Lennon v TNT Australia Pty Ltd - [2012] NSWWCCPD 18

WORKERS COMPENSATION COMMISSION
REFERENCE OF A QUESTION OF LAW TO THE COMMISSION CONSTITUTED BY THE PRESIDENT
*Status – appealed to the Court of Appeal – Lennon v TNT Australia Pty Ltd [2013] NSWCA 77*
CITATION:		Lennon v TNT Australia Pty Ltd [2012] NSWWCCPD 18
APPLICANT:		Robbie Lennon
RESPONDENT:		TNT Australia Pty Ltd
INSURER:		GIO General Ltd to 30 June 2008 Self-insured from 1 July 2008 pursuant to the Safety, Rehabilitation and Compensation Act 1988 (Cth)
INTERVENER:		WorkCover Authority of New South Wales
FILE NUMBER:		7190/11
DATE OF DECISION:		30 March 2012
SUBJECT MATTER OF DECISION:		Question of law; s 17(1)(a)(i) of the Workers Compensation Act 1987; deemed date of injury where the employment concerned spans a period where the employer initially insured under State legislation and subsequently insured under Commonwealth legislation, namely, the Safety, Rehabilitation and Compensation Act 1988 (Cth)
PRESIDENTIAL MEMBER:		President Judge Keating
HEARING:		1 March 2012
REPRESENTATION:		Applicant:	Mr B McManamey instructed by Maurice Blackburn Lawyers
Respondent:	Mr L Morgan instructed by Moray & Agnew
Intervener:	Mr G Sarginson instructed by WorkCover Authority of New South Wales

ORDERS MADE:

1. The answer to the question of law is:

By operation of s 17(1)(a)(i) of the Workers Compensation Act 1987, the applicant’s binaural hearing loss is deemed to have happened on 24 March 2011, when the claim for compensation was made.

2. I make no order as to costs, but I grant the parties liberty to apply within 14 days from the date the decision is published.

THE QUESTION OF LAW

The question of law for consideration pursuant to s 351 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) is in the following terms:
“Whether by operation of s 17(1)(a)(i) of the Workers Compensation Act 1987 (the 1987 Act), the applicant’s binaural hearing loss is deemed to have occurred on 30 June 2008 when the employer ceased to be insured under the New South Wales Workers Compensation Acts or on 24 March 2011 when the claim for compensation was made, at which time the employer was insured under the Safety, Rehabilitation and Compensation Act 1988 (Cth).”

BACKGROUND TO THE REFERRAL OF THE QUESTION

Mr Lennon has been employed by the respondent as a truck driver since September 1997.
The respondent does not dispute that his employment exposed him to loud noise and, as a consequence of which, he now suffers from a substantial hearing loss.
It is common ground that GIO General Ltd, as agent for the New South Wales Nominal Insurer, insured TNT Australia Pty Ltd for liabilities arising under the 1987 and 1998 Acts between 30 June 2001 and 30 June 2008. From 1 July 2008, the respondent was licensed under the Safety, Rehabilitation and Compensation Act 1988 (Cth), which I shall refer to as the SRC Act, to provide workers compensation benefits pursuant to the Commonwealth legislation.
On 24 March 2011, through his solicitors, Mr Lennon made a claim for lump sum compensation pursuant to s 66 of the 1987 Act. He claimed $9,625 in respect of seven per cent whole person impairment, due to a binaural hearing loss of 13.7 per cent.
On 24 May 2011, GIO General Ltd issued a notice under s 74 of the 1998 Act. The relevant part of the notice states:
“3.1A claim has been made for compensation pursuant to s 66 of the Workers Compensation Act 1987 in respect of binaural hearing impairment due to alleged exposure to industrial noise.
3.2The provisions of s 17 of the Workers Compensation Act 1987 deem that compensation is payable by TNT Australia Limited (wrongly referred to as ‘TNT Express Enfield Pty Ltd’) for injury in its employ on 24 March 2011.
3.3GIO General Ltd as agents for the New South Wales WorkCover Scheme ceased to insure the employer on and from 1 July 2008, and so has no liability pursuant to the provisions of the Workers Compensation Act 1987.”
On 19 August 2011, Mr Lennon filed an Application to Resolve a Dispute in the Commission. He claimed $9,625 in respect of seven per cent whole person impairment relating to his hearing loss.
On 9 September 2011, the respondent filed a Reply in which it denied liability for the reasons referred to in its s 74 notice.
On 24 October 2011, the dispute was referred to a Commission Arbitrator, who conducted a telephone conference between the parties. At the telephone conference, the jurisdiction of the Commission to hear the dispute was identified as a preliminary issue and, at the request of the parties, the Arbitrator agreed to refer the question of law to the President for consideration pursuant to s 351 of the 1998 Act.
On 2 November 2011, Arbitrator Perrignon, at the request of the parties, filed an Application for Leave to Refer a Question of Law.
On 11 November 2011, I conducted a telephone conference between the parties, at which time the question of law for consideration was settled. The application has the support of both the applicant and the respondent.
The WorkCover Authority of New South Wales (WorkCover) has exercised its right under s 106 of the 1998 Act to intervene in these proceedings.
Given the importance of and complexity of the issues raised, this matter was listed for hearing before me on 1 March 2012. All parties were represented by counsel and made submissions at the hearing.

LEAVE

Before granting leave to refer the question, I must be satisfied that the question meets the requirements of s 351(3) of the 1998 Act, which provides:
“(3)The President is not to grant leave for the referral of a question of law under this section unless satisfied that the question involves a novel or complex question of law.”
In the Application for Leave to Refer a Question of Law, after stating the relevant facts, the Arbitrator stated:
“7. GIO submits that section 17 of the 1987 Act deems the injury to have occurred when the claim was made on 24 March 2011, after risk had passed to the Commonwealth.
8. The applicant submits that section 17 deems the injury to have occurred on the last day on which the GIO was on risk, because the phrase ‘employment to the nature of which the injury was due’, as it appears in section 17, ‘refers to employment to which the 1987 Act applies’: Horsey v Linfox Transport [2011] NSWWCC 219 at [32], declining to follow Makowski v National Wealth Management Services Ltd [2010] NSWWCC 367.”
The Arbitrator provided the following reasons as to why the issue is novel or complex:
“13. The question for referral is novel, for the following reasons.
a.Apart from Horsey and Makowski, it has not been the subject of any previous decision.
b.It has not been considered at the Presidential level.
c.It has not otherwise been determined at an appellate level.
d.There is no authority on the question which binds the Commission.
14. The question is complex, because it involves consideration of the following:
a.The relationship between Commonwealth and State legislation – namely:
a.section 108A(7) of the Safety, Rehabilitation and Compensation Act 1998 [sic, 1988] (whose constitutional validity was upheld by the High Court in Attorney General for the State of Victoria v Andrews [2007] HCA 9; 230 CLR 369) and
b.section 17 of the Workers Compensation Act 1987, respectively.
b.The potential application of various decisions of the NSW Court of Appeal cited in Horsey, whose facts were similar to, though distinguishable from, the facts of this case.
c.The conflict between the ratio decidendi applied by the Commission in Makowski (at [33]–[34] and [39]) and Horsey (at [31]–[32]).”
The Arbitrator also noted that the parties had respectfully informed him that, in circumstances where there is no authority binding him to apply the ratio in Horsey, the GIO will appeal if he does so, and the worker will appeal if he does not.
At my direction, the parties and WorkCover have lodged written submissions. Those submissions failed to have regard to the decision of Acting President Byron in Sexton v Graincorp Operations Ltd [2007] NSWWCCPD 218 (Sexton). The reasoning and conclusions reached by Acting President Byron are in my view relevant to the proper consideration of the question at issue. At my further direction, following a telephone conference between the parties’ legal representatives and myself on 2 February 2012, I have now received and considered the parties supplementary submissions dealing with that authority.
Both the State workers compensation legislation (namely, the 1987 and the 1998 Acts) and the Commonwealth legislation (that is, the SRC Act) contain provisions with respect to the liability to pay lump sum compensation for permanent impairment, including hearing impairment.
The application of those provisions involves complex issues of statutory construction and constitutional issues concerning the consequences of inconsistency between State laws and a law of the Commonwealth. This is particularly evident in the case of a worker continuing in employment after their employer has ceased to be liable for injuries occurring under NSW legislation after being licensed to insure under the Commonwealth legislation.
The application of the authorities in this Commission concerning these issues has been inconsistent and, in the absence of the issue being determined by the referral of this question of law, it is likely that there will be continuing uncertainty as to how the hearing loss provisions are to be applied in the Commission. The question is of relevance not only to the parties in the current proceedings, but also to other workers in a similar position.
For these reasons, I am satisfied from that the question posed is both novel and complex.
I grant leave to refer the question of law.

