Grunt Labour Services Pty Ltd v Wha

Case [2006] NTSC 6

Grunt Labour Services Pty Ltd v Work Health Authority [2006] NTSC 6

PARTIES:GRUNT LABOUR SERVICES PTY LTD (ACN 095 854 765)

v

WORK HEALTH AUTHORITY

TITLE OF COURT:  SUPREME COURT OF THE NORTHERN TERRITORY

JURISDICTION:  SUPREME COURT OF THE TERRITORY EXERCISING TERRITORY JURISDICTION

FILE NO:132 of 2005 (20524750)

DELIVERED:  9 March 2006

HEARING DATES:  16 and 20 December 2005 and 6, 7, 9, 15, 21 and 23 February 2006

JUDGMENT OF:  SOUTHWOOD J

CATCHWORDS:

ADMINISTRATIVE LAW – Judicial review – Work Health Act – Work Health Regulations – Work Health Authority – procedural fairness – unreasonableness – prescription by administrative action – labour hire agent – independent contractors – insurance – labour hire personnel – “worker” (definition) – approval and revocation – exemption – compensation and rehabilitation – legislative function

Ultra vires – regulations – sub-delegation – legislative power – legislative purpose

A New Tax System (Australian Business Number) Act 1999 (Cth): s 8
Income Tax Assessment Act (Cth)
Interpretation Act: s 43
Public Sector Employment and Management Act
Work Health Act, s 3(b)(vii), s 3(1), s 6, s 10, s 11, s 126(4) s 187

Work Health Regulations (2000), No 39: 3A(3), 3A(4)

Work Health (Amendment) Act

Council of Civil Service Unions v Minister for Civil Service [1985] AC 374, applied

R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598, applied

Hookings v Director of Civil Aviation [1957] NZLR 929, applied

Kioa v West (1985) 159 CLR 550, applied

Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997, applied
R v Lampe; Ex parte Maddalozzo (1963) 5 FLR 160, applied
McKay v Adams [1926] NZLR 518, applied

Attorney-General (NSW) vQuin (1990) 170 CLR 1, applied

In Re Racal Communications Ltd [1981] AC 374, applied

Racecourse Co-operative Sugar Association Ltd v Attorney-General (QLD) (1979) 142 CLR 460, applied
Royal Botanic Gardens and Domain Trust v South Sydney Council (2002) 76 ALJR 436, applied

Dainford Ltd v Smith (1985) 155 CLR 342 referred to
Turner and Another v Owen (1990) 96 ALR 119; referred to

REPRESENTATION:

Counsel:

Plaintiff:A. H. Sylvester

Defendant:M. P. Grant

Solicitors:

Plaintiff:De Silva Hebron

Defendant:Solicitor for the Northern Territory

Judgment category classification:    B

Judgment ID Number:  Sou 0619

Number of pages:  42

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

Grunt Labour Services Pty Ltd v Work Health Authority [2006] NTSC 6

No. 132 of 2005 (20524750)

BETWEEN:

GRUNT LABOUR SERVICES PTY LTD

Plaintiff

AND:

WORK HEALTH AUTHORITY

Defendant

CORAM:     SOUTHWOOD J

REASONS FOR JUDGMENT

(Delivered 9 March 2006)

Introduction

  1. This is an application for judicial review commenced by originating motion.  The plaintiff conducts a labour hire business.  The plaintiff asks the court to quash a decision of the Work Health Authority revoking the plaintiff’s approval as a labour hire agent for the purposes of reg 3A(3) of the Work Health Regulations.  The Work Health Authority notified the plaintiff of its decision to revoke the plaintiff’s…

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AGLC
Grunt Labour Services Pty Ltd v Wha [2006] NTSC 6
Case
[2006] NTSC 6
Decision Date

CaseChat Overview and Summary

In the matter of Grunt Labour Services Pty Ltd v Wha, the respondent Work Health Authority was the subject of a judicial review application by the applicant Grunt Labour Services Pty Ltd. Grunt Labour Services challenged the Work Health Authority’s decision to revoke its approval as a labour hire agent under the Work Health Act. The dispute arose following amendments to the definition of 'worker' in the Work Health Act, which expanded the scope of workers requiring insurance, including those engaged through labour hire companies.

The primary legal issues before the court involved whether the Work Health Authority had the jurisdiction and authority to revoke Grunt Labour Services' approval as a labour hire agent. Furthermore, the court had to determine if the revocation decision, if authorised, was so unreasonable that no reasonable decision-maker could have made it. The court considered the legislative framework, including the Work Health Act, Work Health Regulations, and relevant case law principles regarding administrative law and judicial review.

