Michael Wright v WA Country Health Service

[2021] FWC 1445

[2021] FWC 1445

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.365—General protections

Michael Wright
v
WA Country Health Service
(C2020/8821)

COMMISSIONER WILLIAMS PERTH, 6 APRIL 2021

Application to deal with contraventions involving dismissal - jurisdictional - whether Respondent is a constitutional corporation.

[1] Mr Michael Wright (Mr Wright or the Applicant) has made an application under s.365 of the Fair Work Act 2009 (Cth) (the Act) alleging that he was forced to resign by WA Country Health Service (the Respondent) on 4 December 2020 in contravention of the general protections provisions of the Act.

[2] In its Form F8A – Response to general protections application, the Respondent contended that it was not a constitutional trading corporation and that the Fair Work Commission (the Commission) therefore lacked jurisdiction to deal with the application. The Respondent also contended that the Applicant was not dismissed in contravention of the Act.

[3] On 7 January 2021 the Commission issued a Notice of Listing with Directions regarding a hearing to determine whether the Applicant was dismissed and whether the Respondent is a constitutional corporation.

[4] After having reviewed the materials filed in compliance with the Commission’s Directions, I advised the parties it was not necessary to hold a hearing to determine the Respondent’s jurisdictional objection that it is not a constitutional corporation and consequently, the hearing would be cancelled, and I would first determine this objection based on the materials filed by the parties. The parties were also advised that dependant on the outcome of that decision, if necessary, a hearing would be listed to deal with whether or not Mr Wright was dismissed.

[5] This decision only deals with the Respondent’s objection that it is not a constitutional corporation.

Background

[6] Mr Wright commenced his employment with the Respondent on 17 August 2020 as the Team Leader, Adult Mental Health Team at the Geraldton campus.

[7] On 25 November 2020, Mr Wright resigned by email with the resignation taking effect on 4 December 2020.

[8] The Applicant contends he was forced to resign after having been suspended whilst the Respondent conducted an investigation into alleged complaints made against him and that this alleged dismissal was in contravention of s.340, s.343 and s.351(1) of the Act.

The Legislation

[9] The question before the Commission is whether or not the Respondent is a national system employer and therefore falls within the jurisdiction of the Act, including the Act’s general protections provisions.

[10] Sections 338 and 339 of the Act set out the application of Part 3-1 – General protections of the Act in the following terms:

“338 Action to which this Part applies

(1) This Part applies to the following action:

(a) action taken by a constitutionally-covered entity;

(b) action that affects, is capable of affecting or is taken with intent to affect the activities, functions, relationships or business of a constitutionally-covered entity;

(c) action that consists of advising, encouraging or inciting, or action taken with intent to coerce, a constitutionally-covered entity:

(i) to take, or not take, particular action in relation to another person; or

(ii) to threaten to take, or not take, particular action in relation to another person;

(d) action taken in a Territory or a Commonwealth place;

(e) action taken by:

(i) a trade and commerce employer; or

(ii) a Territory employer;

that affects, is capable of affecting or is taken with intent to affect an employee of the employer;

(f) action taken by an employee of:

(i) a trade and commerce employer; or

(ii) a Territory employer;

that affects, is capable of affecting or is taken with intent to affect the employee’s employer.

(2) Each of the following is a constitutionally-covered entity:

(a) a constitutional corporation;

(b) the Commonwealth;

(c) a Commonwealth authority;

(d) a body corporate incorporated in a Territory;

(e) an organisation.

(3) A trade and commerce employer is a national system employer within the meaning of paragraph 14(d).

(4) A Territory employer is a national system employer within the meaning of paragraph 14(f).

339 Additional effect of this Part

In addition to the effect provided by section 338, this Part also has the effect it would have if any one or more of the following applied:

(a) a reference to an employer in one or more provisions of this Part were a reference to a national system employer;

(b) a reference to an employee in one or more provisions of this Part were a reference to a national system employee;

(c) a reference to an industrial association in one or more provisions of this Part were a reference to an organisation, or another association of employees or employers, a purpose of which is the protection and promotion of the interests of national system employees or national system employers in matters concerning employment;

(d) a reference to an officer of an industrial association in one or more provisions of this Part were a reference to an officer of an organisation;

(e) a reference to a person, another person or a third person in one or more provisions of this Part were a reference to a constitutionally-covered entity;

(f) a reference to a workplace law in one or more provisions of this Part were a reference to a workplace law of the Commonwealth;

(g) a reference to a workplace instrument in one or more provisions of this Part were a reference to a workplace instrument made under, or recognised by, a law of the Commonwealth;

(h) a reference to an industrial body in one or more provisions of this Part were a reference to an industrial body performing functions or exercising powers under a law of the Commonwealth.”