LEGISLATION

Section 17 of the 1987 Act provides:
“(1) If an injury is a loss, or further loss, of hearing which is of such a nature as to be caused by a gradual process, the following provisions have effect:

(a)     for the purposes of this Act, the injury shall be deemed to have happened:
(i)  where the worker was, at the time when he or she gave notice of the injury, employed in an employment to the nature of which the injury was due—at the time when the notice was given, or
(ii)  where the worker was not so employed at the time when he or she gave notice of the injury—on the last day on which the worker was employed in an employment to the nature of which the injury was due before he or she gave the notice,
(b) the provisions of section 61 of the 1998 Act shall apply to or in respect of the injury as if the words “as soon as practicable after the injury happened and before the worker has voluntarily left the employment in which the worker was at the time of the injury” were omitted therefrom,
(c) compensation is payable by:
(i)  where the worker was employed by an employer in an employment to the nature of which the injury was due at the time he or she gave notice of the injury—that employer, or
(ii)  where the worker was not so employed—the last employer by whom the worker was employed in an employment to the nature of which the injury was due before he or she gave the notice,
(d)  an employer (not being an employer referred to in paragraph (c) (i) or (ii)) by whom the worker was employed in an employment to the nature of which the injury was due during the relevant period (as defined in paragraph (e)) shall be liable to make to an employer referred to in paragraph (c) (i) or (ii) a contribution which bears to the amount of compensation payable the same proportion as the period of that employment during the relevant period bears to the total period of employment of that worker in an employment to the nature of which the injury was due during the relevant period,
(e)  in paragraph (d), the relevant period means:
(i)  where the worker has not had a prior injury (being a loss of hearing or a further loss of hearing)—in relation to an injury, the period of 5 years immediately preceding the date when a notice is given in respect of the injury,
(ii)  where the worker has had one or more prior injuries (being losses of hearing or further losses of hearing) which or all of which, as the case may be, are deemed under this Act to have happened at a time more than 5 years before the date when a notice is given in respect of a further injury—in relation to the further injury, the period of 5 years immediately preceding the date when that notice was given, and
(iii)  where the worker has had not more than one, or more than one, prior injury (being a loss of hearing or a further loss of hearing) which or the last of which, as the case may be, is deemed under this Act to have happened at a time during the 5 years immediately preceding the date when a notice is given in respect of a further injury—in relation to the further injury, the period between the time when that prior injury is deemed to have happened and the date when that notice was given,
(f)  where the Commission is satisfied that a contribution required to be made under paragraph (d) cannot be recovered by an employer referred to in paragraph (c), the Commission may direct the Nominal Insurer to pay to that employer out of the Insurance Fund such amount, not exceeding the amount of the contribution, as the Commission considers appropriate and the Nominal Insurer is to pay out that amount accordingly as if it were a payment made in respect of a claim under Division 6 of Part 4,
(g)  where there is a dispute as to the amount of a contribution required to be made under paragraph (d), that dispute shall be deemed to be a matter or question arising under this Act.

(2)Without limiting the generality of subsection (1), the condition known as “boilermaker’s deafness” and any deafness of a similar origin shall, for the purposes of that subsection, be deemed to be losses of hearing which are of such a nature as to be caused by a gradual process.

(3) Compensation is payable by an employer as referred to in subsection (1) (c) in respect of the injury to which the notice given to the employer relates even if the worker, before claiming or receiving that compensation, commences employment (to the nature of which that kind of injury can be due) with another employer.”

Section 108A of the SRC Act provides:
“(1) If:
(a)a licensee is authorised to accept liability to pay compensation and other amounts under this Act in respect of particular injury, loss or damage suffered by, or in respect of the death of, some or all of its employees; and
(b)such injury, loss, damage or death occurs;
then:
(c)the licensee is liable to pay compensation and other amounts under this Act in respect of that injury, loss, damage or death; and
(d) Comcare is not liable to pay compensation or other amounts under this Act in respect of that injury, loss, damage or death.
(2)Nothing in subsection (1) affects Comcare’s liability to pay compensation or other amounts under this Act in respect of a particular injury, loss, damage or death for which Comcare would have been liable, but for the operation of the licence, to the extent that the liability is not a liability that the licensee is authorised to accept.
(3) The fact that a licensee is authorised to accept liability to pay compensation and other amounts under this Act in respect of a particular injury, loss, damage or death does not render the licensee liable to have any proceedings (including proceedings under Part VI) brought against it in respect of that particular injury, loss, damage or death other than proceedings for the recovery of that compensation and those other amounts.
Note: If licensees are authorised to manage claims, proceedings may be brought against them in respect of the management of those claims (see subsection 108C(7)).
(4) If proceedings have been brought against Comcare in respect of a particular injury, loss, damage or death for which a licensee is liable to pay compensation or other amounts under this Act, Comcare must inform the licensee, in writing, as soon as practicable, that the proceedings have been brought.
(5) On being informed that proceedings have been brought against Comcare in respect of a particular injury, loss, damage or death, the court or tribunal before which the proceedings have been brought must, on application of the licensee, join the licensee as a party to the proceedings.
(6) A decision in any proceedings referred to in subsection (4) is binding on Comcare and on the licensee concerned, whether or not the licensee has made application to become a party to the proceedings.
(7) If a licensee who is a corporation is authorised to accept liability to pay compensation and other amounts under this Act in respect of a particular injury, loss or damage suffered by, or in respect of the death of, some or all of its employees after the licence comes into force then:
(a) no law of a State or Territory relating to workers compensation applies to a licensee in respect of such injury, loss, damage or death; and
(b) any liability or obligation of the corporation under a law of a State or Territory in respect of such injury, loss or damage suffered, or death occurring, before the licence came into force is unaffected.”
Section 24 of the SRC Act provides:
“(1) Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.
(2) For the purpose of determining whether an impairment is permanent, Comcare shall have regard to:
(a)the duration of the impairment;
(b) the likelihood of improvement in the employee's condition;
(c) whether the employee has undertaken all reasonable rehabilitative treatment for the impairment; and
(d) any other relevant matters.
(3)    Subject to this section, the amount of compensation payable to the employee is such amount, as is assessed by Comcare under subsection (4), being an amount not exceeding the maximum amount at the date of the assessment.
(4)    The amount assessed by Comcare shall be an amount that is the same percentage of the maximum amount as the percentage determined by Comcare under subsection (5).
(5)    Comcare shall determine the degree of permanent impairment of the employee resulting from an injury under the provisions of the approved Guide.
(6)    The degree of permanent impairment shall be expressed as a percentage.
(7)    Subject to section 25, if:
(a) the employee has a permanent impairment other than a hearing loss; and
(b) Comcare determines that the degree of permanent impairment is less than 10%;
an amount of compensation is not payable to the employee under this section.
(7A) Subject to section 25, if:
(a) the employee has a permanent impairment that is a hearing loss; and
(b) Comcare determines that the binaural hearing loss suffered by the employee is less than 5%;
an amount of compensation is not payable to the employee under this section.
(8)    Subsection (7) does not apply to any one or more of the following:
(a) the impairment constituted by the loss, or the loss of the use, of a finger;
(b) the impairment constituted by the loss, or the loss of the use, of a toe;
(c) the impairment constituted by the loss of the sense of taste;
(d) the impairment constituted by the loss of the sense of smell.
(9)    For the purposes of this section, the maximum amount is $80,000.”

Section 98A(3) of the SRC Act provides:
“(3) If a licence is granted to an eligible corporation, this Act applies in relation to some or all of the employees of the corporation in a similar way to the way in which it applies to employees of the Commonwealth but the application is subject to:
(a) the acceptance by the corporation of the whole or a part of the liability under this Act for payments in respect of injury, loss or damage suffered by, or the death of, those employees; and
(b) the acceptance by the corporation of the function of managing claims under this Act in respect of that injury, loss, damage or death.”
Section 109 of the Commonwealth of Australia Constitution Act (Cth) (the Constitution) provides:
“When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.”

