Klemke v Grenfell Commodities Pty Ltd - [2011] NSWWCCPD 27

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		Klemke v Grenfell Commodities Pty Ltd [2011] NSWWCCPD 27
APPELLANT:		John Klemke
RESPONDENT:		Grenfell Commodities Pty Ltd
INSURER:		Allianz Workers Compensation (NSW) Ltd
FILE NUMBER:		A1-6848/10
ARBITRATOR:	Mr J Phillips
DATE OF ARBITRATOR’S DECISION:		11 January 2011
DATE OF APPEAL DECISION:		23 May 2011
SUBJECT MATTER OF DECISION:		Whether employment connected with New South Wales; section 9AA of the Workers Compensation Act 1987; meaning of “temporary arrangement”
PRESIDENTIAL MEMBER:		President Judge Keating
HEARING:		On the papers
REPRESENTATION:		Appellant:	Slater & Gordon Lawyers
Respondent:	Sparke Helmore Lawyers
ORDERS MADE ON APPEAL:		The Arbitrator’s determination of 19 January 2011 is confirmed. No order as to costs.

BACKGROUND

The appellant worker, Mr John Klemke, commenced employment with the respondent employer, Grenfell Commodities Pty Ltd (Grenfell Commodities), on or about 24 November 2009. Subject to a trial or probationary period of three weeks, he was employed to work as a site manager at the employer’s premises at Kwinana Beach, Western Australia.
Mr Klemke alleged that during the trial or probationary period, he injured his left ankle on or about 10 December 2009, when he twisted his ankle after stepping on a piece of timber.
Mr Klemke continued working for Grenfell Commodities in Western Australia for the duration of the trial or probationary period which ended on 16 December 2009, when he returned to New South Wales. He did not return to the duties in Western Australia on 4 January 2010, as previously arranged, and has not worked since. He alleges he is incapacitated by reason of the injury on 10 December 2009.
Mr Klemke received voluntary payments of weekly compensation to 16 June 2010.
On 3 June 2010, Allianz issued a notice under s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) and under s 54 of the Workers Compensation Act 1987 (the 1987 Act). It denied liability for weekly payments after 17 June 2010, among other things, on the basis that the worker’s employment was not connected with the State of New South Wales pursuant to s 9AA of the 1987 Act on the grounds that:
(a) Mr Klemke was employed as a site manager at the respondent’s premises at Kwinana Beach, Western Australia when he was allegedly injured;
(b) Mr Klemke was not injured in the course of his employment, and, if he was injured in the course of his employment, his employment was not a contributing factor to his injuries.
In an Application to Resolve a Dispute (the Application) registered in the Commission on 24 August 2010, Mr Klemke claimed weekly payments of compensation from 17 June 2010, alleging injuries to his left ankle occurring on 10 December 2010 in the course of his employment at Kwinana Beach, Western Australia. Mr Klemke also claimed medical expenses associated with the treatment of his injuries.
The respondent’s solicitors filed a Reply on 14 September 2010. It denied liability for weekly payments and medical expenses under ss 4, 9A and 9AA of the 1987 Act for the reasons set out in the s 74 notice. The respondent also disputed the quantum of any entitlement to weekly payments pursuant to ss 36 and 37.
The Commission listed the matter for conciliation and arbitration on 6 December 2010 at Wagga Wagga in New South Wales. The Arbitrator heard lengthy submissions from counsel for both sides, but took no oral evidence. In a reserved decision delivered on 19 January 2011, the Arbitrator determined that, pursuant to s 9AA(3)(a) of the 1987 Act, Mr Klemke was not entitled to recover compensation as a result of his alleged injury on 10 December 2010 because his employment was connected with Western Australia and not connected with New South Wales. The Arbitrator was not satisfied that the trial or probationary period was a “temporary arrangement” under s 9AA (6).
Accordingly, the Arbitrator entered an award for the respondent. The Commission issued a Certificate of Determination on 19 January 2011 in the following terms:
“The Commission determines:
1. There will be an award for the respondent.
2. No order as to costs.”
Mr Klemke seeks leave to appeal the Arbitrator’s determination that his employment was not connected with the State of New South Wales.

LEAVE

Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of s 352 of the 1998 Act.

Monetary threshold

The monetary thresholds in s 352(2) of the 1998 Act are satisfied.

Time

The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with s 352(4) of the 1998 Act.
I grant leave to appeal.

ON THE PAPERS REVIEW

Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Nos 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.

