Kelly v Atanaskovic Hartnell Corporate Services Pty Limited (No 2)

This case, Kelly v Atanaskovic Hartnell Corporate Services Pty Limited (No 2), was before the Federal Circuit Court of Australia and involved a dispute between Mrs Kelly and Atanaskovic Hartnell Corporate Services Pty Limited (AHCS). Mrs Kelly was employed by AHCS and had responsibilities for human resources, administration, information technology, and finance. AHCS submitted that Mrs Kelly's performance of her duties caused it to incur significant costs and damages, and thus sought to set off these costs and damages against any entitlement Mrs Kelly had to accrued but untaken long service leave entitlements. Mrs Kelly denied any liability for the costs and damages claimed by AHCS.

The primary legal issues before the court were whether AHCS could set off the claimed costs and damages against Mrs Kelly's long service leave entitlements, and whether the Workers Compensation Act applied to regulate any damages payable for breach of the Safe Workplace Term. The court considered whether the set-off of judgments was available, and whether this was precluded by section 90(2) of the Fair Work Act or rule 24.09 of the Federal Circuit Court Rules.

The court found that the set-off of judgments was a practice of the courts that allowed one judgment for the payment of money to be set off against another judgment for the payment of money, and did not depend upon statutory set-off. The court also found that there was no inconsistency between section 90(2) and rule 24.09 so as to preclude the use of the power in rule 24.09 in proceedings for accrued but untaken annual leave. However, the court found that the Workers Compensation Act was not applicable to regulate any damages payable for breach of the Safe Workplace Term in this case.

In conclusion, the court found in favour of Mrs Kelly and against AHCS on the set-off issue. The court held that any order made pursuant to rule 24.09 would necessarily be premised on a judgment in Mrs Kelly's favour in which it was found that Mrs Kelly was entitled to be paid her statutory entitlements within one month of the cessation of her employment. As AHCS failed to do so, it would have breached a civil remedy provision and would be liable to pay penalties.