THE AUTHORITIES

The effect of s 17 was considered by the Court of Appeal in Russo v World Services & Constructions Pty Ltd [1979] 1 NSWLR 330 (Russo). Mr Russo was employed by World Services & Constructions Pty Ltd between January 1967 and 2 November 1972. From 6 November 1972 until at least 2 October 1975, he was employed by the Department of Defence (Navy). While in the company’s employ, he suffered boilermaker’s deafness, which was aggravated during the period he was employed by the Navy. Each employment was an employment to the nature of which the deafness was due. While working for the Navy, Mr Russo applied for and was awarded compensation for boilermaker’s deafness pursuant to the Compensation (Australian Government Employees) Act 1971–1974 (Cth). However, the extent of the compensation was limited to the effects of the aggravation of his deafness after commencing his employment with the Navy.
On 2 October 1975, Mr Russo sought compensation from World Services & Constructions Pty Ltd pursuant to s 7(4) of the Workers’ Compensation Act 1926 (the 1926 Act), which was in these terms;
“Where the injury is a disease which is of such a nature as to be contracted by a gradual process compensation shall be payable by the employer in whose employment the worker is or who last employed the worker.”
The Workers Compensation Commission held that the 1926 Act could not be taken to purport to deal with any matter arising under the Commonwealth Act, and therefore the company was the employee’s last employer for the purposes of s 7(4) of the State Act. The Commission made an award of compensation accordingly.
On appeal, the Court of Appeal held that the correct interpretation of s 7(4) of the 1926 Act does not extend to include the Commonwealth as an employer for the purposes of the Act for the following reasons: first, the rule of construction affirmed in Commonwealth v Rhind [1966] HCA 83; 119 CLR 584 applied, namely, that the Crown is not included in the operation of a statute unless by express words or by necessary implication. Second, it is beyond the power of the New South Wales legislature to impose obligations of the kind provided for by the Workers Compensation Act upon the Commonwealth.
Hope JA (Hutley and Mahoney JJA agreeing) said at [335] of Russo:
“If the word ‘employer’, when used in section 7(4), does not include the Commonwealth, the worker had no employer within the meaning of the section at the date of the application, and the company was the employer, within the meaning of that section, who last employed the worker.”
It followed that the last employer for the purposes of the Act was World Services & Constructions Pty Ltd, and the award entered against that company by the Workers Compensation Commission was upheld.
In Georgiadis v Australian & Overseas Telecommunications Corporation [1994] HCA 6; 179 CLR 297 (Georgiadis), the High Court considered the constitutional validity of s 44 of the SRC Act. Section 44 of the SRC Act had the effect of extinguishing causes of action for damages against the Commonwealth by employees injured in circumstances where the Commonwealth would otherwise be liable. Mr Georgiadis alleged that, during the period between February 1974 and March 1986, he had suffered five injuries to his back in the course of his employment. The last injury occurred on or about 4 March 1986. On 17 September 1990, Mr Georgiadis commenced a common law action for damages for negligence in respect of those injuries against the AOTC in the Supreme Court of New South Wales. The negligence relied on was a breach of the employer’s common law duty to take reasonable care for the safety of its employees. In its defence, AOTC alleged that the cause of action was barred by virtue of s 44 of the SRC Act 1988.
The Compensation (Commonwealth Employees) Act 1971 (the 1971 Act), which preceded the SRC Act, did not provide for lump sum payment for permanent impairment of the back. Thus, if Mr Georgiadis’s cause of action was extinguished by virtue of s 44 of the SRC Act, he had no right to sue at common law for damages for his injuries, and had no right to obtain lump sum compensation under the SRC Act for his disabilities.
In a joint judgment (Mason CJ, Deane and Gaudron JJ), it was held that, for the purposes of s 51(xxxi) of the Constitution, “property” includes a cause of action arising under the general law and that the “acquisition” in s 51(xxxi) extends to the extinguishment of a cause of action which had “vested” (arisen), at least where the extinguishment results in a direct benefit or financial gain. That direct benefit or financial gain includes a liability being brought to an end without payment or other satisfaction. Accordingly, by majority, the Court held that s 44 of the SRC Act is invalid by reason of the fact that it affects an acquisition of property other than on just terms.
However, at [13], their Honours acknowledge that the position may be different where the cause of action arose under statute. Their Honours said:
“The position may be different in a case involving the extinguishment or modification of a right that has no existence apart from statute. That is because, prima facie at least and in the absence of a recognized legal relationship giving rise to some like right, a right which has no existence apart from statute is one that, of its nature, is susceptible of modification or extinguishment.”
McHugh J rejected the proposition that a cause of action in negligence against the Commonwealth (or any other tort) arose under the general law, noting that, at common law, the Crown was not liable to be sued in an action for tort. In his Honour’s view, the cause of action extinguished by s 44 of the SRC Act was a creation of statute (the Judiciary Act 1903) and therefore could be removed by Parliament without offending s 51(xxxi) of the Constitution.
Hobbs v Costain Australia Ltd (1995) 11 NSWCCR 56 (Hobbs) is a decision of the New South Wales Court of Appeal and concerned the interpretation of the words “for the purposes of this Act” in s 17(1)(a) of the 1987 Act. In Hobbs, the worker commenced common law proceedings claiming damages for industrial deafness. The statement of claim was restricted to a claim for damages occasioned to the worker as a result of alleged negligent conduct of the defendant from the time of the commencement of his employment until 4.00 pm on 30 June 1987. From 30 June 1987, s 151U of the 1987 Act applied and reintroduced access to modified common law benefits. At first instance, s 17(1)(a) was applied so that the hearing loss was deemed to have happened during the period the modified access to common law damages applied, with the result that the worker failed to satisfy the damages threshold, notwithstanding that the negligent acts for some or all of the hearing loss occurred prior to 30 June 1987.
In a unanimous decision, the Court of Appeal, allowing the appeal, held that usually an expression is to be given the same meaning throughout a statute, unless the context otherwise requires. However, where to do so results in deprivation of an existing common law right to damages, and further involves such deprivation occurring retrospectively, and produces an injustice to a distinct category of persons, it is not to be presumed that the legislature intended the expression to be given the same meaning so as to produce those effects. Consequently, the deeming provisions of s 17(1)(a) in relation to “injury” do not apply to the “injury” referred to in s 151U(1)(a).
In the leading judgment, Cole JA, with whom Kirby P and Handley JA agreed, found that, as there was no need to give notice of an injury to complete a common law action, and since s 17(1)(a) did not either expressly or impliedly purport to deal with common law rights, the section had no application to s 151U. His Honour went on to find that the 1989 amendments and, in particular, s 151U(2), made it clear that it was not the intention of the Parliament to negate or deprive a worker of a complete cause of action for common law damages for injuries occurring before 4.00 pm on 30 June 1987.
The application of the deemed injury provisions in s 17 of the 1987 Act were again considered by the New South Wales Court of Appeal in A & G Engineering Pty Ltd v Civitarese (1996) 14 NSWCCR 158; 41 NSWLR 41 (Civitarese). In Civitarese, the worker had been employed by the appellant, A & G Engineering Pty Ltd, for 12 years, from 1976 to 1988, working in a noisy environment. He then moved to the Northern Territory, where he worked in another noisy environment in a refrigeration business. On returning to New South Wales in 1990, he recommenced employment with the appellant, but only for a brief period. He then returned to the Northern Territory and worked again in the refrigeration business. The trial judge held that this was noisy employment to the nature of which the injury was due. The trial judge also held that the appellant was liable to pay compensation to the worker for his hearing loss, as that employment was the last noisy employment to which s 17 applied. The appellant submitted that s 17 only operated if the last employment to the nature of which the injury was due was in New South Wales. It argued that the last such employment was in the Northern Territory. Beazley JA, with whom Handley and Sheller JJA agreed, held that the 1987 Act does not have extraterritorial operation so as to make the Northern Territory employer liable as the last employer under s 17. The section operates to make the last employer to whom the legislation applies liable to pay compensation (Russo followed).
Telstra Corporation Ltd v Worthing [1999] HCA 12; 197 CLR 61; 17 NSWCCR 674 (Worthing) was a unanimous decision of the High Court allowing an appeal from a decision of the NSW Court of Appeal concerning the jurisdiction of the Compensation Court. Mr Worthing had filed an application for determination in the Workers Compensation Court relying on the 1987 Act. He alleged that he had suffered injuries while employed by Telstra as a linesman in 1986, 1988 and 1993. Telstra filed a motion in the Compensation Court seeking to have the application struck out on the basis that neither the 1987 Act nor its predecessor, the 1926 Act, upon their proper construction, extended to cover employees of Telstra. In the alternative, Telstra argued that, if the legislation did apply, it conflicted with the laws of the Commonwealth and, by reason of the operation of s 109 of the Constitution, was invalid to the extent of the inconsistency.
At the time of the 1986 injury, the 1926 Act and the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (the 1971 Commonwealth Act) were in force. By the time of the 1988 injury, the operation of the 1987 Act had commenced, but the 1971 Commonwealth Act was still in force. With respect to the 1993 injury, the relevant State legislation remained the 1987 Act and the relevant Commonwealth legislation was the SRC Act.
At the time of the 1986 injury and the 1988 injury, Mr Worthing’s employer was the Australian Telecommunications Commission (ATC), which later became Telstra. It was established under the Telecommunications Act (Cth). It was a body corporate and, pursuant to s 21(3), was not subject to any requirement, obligation, liability, penalty or disability under a law of the State to which the Commonwealth was not itself subject.
The first consideration was whether the ATC was an employer for the purposes of the New South Wales legislation. The 1987 Act, unlike its predecessor, contained an express statement (s 6(1)) that it “binds the Crown, not only in the right of New South Wales, but also, so far as the legislative power of the Parliament permits, in all other capacities”. The Court rejected the submission that, as a matter of construction, the 1926 Act and the 1987 Act did not in their terms apply to the ATC as an employer.
However, by reason of s 21(3) of the Telecommunications Act (Cth), the ATC was not subject to any liability under either State statute to which the Commonwealth was not subjected. Noting that the 1987 Act required, under sanction of a penalty, that an employer other than a self-insurer obtain and maintain a policy of insurance, it was held that it would require the clearest intention of legislative purpose to demonstrate that these penal provisions attach to the Commonwealth. The Court unanimously held that there was no intention as seen in the 1987 Act; to the contrary, s 6(2) states that nothing in the statute renders “the Crown” liable to be prosecuted for an offence. The Court concluded that liabilities under the 1987 Act were not liabilities to which the Commonwealth was subjected. In other words, in respect of the 1986 and 1988 injuries, the State legislation had no application to the ATC.
By the time of the 1993 injury, as a result of successive Commonwealth legislation, Mr Worthing’s employer had become Telstra and any relevant liability had passed to it. There was no statutory conferral upon Telstra of immunity corresponding to that conferred by s 21(3) of the Telecommunications Act (Cth). Section 26 of the Telstra Corporation Act is explicitly to the contrary. It was accepted that Telstra was an employer within the meaning of the 1987 Act and was subject to the liability for injuries to workers as detailed in Pt 2 of the statute.
Given the potential for conflict, the High Court then went on to consider the application of s 109 of the Constitution. The applicable principles are well-settled. At [27], the Court held:
“… It was held in Wallis v Downard-Pickford (NorthQueensland) Pty Ltd that a state law which incorporated into certain contracts a term which a law of the Commonwealth forbad was invalid. However, it is clearly established that there may be inconsistency within the meaning of s 109 although it may be possible to obey both Commonwealth law and the State law [29]. Further, there will be what Barwick CJ identified as ‘direct collision’ where the State law, if allowed to operate, would impose an obligation greater than that for which the federal law has provided [30]. Thus, in Australian Mutual Provident Society v Goulden, in a joint judgment, the Court determined the issue before it by stating that the provision of the State law in question ‘would qualify, impair and, in a significant respect, negate the essential legislative scheme of the Commonwealth Life Insurance Act’ [31]. A different result obtains if the Commonwealth law operates within the setting of other laws so that it is supplementary to or cumulative upon the State law in question [32]. But that is not this case.”
The High Court went on to identify from the judgment of Cole JA in the Court of Appeal the relevant differences in the compensation payable under both the State and Commonwealth legislation. The Court held at [31]:
“From that analysis, it follows that to apply the State law to the claim made by Mr Worthing would qualify, impair and, in some respects, negate the application of federal law, with the consequence that, to the extent of the inconsistency thereby made out, the State law was invalid. That conclusion means that Telstra should have succeeded on its motion that the application to the Compensation Court be struck out.” (emphasis added)
The Court went on to explain why the provisions upon which the Court of Appeal relied for determination of the case were misconstrued. Having considered ss 52 and 118 of the SRC Act, Cole JA concluded that the Commonwealth had not sought to exclude claims for State workers compensation in respect of injuries which might give rise to compensation under the SRC Act.
However, the High Court concluded that the apparent purpose of this provision (s 118) is to prevent what might be called “double recovery”. At [37], the Court noted:
“Injury may have been incurred progressively while the worker was in the employment of successive employers who were themselves subjected to different statutory regimes. The result could be what Hope JA in [Russo] identified as the anomaly that the worker could obtain some duplication of compensation [41]. Section 118(1) protects the operation of the Commonwealth law in such a situation by denying payment under it. The section is concerned with avoidance of duplication of recovery rather than protection of concurrent rights to recovery.”
It was held at [38] that s 52 of the SRC Act does not proceed upon any assumption as to concurrent operation of Commonwealth and State laws with respect to workers compensation. It operates to limit rights by requiring an election between entitlement to compensation under the SRC Act and the enjoyment of benefits under an award in respect to the same injury.