THE LEGISLATION

Section 9AA of the 1987 Act states:
“9AA Liability for compensation
(1) Compensation under this Act is only payable in respect of employment that is connected with this State.
(2) The fact that a worker is outside this State when the injury happens does not prevent compensation being payable under this Act in respect of employment that is connected with this State.
(3) A worker’s employment is connected with:
(a)the State in which the worker usually works in that employment, or
(b)if no State or no one State is identified by paragraph (a), the State in which the worker is usually based for the purposes of that employment, or
(c)if no State or no one State is identified by paragraph (a) or (b), the State in which the employer’s principal place of business in Australia is located.
(4) In the case of a worker working on a ship, if no State or no one State is identified by subsection (3), a worker’s employment is, while working on a ship, connected with the State in which the ship is registered or (if the ship is registered in more than one State) the State in which the ship most recently became registered.
(5) If no State is identified by subsection (3) or (if applicable) (4), a worker’s employment is connected with this State if:
(a)the worker is in this State when the injury happens, and
(b)there is no place outside Australia under the legislation of which the worker may be entitled to compensation for the same matter.
(6) In deciding whether a worker usually works in a State, regard must be had to the worker’s work history with the employer and the intention of the worker and employer. However, regard must not be had to any temporary arrangement under which the worker works in a State for a period of not longer than 6 months.
(7) [not reproduced]
(8) [not reproduced]”
Section 9AA was introduced into the 1987 Act by the Workers Compensation Legislation Amendment Act 2002. The Parliamentary Secretary, the Hon Ian Macdonald, said, during the second reading speech on 4 December 2002, that the purpose of the amendment was to “eliminate the need for employers to obtain workers compensation coverage for a worker in more than one jurisdiction”. The principles were intended to ensure that workers:
“working temporarily in another jurisdiction will only have access to the workers compensation entitlements – and common law benefits – available in their home State or ‘State of connection’ and to provide certainty for workers about their workers compensation entitlements and to ensure that each worker is connected to one jurisdiction or another.”
Complementary legislation to s 9AA was introduced in other Australian States and Territories.
Section 9AA(3) provides for a series of cascading tests for determining the State to which the worker’s employment is connected. Section 9AA(3)(a), referred to as the “usually works” test, provides that a worker’s employment is connected with the State in which the worker usually works in that employment. If that test provides an answer to the question of the worker’s connection to this State, there is no need to proceed further. If not, then it is necessary to consider the “usually based” test, identified in s 9AA(3)(b), which provides that a worker’s employment is connected with the State in which the worker is usually based for the purposes of that employment. Finally, if no State or no one State is identified by applying the usually works or usually based tests, the State in which the employer’s principal place of business in Australia is located will be the State of connection with employment.

ISSUES IN DISPUTE

Pursuant to s 9AA of the 1987 Act, compensation is only payable in respect of employment that is connected with New South Wales. The issue in this case is whether Mr Klemke’s employment was connected to this State or the State of Western Australia.
In deciding whether a worker usually works in a State, regard must be had to the worker’s history with the employer and the intentions of the worker and the employer. However, under s 9AA(6), regard must not be had to any “temporary arrangement” under which the worker works in a State for a period of not longer than six months. Mr Klemke argues that his contract was for a temporary period of three weeks and should therefore be disregarded for the purpose of determining the State where he usually works.
Mr Klemke argues that the “usually works” test identified in s 9AA(3)(a) and the “usually based” test identified in s 9AA(3)(b) do not provide an adequate answer to determine the employment connection to this State. Therefore, the answer is to be found in the test identified in s 9AA(3)(c), namely, the State in which the employer’s principal place of business is located, which in this case is New South Wales.
The Arbitrator determined that Mr Klemke’s employment in Western Australia was not temporary. He relied on the fact that there was no evidence that his employment was to be conducted in New South Wales, nor had he ever worked for the respondent employer in New South Wales. He determined that the whole purpose of the contract of employment was for Mr Klemke to manage the employer’s site in Western Australia. Mr Klemke’s argument on appeal is that, in so deciding, the Arbitrator “too narrowly interpreted” the word “temporary” for the purposes of s 9AA.

