[2012] FWAFB 3206

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.604—Appeal of decision

WorkPac Pty Ltd
v
M Bambach
(C2012/3244)

JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT SAMS
COMMISSIONER BOOTH

MELBOURNE, 31 MAY 2012

Appeal against decision [2012] FWA 670 of Commissioner MacDonald at Sydney on 9 March 2012 in matter number U2011/2130.

[1] On 9 March 2012 Commissioner MacDonald decided that Michael Bambach was a person ‘protected from unfair dismissal’ within the terms of s.382 of the Fair Work Act 2009 (the Act) and that Fair Work Australia (the Tribunal) had jurisdiction to determine his unfair dismissal application. WorkPac Pty Ltd (WorkPac) has appealed the Commissioner’s decision. The central issue on appeal is whether a ‘period of employment’ and a ‘period of continuous service’ in s.384(1) of the Act includes a workers’ compensation absence.

[2] We propose to briefly set out the relevant facts before turning to the decision subject to appeal and the relevant statutory provisions.

[3] WorkPac is a major national labour hire business that supplies labour to clients throughout Australia, including clients in the Hunter Valley Region. 1 Mr Bambach has had various periods of casual employment with WorkPac since 2007, namely2

[4] At all relevant times, Mr Bambach’s employment was regulated by the WorkPac Pty Ltd Mining (Coal) Agreement 2007 (the 2007 Agreement).

[5] On 1 June 2010 Mr Bambach was injured at work. His workers’ compensation claim was accepted by WorkPac’s insurer, Coal Mines Insurance Pty Ltd. 3 Mr Bambach regularly attended his nominated treating doctor and was provided with a series of Workcover Medical Certificates, covering the period from 2 June 2010 until 23 September 2011.4 On 23 September 2011, Mr Bambach was certified as fit to resume his pre-injury duties5 and on the same day he advised WorkPac that he was fit to return to his pre-injury duties.6

[6] On 17 October 2011, Mr Bambach received an Employment Separation Certificate from WorkPac stating that his employment had ceased on 24 September 2011 and that the reason for separation was ‘unsuitability for this type of work’. 7

[7] In the proceedings before Commissioner MacDonald WorkPac submitted, among other things, that Mr Bambach was precluded from bringing an unfair dismissal claim because he was a casual employee who had not been engaged on a regular and systematic basis for more than six months. WorkPac contended that the relevant period of employment was only two and a half months (from 6 March 2010 to 1 June 2010), and that the period during which Mr Bambach was in receipt of workers’ compensation benefits was not a ‘period of service as a casual employee’ for the purposes of s.384(2)(a) of the Act. 8

[8] Mr Bambach’s response to this submission is encapsulated in paragraph [7] of his further outline of submissions (a):

[9] The Commissioner rejected WorkPac’s jurisdictional objection, in these terms:

[10] There are two broad limbs to WorkPac’s appeal. First, it is contended that Mr Bambach’s application for relief was filed out of time and in those circumstances the Commissioner erred in two respects:

[11] The second limb of the appeal is that the Commissioner erred in deciding that the Tribunal had jurisdiction to determine Mr Bambach’s unfair dismissal application.

[12] The appellant was represented by the Australian Industry Group (AiGroup). We granted the Australian Chamber of Commerce and Industry (ACCI) leave to intervene and also granted leave to the AiGroup to intervene on its own behalf.

[13] An appeal under s.604 of the Act is an appeal by way of rehearing and the Tribunal’s powers on appeal are only exercisable if there is error on the part of the primary decision maker. 12 The decision subject to appeal was made under Part 3.2 - Unfair Dismissal - of the Act. Section 400(1) provides that permission to appeal must not be granted from a decision made under Part 3.2 unless the Tribunal considers that it is in the public interest to do so. Further, in such matters appeals on a question of fact can only be made on the ground that the decision involved a significant error of fact (s.400(2)).

[14] Section 400 manifests an intention that the threshold for a grant of permission to appeal is higher in respect of unfair dismissal appeals than that pertaining to appeals generally (compare s.604(2) and s.400).

[15] As to the first limb of the appeal it is important to observe at the outset that no such point was taken in the proceedings below. Indeed before the Commissioner the appellant conceded that the application had been filed within time. 13 The application for relief was filed on 18 October 2011. WorkPac’s primary submission at first instance was that there had been no termination of employment at all, but in the event the Tribunal rejected that submission it was conceded that the date of dismissal was 10 October 2011 and that the application for relief had been filed within the 14 days prescribed by s.394(2). A similar submission was put on behalf of Mr Bambach.14 Hence in the proceedings at first instance it was common ground that if the Tribunal found that Mr Bambach had been dismissed from his employment with Workpac then that dismissal took effect on 10 October 2011. On appeal neither party resiled from the proposition that the date of dismissal was 10 October 2011.