[11] Section 14 of the Act defines a national system employer as follows:

“14 Meaning of national system employer

(1) A national system employer is:

(a) a constitutional corporation, so far as it employs, or usually employs, an individual; or

(b) the Commonwealth, so far as it employs, or usually employs, an individual; or

(c) a Commonwealth authority, so far as it employs, or usually employs, an individual; or

(d) a person so far as the person, in connection with constitutional trade or commerce, employs, or usually employs, an individual as:

(i) a flight crew officer; or

(ii) a maritime employee; or

(iii) a waterside worker; or

(e) a body corporate incorporated in a Territory, so far as the body employs, or usually employs, an individual; or

(f) a person who carries on an activity (whether of a commercial, governmental or other nature) in a Territory in Australia, so far as the person employs, or usually employs, an individual in connection with the activity carried on in the Territory.

Note 1: In this context, Australia includes the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands (see paragraph 17(a) of the Acts Interpretation Act 1901).

Note 2: Sections 30D and 30N extend the meaning of national system employer in relation to a referring State.

(2) Despite subsection (1) and sections 30D and 30N, a particular employer is not a national system employer if:

(a) that employer:

(i) is a body established for a public purpose by or under a law of a State or Territory, by the Governor of a State, by the Administrator of a Territory or by a Minister of a State or Territory; or

(ii) is a body established for a local government purpose by or under a law of a State or Territory; or

(iii) is a wholly‑owned subsidiary (within the meaning of the Corporations Act 2001) of, or is wholly controlled by, an employer to which subparagraph (ii) applies; and

(b) that employer is specifically declared, by or under a law of the State or Territory, not to be a national system employer for the purposes of this Act; and

(c) an endorsement by the Minister under paragraph (4)(a) is in force in relation to the employer.

(3) Paragraph (2)(b) does not apply to an employer that is covered by a declaration by or under such a law only because it is included in a specified class or kind of employer. …”

[12] Section 12 of the Act defines a constitutional corporation as “a corporation to which paragraph 51(xx) of the Constitution applies.”

[13] Paragraph 51(xx) of the Constitution applies to “foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.”

The Respondent’s submissions

[14] The Respondent submits it is a board governed health service provider established pursuant to s.32(1) of the Health Services Act 2016 (WA) (the HS Act). Section 33 of the HS Act prescribes the Respondent is an agent of the State and has the status, immunities and privileges of the State.

[15] It is submitted the Applicant’s terms and conditions of employment were governed by the WA Health System - HSUWA - PACTS - Industrial Agreement 2018 1(the WA Health System Agreement), an industrial instrument registered pursuant to section 41 of Division 2B of the Industrial Relations Act 1979 (WA).

[16] The Respondent’s main function is to provide health services for regional Western Australians, teaching, training and research to support the provision of health services as agreed with the Department CEO, and any other services agreed with the Department CEO.

[17] The Respondent submits s.14(2)(a)(i) of the Act expressly excludes a body established for a public purpose by, or under a law of a State or Territory, by the Governor of the State, by the Administrator of a State or Territory, or by a Minister of a State or Territory, from the definition of national system employer.

[18] The Respondent further submits it delivers health care services free of charge except where a person is admitted as a private patient. It is submitted the Respondent does not engage in trading and any revenue generated by the Respondent is incidental to its primary purpose, which is to provide heath care services to citizens in regional Western Australia.

[19] The Respondent relies on the witness statement of Mr John Arkell (Mr Arkell), Director Financial Services and Chief Financial Officer for the Respondent which attached the 2019/2020 Annual Report and Financial Statements.

[20] Mr Arkell’s evidence is that the Respondents’ total income (Own Sourced Revenue and Income from State Government) in the 2019/2020 financial year was $1,918,073,000, including:

•  Amounts provided under the Commonwealth Government National Health Reform Agreement (NHRA): $461.728m;

•  Amounts provided via the Western Australian State Government Services Appropriation: $988.517m;

•  Direct Grants (Commonwealth, State and/or other sources); $198.184m (not including NHRA grants above); and

•  Own Sourced Revenue: $90.561m (not including NHRA and Other Grants above).

[21] The Respondent submits Mr Arkell’s evidence demonstrates it is not a trading or financial corporation for the purposes of paragraph 51 (xx) of the Constitution and therefore was not a constitutional corporation for the purposes of the Act.

[22] For these reasons the Respondent submits the application should be dismissed.

The Applicant’s submissions

[23] The Applicant was directed to file materials in response to the submissions and evidence filed by the Respondent in support of its jurisdictional objection however the only materials filed by the Applicant was an Amended Statement of Claim with attachments addressing the circumstances surrounding his alleged dismissal.