THE EVIDENCE

John Arthur Klemke

Mr Klemke is 54 years of age. He lives at Henty in New South Wales.
In response to an advertisement by Grenfell Commodities on the internet at Seek.com, he applied for a position as a site manager. He met with principals of Grenfell Commodities at their premises in Grenfell, New South Wales. He was successful in the application.
He stated that he was employed by Grenfell as a site manager. His employment began on or about 24 November 2009. He was based at their Thomas Road premises at Kwinana Beach, Western Australia. As a site manager, his duties and responsibilities involved packing shipping containers, sampling and assessing of grain, the silo operations, staff supervision, forklift operation, administration duties and potential substitute truck-driving. Basically, he said he was responsible for the day-to-day running of the site, which was a terminal for the packing of export containers of grain.
Mr Klemke and Grenfell Commodities had agreed on a salary of $80,000 per annum. He did not understand that he was employed pursuant to an award. He did not sign a contract of employment or any form of agreement prior to commencing work. He said at [8] of his statement of evidence, “I was not employed under a trial period”.
He did not undergo any training or induction, as he was experienced in the grain-handling industry. His immediate supervisor was Trevor Mawhinney, a company director. Until he was able to arrange more suitable accommodation, Mr Klemke lived at the employer’s site at Western Australia in one of the offices converted to a bedroom. As part of his employment, he was asked to prepare workplace procedures for all of the different tasks on the site from cleaning to sampling-equipment operation.
One of his duties involved constructing “bulkheads” for the internal fitting into shipping containers. It was whilst he was undertaking this task, on or about Thursday 10 December 2009, that he alleged he stepped on a piece of timber which caused him to twist his ankle, resulting in the injuries complained of.
Mr Klemke continued with his normal duties until 16 December 2009 when, by prior arrangement, he returned home for the Christmas break. He was to report for duties in Western Australia on 5 January 2010.
On 17 December 2009, Mr Klemke was contacted by Trevor Mawhinney and informed that his pay would include one day’s holiday pay, I infer on a pro rata basis.
On or about 18 December 2009, Mr Klemke attended a medical appointment which was for the purposes of a general medical check-up arranged by his wife. During the course of that consultation, he mentioned to Dr Roman Al Musawy, his general practitioner, that he had a sore ankle. In due course, Mr Klemke underwent x-rays and an MRI, and was referred to a specialist, Dr Slater.
In a second statement of evidence dated 12 August 2010, Mr Klemke provided some further details surrounding his contract of employment. He described in more detail the arrangements concerning his employment in Western Australia. On this occasion, he said that he had been told by Trevor and Peter Mawhinney, when he was interviewed at their offices in Grenfell, that his position as site manager at the facility in Western Australia was to include the overall management of the facility and to assist in changing work practices. He said, “I was going on a three-week trial with a view to perhaps staying”.
He agreed that he accepted the job and flew to Perth a couple of days later to commence work, which was to proceed from 24 November 2009 to 16 December 2009. He said that during the trial he realised the job was more physically demanding than he had thought.
Mr Klemke stated that, as at the date of his accident on 10 December 2009, he had not made any decision as to whether he would stay in Western Australia.

Trevor Mawhinney

Mr Mawhinney is a director of Grenfell Commodities. He stated that the company is based in Grenfell, New South Wales, but operates an export and transport site at Kwinana Beach, approximately 30 km south of Fremantle in Western Australia. He stated that Mr Klemke was initially employed by Grenfell Commodities as a site manager at the Kwinana Beach premises. He commenced duties in Western Australia on 24 November 2009. Mr Mawhinney states that he had prior knowledge of Mr Klemke through working in the industry. He said he presented as an experienced and competent manager. Mr Klemke’s role was to manage the site on a day-to-day basis and to instigate policies and procedures for the running of the site that had not been implemented by previous managers. He was employed on a verbal agreement and was to be on a probationary period until 16 December 2009.
Mr Mawhinney attended the Kwinana Beach site from 30 November to 12 December 2009, during which time he worked closely with Mr Klemke, introducing him to the business and how it ran.
On 11 December 2009, prior to Mr Mawhinney flying home from Perth, he and Mr Klemke shared pre-dinner drinks and a meal. Mr Mawhinney stated:
“During conversations with John during that evening he indicated that he was willing to return to Western Australia on 4 January 2010 to continue his employment. He indicated his wife was 95 per cent committed to returning to Perth with him. There were indications he had a son and grandchildren in Western Australia, up in the mines.”
He added:
“I would have spoken to John over the ensuing days by phone until 16 December when he flew out to return to NSW. All indications were that he was still to return to WA after Christmas. We had actually given John the 16^th of December off work to look at real estate to lease/buy when he returned to WA, before he flew out of WA.”
Mr Mawhinney stated that, on either 18 or 19 December, he had spoken to Mr Klemke regarding his attendance at Grenfell the following week to see how that site operated. Mr Klemke advised him that he was unable to go to Grenfell the following week because he was ill.
Mr Klemke added that the indications at that time were that he would still be returning to Western Australia in January 2010.
Mr Mawhinney stated that he and Peter Mawhinney tried to contact Mr Klemke several times on his mobile phone and a landline between Christmas and New Year to ensure that he was still returning to Western Australia. The company was closed between 23 December 2009 and 4 January 2010. Upon his return to work at Grenfell on 4 January 2010, Mr Mawhinney received a fax from either Mr Klemke or his doctor notifying of the ankle injury via a WorkCover medical certificate. He tried several times to contact Mr Klemke that day, without success.
On the morning of 5 January 2010, an email was received from Mr Klemke. It stated:
“Good afternoon Trevor. Sorry I have missed your call this morning. At this stage I am unable to return to Perth much to my disappointment. Sandy won’t move at this present stage due to the family issues. I am currently housebound due to my ankle injury, haven’t even taken delivery of my bike because I can hardly move. Will call you this evening when I can talk in private. Regards John K.”
Mr Mawhinney added that the agreement with Mr Klemke was a verbal one which was entered into about a week before he flew out to Western Australia. They negotiated a salary of $80,000 per annum. Mr Klemke agreed to be employed until the probationary period expired, at which time he could make a decision whether he wanted to return to Western Australia after the New Year.
Mr Mawhinney concluded by adding that the registered trading address of Grenfell Commodities is 1 Grafton Street, Grenfell, New South Wales. Mr Klemke was to perform all his duties at the Western Australian site and was to reside at the Western Australian depot until he found alternative accommodation. He was to liaise with head office as required, which would normally be on a daily basis.

