Golubenko and Repatriation Commission (Veterans' entitlements)
[2017] AATA 885
•8 June 2017
Golubenko and Repatriation Commission (Veterans' entitlements) [2017] AATA 885 (8 June 2017)
Division:VETERANS' APPEALS DIVISION
File Number: 2015/0528
Re:Stanley Golubenko
APPLICANT
AndRepatriation Commission
RESPONDENT
DECISION
Tribunal:Regina Perton, Member
Date:8 June 2017
Place:Melbourne
The Tribunal affirms the decision under review.
[sgd]........................................................................
Regina Perton, Member
VETERANS’ APPEALS - pension at special rate – claim lodged after applicant’s 65th birthday – whether 10 years of work in same field as employee when working for different companies - decision under review affirmed
LEGISLATION
Veterans’ Entitlements Act 1986 (Cth) ss 24(2A), 119(g)
CASES
Carter v Repatriation Commission (2001) 66 ALD 139
Re Hardy and Repatriation Commission [2017] AATA 425
Re Elliott and Repatriation Commission (2015) 148 ALD 193
James v Repatriation Commission [2004] FMCA 548
Kowalski v Repatriation Commission [2011] FCAFC 43
Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd and Anor (2005) 222 CLR 194
Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355
Sherman v Repatriation Commission [1991] FCA 238
Thomson v Repatriation Commission (2000) 96 FCR 550White v Repatriation Commission [2001] FCA 1585
SECONDARY MATERIALS
Commonwealth, Parliamentary Debates, House of Representatives, 9 June 1994, 1809 (Kim Beazley, Minister for Finance)
Explanatory Memorandum, Veterans’ Affairs (1994-1995 Budget Measures) Legislation Amendment Bill 1994
REASONS FOR DECISION
Regina Perton, Member
8 June 2017
Stanley Golubenko was born in April 1946. He was conscripted for National Service in the Australian Army (the Army) and served from 1 May 1968 to 30 April 1970. His service included operational service in Vietnam from 10 December 1968 to 15 October 1969. On 11 April 2014 Mr Golubenko’s service disability pension was increased to 100 per cent of the general rate, effective from 6 September 2013. He suffers from the following medical conditions which have been accepted by the Repatriation Commission (the respondent) as war-caused: Post-traumatic Stress Disorder (PTSD), Lumbar Spondylosis, Osteoarthritis Tibio-Fibular Joint Left Knee, Ganglion Left Lateral Knee Joint, Osteoarthritis 1st MTP Joint Both Feet, Solar Keratoses, Bilateral Sensorineural Hearing Loss, Tinnitus, Tinea Pedis and Dyshyrosis.
On 26 May 2014 Mr Golubenko applied to the Veterans’ Review Board (VRB) for review of the decision and sought a special rate pension, which is a higher rate of pension paid to a person who is unable to work due to accepted war-caused disabilities alone.
On 10 December 2014 the VRB affirmed the respondent’s decision. On 5 February 2015 Mr Golubenko applied to the Tribunal for review of the decision.
LEGISLATIVE BACKGROUND
The provisions concerning qualification for special rate are set out in s 24 of the Veterans' Entitlements Act 1986 (the VE Act) for a person whose claim was lodged after the person’s 65th birthday are:
…
(2A)This section applies to a veteran if:
(a)the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(b)the veteran had turned 65 before the claim or application was made; and
(c)paragraphs (1)(a) and (1)(b) apply to the veteran; and
(d)the veteran is, because of incapacity from war-caused injury or war-caused disease or both, alone, prevented from continuing to undertake the remunerative work (last paid work) that the veteran was last undertaking before he or she made the claim or application; and
(e)because the veteran is so prevented from undertaking his or her last paid work, the veteran is suffering a loss of salary or wages, or of earnings on his or her own account, that he or she would not be suffering if he or she were free from that incapacity; and
(f)the veteran was undertaking his or her last paid work after the veteran had turned 65; and
(g)when the veteran stopped undertaking his or her last paid work, the veteran:
(i) if he or she was then working as an employee of another person--had been working for that person, or for that person and any predecessor or predecessors of that person; or
(ii) if he or she was then working on his or her own account in any profession, trade, employment, vocation or calling--had been so working in that profession, trade, employment, vocation or calling;
for a continuous period of at least 10 years that began before the veteran turned 65; and
(h)section 25 does not apply to the veteran.