[16] The manner in which this matter was run at first instance tells heavily against granting permission to appeal. An appeal is not an opportunity to re-run the case below with the benefit of hindsight. Nor should an appeal provide an avenue for a party to resile from a concession properly made.

[17] In any event we are not persuaded that the Commissioner erred in the manner contended by the appellant. In the circumstances of this case we are not persuaded that the occasion arose for the exercise of the discretion to extend time under s.394(3). This is so because in our view the date of dismissal was 10 October 2011 and not 24 September 2011 as found by the Commissioner. It was common ground at first instance and on appeal that 10 October 2011 was the date that the dismissal of Mr Bambach’s employment took effect. This was the date on which the appellant informed Mr Bambach that there was no work available for him.

[18] We acknowledge that the Employment Separation Certificate identified the date of termination as 24 September 2011. 15 But that fact is not determinative of this issue, for three reasons:

[19] In relation to the last point there is ample authority for the proposition that a termination of employment takes effect when it is communicated to the employee. There may be some exceptions to this general proposition but none are relevant in the context of this matter. 19 On this basis even if the Employment Separation Certificate constituted the instrument which terminated Mr Bambach’s employment it did not take effect until he received it, on 17 October 2011.

[20] Accordingly, on any view of it, the application was filed within the prescribed time.

[21] We are not persuaded that there is any merit in the first limb of the appeal and we refuse permission to appeal in respect of that matter.

[22] Before turning to the second limb of the appeal we set out the relevant statutory provisions.

[23] Section 382 relevantly provides that a person is ‘protected from unfair dismissal’ at a time if, at that time:

[24] The ‘minimum employment period’ is defined in s.383:

[25] WorkPac is not a small business employer and hence the relevant minimum employment period is six months.

[26] An employee’s ‘period of employment’ with an employer is defined in s.384:

[27] Only ss.384(1) and (2)(a) are relevant for present purposes.

[28] The meanings of ‘service’ and ‘continuous service’ are dealt with in s.22 of the Act, only s.22(1), (2), (3), (3A) and (4) are relevant:

[29] No regulations have been made pursuant to s.22(2)(b)(iii) or (c).

[30] The appellant contends that an absence on workers’ compensation is an ‘excluded period’ because such an absence is an ‘unpaid authorised absence’ within the meaning of s.22(2)(b).

[31] At issue in these proceedings is the proper construction of the expression ‘unpaid authorised absence’ in s.22(2)(b). The starting point is to construe these words according to their ordinary meaning, having regard to their context and purpose. ‘Absence’ in this context means absence from work. The Oxford Dictionary defines ‘authorised’ to mean, among other things, ‘legally or formally sanctioned’. An absence due to work related injury may be regarded as being legally sanctioned.

[32] The word ‘unpaid’ presents an insurmountable problem for the appellant in this case. The period during which Mr Bambach’s was absent due to his work related injury was not ‘unpaid’. During the relevant period Mr Bambach received compensation payments in accordance with the provisions of the Workers’ Compensation Act 1987 (NSW) (the Workers’ Compensation Act). Those payments were made pursuant to a legal obligation upon Mr Bambach’s employer, WorkPac. Section 9(1) of the Workers’ Compensation Act provides:

[33] It is also relevant that during this period the 2007 Agreement applied to Mr Bambach’s employment. Clause 9 of that agreement provides an entitlement to accident pay for a period of 78 weeks from the date of the worker’s injury, at the following rate:

[34] During the period that Mr Bambach was absent from work due to his injury (i.e. 2 June 2010 to 23 September 2011) he was paid accident pay in accordance with clause 9 of the 2007 Agreement. These payments were made by Workpac’s insurer Coal Mines Insurance Pty Ltd. 20

[35] The appellant contended that the payments made to Mr Bambach were ‘unpaid’ within the meaning of s.22(2)(b):

[36] We reject this proposition insofar as it applies to the payments made to Mr Bambach while absent on workers’ compensation. Both the workers’ compensation payments and the payment of accident pay were made pursuant to a legal obligation upon his employer, WorkPac.

