that from 1931 to the present time the averaging principle had been adapted as the basis of computation. His Honour: Prior to that? Mr Spratt: Prior to that, what we contend for operated. This has be-in a bone of contention between the various organisations of the men since 1931. Mr Aitken: There was a peculiar system in operation prior to 1931. If a 1 member or officer received an increase ! in pay and changed his title he was averaged but if he didn’t change his > title he was not averaged, j His Honour: In this case the title was ■ not altered in the last three years of ! service. Mr Aitken: It was considered in •1931 that the previous practice W’as wrong. His Honour: How long did it operate? Mr Aitken: I should say for about 11 years. Mr Spratt said that a note handed to him by a responsible person stated that the practice had operated for 30 years. His Honour: It appears then that, prior to 1931—and presumably the practice obtained for 30 years—in a case like the present where the superannuitant had held a position with the same title for the last three years of i his service, but with varying rates of ' pay, he received superannuation tn the basis of his last year’s pay. i Mr Spratt said the question was: Did I the restoration of the cuts imply within J section 116 that the person to whom a cut had been restored was thereby deemed to have served in a lower grade when he was receiving the lesser salary? “I submit,” added Mr Spratt, “that that state of affairs was not in the contemplation of the framers of the Act, and that it does not come within the plain words of the section in dispute.” Decision was reserved.