The Court concluded at [39]:
“The proposition accepted by the Court of Appeal and expressed by Stein JA as being that ss 52 and 118 ‘evince an intention to recognise mutuality between the Commonwealth, State and Territory workers compensation systems’ and ‘fly in the face of inconsistency’ cannot be accepted [45].”
In Attorney-General (Vic) v Andrews [2007] HCA 9; 233 ALR 389; 81 ALJR 729 (Andrews), the High Court considered the constitutional validity of various sections of the SRC Act with respect to the issuing of licences to enable Commonwealth authorities and certain corporations to accept liability for, and/or to manage, workers compensation claims.
The proceedings concerned the licence issued to Optus by the Safety, Rehabilitation and Compensation Commission authorising Optus to accept liability for workers compensation and to pay benefits under the SRC Act, thus removing the obligation on Optus to obtain compulsory workers compensation insurance in Victoriaas required by the Accident Compensation (WorkCover Insurance) Act 1993 (Vic).
The Victorian WorkCover Authority issued proceedings in the Federal Court. It sought a declaration that the licence issued to Optus was invalid. It claimed that the following provisions were beyond the Parliament’s legislative power and invalid to the extent of those provisions:
(a) section 104(1), which authorises the Safety, Rehabilitation and Compensation Commission to grant an eligible corporation a licence under Pt VIII of the SRC Act;
(b) section 108(1), which authorises an eligible corporation to accept liability to pay compensation in respect of injury, loss or damage suffered by or in respect of death of its employees under the SRC Act, and
(c) section 108A(7), which has the effect of removing the obligation of a licensed corporation to obtain and keep in force a policy of insurance under the Accident Compensation (WorkCover Insurance) Act 1993 (Vic). The provision also removes the liability of an eligible corporation to pay compensation under the Accident Compensation Act 1985 (Vic).
It was argued that the provisions were unconstitutional by reason of s 51(xiv) of the Constitution. Section 51(xiv) of the Constitution provides that the Parliament shall have power to make laws with respect to insurance other than state insurance. It was held by a majority (Gummow, Hayne, Heydon and Crennan JJ) that the licensing provisions in the SRC Act were laws with respect to a trading corporation formed within the limits of the Commonwealth (s 51(xx)). Further, it was held that a State law requiring Optus to meet liabilities under a State compensation scheme would alter, impair or detract from the federal scheme, so that the State law would be invalid to the extent of the inconsistency under s 109 of the Constitution. The result of the operation of s 109 on Victoria’s Accident Compensation Act 1985 is that Optus is not subject to compulsory WorkCover insurance in Victoria.

Sexton concerned the referral of a question of law pursuant to s 351 of the 1998 Act. The question referred for consideration was expressed in these terms:
“The question to be decided is whether or not the Workers Compensation Commission has jurisdiction in a matter where one of the employers is a Federal employer which is subject to the Safety, Rehabilitation and Compensation Act 1988 (Cth) (as amended) and not insured for the purposes of the Workers Compensation Act 1987 (NSW) (as amended).”
Mr Sexton commenced proceedings against two respondents, Graincorp Operations Pty Ltd (Graincorp) and Pacific National (ACT) Ltd (Pacific National). Pacific National was insured under the Commonwealth legislation, but was not insured in New South Wales. Mr Sexton sought compensation in respect of injuries sustained during a fall on 10 January 2001 and as a result of the general nature of his duties spanning his employment with both employers. After considering the authorities, including Russo and Worthing, Acting President Byron concluded that the relevant provisions of the Federal and State Acts were broadly similar for practical purposes. Consequently, he held that the provisions of the State Act in question, if applied, would necessarily qualify, impair and, in a significant respect, negate the essential legislative scheme of the Commonwealth legislation. Therefore, he concluded, the Commonwealth law could not be said in the circumstances to operate within the setting of other laws so that it was supplementary to or cumulative upon the State legislation. He concluded at [68]:
“The inconsistency within the meaning of section 109 of the Constitution is clear and the operation of the section is decisive (see Worthing, in particular [27] and [28], set out at paragraph 57 of these Reasons), and is therefore, binding on the Commission.”
The Acting President concluded that the Workers Compensation Commission does not have jurisdiction in a matter where one of the employers is subject to the SRC Act and not insured for the purposes of the 1987 Act.
There are three decisions in this Commission that are relevant to the question. In Makowski v National Wealth Management Services Ltd [2010] NSWWCC 367 (Makowski), Ms Makowski was employed as a data entry operator. She alleged injuries to her back and right upper limb as a result of extensive data entry work between 11 October 2004 and May 2009. CGU Workers Compensation (NSW) Ltd insured the respondent, National Wealth Management Services Ltd, to 13 April 2007. Thereafter, the respondent ceased to be insured under the NSW legislation and became licensed under the Commonwealth SRC Act to accept liability and to pay compensation and other amounts under the SRC Act in respect of injury, loss or damage suffered by its employees.
After dealing with an allegation of injury to the neck, which is not currently relevant, the Arbitrator applied s 16 of the 1987 Act for the purposes of identifying a deemed date of injury in respect of the worker’s claim for lump sum compensation and in respect of her claim for weekly benefits. After considering the relevant authorities, the Arbitrator deemed the date of injury in respect of the claim for lump sum compensation to be 9 December 2009 and the deemed date of injury in respect of the claim for weekly benefits was 15 May 2009. Both of those dates postdated 13 April 2007, when the respondent’s compensation liabilities were governed by the SRC Act, rather than under the New South Wales Workers Compensation Acts. The applicant relied on the decision in Russo. However, the Senior Arbitrator noted that the facts in Makowski are not on all fours with the facts in Russo. Unlike Russo, Makowski was not a case involving a subsequent Commonwealth employer to which the New South Wales legislation did not apply. There was only one relevant employer. There had been no relevant change to the circumstances between 13 April 2007 and 19 May 2009. The Senior Arbitrator held at [32] of the decision:
“For the applicant to succeed against that employer pursuant to the ‘disease’ provisions, she needs to establish an injury by way of aggravation, etc of a disease. If she succeeds in doing this, pursuant to the provisions of the New South Wales legislation, then s 16 of the 1987 Act contains a scheme for fixing deemed dates of injury. The application of that statutory scheme produces deemed dates of injury, on the facts of the current claim, that postdate 13 April 2007. Section 108A(7) prevents the application of the New South Wales legislation to the respondent in such circumstances.”
In Horsey v Linfox Transport [2011] NSWWCC 219 (Horsey), Mr Horsey was employed by Linfox Transport as a truck driver for 27 years. During the course of his employment, he was exposed to loud noise while driving, loading and unloading trucks. He was diagnosed as suffering from noise-induced bilateral hearing loss. On 27 September 2010, Mr Horsey made a claim on Linfox for lump sum compensation pursuant to s 66 of the 1987 Act in the sum of $33,000 in respect of 21 per cent whole person impairment. The respondent’s workers compensation insurer, Allianz Australia Workers Compensation (NSW) Ltd (Allianz), declined liability for the claim.
Allianz insured the respondent up to 2 April 2006. Thereafter, the respondent became self-insured pursuant to the provisions of the SRC Act. In an Application to Resolve a Dispute filed in the Commission, Mr Horsey alleged that the date of injury was 2 April 2006. He alleged that his hearing loss was caused by his employment with the respondent up to that date. It was not in dispute that Mr Horsey first made a claim on his employer for compensation benefits in respect of his industrial deafness on 27 September 2010. Allianz first received the notice on 6 October 2010. After referring to relevant authorities, the Senior Arbitrator said at [30]–[32]:
“30.   … Finding a deemed date of injury which falls beyond 2 April 2006 could, it was submitted on behalf of the applicant, result in a serious curtailment to Mr Horsey’s potential recovery of compensation (Grixti v Linfox Australia Ltd (2009) AATA 566).
31.    I agree with the submission made on behalf of Mr Horsey that the decision in Makowski is problematic in that if the State law does not apply, it follows that the provisions of section 16 of the 1987 Act cannot be invoked to deem the date of injury.
32.    I note the decision of the Arbitrator in Makowski but, having regard to the principles set out by the Court of Appeal in Russo and Civitarese, I consider that the better view is that the legislation is to be interpreted so as to affirm rights to be compensated in respect of injuries sustained during the course of a period of employment to which that legislation applies. The deeming provisions in section 17 of the 1987 Act have the purpose of designating a date of injury ‘for the purposes of this Act’. It follows that ‘employment to the nature of which the injury was due’, refers to employment to which the 1987 Act applies. In the current case, such employment was that in which the applicant was engaged until 2 April 2006, being the last date on which his employment was subject to the provisions of the 1987 Act. That date is, as contemplated by section 17(1)(a)(ii), therefore ‘the last day on which the worker was employed in an employment to the nature of which the injury was due before he or she gave the notice’.”

