United Kingdom House of Lords Decisions

Lord Dunedin—This is an exceedingly clear case—the facts are simple. The respondent was a passenger porter stationed at Bath, and in his general occupation as a porter he was in the habit of getting tips from passengers. He was injured in the course of his employment by an accident arising out of his employment, and it is not denied that he is entitled to compensation. But the controversy between the parties is whether in estimating his compensation there is to be taken into account not only the weekly wage which he gets from the company, but also such sum as represents his average takings in this matter of tips. It was only a few weeks ago that I had occasion in this House, in the case of Woodilee Coal and Coke Company Limited v. M'Neill, [1918] A.C. 43, 55 S.L.R. 15, to point out that compensation which is directed to be paid by an employer to a workman who is injured by accident arising out of and in the course of his employment in section 1 of the Workmen's Compensation Act has its natural meaning—that is to say, something that is to be paid which makes up for the loss that the man has sustained. It is quite true that the full measure of the compensation is afterwards cut down by several rules, because the compensation which is directed to be paid under the first section is not compensation in general, but is compensation in accordance with the first schedule, and when we go to the first schedule we find certain things which, so to speak, cut down the compensation; but when we go to the first schedule we find a set of rules there for the computation which has the phrase “earnings and “average weekly earnings,” and it is upon a computation based upon “earnings” and “average weekly earnings” that a sum is arrived at. The whole point therefore is—Do these tips fall within the statutory expression “earnings”? If you were to ask a person in ordinary common parlance what this porter earned the answer would be—“Well, I will tell you what he gets; he gets so much wages from his employer and he gets on an average so much in tips.”

It has been sought in the argument addressed for the appellants to limit the meaning of “earnings” to what the workman gets by what I may call direct contract with his employers. The simple answer is that the statute does not say so—it uses the general term “earnings” instead of the term “wages,” or that expression “what he gets from his employers,” and as a matter of fact the employer in a case where there is a known practice of giving tips obviously gets the man for rather less direct wages than he would if there was not that other source of remuneration to the man when he is in his post. More than that, in this case the employer is obviously a party and privy to the whole arrangement.

The learned arbitrator found as a fact “that the giving and receiving of these tips has been ‘open and notorious,’” and says, “I find as a fact that they have been sanctioned by the employers.” Now that fact found by the arbitrator could only be challenged on one of two grounds, either if it was founded upon some erroneous legal proposition which underlay it, or if it was a fact which had no evidence in the case to support it. It is quite obvious that neither of these objections can be stated in this case against the finding, and therefore the finding rules. The result is that these tips are part of the man's ordinary earnings.

I entirely agree with the decision of the Court of Appeal in the case of Penn v. Spiers & Pond, [1908] 1 KB 766, which was decided in 1908 by the Court of Appeal, and I would especially also commend the very careful limitation that is laid down in that case by the Master of the Rolls where he says—“To avoid misconception we desire to state that nothing in this judgment extends to ‘tips’ or gratuities ( a) which are illicit, ( b) which involve or encourage a neglect or breach of duty on the part of the recipient to his employer, or ( c) which are casual and sporadic and trivial in amount.” There is here, as I have already pointed out, a direct finding which shows that this ( c) is excluded in this case.

As regards the subsequent case of Skailes v. Blue Anchor Line Limited, [1911] 1 KB 360, not only do I find that the majority of the Court adhered to the judgment in Penn v. Spiers & Pond, but the dissentient member of the Court, Fletcher Moulton, L.J.,

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