…
ISSUE
The respondent accepted that Mr Golubenko satisfies all paragraphs in s 24(2A) of the VE Act except s 24(2A)(g). The only issue to be determined by the Tribunal is whether, when Mr Golubenko ceased paid employment, he had been working for his last employer, or predecessor, for a continuous period of 10 years that began before he turned 65 years of age.
HAD MR GOLUBENKO BEEN WORKING FOR HIS LAST EMPLOYER, OR PREDECESSOR, FOR A CONTINUOUS PERIOD OF 10 YEARS THAT BEGAN BEFORE HE TURNED 65?
Mr Golubenko told the Tribunal that he and his family migrated to Australia from Germany in 1950. He attended Sunshine Technical School and left after the equivalent of Year 10 to commence an apprenticeship with the Government Aircraft Factory (GAF) as an aviation sheet metal worker. He was then called up to the Army. After he left the army in 1970, Mr Golubenko returned to the GAF where he remained until he was retrenched in the early 1990s. He then commenced employment in the security industry at the age of 47 years. He worked for WB Engineering Pty Ltd (WB Engineering) at the Port of Melbourne from 10 January 1994 until 30 June 2004, when Chubb Security (later known as MSS Security) won the contract for security services at the Port of Melbourne and his employment was terminated. He said that on 1 July 2004 Chubb Security hired him in the same position as previously until 30 June 2008. His employment was terminated when ISS Security won the contract for security services at the Port of Melbourne to commence on 1 July 2008.
On 2 July 2008 Mr Golubenko was hired by ISS Security. The company also held the contract for security services at Melbourne Airport, and he was given permission to change location, where he remained until 10 January 2014, when he resigned at the age of 67 years because of his war-caused medical conditions, particularly PTSD.
The Explanatory Memorandum to the Veterans’ Affairs (1994-1995 Budget Measures) Legislation Amendment Bill 1994 describes a predecessor as follows:
Where the veteran was an employee in his or her last paid work, he or she must have been employed by the same person or a predecessor or predecessors of that person for a continuous period of at least 10 years that began before the veteran turned 65 years of age. In this context, a predecessor of a person means the person who was previously the veteran’s employer and whose position as employer of the veteran was taken over by a legal successor to the position as the veteran’s employer, for example, by a takeover or sale of the business enterprise in which the veteran was employed.
The Second Reading Speech for the Bill on 9 June 1994 includes the following:
Subject to certain exceptions and protection of existing special and intermediate age pensions, the changes being made by the bill reinforce that intention just stated. That will mean that these pensions will not normally be granted to veterans who are over 65. An exception to this rule will apply if the veteran was engaged in remunerative work after the age of 65, and that work was in the same business or employment in which the veteran had been working for 10 continuous years. This would include, for example, many in the farming community.
Mr De Marchi, appearing on behalf of Mr Golubenko, submitted that the period of more than 10 years prior to Mr Golubenko’s resignation from ISS Security commenced on 10 January 1994 when he joined WB Engineering and was continuous until he ceased work with ISS Security. He submitted that an employer-predecessor within the meaning of the VE Act includes an employer who provides a particular service, who is then replaced by another employer who provides the same service (the successor-employer).
Accordingly, Mr De Marchi submitted that ISS’s predecessor was Chubb Security, whose predecessor was WB Engineering because the three companies each occupied the office of contractor for the security of the Port of Melbourne, and each employer had a strong continuity that resulted from the Port of Melbourne tender process. He said that Mr Golubenko’s occupation and responsibilities remained unaffected by the change of employer, because he continued as a security officer in the same capacity, with the same duties, even when he changed his work location from the Port of Melbourne to Melbourne Airport. It was submitted that Mr Golubenko therefore satisfies the 10-year rule because it is open to the Tribunal to find that a succeeding employer who has won a tender or contract to provide services and retained the existing employee base of the previous company is a legal successor in the same way that a merger or acquisition results in a company being a legal successor.
Mr De Marchi submitted further that the VE Act is beneficial legislation (Kowalski v Repatriation Commission [2011] FCAFC 43 at [36]), so the meaning of predecessor should be interpreted as broadly as possible to benefit veterans, and should be given its natural meaning.
Mr Rudge, appearing on behalf of the respondent, submitted that Mr Golubenko had not been working for his last employer, or its predecessors, for a continuous period of 10 years when he ceased his last paid work. Rather, the employer had changed in that period. He said that a legal successor to the position of the veteran’s employer would assume the rights and responsibilities of the predecessor in the contract of employment, as in the case of a takeover or sale of the business enterprise as stated in the Explanatory Memorandum. He said that the successor employers did not assume the rights and responsibilities in the veteran’s contract of employment and did not take over the business or part of the business. Consequently, WB Engineering and Chubb Security were not predecessors within the meaning of s 24(2A)(g) of the VE Act, but were new employers who made new contracts with Mr Golubenko.
In Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 the High Court of Australia stated at 384:
…the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.
There is no definition of predecessor or predecessors in the VE Act, so the words should be given their ordinary meaning in the context of the way the words appear in the legislation. The Macquarie Online Dictionary defines predecessor as :
noun 1. someone who precedes another in an office, position, etc.
2. anything succeeded or replaced by something else.
3. an ancestor or forefather.
In Thomson v Repatriation Commission (2000) 96 FCR 550 the Full Federal Court stated at 554-555:
…sub-section (g) of s 24(2A) is concerned with the capacity in which the last paid work was undertaken. A veteran meets the requirements of the sub-section if the last paid work has been undertaken in the relevant capacity for a continuous period of at least 10 years. If the capacity is as an employee, the veteran must have been employed by the same employer (or its predecessor) continuously for the 10 year period…
In White vRepatriation Commission (2001) 114 FCR 494 Conti J stated at 503:
It may be observed that the sub-paragraph (i) continuity test focuses upon the need to identify one employer during the statutory ten year period, subject only to exceptions in the case of a predecessor or predecessors of that employer, irrespective (implicitly) of what changes might have occurred in the nature of the business of that employer or its predecessor or predecessors during that period of time, whereas the sub-paragraph (ii) continuity test focuses upon the nature or description of the profession, trade, employment, vocation or calling in which the veteran was engaged during such period…
At 504 Conti J stated:
…it is apparent that the legislature framed subparagraph (i), as well as subparagraph (ii), in more restricted terms than was foreshadowed by the generality of the Second Reading speech.
In Carter v Repatriation Commission (2001) 66 ALD 139 Branson J stated at 144:
…it is to be observed that par 24(2A)(g) is not concerned with whether a veteran had at the crucial time been undertaking the same remunerative work for a continuous period of at least ten years, but merely with whether the veteran, if employed, had been working with the same employer or, if self employed, in the same profession, trade etc, for a continuous period of at least ten years.
In James vRepatriation Commission [2004] FMCA 548 Phipps FM stated at [18]:
The explanatory memorandum and the decisions referred to make it clear that for a veteran to meet the requirements of s.24(2A)(g) he must have been employed by the same employer (or its predecessor) continuously for the 10 year period, or must have been self-employed for a continuous period of 10 years. A period of 10 years with different employers or comprised partly of self-employment and partly of employment will not satisfy s.24(2A)(g). The argument for the applicant that employment in similar occupations will satisfy the subsection is contrary to the explanation in the explanatory memorandum and to the authorities.
In respect of the meaning of successor, in Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 the High Court of Australia held that Gribbles (which employed the same staff at the same premises and conducted the same type of business) was not the successor of the companies that previously conducted business at the premises. The Court stated at 211:
It is accepted that it would be wrong to attempt any general definition of the term. Whether one employer is the successor to another is a mixed question of fact and law, and "business" is a word that may have application in a wide variety of different circumstances. But to be a "successor" to the business or part of the business of a former employer, the new employer must enjoy some part of the "business" of the former employer. For the reasons given earlier, it will not suffice to show that the new employer pursues the same kind of business activity. If the new employer does not enjoy any part of the business of the former employer, it cannot be said to be a successor to or of that business, or a part of it.
In Re Elliott and Repatriation Commission (2015) 148 ALD 193 the Tribunal stated at 200:
Given that explanation in the Explanatory Memorandum, it becomes clear to me why s. 24(2A)(g) is focused on the capacity in which the last paid work was undertaken and the nature of the work conducted by the veteran over a continuous period of 10 years, that work being in the same capacity; of the same nature and having commenced before the veteran reached 65 years of age. That consistency of work conducted is, in the case of an employee, deemed to be manifested by working for the same employer over that period of time…
The Tribunal stated at 202:
The first point to make about whether the predecessor provision should be applied in this case is that DFP Recruitment Services was the legal successor of Esso in so far as it became Mr Elliott’s employer. Although the Explanatory Memorandum gives the example of a takeover or sale of business enterprise where the veteran was employed, it is plainly not intended to be exhaustive…The second point is that despite the change of employer, Mr Elliott continued to perform precisely the same work for Esso as he did prior to being transferred to DFP Recruitment Services. The fact that he was, following the transfer, employed and paid by DFP Recruitment Services, can be taken to mean that he continued working in the same capacity and occupation as he did previously and that the work was done for DFP Recruitment Services (by whom he was paid) although, in a practical sense, at Esso’s premises. In that sense, given the ordinary meaning of the word predecessor, at the time Mr Elliott stopped undertaking his last paid work, he was working for Esso’s successor in exactly the same trade or employment. Therefore, in my opinion, Mr Elliott’s transfer to DFP Recruitment Services as its employee does not derogate from the requirement that he must clearly demonstrate it was his long-term intention to work past the age of 65 in the remunerative work which he was performing for Esso. In fact, it supports that claimed intention.