At [33], the Arbitrator said:
“It is well established that legislation should be interpreted or construed in a way that promotes the purpose or object underlying the Act (section 33 of the Interpretation Act 1987, No 15). The NSW workers compensation Acts are Acts that provide for the compensation or rehabilitation of workers in respect of work-related injuries. It is socially beneficial legislation and should be interpreted in a way that promotes its purposes.”
At [34], the Senior Arbitrator found that s 17 of the 1987 Act only applied:
“‘for the purposes of this Act’, that is, up until 2 April 2006, when the 1987 Act ceased to apply to Linfox.”
The Senior Arbitrator held that the deemed date of injury was 2 April 2006, pursuant to s 17 of the 1987 Act, and therefore found that the last employment to which the 1987 Act applied was employment with Linfox that ceased on 2 April 2006.
In the recent case of Milburn v Veolia Environmental Services (Australia) Pty Ltd [2012] NSWWCC 10 (Milburn), Arbitrator Beilby followed the approach adopted in Makowski. The dispute involved an allegation of aggravation of a pre-existing degenerative condition due to a long period of exposure to operating high-pressure water-blasting equipment. It is common ground that the employer had ceased to be insured under the NSW legislation on 1 July 2008 and was thereafter insured under the SRC Act.
The Arbitrator held that, being a disease case, s 16 the 1987 Act applied to determine the deemed the date of injury. The Arbitrator applied the principles discussed in Alto Ford Pty Ltd v Antaw [1999] NSWCA 234 and Stone v Stannard Brothers Launch Services Pty Ltd [2004] NSWCA 277 to determine a deemed date of injury of 23 August 2008. As the deemed date of injury was after the employer became licensed under the Commonwealth legislation, s 108A(7) of the SRC Act applied, which prevented the worker from recovering compensation under NSW legislation (Russo and Civitarese not followed).

SUBMISSIONS

The applicant’s submissions

The applicant submits that, having regard to the authorities, including Russo, Civitarese and Worthing, once the respondent became insured under Commonwealth legislation, it ceased to be an employer to which the State Act applied.
The applicant submits that any question of jurisdiction of the Commission is resolved by simply applying the terms of s 17(1)(a)(ii), as applied in Russo and Civitarese, namely that, at the time Mr Lennon gave notice of his injury, he was not in employment to which the State Act applies. In the applicant’s submission, the focus in s 17(1)(a)(ii) is on the employment, not on the employer. It is submitted that it is significant that the subsection does not focus on the last day on which the worker was employed by an employer in employment to the nature of which the injury was due. The application of s 17(1)(a)(ii) is not dependent upon the identity of the employer for determining the deemed date of injury. Therefore, when the terms of s 17(1)(a)(ii) are applied, the deemed date of injury is the last day on which the worker was employed in employment to the nature of which the injury was due before he gave notice of injury.
On the facts of this case, that approach produces a deemed date of injury of 30 June 2008. That is because GIO ceased to insure the respondent on that date and therefore 30 June 2008 was the last day Mr Lennon worked in employment to which the State legislation applied. The applicant submits it follows that the last employer for the purposes of s 17 is the respondent in its capacity as a State employer up to 30 June 2008.
The deemed date is before the licence under the SRC Act came into effect. It follows therefore that, applying the terms of s 108A(7) of the SRC Act, the liability in respect of injuries occurring before the granting of the licence is unaffected.
The applicant seeks to distinguish the decision in Makowski on the basis that, in that matter, the deemed date of injury (applying s 16 of the 1987 Act) was the date when the claim was made which, on the facts in Makowski, occurred after the transfer to the Commonwealth scheme. The Arbitrator in that matter applied s 108A(7), which prevented the claim being met under the New South Wales State scheme. In this case, it is argued that the deemed date is determined to be before the change of scheme, with the consequence that s 108A(7) clearly preserves the rights under the State scheme.
The applicant challenges the reasoning in Makowski on two bases. Firstly, the Arbitrator held that there was no relevant change in employment. The applicant submits that that conclusion is inconsistent with authority. There had been a change from a State employer to a Commonwealth employer, with a consequential and significant change to the applicant’s rights. That change accords exactly with the principles established in Russo.
Secondly, it is submitted that the decisions in Makowski and Milburn are internally inconsistent. Pursuant to s 108A(7), either the State law applies or it doesn’t. The Arbitrators in those matters determined the date of injury by applying the deeming provisions of s 16 of the State Act. They then concluded that, because of the operation of s 108A(7) of the SRC Act, the State legislation could have no further operation because the determined dates of injury postdated the transfer of the insurance arrangements to the Commonwealth scheme. It is submitted that this approach is confused and mistaken. If the State Act does not apply, it could not operate to deem a date of injury. The Arbitrators in Makowski and Milburn failed to recognise that the two issues are mutually exclusive.
The applicant submits that “the better view” is to apply all of the words of s 17, which expressly limits the operation of the section. The section only operates “for the purposes of this Act”. It does not operate for the purpose of common law rights (Kotevski v Esselte Australia Pty Ltd [2005] NSWCA 126 (Kotevski)). In its own terms, it does not operate for the purposes of another Act. It is submitted that it should not be interpreted to deprive the worker of rights (Hobbs). Accordingly, it is submitted that the section cannot be used to deprive a worker of existing rights through its interoperation with Commonwealth legislation. The section only applies to the determination of compensation under the Workers Compensation Acts of New South Wales.
The applicant’s alternative submission is that, after 30 June 2008, there was a fundamental change in the employment contract, such that one contract ended on 30 June 2008 and another was created with different terms. The applicant submits that the rights and entitlements under the State and Commonwealth legislation are fundamentally different. For example, the determination of liability for disease conditions is treated differently, as are journey claims and the requirements for establishing the contribution to the injury or condition due to the employment (see s 9A of the 1987 Act).
In particular, the applicant submits it is significant that, in respect of industrial deafness liability under the State legislation, workers are not required to prove actual causation, whereas, under the SRC Act, the employer is only liable for the extent of the deafness caused after the employer became licensed (Grixti v Linfox Australia Ltd (2009) AATA 566 (Grixti)). For these reasons, the applicant submits that, for the purposes of its application to the legislation, there is in fact a different contract.
The applicant submits that, applying State law, the applicant has a property right that vested on 30 June 2008. To apply s 108A(7) (as suggested by the respondent) would mean that the section operates to deprive the applicant of a property right without just compensation (Georgiadis). While the High Court found s 108A(7) to be valid in Andrews, that was a case in which the possibility of a deprivation of property rights did not arise. Accordingly, the applicant submits that Andrews is not relevant to the point currently being made.
However, the applicant does not seek to argue that s 108A of the SRC Act is constitutionally invalid, but he does submit that, if the question of law is answered in the manner contended for by the respondent and WorkCover, the practical result is that the worker would be deprived of a right to compensation which he submits was a vested right as at 30 June 2008, without compensation. That loss of rights would be a powerful “signpost” to the interpretation of the State legislation in a way that would allow the State and Commonwealth legislation to dovetail together by preserving that to which the worker says he was entitled under the State legislation up to 30 June 2008 and allowing the Commonwealth to regulate his entitlements thereafter. Before I leave this submission, and for the sake of clarity, I should point out a transcription error at T16.25 where the word “arguing” was omitted. The question I put to the applicant’s counsel, Mr McManamey, and his reply were in these terms:
PRESIDENT: “But you are not arguing invalidity”
MR MCMANAMEY: “No. The point before us is the interpretation of s 17…”
It is submitted that the purpose of s 108A(7) is to provide that the Commonwealth legislation does not apply to injuries occurring before the respondent became licensed under the SRC Act. The State legislation continues to apply to those injuries. It is submitted that the intention is that there is no liability under the Commonwealth legislation for injuries resulting from events that occur prior to the Commonwealth legislation applying. It is not intended that existing rights are extinguished. It is submitted that this is made clear from s 108A(7)(b).
The applicant submits that, in any event, the matter is simply resolved by the application of settled State law, that is, by applying the rationale in Horsey.

