Scottish Court of Session Decisions

This was an appeal from a decision of the Sheriff-Substitute at Airdrie in an arbitration under the Workmen's Compensation Act 1897, between William Dixon, Limited, iron manufacturers, Glasgow (appellants), and James Parker, furnace filler, Calder Street, Greenend, Coatbridge, claimant and respondent.

The facts found proved or admitted by the Sheriff-Substitute ( Mair) in the stated case were as follows:—“(1st) That prior to 20th March 1900 the respondent was engaged in appellants' works as a furnace filler at the weekly wage of 39s. 6d.; (2nd) that on that date he was by an accident arising out of and in course of his employment burned in the face and hands; (3rd) that in consequence of the injuries he thus sustained he was confined to the Alexandra Hospital, Coatbridge, for a period of eight weeks; (4th) that about 26th November 1900 he was employed by the appellants to do light work, and continued to perform such work until about 22nd May 1901, when the work ceased, and he was earning £1 per week; (5th) that it is admitted that his claim for compensation has been satisfied till 24th June 1901; (6th) that sometime after that date the appellants offered him the job of burner at Hoffman Kiln at a weekly wage of 33s., and that the respondent refused the offer on the ground that his injuries incapacitated him from performing it; (7th) that when he received the offer he was and still is incapacitated from performing the duties of a burner.”

In these circumstances the Sheriff-Substitute held that the appellants were liable to pay compensation, and granted decree against the appellants, ordaining them to pay to the respondent the sum of 19s. 6d. (being the difference between his earnings of 39s. 6d. per week as a furnace filler, and the wage of 20s. per week which he could now earn at light work), beginning the first payment as on 2nd July 1901 for the week preceding that date, and so on weekly thereafter (with interest as craved) till the respondent was again able to earn his full wage, or until such weekly payment should be varied by the Court.

William Dixon, Limited, appealed.

The following questions were submitted for the opinion of the Court:—“1. Whether the parties having agreed that 9s. 9d. was the proper amount of weekly compensation due to respondent when he was earning £1 per week it is competent to increase the rate of compensation to 19s. 6d. when his earning capacity is still £1 per week. 2, Whether the rate of compensation, viz., 9s. 9d. per week, offered by the appellants on record, being 50 per cent. of the difference between respondent's average weekly earnings before the accident and his present earning capacity, is not in the circumstances the proper amount due?”

The Workmen's Compensation Act 1897 (60 and 61 Vict. c. 37), Schedule 1, section 1, enacts—“The amount of compensation under this Act shall be … ( b) where total or partial incapacity for work results from the injury a weekly payment during the incapacity after the second week not exceeding 50 per cent. of his average weekly earnings during the previous twelve months, if he has been so long employed, but if not, then for any less period during which he has been in the employment of the same employer, such weekly payment not to exceed one pound.” Section 2 enacts—“In fixing the amount of the weekly payment regard shall be had to the difference between the amount of the average weekly earnings of the workman before the accident and the average amount which he is able to earn after the accident, and to any payment, not being wages, which he may receive from the employer in respect of his injury during the period of his incapacity.”

Argued for the appellants—9s. 9d. was the extent of the respondent's statutory right, being 50 per cent. of the difference between his average weekly earnings before the accident and his present earning capacity. Section 2 of Schedule 1 says, in fixing the amount “ regard shall be had to the difference,” … that implies by way of reduction, otherwise the effect would be to give as much compensation in cases of partial incapacity as in cases of total incapacity. The Sheriff-Substitute ought to have taken into account the respondent's present earning capacity. The case of Geary (cited infra), which the Sheriff-Substitute thought he was bound to follow, led to the respondent getting the whole of the difference between 39s. 6d. and £1, i.e., 19s. 6d., as much as he would have got had he been totally incapacitated. The decision in that case ought not to be followed. The “difference” referred to in section 2 was meant to be subject to the limitation of 50 per cent. imposed by section 1 ( b). The policy of the statute was that where the injury was not due to the fault of the employer, one-half of the loss resulting from the accident should be borne by the employer and the other by the workman. This policy applied to section 2 as much as to section 1 ( b), and it was therefore incompetent for the arbitrator to award more than half of the difference between the former and the present rate of wages— Pomphrey v. South-wark Press [1901] 1 K.B. 86, per Collins, L. J., at. p. 91; Irons v. Davis [1899], 2 Q.B. 330.

Argued for the respondent—There was nothing in the statute to support the contention that only 50 per cent. of the difference between the rates of wages could be

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awarded. Section 1 ( b) of Schedule 1 provides that the compensation shall be 50 per cent. of the average weekly wages, such weekly payment not to exceed £1, and not 50 per cent. of the difference between the original and present wages. Within that limitation—50 per cent. of the original wages—the arbitrator may take into consideration the loss of earnings suffered by the workman. In the present case the loss was the difference between 39s. 6d. and £1, i.e., 19s. 6d.; and it was competent for the Sheriff to award the whole of that difference. The present case was ruled by the case of Geary v. Dixon, Limited, May 12, 1899, 36 S.L.R. 640. The test of a workman's right to compensation was the diminution of his earning capacity— Freeland v. Macfarlane, Lang, and Company, March 20, 1900, 2 F. 832, 37 S.L.R. 699.

At advising—