THE ARBITRATOR’S REASONS

The Arbitrator noted that s 9AA(3) provides a series of cascading tests for determining the State with which a worker’s employment is connected (Martin v R J Hibbens Pty Ltd [2010] NSWWCCPD 83 (Martin)). He noted that a worker’s employment is connected with a State in which the worker usually works in that employment (the “usually works” test). If that test provides an answer to the question, there is no need to proceed further. If not, s 9AA(3)(b) applies, and it is then necessary to consider the State in which the worker is usually based for the purpose of that employment (the “usually based” test). If that test provides an answer, there is no need to proceed further. If neither of the abovementioned tests provides an answer, s 9AA(3)(c) applies and it becomes necessary to consider the State in which the employer’s principal place of business is located in Australia (the “principal place of business” test) to determine the State of connection.
The Arbitrator concluded that the “usually works” test, when applied to the facts in the instant case, provided a clear answer to the question of the worker’s employment connection with the State. The Arbitrator held that the preponderance of evidence was that the State where the applicant worked pursuant to the contract of employment he had with the employer was Western Australia. He found that it was clearly the objective intention of the parties that the work be performed in the State of Western Australia at the Kwinana Beach premises.

The Arbitrator concluded that there was no evidence to suggest that the worker was employed to do any work in New South Wales and did not do so. There is no evidence that his employment in Western Australia was of a temporary nature. He concluded that the purpose of the contract of employment was for Mr Klemke to manage the employer’s site in Western Australia.
The Arbitrator rejected the worker’s submission that the short period of employment in Western Australia was a temporary arrangement which, by virtue of s 9AA(6), should have been disregarded for the purpose of determining where the worker usually worked. The Arbitrator concluded that such a submission was misconceived, noting that the sub-section is concerned with an employee who is normally based in New South Wales and who, on a temporary basis not longer than six months, is required to work in another State. The Arbitrator concluded that the contract entered into between Mr Klemke and the employer was not a temporary arrangement of the kind envisaged by s 9AA(6). The fact that the employment was only short-term or was of a probationary nature was not to the point. He found as a matter of fact that all of the work to be performed under the contract was to be undertaken in the State of Western Australia and not New South Wales.
Having concluded that the worker’s employment was not connected with the State of New South Wales, he entered an award for the respondent.

SUBMISSIONS ON APPEAL

The worker’s grounds of appeal are within a very narrow compass. The only ground of appeal relied upon is “putting too narrow an interpretation upon the word ‘temporary’” for the purpose of s 9AA.
The worker makes a number of submissions in support of the ground of appeal which may be summarised as follows:
(a)     the contract of employment was entered into at Grenfell, New South Wales;
(b)     the Arbitrator accepted as a fact that the worker was employed as a site manager and began his employment on 24 November 2009;
(c)     it was a term of the contract of employment that there would first be a three-week trial, with notice to be given at the end of the three weeks as to whether the contract of employment “would be commenced on a permanent basis”; the trial could be terminated by either party;
(d)     as at the date of injury on 10 December 2009, Mr Klemke had made no election whether to continue his employment;
(e)     Mr Klemke returned to Henty in New South Wales on 16 December 2009;
(f)      Mr Klemke was dismissed on 17 December 2009;
(g)     Mr Mawhinney’s evidence dealing with conversations between himself and the worker regarding the worker’s intention to return to Western Australia in 2010 were inadmissible;
(h) the contract of employment was entered into in New South Wales for the purpose of the worker attending Western Australia on a three-week temporary basis. It is therefore excluded, by the operation of s 9AA (6) of the 1987 Act, for the purposes of determining where the worker “usually works”;
(i)      the parties intended that the three-week trial period was a “temporary arrangement”;
(j)      the three-week trial was a separate contract of employment to a permanent contract of employment that would be separately offered to the worker if both parties were in agreement. There was no agreement that Mr Klemke would work more than the three-week trial period;
(k)     it was the intention of the parties that, if Mr Klemke did not complete the trial period or made an election not to work in Western Australia, he would return to New South Wales; however, he would not continue his employment with the employer;
(l)      “usual” is defined by the Australian Concise Oxford Dictionary (4^th ed) as “such as commonly occurs, or is observed or done; customary, habitual”;
(m)   “usual” is defined by the Macquarie Dictionary (3^rd ed) as “habitual or customary, such as is commonly met with or observed and experienced; ordinary, in common use; common, that which is usual or habitual”;
(n)     a temporary contract of employment cannot fall within the definitions of “usual” or “usually works”;
(o)     the Arbitrator erred in finding there was no evidence that the worker’s employment in Western Australia was of a temporary nature;
(p)     the Arbitrator accepted the worker was on a three-week trial;
(q)     “temporary” is defined by the Macquarie Dictionary (3^rd ed) as “lasting, existing, serving or effective for a time only; not permanent”. The Australian Concise Oxford Dictionary (4^th ed) refers to “temporary” as “lasting or meant to last for only a limited time”;
(r)      the Commission should give effect to the words in the section and not import a narrow interpretation of the word “temporary”;
(s)     in this particular case, the “usually works” test is “not appropriate”;
(t)      at [73] of Martin, the Deputy President defined one type of temporary arrangement. It is submitted that it is not definitive of all situations and is not exclusionary when considering the facts of the instant case.
Mr Klemke claims that the determination of the Arbitrator should be revoked and substituted with a finding that the worker’s contract of employment took place in New South Wales for the purpose of the worker working in Western Australia on a three-week temporary basis. “Consequently, the correct jurisdiction to consider the worker’s entitlements is New South Wales. Consequently, there should be an award for the worker in terms of the claim in the Application to Resolve a Dispute.”