The respondent’s submissions

If, as the applicant’s counsel submits, in the circumstances of this case, the worker retained an entitlement to compensation under the NSW legislation, in addition to any entitlement under the Commonwealth legislation, it would, to use the phrase in Worthing, be “cumulative” upon any right that might be available under the Commonwealth scheme. If such an entitlement existed, it would qualify, or potentially impair or negate, the essential legislative scheme within the Commonwealth legislation. In those circumstances, the Commonwealth legislation must prevail and exclude the operation of s 17 in the manner submitted by the applicant. This approach is consistent with the rationale in Sexton.
Any other construction would result in the employer being faced with two claims with respect to the same injury, with little recourse to set one off against the other.
The respondent submits that the applicant has approached the analysis of s 17 of the 1987 Act from an incorrect perspective. It submits that the correct starting point for any analysis of the question to be determined commences with a consideration of s 9 of the 1987 Act.
The respondent submits that the liability of an employer to pay compensation is predicated on a finding that there was an injury in compensable circumstances, that is, that the worker suffered an injury and is entitled, through the operation of the Workers Compensation Acts (NSW), to be compensated for the consequences of that injury. The respondent asserts that the applicant’s reliance on Russo and Civitarese is misplaced. Notwithstanding the applicant’s submission to the contrary, those decisions are clearly distinguishable, as they involve workers who have left their respective NSW-insured employers and undertaken employment with another employer, namely a Commonwealth employer in the case of Russo, or an interstate employer as in Civitarese.
The respondent submits that the Act provides a mechanism, where an injury involves the loss of hearing as a consequence of exposure to industrial noise, to determine when the injury occurred so as to identify the relevant employer, if any, liable to pay compensation. The respondent submits that the applicant proceeds on a different tack, that is, that the employer be identified at first and, having identified the employer, the applicant argues, a determination is then made as to the date of injury and whether compensation is payable. This approach, the respondent submits, is to manipulate the application of s 17 to achieve a deemed date of injury outside the operation of the Commonwealth legislation.
The respondent submits that the words “for the purposes of this Act” in s 17(1)(a) is for the purposes of determining whether a worker has suffered an injury and whether an employer is liable to pay compensation. Regardless of any assertion as to the Act’s beneficial nature, the purposes of the Act is not to compensate without regard to establishing the basic tenets the Act was set up to achieve.

The expression “for the purposes of the Act” in s 17(1)(a) is to determine the date of injury. Having established the date of injury, s 17(1)(c) operates to identify the relevant employer.
In Mr Lennon’s case, he was employed in employment to the nature of which the injury was due, and the Act fixed a date of injury. The effect of fixing the date of injury determines whether compensation is payable under the State legislation.
It is not in dispute that, from 30 June 2008, the applicant was an employee of the respondent in New South Wales and the applicant’s employment was “noisy”. The respondent was also an employer able to rely on the relevant Commonwealth legislation for workers compensation purposes.
The respondent submits that the employment relationship between the applicant and the respondent did not alter from 30 June 2008. There was not a termination of one contract on 30 June 2008 and a new contract entered into after that date. There was only one contract, which continued, notwithstanding the change in the insurance arrangements.
When the worker made his claim for compensation on 25 March 2011, he was not a worker entitled to rely upon the State legislation as a consequence of the operation of s 108A(7) of the SRC Act. The respondent submits that there has been no extinguishment of rights, because the rights did not exist in June 2008, as the worker had not been “injured”. The respondent submits that there is no evidence of what entitlements, if any, are payable under the Commonwealth legislation and, in any event, any such commentary or inquiry is, in the respondent’s submission, irrelevant.
In the respondent’s submission, the purpose of s 108A(7) of the SRC Act is similar to that of s 17 of the 1987 Act, which is to provide certainty.
With respect to the decision in Horsey, rather than identify the date of injury and then make a determination as to whether compensation is payable, the Arbitrator considered that one possible determination on injury would result in an adverse effect on the injured worker’s rights and entitlements, and, in the respondent’s submission, the Arbitrator relied on a presumptive denial of property rights as a reason for determining whether compensation was payable. The respondent submits that such an inquiry has no relevance to the task required by the Act.
The respondent submits that, when the worker made his claim for lump sum compensation on 25 March 2011, he was not a worker entitled to rely on the State legislation as a consequence of the operation of s 108A(7) of the SRC Act. The 1987 Act independently determined that the date of injury was 25 March 2011, in which circumstance any liability for compensation would then fall on the employer who employed the worker in noisy employment at that date.

WorkCover’s submissions

Workcover adopts the respondent’s submissions in respect of the interpretation of s 17. It submits that, where a worker claims hearing loss and was, when notice of injury was given, working for an employer in a noisy industry, s 17(1)(a)(i) applies and compensation is payable by that employer.
Where the worker claims hearing loss and was not working for an employer in a noisy industry at the time when the notice of injury was given, s 17(1)(a)(ii) applies and compensation is payable by the last employer to have employed the worker in employment to the nature of which the injury was due before the notice of injury was given.
WorkCover further submits that the application to resolve a dispute indicates that the applicant worker is still engaged in truck driving (including loading and unloading), that is, in employment to the nature of which the injury was due. On this basis, s 17(1)(a)(i) of the 1987 Act operates to fix the date of injury as 24 March 2011, that is, the date of notice of claim.
Once the date of injury is fixed by s 17(1)(a)(i) of the 1987 Act, s 17(1)(c)(i) provides, that in the circumstances of this case, the employer liable to pay compensation is the employer as at 24 March 2011. However, at this date, the employer was a licensee under the SRC Act.
When the employer became a licensee under the SRC Act for the purposes of workers compensation, the New South Wales State legislation relating to workers compensation had no further operation in relation to the employer (Worthing).
From the date that the employer became a licensee under the SRC Act (1 July 2008), the worker’s rights and the employer’s obligations were governed by that Act. The 1987 Act has no ongoing operation in relation to the applicant and the respondent except for any accrued rights and obligations.
Further, s 17(1)(a)(ii) of the 1987 Act has no application, as the worker was employed in an employment to the nature of which the injury was due when he gave the notice of injury, that is, on 24 March 2011. Section 17(1)(a)(ii) only operates as an alternative to s 17(1)(a)(i).
Therefore, in this case, there can be no accrued right to compensation for hearing loss that can be preserved by s 108A(7)(b) of the SRC Act.
WorkCover submits that the decision of the New South Wales Court of Appeal in Russo is distinguishable from the facts in the present matter. In that matter, there were two relevant employers and, for the reasons discussed at [29]–[33] of this decision, the 1926 Act could not have any application to the Commonwealth, and therefore the State-insured company was held to be the last employer to which the legislation applied. In this matter, there is only one relevant employer.
The same distinction is made in respect of Civitarese. WorkCover submits that the Court of Appeal was concerned with the interpretation of s 17(1)(a)(ii) and s 17(1)(c)(ii); that is, accepting that the NSW legislation could have no application to an employer in the Northern Territory, the worker was not employed by an employer to whom the NSW legislation applied at the time the claim was made. In those circumstances, the finding was that the deemed date of injury was the date the worker was last employed by an employer to whom the NSW legislation applied. However, in the instant matter, there is only one relevant employer throughout the period of employment relied upon by the worker.
WorkCover submits that the only basis upon which it is alleged that the nature of the worker’s employment has changed is on the basis of the change in the legislation applicable. That is not sufficient to take a factual scenario which, at face value, falls within s 17(1)(a)(i) and s 17(1)(c)(i), into the alternative provisions. WorkCover submits that the worker’s argument in terms of the issue of the last employer being deemed to be the last employer to which the New South Wales legislation applies relies wholly on an interpretation of Russo and Civitarese. In WorkCover’s submission, that interpretation is too expansive. Those decisions were dealing with a quite separate and distinct issue in respect of a separate provision of the legislation.
WorkCover submits that the worker can draw no comfort from the decision in Georgiadis. The New South Wales legislation has not been altered and no rights have been removed by the legislature. Even if that were to be the case, the majority in Georgiadis specifically reserved any determination on whether the removal or alteration of statutory rights (as opposed to a vested common law right) would offend the Constitution.
WorkCover adopts the respondent’s position in respect of the process that is to be applied to the operation of s 17, namely that, for there to be any right to compensation, there must not only be an injury, but there must be a date of injury and the terms of the legislation must be applied to determine the deemed date of injury. When so applied, if the deemed date of injury falls outside the scope of the New South Wales legislation, there is simply no right for compensation.