[37] Contrary to the appellant’s submission, the fact that WorkPac chose to insure against such liabilities, and hence the payments were actually made by WorkPac’s insurer, is irrelevant. The fact that the payments were made pursuant to a legal obligation upon the employer is the critical consideration. The nature of the payment does not change because the employer has entered into an indemnity arrangement with a third party. We note that our conclusion in this regard is consistent with the decision of Commissioner Roe in Webster v Toni and Guy Port Melbourne Pty Ltd. 22 In that case the Commissioner concluded that an employee’s period of absence due to a motorcycle accident was a period of ‘unpaid leave or unpaid authorised absence’ within the meaning of s.22(2)(b). This was found to be so despite the fact that the employee was receiving payments from the Transport Accident Commission during the relevant period.

[38] There is an important distinction between the present case and the facts in Webster. The payments to Webster were not made pursuant to any legal obligation upon his employer, rather the payments were made pursuant to a separate ‘no fault’ statutory transport accident scheme. As the Commissioner observed in Webster:

[39] In the context of workers’ compensation obligations it is important to appreciate that many employers choose to self insure. In such instances the payment of compensation and, where relevant, accident pay would be made by the employer directly. If the appellant’s contention were accepted then an absence on workers’ compensation would be an ‘unpaid authorised absence’ if the worker’s employer was insured, but such an absence would not be regarded as ‘unpaid’ if the worker’s employer was self insured. Such an arbitrary outcome also tells against the construction advanced by the appellant.

[40] The appellant also submits that if the decision subject to appeal is not overturned then employers would be reluctant to continue to employ workers who are absent from work for extended periods as a result of workplace injuries. AiGroup made the following submission in this regard:

[41] We do not find this submission persuasive. It is speculative, insofar as it purports to predict future employer behaviour, and it ignores the fact s248(1) of the Workers Compensation Act 1987 (NSW) provides injured workers with protection against the termination of their employment within 6 months of injury.

[42] It is convenient at this point to deal with two submissions advanced on behalf of ACCI. First, ACCI relied on a non-binding ruling from the Australian Taxation Office regarding the meaning of ‘ordinary time earnings’ in s.6(1) of the Superannuation Guarantee (Administration) Act 1992 (the Ruling). 25 The import of the Ruling is that there is no legislative obligation to pay superannuation in circumstances where an employee is absent from work and in receipt of workers’ compensation payments. ACCI relied on the Ruling to advance the following submission:

[43] We do not find this submission persuasive. The definitions in question, ‘unpaid authorised absence’ and ‘ordinary time earnings’, are quite different and the two statutes cannot properly be regarded as in pari materia for the purpose of ascertaining the proper construction of ‘unpaid authorised absence’ in s.22(2)(b) of the Act. 27

[44] The second argument advanced by ACCI was that ‘paid’ in the context of the Act referred to the work - wages bargain. Leave entitlements were used to illustrate this point. It was submitted that the entitlement to leave derived from service, as in the performance of work, with an employer whereas workers’ compensation payments do not, they derive from a separate statutory scheme.

[45] This submission is unconvincing. Contrary to ACCI’s contention, the ‘whole theme’ of the Act is not predicated on a connection between payment and the performance of work. 28 The following points illustrate the absence of any such statutory consistency.

[46] The statutory entitlement to paid compassionate leave (s.106) and to be paid while absent on jury service (s.111) are not dependent on any particular period of service with an employer.

[47] Further, the Act does not adopt a consistent approach in relation to what constitutes ‘service’ for the purpose of accruing statutory entitlements. There are numerous circumstances where employees accrue entitlements to paid leave when they are engaged in activities which are entirely unrelated to the performance of work for their employer. In particular, the Act provides that an employee’s leave entitlements continue to accrue when the employee is:

[48] Nor is there any consistency in relation to what constitutes service for the purpose of accruing statutory entitlements. On the one hand ‘unpaid leave and unpaid authorised absences’ do not count as ‘service’ for the purpose of calculating an employee’s entitlement to annual leave, personal carer’s leave or redundancy pay. But this is to be contrasted with the fact that ‘unpaid leave and unpaid authorised absences’ do count as ‘service’ for the following purposes:

[49] There are other contextual impediments to the adoption of the construction advanced by the appellant, AiGroup and ACCI. Section 130 of the Act is particularly relevant in this regard, it states:

[50] Section 130(1) provides that while an employee is absent on workers compensation he or she does not accrue any leave or absence under Part 2.2 of the Act. Part 2.2 deals with the National Employment Standards and includes the entitlement to annual leave and personal carer’s leave. It is instructive to note that an employee’s entitlement to these forms of leave accrue on the basis of the employee’s service with his or her employee. Hence, the effect of s.130 is that a period of absence on workers’ compensation does not constitute service for the purpose of accruing an entitlement to the types of leave prescribed in Part 2.2 of the Act.