Grenfell Commodities’ submissions

Grenfell Commodities submits:
(a) Section 9AA(3)(a) identified that the place where Mr Klemke usually worked, in fact only worked, was in Western Australia.
(b)     There is no evidence that Mr Klemke would have performed other work for Grenfell Commodities in any other State (other than Western Austtralia) at any time during or after his contract of employment.
(c)     If the evidence objected to in Mr Mawhinney’s statement (at [15] and [16]) was inadmissable, it would be immaterial to the outcome of these proceedings.
(d) If the contract of employment was found to be for a discrete three-week period, Grenfell Commodities submits that the Arbitrator was correct in his analysis of s 9AA(6) at [17].
(e)     The Arbitrator correctly applied the principles in Martin.

DISCUSSION

In Martin, Deputy President Roche considered several authorities dealing with the application of equivalent statutory provisions to s 9AA in various other States and Territories. At [60], he extracted a number of principles relevant to the application of s 9AA of the 19878 Act:
“(a)   regard should always be had to the terms of the contract of employment;
(b)    ‘usually works’ means the place where the worker habitually or customarily works, or where he or she works in a regular manner (Hanns at [26]). It does not mean the place where the worker works for the majority of time (Knight at [76]) and is not simply a mathematical exercise (Falls at [43]), though the time worked in a particular location will naturally be relevant. It will also be relevant to look at where the worker is contracted to work (Falls). Regard must be had to the worker’s work history with the employer and the parties’ intentions, but ‘temporary arrangements’ for not longer than six months within a longer or indefinite period of employment are to be ignored. Whether an arrangement is a ‘temporary arrangement’ will depend on the parties’ intentions, which will be ascertained by looking at the worker’s work history and the terms of the contract. A short-term contract of less than six months that is not part of a longer or indefinite period of employment will not usually be a ‘temporary arrangement’ (Knight);
(c)     ‘usually based’ can include a camp site or accommodation provided by an employer (Knight at [83]). Where a worker is usually based may coincide with the place where the worker usually works, but that need not necessarily be so. In considering where a worker is ‘usually based’, regard may be had to the following factors, though no one factor will be decisive: the work location in the contract of employment, the location the worker routinely attends during the term of employment to receive directions or collect materials or equipment, the location where the worker reports in relation to the work, the location from where the worker’s wages are paid, and

(d) an employer’s ‘principal place of business’ is the most important or main place where it conducts the main part or majority of its business (Knight at [66]). It will not necessarily be the same as its principal place of business registered with ASIC.”