In Re Hardy and Repatriation Commission [2017] AATA 425 the Tribunal stated at [36]:
I acknowledge that the outcome of the proper application of the provision in Mr Hardy’s circumstances appears somewhat harsh, given that he did work at the same location carrying out similar duties for the requisite 10 year period. However, in my view, properly construed, the provision is only satisfied in circumstances where a person has the same employer, or more than one employer but the later employer is a legal predecessor to the former one. That was not the case in Mr Hardy’s situation as, in my view, Bulkhaul and HWE were separate legal entities and HWE cannot be regarded as a legal successor to Bulkhaul.
The Explanatory Memorandum and Second Reading Speech, together with relevant authorities, provide guidance as to the meaning of s 24(2A)(g) of the VE Act, and suggests that a predecessor is an employer who has a legal relationship with the employer who is a legal successor who would assume the rights and responsibilities of the previous employer. Otherwise, a predecessor would simply be the entity that employed a veteran before the previous employer, and all that would be required to satisfy s 24(2A)(g) of the VE Act is a continuous period of employment for at least 10 years.
In Mr Golubenko’s case, Chubb Security did not assume the rights and responsibilities of his contract of employment with WB Engineering and did not take over any or part of that company. Similarly, ISS did not assume the rights and responsibilities of Mr Golubenko’s contract of employment with Chubb Security (or MSS Security).
Although the type of work and responsibilities carried out by Mr Golubenko did not change during his period of employment as a security officer, the Tribunal finds that WB Engineering, Chubb Security and ISS were unrelated companies which had won contracts for security work, and the successor employers did not assume the rights and responsibilities in the veteran’s contract of employment. They did not take over the previous business or part of the business. Consequently, none of the companies was a predecessor within the meaning of s 24(2A)(g) of the VE Act, but each was a different employer who made a new contract with Mr Golubenko.
Section 119(1)(g) of the VE Act provides that the Repatriation Commission:
(g)shall act according to substantial justice and the substantial merits of the case, without regard to legal form and technicalities;
In Sherman v Repatriation Commission [1991] FCA 238 Gray J stated at [21]:
The "substantial justice" argument rested on the proposition that the applicant was one of a class of persons intended to be benefited by the VE Act, and that his past hardships should have produced a decision in his favour. The flaw in this argument is that it overlooks the terms of the VE Act itself. The extent to which the class of veterans is intended to be benefited is to be gleaned only from the terms of the VE Act. It is not possible for the Tribunal, or the Court, to ignore a provision of the VE Act in favour of a veteran, simply because of hardship. It is unnecessary to explore the meaning of "substantial justice". That task can be left to the future, and to full and proper argument on the point. Whatever "substantial justice" means, it clearly does not mean setting aside a provision of the VE Act, so as to favour one party, because of circumstances external to the facts which fall within the scope of the matter to be determined.
The Tribunal finds that, although the VE Act is commonly referred to as an example of beneficial legislation and reflects the administrative rather than the judicial nature of decision-making, the meaning of predecessor should not be interpreted more widely merely on the basis that to do so would be of benefit to Mr Golubenko as a veteran.
CONCLUSION
Mr Golubenko does not satisfy s 24(2A)(g) of the VE Act and is not eligible for payment of a pension at the special rate.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 31 (thirty-one) paragraphs are a true copy of the reasons for the decision of Regina Perton, Member [sgd].......................................................................
Associate
Dated 8 June 2017
Date of hearing 7 December 2015 Advocate for Mr Golubenko Mr D De Marchi Solicitors for Mr Golubenko De Marchi & Associates Advocate for the Respondent Mr K Rudge Solicitors for the Respondent Department of Veterans’ Affairs
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