[51] The leave accrual rules in Part 2.2 provide that the entitlement to various forms of leave is dependent on the employee completing a prescribed period of service:

[52] Limited exclusions to the operation of s.130(1) are set out in s.130(2) and (3). Section 130(2) provides that an employee is not prevented from taking or accruing ‘leave’ if the taking or accruing of leave is permitted by a compensation law (i.e. a law of the Commonwealth, a State or a Territory that is about workers’ compensation). Section 130(3) allows employees to take unpaid parental leave during a compensation period.

[53] The Explanatory Memorandum to what is now s130 is instructive. It states:

[54] The appellant submits that the Explanatory Memorandum to s.130 is consistent with the construction of s.22 for which they contend. Paragraph [59] of the appellant’s written submission deals with this point:

[55] We do not find this submission persuasive. It seems to us that the Explanatory Memorandum in fact supports the contrary proposition, namely that an absence on workers’ compensation is not an ‘excluded period’ for the purpose of calculating an employee’s service and hence her or his entitlement to various forms of leave. Indeed if the appellant’s construction of s.22 was correct then there would be no need for s.130 to ‘switch off’ the leave accrual rules in Part 2.2.

[56] ‘Service’ for the purpose of the leave entitlements in Part 2.2 is defined in s.22(1) of the Act. If an absence on workers’ compensation was excluded from the calculation of ‘service’ in s.22 - as contended by the Appellant - then why was it necessary to enact s.130(1) to ‘switch off’ the standard accrual rules? If the appellant’s construction of s.22(2)(b) was correct then s.130(1) would be otiose. If absence on workers’ compensation was ‘unpaid authorised absence’ within the meaning of s22(2)(b), and hence excluded from the definition of service by an employee with their employer, then there would be no need for the specific exclusion provided by s.130. As a general principle statutory provisions are to be given some meaning and effect. 29

[57] As Gummow J observed in Minister for Resources v Dover Fisheries Pty Ltd: 30

[58] We note ACCI’s contention that s.130(1) is not otiose as it adds clarity and also deals with the ‘taking’ of any leave under Part 2.2, 31 but we do not find that submission persuasive. It would have been open to Parliament to confine s.130(1) to the ‘taking’ of leave.

[59] The final point we wish to deal with concerns the appellant’s contention that the Commissioner failed to interpret s.384 of the Act in a way which would best achieve the purpose and objects of the Act. In this context, the appellant and the intervenors’ rely on the Explanatory Memorandum to the Fair Work Bill 2008 which, relevantly, states:

[60] It was submitted that if a period on workers’ compensation was counted toward the minimum employment period it would defeat the rationale of allowing the employer the specified period of 26 weeks in which it could assess the capacity and conduct of a new employee.

[61] A number of things may be said about this contention. The first is that the Explanatory Memorandum is an aid to construction, it does not control the construction of a statutory provision. The language of the provisions themselves and their context are surer guides to Parliament’s intention.

[62] The second observation we would make is that counting a period on workers’ compensation towards the minimum employment period would not necessarily deny the employer the ability to assess the capacity and conduct of a new employee. It would depend on the extent of the employee’s incapacity and the length of the absence. In many instances injured employees return to work on modified duties, indeed the relevant legislation encourages them to do so, thereby allowing the employer to assess their performance. In any event, as we have already noted, there are other instances where the Act counts an unpaid authorised absence towards the minimum employment period. An employee’s absence on jury service or while engaged in an eligible community service activity both count towards the minimum employment period, yet both do not allow the employer to assess the capacity and conduct of the employee.

[63] Finally, the objects of Part 3-2 - Unfair Dismissal of the Act are also relevant. Section 381 provides:

[64] The objects of Part 3-2 speak of a legislative framework which balances the needs of business and employees. Counting an absence on workers’ compensation towards the minimum period of employment is consistent with that object. It must be remembered that the worker’s injury is work related and the relevant Act imposes a liability upon the employer for that injury.

[65] We conclude by observing that the construction contended for by the appellant would give rise to some anomalous outcomes. As we have noted, if the appellant’s construction of s.22 were correct, then a compensation period (i.e. a period when an employee is absent on workers’ compensation) would not count towards the ‘minimum employment period’ for the purpose of determining whether the employee was protected from unfair dismissal, but would count as service for the purpose of calculating notice of termination or payment in lieu of notice.