With one qualification, I agree and adopt the Deputy President’s formulation of the principles. The qualification concerns the relevance of where the worker was contracted to work.
In Avon Products Pty Ltd v Falls [2009] ACTSC 141 (Falls), Higgins CJ determined an appeal from the decision of a special magistrate on the application of s 36B(3)(b) of the Workers Compensation Act 1951 (ACT). In that case, Ms Falls was the district sales manager for Avon and had responsibility for a large number of agents working in a specified district in the Canberra region. Although most of Ms Falls’s working time was spent in the Australian Capital Territory supervising her agents, a significant proportion of her time was spent record-keeping and on other administrative work, which she did mainly from her home in New South Wales. In construing s 36B(3)(b), which is in substantially the same terms as s 9AA of the 1987 Act, his Honour held that Ms Falls usually worked only in the Australian Capital Territory. He found that her primary and essential duties were performed in the Australian Capital Territory and that her bookwork was performed at a place solely determined by her. He determined that the Australian Capital Territory was the appropriate Territory of connection.
On appeal, the Supreme Court of the ACT Court of Appeal in Avon Products Pty Ltd v Falls [2010] ACTCA 21 (Falls CA), allowing the appeal, held at [29]:
“There is no gloss placed on s 36B(3)(a) which compels a court only to consider where a worker is ‘required’ to work.”
The Court went on to conclude at [30]:
“We have no doubt that Ms Falls was required to do the work that she happened to do in NSW, but that she was not required to do it in NSW. We also have no doubt that a requirement or the absence of a requirement as to where work is performed is not relevant; the test is where the work is done, rather than where it is required to be done or whether it is required to be done anywhere in particular.”
Thus, the extracted principle from the Supreme Court proceedings in Falls that it would be relevant to look at where the worker is contracted to do the work is no longer a relevant consideration. The test is where the work is done (Falls CA).
Before applying the principles as discussed above to the facts in this case, I must first resolve Mr Klemke’s objection to certain parts of Mr Mawhinney’s evidence, in particular, the evidence referred to at [39] and [40]. Grenfell Commodities has asserted that, even if the passages objected to by Mr Klemke are inadmissible, it would be immaterial to the outcome of those proceedings. The evidence essentially concerns Mr Mawhinney’s understanding of Mr Klemke’s intention with respect to returning to work in Western Australia early in January 2010.
Although Mr Mawhinney’s evidence may not be strictly admissible in a court, pursuant to s 354(2) of the 1998 Act, the Commission is not bound by the rules of evidence and may inform itself on any matter in such manner as the Commission thinks appropriate.
Rule 15.2 of the Workers Compensation Commission Rules 2010 provides that, when informing itself on any matter, the Commission is to bear in mind that the evidence should be logical and probative, relevant to the facts in issue, that evidence “based on speculation or unsubstantiated assumption is unacceptable” and that “unqualified opinions are unacceptable”.
Rule 15.2 broadly reflects fundamental principles of the common law concerning admissibility of evidence. Indeed, in Aluminium Louvres & Ceilings Pty Ltd v Zheng[2004] NSWWCCPD 26 (at [24]), Deputy President Fleming said:
“Where the rules of evidence do not apply, the conduct of proceedings will be a matter to be determined according to principles of fairness, taking into account the nature of the proceedings, the legislative requirements and the demands of the instant case. The Commission may have regard to evidence that would not be admissible in a court in accordance with the rules of evidence. Fairness must guide the weight to be given to this evidence.”
The passage quoted above was cited with approval by McColl JA in the Court of Appeal in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 at [128].
In deciding where a worker usually works, s 9AA(6) provides that regard must be had to the intentions of the worker and the employer. Mr Mawhinney’s statements at [39] and [40] are relevant to the worker’s intentions of returning to work in Western Australia after the trial period had ended and after he had spent the Christmas period with his family in New South Wales. There was no objection raised to Mr Mawhinney’s evidence before the Arbitrator, nor was any application made for Mr Mawhinney to be available for cross-examination.
The evidence Mr Klemke objects to is contained in the statement of evidence of Mr Mawhinney dated 8 March 2010. In Mr Klemke’s second statement dated 12 August 2010, which postdated Mr Mawhinney’s statement, he challenged much of Mr Mawhinney’s evidence, but he took no issue with the evidence of which he now complains.
Mr Klemke has had every opportunity to respond to Mr Mawhinney’s evidence and has done so. For these reasons, although the evidence may not have been strictly admissible in a court, it is directly relevant and probative to a fact in issue, namely, Mr Klemke’s intentions with respect to returning to his duties in Western Australia. I do not accept there was any unfairness in admitting Mr Mawhinney’s statements. In my view, the statements were properly admitted. I reject the submission that they were inadmissible.
Mr Klemke argues on appeal that it was a fundamental clause of the contract of employment that Mr Klemke would first work on a three-week trial basis in Western Australia, at the end of which either party could elect to pursue a continuing contract of employment for an indefinite period. He argues that the three-week trial was a separate contract of employment, and seeks to characterise it as a “temporary arrangement”.
Mr Klemke said in his first statement that he did not consider his employment was subject to a trial period [8], but, in his second statement, he said that it was a trial period, with a view to “perhaps staying” [8]. Mr Mawhinney, on the other hand, regarded the initial period of employment merely as a probationary period.
The question I must determine is: was the trial or probationary period a “temporary arrangement” which would exclude it from consideration when applying the “usually works” test in s 9AA(3)(a)?
In Tamboritha Consultants Pty Ltd v Knight [2008] WADC 78 (Knight), Commissioner Herron considered whether the worker’s employment was a “temporary arrangement”. Mr Knight worked as a remotely-operated vehicle supervisor. The vehicle involved the use of a range of mechanical equipment under water. Mr Knight was offered employment on a job-by-job basis. It often involved him working interstate or overseas. He did not work exclusively for Tamboritha. From time to time, Mr Knight provided electronic services to Tamboritha, either from his home or at their facilities in Western Australia. Mr Knight was injured when he suffered serious burns in a fire on board a ship off the coast of Victoria on which he had contracted to work for Tamboritha.
The provision of the Western Australian legislation s 20 of the Workers Compensation and Injury Management Act 1981 (WA) is in similar terms to s 9AA of the 1987 Act. Commissioner Herron noted that it was never the intention on the part of the parties that Mr Knight would usually work in any one State or in any one location. He found that the nature of the arrangement between the parties was that each period of work constituted a separate contract. He said at [73]:
“There was no continuing period of employment as seems to be contemplated by s 20(7). Therefore there was no ‘temporary arrangement’ for the purposes of s 20(7). Each period of work constituted a separate period of employment. When the plaintiff worked on board a ship in Victoria it was not a temporary arrangement. The arrangement was permanent in the sense the defendant was required to work on the ship for the duration of the period of work. There was no intention on the part of the parties that once the period of work had been completed on a ship in Victoria the defendant would return to Western Australia and continue work or employment with the plaintiff.”
As Deputy President Roche noted in Martin at [60]:
“Whether an arrangement is a ‘temporary arrangement’ will depend on the parties’ intentions, which will be ascertained by looking at the worker’s work history and the terms of the contract. A short-term contract of less than six months that is not part of a longer or indefinite period of employment will not usually be a ‘temporary arrangement’.”
Unlike the facts in Falls, Knight and Martin, there is no suggestion that the parties ever intended that Mr Klemke would work anywhere other than in the State of Western Australia. Looking to the work history does not assist as there is no history between the parties.
In contrast to the facts in Knight, in the instant case, the parties contemplated that, following the completion of the trial or probationary period, if both parties were content to proceed with the contract, Mr Klemke would continue working for Grenfell Commodities in Western Australia.
The Arbitrator concluded that there was no evidence that Mr Klemke’s employment in Western Australia was a “temporary arrangement”. I agree with that conclusion.
If I accept that the trial or probationary period was a temporary arrangement, it would not in any event be excluded from consideration under s 9AA(6) to determine the State in which the worker usually works. Deputy President Roche noted in Martin at [73] that s 9AA(6) is intended to operate where a worker usually works under a contract of employment with an employer in one State and works under a “temporary arrangement” with that employer in another State for a period of not longer than six months. Commissioner Herron reached the same conclusion in Knight at [73]. I agree.
It seems to me that, for the proviso in s 9AA(6) to have any work to do, any temporary arrangement contemplated by that provision must be seen as part of a longer or indefinite period of employment. Therefore, in my view, the Arbitrator was correct to conclude that the employer’s submission that the short nature of the employment would permit the applicant to come under the temporary arrangements in s 9AA(6) is to misread the section, noting that the purpose of the section is to cover an employee who is normally based in one State and who, on a temporary basis, not longer than six months, is required to work in another State.
It follows therefore that the Arbitrator was correct to conclude that Mr Klemke “usually worked” in the State of Western Australia. On no view of the parties contractual arrangements does s 9AA(3)(a) suggest that New South Wales is the State of connection.
If I am wrong in reaching that conclusion, it does not follow that the appeal succeeds. It merely means that the employment in Western Australia may not be taken into consideration for the purpose of applying s 9AA(3)(a). What flows from that is that, given the lack of any relevant employment history, s 9AA(3)(a) does not give an answer to determine the State of connection and therefore, in the cascading sequence of tests, the “usually based” test in s 9AA(3)(b) would next apply.