[24] The Applicant agrees that the Respondent is a State Government Entity registered in Western Australia and that the terms and conditions of his employment was governed by the WA Health System Agreement. 2

Consideration

[25] There is nothing before me in contrary to the Respondent’s arguments in this matter.

[26] I am satisfied, in accordance with s.14(2)(a)(i) of the Act, the Respondent excluded from the definition of national system employer because it is a body established for a public purpose by, or under a law of a State or Territory, by the Governor of the State, by the Administrator of a State or Territory, or by a Minister of a State or Territory.

[27] Relevantly, the State of Western Australia has not referred its industrial powers to the Commonwealth.

[28] For completeness, I will now turn to consider whether the Respondent is a trading or financial corporation for the purposes of paragraph 51 (xx) of the Constitution.

[29] In Aboriginal Legal Service of WA Inc v Lawrence [No 2] 3 (ALS) the Western Australian Court of Appeal examined a number of High Court decisions which dealt with the test to be applied in determining whether or not a corporation should be categorised as a trading corporation for the purposes of paragraph 51(xx) of the Constitution. In ALS the Court summarised the principles that might be drawn from those and other cases as follows:

“68. The more relevant (for present purposes) principles that might be drawn from these and other cases are as follows:

(1) A corporation may be a trading corporation even though trading is not its predominant activity: Adamson at 239; State Superannuation Board at 303-304; Tasmanian Dam case at 156, 240, 293; Quickenden at [49]-[51], [101]; Hardeman at [18].

(2) However, trading must be a substantial and not merely a peripheral activity: Adamson at 208, 234, 239; State Superannuation Board at 303-304; Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10 at 20; Fencott at 622; Tasmanian Dam case at 156, 240, 293; Mid Density at 584; Hardeman at [22].

(3) In this context, “trading” is not given a narrow construction. It extends beyond buying and selling to business activities carried on with a view to earning revenue and includes trade in services: Ku-ring-gai at 139, 159-160; Adamson at 235; Actors and Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 at 184-185, 203; Bevanere Pty Ltd v Lubidineuse (1985) 7 FCR 325 at 330; Quickenden at [101].

(4) The making of a profit is not an essential prerequisite to trade, but it is a usual concomitant: St George County Council at 539, 563, 569; Ku-ring-gai at 140, 167; Adamson at 219; E at 343, 345; Pellow at [28].

(5) The ends which a corporation seeks to serve by trading are irrelevant to its description: St George County Council at 543, 569; Ku-ring-gai at 160; State Superannuation Board at 304-306; E at 343. Consequently, the fact that the trading activities are conducted is the public interest or for a public purpose will not necessarily exclude the categorisation of those activities as “trade”: St George County Council at 543 (Barwick CJ); Tasmanian Dam case at 156 (Mason J).

(6) Whether the trading activities of an incorporated body are sufficient to justify its categorisations as a “trading corporation” is a question of fact and degree: Adamson at 234 (Mason J); State Superannuation Board at 304; Fencott at 589; Quickenden at [52], [101]; Mid Density at 584.

(7) The current activities of the corporation, while an important criterion for determining its characterisation, are not the only criterion. Regard must also be had to the intended purpose of the corporation, although a corporation that carries on trading activities can be found to be a trading corporation even if it was not originally established to trade: State Superannuation Board at 294-295, 304-305; Fencott at 588-589, 602, 611, 622-624; Hughes at 20; Quickenden at [101]; E at 344; Hardeman at [18].

(8) The commercial nature of an activity is an element in deciding whether the activity is in trade or trading: Adamson at 209, 211; Ku-ring-gai at 139, 142, 160, 167; Bevanere at 330; Hughes at 19-20; E at 343; Fowler; Hardeman at [26].”

[30] Adopting the principles set out above, the evidence of the Respondent’s Director Financial Services and Chief Financial Officer is that the Respondent’s income substantially comes from Commonwealth and State funding and the services it delivers is free of charge except where a person is admitted as a private patient.

[31] On the evidence before me, I am satisfied the Respondent does not engage in trading and any revenue generated by the Respondent is incidental therefore it is not a trading corporation and there is nothing to suggest that that the Respondent is otherwise a constitutional corporation.

Conclusion

[32] For all the above reasons, I find the Respondent is not a national system employer. As a result, Mr Wright is not able to make this application and so, the application must be dismissed.

[33] An order [PR727850] to that effect will be issued in conjunction with this decision.

Printed by authority of the Commonwealth Government Printer

<PR727849>

 1   2018 WAIRC 00852.

 2   Applicant’s Amended Statement of Claim, 10 February 2021 at paragraphs 1 and 2.

 3 (2008) 252 ALR 136.