DISCUSSION AND FINDINGS

The Commission’s jurisdiction to determine disputes is governed by s 105 of the 1998 Act. Its jurisdiction is limited to hear and determine matters arising under the 1998 and the 1987 Acts. It is accepted that the Commission has no jurisdiction to determine rights or entitlements arising under the SRC Act.
The effect of s 108A(7) of the SRC Act in respect of employers who are licensed to accept liability under that Act is to exclude the operation of any State or Territory law relating to workers compensation for injuries sustained after the licence comes into force. Any liability under State law occurring before the licence comes into effect is unaffected.
The question before me is to determine whether the operation of s 17(1)(a)(i) deems the worker’s hearing loss to have occurred on 30 June 2008 (the date the employer ceased to be insured in NSW) or, in the alternative, whether the injury is deemed to have occurred on 24 March 2011, when the claim for compensation was made.
The applicant’s submissions in substance depend not on the operation of s 17(1)(a)(i), but on the operation of s 17(1)(a)(ii). In other words, the applicant submits that, in determining the question, the focus should be on the worker’s employment, not on the identity of his employer. The fallacy of that argument is that, at the time he gave notice, the worker was employed in employment to the nature of which the injury was due. Therefore, s 17(1)(a)(i) applies to fix the deemed date of injury as the date when the claim for compensation was made.
Section 17(1)(a)(ii) operates as an alternative to s 17(1)(a)(i). In order to overcome the application of s 17(1)(a)(i), the applicant submits that the worker’s employment with the employer should be seen in two separate and distinct periods by categorising the employer as, firstly, one to which the State Act applies and, secondly, one to which the Commonwealth law applies.
The authorities advanced to support the applicant’s argument are Russo and Civitarese. The respondent and WorkCover both argue that Russo was clearly distinguishable (as found in Makowski and Milburn) because, in Russo, there were two employers by whom the worker had been employed in employment to the nature of which the injury was due. The first employer was a State-insured company and the subsequent employer was the Commonwealth (Navy). For the reasons referred to at [29]–[33], it was held that the NSW worker’s compensation legislation had no application to the Commonwealth and, in those circumstances, the last employer to which the State Act applied was the employer in New South Wales. Civitarese, although not dealing with the Commonwealth, followed the same approach in respect of a subsequent interstate employer. In the instant matter, however, there was only one employer and, other than the change in the insurance arrangements, the worker’s employment has not altered up to the point that he made his claim.
I agree that Russo and Civitarese are distinguishable from the instant matter. Unlike those cases, this is not a case involving a subsequent Commonwealth or interstate employer. There is only one employer. There has been no alteration to Mr Lennon’s employment throughout the period of his employment with the respondent. That is, he remained in employment to the nature of which the injury was due at the time he gave notice of injury.
The applicant submits that the approaches adopted in Makowski and Milburn are internally inconsistent because either the State Act applies or it doesn’t. It is inconsistent to apply the provisions of the State Act to determine the deemed date of injury, but then conclude that it has no further operation. I disagree for the following reasons.
Liability for compensation under the 1987 Act only arises when a worker has received an injury (s 9(1)). “Injury” is defined in s 4 as follows:
“(a) means personal injury arising out of or in the course of employment,
(b) includes:
(i)a disease which is contracted by a worker in the course of employment and to which the employment was a contributing factor, and
(ii)the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration, …”
Where the injury is a loss or further loss of hearing, s 17 operates to determine when the injury is deemed to have occurred.
Once it is established that the worker has sustained an injury and the deemed date of the injury has been determined, s 17(1)(c) is applied to determine the employer liable to pay the compensation. When a claim is made under the State legislation, as in Mr Lennon’s case, unless the claim is assessed by the application of these provisions, it is impossible to determine whether there is a liability for compensation and where the liability for it should fall.
If, as in the circumstances of this case, the deemed date of injury occurs at a point in time when the employer is insured under the SRC Act, s 108A comes into play to determine whether or not the liability falls under the State or the Commonwealth legislation. There is no inconsistency in that approach. It should be remembered that s 108A had not been enacted when Russo was decided.
The applicant does not seek to argue that s 108A of the SRC Act is constitutionally invalid in the Georgiadis sense. The validity of s 108A was considered in Andrews and the provision was held not to infringe the Constitution. Nevertheless, the applicant submits that the loss of rights would be a powerful “signpost” to interpret the State legislation in a way that would allow the State and Commonwealth legislation to dovetail together by preserving that to which the worker was entitled under the State legislation up to 30 June 2008 and allowing the Commonwealth to regulate his entitlements thereafter.
The submission is contrary to the principles discussed in Worthing and I reject it. As I noted at [51], the High Court noted from the judgment of Cole JA in the Court of Appeal that both the State and Commonwealth legislation provided workers compensation benefits, although there were a number of differences in the quantification of compensation payable. In that context, the High Court held that to apply State law to the claim made by Mr Worthing would qualify, impair and, in some respects, negate the application of Commonwealth law, with the consequences that, to the extent of the inconsistency thereby made out, the State law was invalid. This was the conclusion reached in Sexton and, in my view, the same conclusion is inescapable in the instant matter. The principles discusses in Worthing have been reiterated in the High Court in Dickson v The Queen[2010] HCA 30; 241 CLR 491 at 502 [13]–[14] and Jemena Asset Management (3) Pty Ltd v Coinvest Ltd [2011] HCA 33 at [39].
The applicant submits that the words “for the purposes of this Act” appearing in s 17 limit the operation of the section. He submits that, consistent with the authorities in Kotevski and Hobbs, the section should not operate for purposes other than the 1987 Act, and should not be interpreted in a manner which deprives workers of rights through its interoperation with the Commonwealth legislation.
It was on this basis that the Arbitrator in Horsey adopted the approach contended for by the applicant. However, at [30], the Arbitrator identified the potential for a denial of rights as a basis for construing the legislation in a manner beneficial to the worker. However, in my view, this approach offends the literal approach to statutory construction as explained by Higgins J in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd [1920] HCA 54; 28 CLR 129 at 161–2 as follows:
“The fundamental rule of interpretation, to which all others are subordinate, is that a statute is to be expounded according to the intent of the Parliament that made it; and that intention has to be found by an examination of the language used in the statute as a whole. The question is, what does the language mean; and when we find what the language means, in its ordinary and natural sense, it is our duty to obey that meaning, even if we think the result to be inconvenient or impolitic or improbable.”
In OV and OW v Members of the Board of the Wesley Mission Council [2010] NSWCA 155, Basten JA and Handley AJA (Allsop P agreeing) at [50] highlighted the risks of working backwards from what are perceived to be anomalous consequences of a particular construction. In Victims Compensation Fund Corporation v JM [2011] NSWCA 89, Sackville AJA commented at [64] that “It is … not a decisive argument against [a particular] construction that it is possible to point to various outcomes of it which might be thought irrational, anomalous or harsh”.
Kotevski and Hobbs were cases that involved the interpretation of s 17 in so far as it applied to common law rights. In the instant case, s 17 is not applied to determine rights independent of the Act; it is being applied to determine when the worker’s hearing impairment is deemed to have happened and by whom compensation is payable in accordance with the Act.
For these reasons, I do not accept that the use of the expression “for the purposes of this Act” in s 17 can be called in aid to qualify the plain meaning of s 17(1)(a)(i) in the manner contended for by the applicant.

Was there a termination of the employment contract?

The applicant’s alternative submission is that, after 30 June 2008, there was a fundamental change in the employment contract, such that one contract ended on 30 June 2008 and another was created on different terms. This, the applicant submits, is because the rights and entitlements under the State and Federal legislation are fundamentally different in a number of respects. Some examples are referred to at [81]–[82]. No authority was advanced for this submission that, as a matter of law, the change in insurance arrangements terminated one contract of employment and created another.
The effect of variation of a contract is considered in N C Seddon and M P Ellinghaus, Cheshire and Fifoot’s Law of Contract (LexisNexis Butterworths, 8^th ed, 2002) at 960:
“Effective variation. Two views have been taken of the effect of variation. One is that by varying a contract parties necessarily terminate their existing contract and replace it with a new contract. On this view a variation always involves a termination – of a prior contract. The other view is that a variation alters the contract while keeping it in existence. As important legal consequences flow from the termination of a contract, it is surely preferable not to insist rigidly that a contract is inevitably terminated whenever it is varied. Often this would fly in the face of the parties’ own understanding or expectation. It should be possible to modify a contract without creating a hiatus, however formal, in a contractual relationship between the parties.
The High Court has therefore wisely rejected the view that a variation of contract necessarily involves its termination. Whether it does or does not depends on the actual or inferred intention of the parties.”