In the alternative, the preponderance of the evidence favours the conclusion that Mr Klemke and Grenfell Commodities made a contract of indefinite duration that included, as is commonly the case in employment contracts, a term that the first three weeks were to be a probationary period during which either party could terminate the agreement without penalty. That term did not make the contract a “temporary arrangement” within the meaning of s 9AA(6) such that a second contract would be entered into at the end of the probationary period. The contract commenced on 24 November 2009 and continued according to its original terms at the conclusion of the probationary period. The evidence clearly establishes that, viewed objectively, the parties did not intend the contract to be a short-term or temporary arrangement.
The objective facts which lead me to this conclusion are:
(a)     Mr Klemke was experienced in the grain-handling business;
(b)     his employment was at a managerial level, being responsible for the day-to-day running of the site in Western Australia;
(c)     an annual salary of $80,000 had been agreed upon (not a fixed sum for a three-week trial);
(d)     Mr Klemke received pro rata holiday pay for the period he worked in Western Australia;
(e)     Mr Mawhinney flew to Western Australia to work with Mr Klemke for a period of time to familiarise him with the company’s operations in Western Australia;
(f)      Mr Klemke had commenced the process of preparing workplace procedures for a variety of different tasks which he had not completed, and
(g)     Mr Klemke had discussed with his wife moving permanently to Western Australia and had been given time off work whilst in Western Australia to inspect property for rent or purchase in Perth.
If, contrary to my finding, the “usually works” test does not provide an answer to determine if the worker’s employment is connected with this State, then, in the cascading sequence of tests, it would be necessary to consider if the State in which the worker is “usually based” for the purposes of that employment under s 9AA(3)(b) identifies a connection with the State.
The “usually based” test was not argued before or determined by the Arbitrator. In the circumstances, before considering its application, I listed the matter for a telephone conference on 29 April 2011, at which time both parties were represented by counsel. Both counsel conceded that the issue had not been adequately addressed in the submissions thus far. In the circumstances, in order to give the parties an opportunity to make submissions before considering the matter further, I issued a direction requiring each party to file further submissions regarding the application of s 9AA(3)(b). In response to that direction, the appellant lodged additional submissions which may be summarised as follows:
(a)     Sub-section (3) generally endeavours to identify the State in which the worker usually works. The word “usually” must be given its ordinary meaning as discussed in Knight.
(b)     The words “usually based” must be read conjunctively.
(c)     In order for s “9AA(3)(b)(2)” [sic] to come into operation, it is necessary for the employment to have an appearance of permanency: that is, not temporary.
(d)     The Arbitrator accepted that the worker was sent to work in Western Australia on a three-week trial and found as a fact that the trial could be terminated by either party.
(e) Section 9AA(3)(b) requires that, in order for the sub-section to be applied, the tribunal must consider whether no State or no one State is identified. The sub-section has no application if the State where employment is carried out can be properly identified under s 9AA(3)(a).
(f) The totality of s 9AA envisages that the worker is in permanent employment that is not temporary. To interpret s 9AA(6) to refer to workers in permanent employment but consigned to work in another State is to put too narrow a meaning on the provision.
The Respondent submitted the following with respect to the application of s 9AA(3)(b):
(a)     The phrase “the worker is usually based for the purposes of that employment” ought to be read conjunctively. That is, it is constrained to where the worker is usually based, and does not encompass a consideration of where the employer is situated or is usually based.
(b) The State in which the employer is based will only be relevant to the application of s 9AA(3)(c), which only comes into consideration if the application of sub-ss (a) and (b) fail to identify a connection with the State.
(c)     Where the worker is usually based is where he is based for the purposes of that employment, and not the worker’s employment generally. Where the worker works or has worked for other employers is also irrelevant to the application of sub-s (3)(b) (see Knight).
(d)     The indicia considered in Knight would lead the Commission to conclude that Western Australia is the place where the applicant was accommodated by the employer for the duration of that employment and is the only work location contemplated and specified in the oral contract.
(e)     The orientation to the work was also conducted in Western Australia.
(f)      There is no other State other than Western Australia that can be identified as the place where the appellant is “usually based in that employment”.
I reject Mr Klemke’s submission that the totality of s 9AA envisages that the worker is in permanent employment that is not temporary. The qualification concerning temporary arrangements in sub-s (6) is only relevant to a consideration of the “usually works” test in s 9AA(3)(a). That qualification is not relevant to the application of sub-ss (b) or (c).
Even if sub-s (6) was to be construed in the manner urged by Mr Klemke, for the reasons given in this decision, I am not satisfied that the employment was temporary.
The evidence clearly establishes that the worker only worked in the State of Western Australia. He was clearly based there for the purposes of “that employment” in that all of the work that he performed for the employer was in Western Australia, he underwent a lengthy induction in Western Australia and he was accommodated in that State for the duration of the employment.
It follows that, if the “usually works” test does not identify the State of connection, the “usually based’ test identifies Western Australia because the evidence unequivocally establishes that “for the purpose of” Mr Klemke’s employment (whether it was a temporary or long-term arrangement) he was “usually based” in Western Australia.