[66] This is so because s.22(4) which has the practical effect of counting an ‘unpaid authorised absence’ as service for the purpose of Subdivision A of Division 11 of Part 2.2. Notice of termination, or payment in lieu of notice is dealt with in subdivision A of Division 11 of Part 2.2 of the Act. The definition of service for this purpose is set out in s.22(4)) does not exclude any period of ‘unpaid authorised absence’ (unlike the general meaning of ‘service’ in s.22(1). Hence if the appellant’s contention that a ‘compensation period’ was an ‘unpaid authorised absence’ was correct this would not alter the fact that a compensation period counts as service for the purpose of calculating notice of termination.

[67] We have concluded that an absence on workers’ compensation is not an ‘excluded period’ within the meaning of s.22. It follows that the Commissioner’s conclusion was correct and Mr Bambach was ‘protected from unfair dismissal’ within the meaning of s.382. We are satisfied that this limb of the appeal raises some important issues regarding the proper construction of the Act and accordingly we grant permission to appeal. However, for the reasons given we dismiss the appeal.

PRESIDENT

Appearances:

Mr S. Smith with Ms G. Vaccaro for WorkPac Pty Ltd and intervening on behalf of AiGroup.

Mr T. Vernier intervening on behalf of the Australian Chamber of Commerce and Industry.

Mr K. Endacott; of the Construction, Forestry, Mining and Energy Union, appearing on behalf of Mr Bambach.

Hearing details:

Sydney
19 April 2012.

Supplementary written submissions filed on 26 and 27 April, 8 and 11 May 2012.

 1   Ms Deen’s evidence, Transcript 24 January 2012 paragraph [133]

 2   Further Witness Statement of Mr Bambach 13 January 2012 at paragraph [4] and annexures MJB-A, MJB-B, MJB-C and MJB-D; Appeal Book p148-284.

 3   Annexure MJB-2 to Mr Bambach’s witness statement of 12 December 2011; Appeal Book p87.

 4   Annexures MJB-3 to MJB-24 to Mr Bambach’s witness statement of 12 December 2011; Appeal Book p88-131.

 5   Ibid, Annexure MJB-25 at Appeal Book p133.

 6   Paragraph [10] and [12] of Mr Bambach’s witness statement of 12 December 2011; Appeal book p82

 7   Annexure MJB-26 to Mr Bambach’s witness statement of 12 December 2011; Appeal Book p135

 8   Form F3 - Employer’s Response to Application for Unfair dismissal Remedy and Form F4 Objection to Application for Unfair Dismissal Remedy and Respondent’s Outline of Submissions filed 12 December 2011, marked as Exhibit 5; see Appeal Book p65-75.

 9   Appeal Book p291

 10   Annexure MJB-2 to Mr Bambach’s witness statement of 12 December 2011, Exhibit 3

 11   [2012] FWA 670

 12   This is so because on appeal FWA has power to receive further evidence, pursuant to s.607(2); see Coal and Allied v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.

 13   Transcript of the proceedings before Commissioner MacDonald, 24 January 2012 at paragraphs [13] - [19]

 14   Transcript of the proceedings before Commissioner MacDonald, 24 January 2012 at paragraphs [18] - [19], [28]-[29] and [39] - [43]

 15   Appeal Book p61

 16   Transcript of the proceedings before Commissioner MacDonald, 24 January 2012 at paragraphs [276] - [2873]

 17   Appeal Book p66

 18   Transcript of the proceedings before Commissioner MacDonald, 24 January 2012 at paragraph [32].

 19   Transport Workers’ Union of Australia v National Dairies Limited (1994) 57 IR 183; P.T Wilson v Australian Taxation Office PR901127, 26 February 2001 per Guidice J, Williams SDP and Bacon C; A.N. Makenja v Baptist Community Services [2007] AIRCFB 38

 20   See the reply submissions by Ai Group on behalf of the appellant and intervener, 8 may 2012 at paragraph [11]

 21   AiGroup written submission 18 April 2012 at paragraph [47]

 22   [2010] FWA 4540

 23   Ibid at paragraph 10

 24   Ai Group written submission 18 April 2012 at paragraph [71]

 25   Superannuation Guarantee Ruling SGR 2009/2

 26   ACCI Written Submission 18 April 2012 at paragraph [19]

 27   United Society v Eagle Bank (1829) 7 Conn 457 at 470 per Hosmer J; Alfonso v Northern Territory (1999) 131 NTR 8 at 10 per Mildren J

 28   Transcript of proceedings 19 April 2012 at paragraph [224]

 29   Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 per McHugh, Gummow, Kirby and Hayne JJ.

 30   (1993) 43 FCR 565 at [574]

 31   Transcript 19 April 2012 at paragraphs [230] - [246]

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