The learned authors went on to state at 962:
“Whether the parties intended termination or not can sometimes be inferred from the degree to which their contract has been modified. If the new terms are so far inconsistent with the original contract so as to destroy its substance, it can be inferred that the parties intended to abrogate it and replace it with a new and independent contract. It is not always easy, however, to reconcile the cases. Overall they exhibit a bias against termination in recognition of the fact that commercial parties commonly modify their contractual regime as it ‘steers its course through the various potholes of business life’ (Berry v Wong [2000] NSWSC 1002 at 33).”
Whether or not the change in the insurance arrangements terminated an existing contract of employment would depend upon the particular facts of the case and the extent to which the worker consented to the variation. I do not accept, however, that as a matter of law the fact that there was a change in the insurance arrangements of itself terminated the employment contract at the point the change in insurance arrangements was effected. There is no evidence that, because of the change in insurance arrangements in June 2008, the parties intended to vary or did vary Mr Lennon’s contract of employment.

Did the worker have a property vested right on 30 June 2008?

The applicant further submits that, as of 30 June 2008, he had a property right to compensation that vested at that time. If s 108A(7) is applied in the manner suggested by the respondent and WorkCover, then, in accordance with the decision in Grixti, the worker would only be entitled to recover compensation under the Commonwealth Act for the extent of the deafness caused after the employer became licensed under the Commonwealth legislation. Therefore, the applicant submits that, by applying s 108A(7) in the manner suggested by the respondent and WorkCover, the worker would be deprived of the compensation for that part of his impairment that was caused during the period of his employment while his employer was insured under State legislation.
The entitlement to compensation under the State workers compensation legislation only vests when the statute creates a liability or a right to compensation. The liability for or right to compensation vests at the time of injury. In respect of compensation for hearing loss, the statute creates a liability for compensation when the injury is deemed to have occurred by applying the terms of s 17 of the 1987 Act. In cases where the worker is still in employment to the nature of which the injury is due when he or she makes the claim (as Mr Lennon was), s 17(1)(a)(i) applies and the injury is deemed to have occurred at that time, and that is the time when the right to compensation vests.
In Rico Pty Ltd v Road Traffic Authority (1992) 28 NSWLR 679, the NSW Court of Appeal considered the rationale for and the application of the deeming provisions of s 17 of the 1987 Act. The issue arose in the context of a consideration of the entitlement to compensation for pain and suffering under s 67 of the 1987 Act, in respect of a hearing impairment sustained before the introduction of s 67, but deemed (by operation of s 17) to have occurred after its enactment. Sheller JA, with whom Priestly agreed (Mahoney JA dissenting), said at [689]:
“The legislative scheme for awards of compensation for boilermaker's deafness proceeds on the following assumptions or fictions:
1.The condition known as ‘boilermaker's deafness’ is deemed to be a loss of hearing which is of such a nature as to be caused by a gradual process (s 17(2)).
2.A loss of hearing which is of such a nature as to be caused by a gradual process is an injury (s 17(1)).
3.In the language of Barwick CJ, in Commissioner for Railways v Bain (1965) 112 CLR 246 at 256–257, the injury is taken to have happened ‘as it were, at one blow’. If the worker was, at the time when he or she gave notice of the injury, employed in an employment to the nature of which the injury was due, the injury is deemed to have happened at the time when the notice of the injury was given; if the worker was not so employed, when he or she gave notice of the injury, the injury is deemed to have happened on the last day on which the worker was employed in such employment, before he or she gave the notice (s 17(1)(a)).
4.Compensation is payable by the worker's employer at the time when the notice of injury was given, if the worker was then employed in employment to the nature of which the injury was due; if the worker was not so employed at the time of the notice, it is payable by the last employer by whom the worker was so employed (s 17(c)).
On the basis of these assumptions or fictions the worker's entitlement to recover a lump sum calculated in accordance with s 66 or an amount for pain and suffering calculated in accordance with s 67 is determined.
In this case, according to these assumptions or fictions, the injury was received on 17 August 1987 after the commencement of Div 4. The loss of hearing actually must have occurred over a period extending back before the commencement of Div 4.
Section 17 deems the injury here suffered to have happened at a particular time for the purposes of the Act. The time the injury actually happened is irrelevant. Clause 2 of Pt 6 limits the application of s 67 to injuries received after a particular time. The question for decision is whether cl 2 refers to the point of time at which the injuries were actually received or to the deemed or notional point of time prescribed by s 17.
To choose the actual point of time is to depart from the result of an historical development in workers compensation legislation in New South Wales designed, in the case of progressive slow growing industrial or occupational diseases or injuries, to relieve the worker from the daunting forensic task of proving when they occurred and, if they were employment related, by which relevant employer compensation therefore is payable. In the case of loss of hearing caused by a gradual process, s 17 achieves this design by providing that the loss is an injury which happened at a particular arbitrary point of time, making compensation payable upon demonstration that the worker was employed by an employer in an employment to the nature of which the injury was due and fixing a particular employer with liability, though leaving that employer a right to recover contribution from another or other employers in appropriate circumstances. If cl 2 of Pt 6 does not operate in accordance with this regime the daunting forensic task previously abandoned must be undertaken at least to the point of determining when the injury happened, which may not be possible at all due to the usually gradual onset of industrial deafness.”
Further support for the proposition that liability vests at the time of injury is found in TNT Aust Pty Ltd v Horne (1995) 36 NSWLR 630 (Horne). Kirby P, with whom Priestley JA agreed generally, said at [637]:
"The workers' compensation legislation of this State was substantially modelled, both in the 1926 Act and in its predecessors, upon the United Kingdom Act which was the subject of the House of Lord's decision in Simpson. In 1930, a question arose as to when a right under the Workers’ Compensation Act 1926 accrued to a worker. The answer to the question was important because of an amendment to the Act governing entitlements to compensation and damages. The Full Court of the Supreme Court of this State held, in Stevens v Railway Commissioners for NSW(1930) 31 SR (NSW) 138; 48 WN (NSW) 69, that the worker's right ‘accrued’ immediately upon the happening of the injury.”
Kirby P added at 642:
“Some claims, such as the total loss of an eye (or one might say cases similar to the present) involve no necessity of litigation at all. The provision of a court and of an award constitute machinery for the quantification and enforcement of disputed claims. But the ‘right’ rests upon the entitlements expressed in the Workers Compensation Act. For a very long time it has been held that such right accrues to the worker upon the happening of the injury.”
Speirs v Industrial Relations Commission of New South Wales [2011] NSWCA 206 concerned an application to the Supreme Court for prerogative writ relief. One of the issues before the Court of Appeal concerned whether the Industrial Relations Commission of New South Wales had jurisdiction to determine whether an applicant was entitled to receive compensation for injury as part of its power to make a reinstatement order. Giles JA (Allsop P and Hodgson JA agreeing) at [66]–[85] noted that the definition of injury in s 4 and the provisions of s 9 “set the scene” for the payment of compensation. His Honour noted at [68] that “[a]lthough the word ‘entitled’ is not there, a worker who receives an injury is entitled to compensation payable by the worker's employer”. His Honour then referred to various sections of the 1987 and 1998 Acts that regulate when compensation is payable in respect of an injury and those provisions of the Act which restrict the payment of compensation. His Honour concluded at [76]:
“The language of compensation payable, an employer's liability to pay compensation and a worker's entitlement to compensation is used elsewhere in the WC Act, for example in Pt 5 dealing with common law remedies. Although without entire uniformity in the language, an employer's liability to pay compensation and a worker's entitlement to receive compensation each express compensation being payable. There is an entitlement to receive compensation by reason of the injury; the entitlement does not arise only when a tribunal or court determines that compensation should be paid.”
Thereafter, his Honour set out various passages in Horne and Stevens, and concluded at [82]:
“The present question is different from the question in these cases, but they provide powerful confirmation of entitlement to receive compensation by reason of the injury, under the 1926 WC Act and under the WC Act alike.”
For these reasons, I reject the submission that there was a vested right as at 30 June 2008. The right to compensation did not vest until the injury was deemed to have occurred, that is, when notice of the injury was given on 24 March 2011.

CONCLUSION

For the reasons expressed above, I am not persuaded that there is any reason to depart from applying the clear language of s 17(1)(a)(i) of the 1987 Act to identify the deemed date of injury in circumstances where a worker remained in employment to the nature of which the injury was due at the time he gave notice of injury. In the circumstances of this case, and I suspect many others, this interpretation is likely to result in the unfortunate anomaly that the worker may be denied compensation for that proportion of the loss sustained before the transfer of the insurance arrangements to the Commonwealth scheme. That is a matter which, in my view, requires urgent legislative intervention.

ANSWER TO THE QUESTION OF LAW

The answer to the question of law is:
By operation of s 17(1)(a)(i) of the Workers Compensation Act 1987, the applicant’s binaural hearing loss is deemed to have happened on 24 March 2011, when the claim for compensation was made.

COSTS

I make no order as to costs, but I grant the parties liberty to apply within 14 days from the date the decision is published.

Judge Keating

President
30 March 2012

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

ASSOCIATE