The court examined the statutory authority and legislative intent behind the Work Health Authority’s decision-making powers. It found that the revocation of Grunt Labour Services’ approval was made without jurisdiction or authority, rendering the unreasonableness of the decision irrelevant. The court noted that the regulations exempting labour hire companies from insurance requirements had already been established, and the Work Health Authority overstepped its legislative mandate by revoking the approval. Consequently, the revocation decision was set aside.

Following the determination, the court ordered the revocation decision to be set aside, leaving open further discussion on ancillary orders and costs. The court emphasized that it was not appropriate to make the declaration sought by Grunt Labour Services without labour hire personnel as parties to the proceeding.

Orders

Orders of the court

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Background

Background to the litigation

The Work Health Authority is a body corporate with perpetual succession that is established by s 6 of the Work Health Act. The Work Health Authority is constituted by the Chief Executive Officer within the meaning of the Public Sector Employment and Management Act, of the Agency administering the Work Health Act. The Agency is currently the Department of Employment, Education and Training. The functions of the Work Health Authority are to administer and enforce the Work Health Act and such other functions as are imposed on it by the Work Health Act or any other Act. The Work Health Authority has such powers as are necessary to enable it to perform its functions or as are conferred on it by or under the Work Health Act or any other Act. The Work Health Authority, in the exercise of its powers and the performance of its functions, is subject to the directions of the Minister responsible for the Work Health Authority. NT WorkSafe is the body that provides administrative and policy support to the Work Health Authority. Under the Administrative Arrangements Order, NT WorkSafe is a division of the Department of Employment, Education and Training.The facts Having considered all of the affidavits and other exhibits that have been tendered in evidence and the testimony of Mr Hird, Mr Coventry and Mr Simpson I find the following facts. On 1 July 2000 the Work Health Amendment Act No 27 of 2000 commenced operation. The act amended the definition of worker in the Work Health Act. Following the commencement of the amending Act the definition of worker was no longer confined to a person in respect of whom the employer deducted P.A.Y.E. tax. Instead a worker, so far as is relevant, was defined as a natural person who, under a contract or agreement of any kind (whether expressed or implied, oral or in writing or under a law of the Territory or not), performs work or a service of any kind for another person unless and until the person notifies the other person, in writing, of a number that is, or purports to be, the ABN of that person for the purposes of the work or service. A consequence of the amendments to the definition of worker was that labour hire companies, who had previously deducted tax under the Prescribed Payments Scheme (PPS) of the Income Tax Assessment Act (Cth) from the wages they paid to their personnel and had therefore not been required to take out workers compensation insurance, were now required to obtain such insurance unless otherwise exempted. The personnel engaged by labour hire companies are not eligible to obtain an Australian Business Number (ABN) under s 8 of the A New Tax System (Australian Business Number) Act 1999 (Cth) as they are not carrying on an enterprise. Following the amendments to the definition of worker in the Work Health Act, the owners of one of the labour hire companies lobbied the Northern Territory Government for labour hire companies to be exempt from the requirement to take out workers compensation insurance. The company was successful and reg 3A(3) and reg 3A(4) of the Work Health Regulations (Regulations 2000, No.39) were made by the Administrator on 30 June 2000. They were notified on 1 July 2000. The regulations provided as follows:(3) For the purposes of paragraph (b)(vii) of the definition of "worker" in section 3 of the Act, a natural person who performs work or a service for another person under an arrangement entered into by that other person with an approved labour hire agent is a prescribed person who is not a worker within the meaning of that definition when performing the work or service. (4) In subregulation (3), "approved" means approved by the Authority for the purposes of that subregulation.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

As I have found that the revocation of the plaintiff’s approval as a labour hire agent by the Work Health Authority was without jurisdiction or authority, the issue as to whether the decision was so unreasonable that no reasonable decision maker would have made the decision becomes irrelevant. However, had the revocation been authorised, I would not have found that it was so unreasonable that no reasonable repository of the power could have taken the impugned decision. The unreasonableness ground of judicial review is extremely confined: Attorney-General (NSW) v Quin (supra) at 36 Declaration It is not appropriate to make the declaration sought by the plaintiff in the absence of labour hire personnel as parties to the proceeding.Orders I make the following order:The decision of the Work Health Authority to revoke and the revocation of the plaintiff’s approval as a labour hire agent for the purposes of reg 3A(3) of the Work Health Regulations notified to the plaintiff by letter dated 30 September 2005 and effective from 7 October 2005 are set aside. I will hear the parties further as to any ancillary orders and costs.