OTHER MATTERS

For the sake of completeness, I reject the submission that Mr Klemke was dismissed from his employment on 17 December 2009. The submission was not developed or supported by reference to any evidence. Indeed, the evidence is to the contrary. Mr Trevor Mawhinney spoke to Mr Klemke on 18 and 19 December regarding Mr Klemke attending at the Grenfell site in late December 2009. Throughout the Christmas holiday period both Trevor and Peter Mawhinney attempted to contact the worker on several occasions to confirm arrangements for the him return to work in January. Additionally, Mr Klemke sent an email to the employer on 5 January 2010 advising of his intention not to return to work.

CONCLUSION

Having conducted a review on the merits, the Arbitrator was correct to conclude that the worker’s employment was not connected to the State of New South Wales. Applying s 9AA(3)(a), the objective facts demonstrate that Mr Klemke “usually worked” in the State of Western Australia. If, however, contrary to my finding, the “usually worked” test did not provide a complete answer to determine the State of connection, I am comfortably satisfied that the application of s 9AA(3)(b) (the “usually based” test) identifies Western Australia as the State where Mr Klemke was usually based for the purpose of his employment. Therefore, there is no connection with the State of New South Wales and therefore the appeal must fail.

DECISION

The Arbitrator’s determination of 19 January 2011 is confirmed.

COSTS

No order as to costs.

Judge Keating

President
23 May 2011

I, MARGOT UNDERCLIFFE, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF JUDGE KEATING, PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE