NSW Nurses and Midwives' Association v Anglican Care

[2014] FCCA 2580

FEDERAL CIRCUIT COURT OF AUSTRALIA

NSW NURSES AND MIDWIVES’ ASSOCIATION v ANGLICAN CARE [2014] FCCA 2580

Catchwords:
INDUSTRIAL LAW – Whether an employee in receipt of workers’ compensation payments is entitled to accrue annual leave during the compensation period – whether the Workers Compensation Act 1987 (NSW) is a compensation law for the purposes of s.130(2) of the Fair Work Act 2009 (Cth) – whether the accrual of leave is a “benefit” for the purposes of s.49 of the Workers Compensation Act 1987 (NSW) – whether s.49 of the Workers Compensation Act 1987 (NSW) permits an employee to accrue annual leave whilst in receipt of workers’ compensation payments – whether s.130(2) of the Fair Work Act 2009 (Cth) is enlivened by s.49 of the Workers Compensation Act 1987 (NSW).

Legislation:
Workers Compensation Act 1987 (NSW) s.49
Workers Compensation Act 1926 (NSW) s.7
Fair Work Act 2009 (Cth) ss.44, 90, 130, 545, 547
Workers Compensation and Rehabilitation Act 2003 (QLD) s.119A
Interpretation Act 1987 (NSW) s.33

Cases cited:
Thompson v Armstrong and Royce Pty Ltd (1950) 81 CLR 585
Bull v Attorney General (NSW) (1913) 17 CLR 370
IW v The City of Perth (1997) 191 CLR 1
Waugh v Kippen (1986) 160 CLR 156
Amaca Pty Ltd v Cremer (2006) 66 NSWLR 400
Adco Constructions Pty Ltd v Goudappel [2014] HCA 18
Building Workers Industrial Union v Master Builders’ Association (NSW) (1987) 20 IR 226
Construction, Forestry, Mining and Energy Union v Cooks Construction Pty Ltd (C2005/4157)

Applicant: NSW NURSES AND MIDWIVES’ ASSOCIATION

Respondent: ANGLICAN CARE (ABN 94 273 103 460)

File Number: SYG 2067 of 2013

Judgment of: Judge Emmett

Hearing date: 22 October 2014

Date of Last Submission: 22 October 2014

Delivered at: Sydney

Delivered on: 11 November 2014

REPRESENTATION

Counsel for the Applicant: Mr Mark Gibian

Solicitors for the Applicant: New South Wales Nurses and Midwives Association

Counsel for the Respondents: Mr Gerard Boyce

Solicitors for the Respondents: Karen Ansen, Lawyer

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2067 of 2013

NSW NURSES AND MIDWIVES’ ASSOCIATION

Applicant

And

ANGLICAN CARE (ABN 94 273 103 460)

Respondent

REASONS FOR JUDGMENT

1. The issue in this case is whether or not an employee receiving workers’ compensation payments is, on a proper construction of the relevant legislation, entitled at the same time to accrue any leave or absence (whether paid or unpaid) during the period of receipt by the employee of compensation payments.

2. In a document titled “Amended Statement of Agreed Facts and Issues”, filed by the applicant on 4 March 2014,  the parties agreed, and I find, as follows:

   “1. The applicant:

   (a) is a registered organisation pursuant to the Fair Work (Registered Organisations) Act 2009 (Cth);

   (b) is entitled to represent the industrial interests of persons employed in or in connection with the profession of nursing or midwifery, including as Assistants in Nursing.

   2. The respondent:

   (a) is an incorporated charitable entity and able to sue and be sued in its corporate name;

   (b) provides aged care services in the Hunter and Central Coast regions; and

   (c) is a “national system employer” for the purposes of the Fair Work Act 2009 (Cth).

   3. In the period from 18 September 2009 to 28 November 2011, the applicant and the respondent were both parties to and covered by an enterprise agreement made pursuant to the Fair Work Act 2009 (Cth) known as the Anglican Care NSWNA and HSU Enterprise Agreement 2009.

   4. In the period from 27 March 2006 to 31 December 2009, employees of the respondent were entitled to accrue and take annual leave in accordance with Division 4 Part 7 of the Workplace Relations Act 1996 (Cth).

   5. In the period from 1 January 2010 to the present, employees of the respondent were and continue to be entitled to accrue and take annual leave in accordance with Division 6 of Part 2-2 of Chapter 2 of the Fair Work Act 2009 (Cth).

   6. Ms Lynnette Gai Copas (“Ms Copas”) commenced employment for the respondent as an Assistant in Nursing on 26 February 2007 and was, at all material times, a member of the applicant.

   7. Ms Copas suffered a workplace injury on 17 December 2009 in the course of her employment and was, from that date unable to perform work for the respondent due to her injury.

   8. In the period from 17 December 2009 to 23 May 2011, Ms Copas continued to be employed by the respondent, but was absent from work and receiving workers compensation payments under the Workers Compensation Act 1987 (NSW).

   9. Ms Copas ceased employment with the respondent on 23 May 2011.

   10. If Ms Copas had any period of untaken annual leave upon termination of her employment, she was entitled to be paid the amount that would have been payable to her had the leave been taken pursuant to s 90(2) of the Fair Work Act 2009 (Cth).

   11. Upon termination of employment, Ms Copas was paid an amount of $1,879.65 with respect to accrued and untaken annual leave which covered her entitlement to accrue leave under the Workplace Relations Act 1996 (Cth) up to 31 December 2009.

   12. If Ms Copas was entitled to accrue annual leave under the Fair Work Act 2009 (Cth) during the period from 1 January 2010 to 23 May 2011, the respondent is liable to pay Ms Copas the sum of $2,993.26 in addition to the amount paid on termination.”

3. As a consequence of the Agreed Facts, if the applicant is ultimately successful in this proceeding, the amount of accrued annual leave that the respondent is liable to pay upon termination is agreed.

4. Pursuant to s.49 of the Workers Compensation Act 1987 (NSW) (“the Workers Compensation Act”), compensation is payable to a worker in respect of any period of incapacity, even though the worker has received or is entitled to receive in respect of that period any payment, allowance or benefit for holidays, annual holidays or long service leave under any Act (Commonwealth or State), award or industrial agreement under any such Act or contract of employment. Section 49 is in the following terms:

   “(1) Compensation is payable under this Division to a worker in respect of any period of incapacity for work even though the worker has received or is entitled to receive in respect of the period any payment, allowance or benefit for holidays, annual holidays or long service leave under any Act (Commonwealth or State), award or industrial agreement under any such Act or contract of employment.

   (2) The amount of compensation so payable is the amount which would have been payable to the worker had the worker not received or been entitled to receive in respect of the period any such payment, allowance or benefit.”

5. It is common ground that the precursor to s.49 of the Workers Compensation Act was s.7(2B) of the Workers Compensation Act 1926 (Cth).  Section 7(2B) was inserted in 1953 following a decision of the High Court in Thompson v Armstrong and Royce Pty Ltd (1950) 81 CLR 585, which had the effect that a worker could not receive annual leave or long service leave whilst receiving compensation.

6. Section 7(2B) of the Workers Compensation Act 1926 (NSW) was expressed in the Second Reading Speech to have the effect that a worker who is injured is entitled to accrue benefits whilst receiving compensation that would otherwise have accrued to the worker had he not been on compensation. Relevantly, the Second Reading Speech stated as follows:

   “A recent decision given by the High Court in the case of Thompson v Armstrong and Royce Pty Ltd was to the effect that a worker who is injured is not entitled under the existing Act to payment both for annual holidays which may have accrued to him before the date of his injury and workers’ compensation benefits which accrue because of that injury. Annual leave and long service leave are in the nature of accrued rights. The worker has a vested right to payment for such leave and if his employment were terminated he would be entitled to claim from his employer the value of such leave. It did not seem fair to me that an employee who is receiving workers compensation benefits should be compelled to forgo part of these benefits and receive in lieu payment for his holidays if his employer required him to take his holidays during the period for which he otherwise would be entitled to compensation. This Bill will provide that compensation will be payable while a worker is on annual leave or long service leave in addition to wages for such leave.”

7. On 1 January 2010, provisions of the Fair Work Act 2009 (Cth) (“the Fair Work Act”) setting out the National Employment Standards commenced operation making provision for various minimum entitlements for employees, including for the accrual of certain leave benefits. Pursuant to s.90 of the Fair Work Act, an employer must pay to the employee upon termination the amount that would have been payable to the employee had the employee taken that period of leave in relation to annual leave. The failure to make such a payment is a contravention of s.44(1) of the Fair Work Act, which is a civil remedy provision.

8. However, s.130(1) of the Fair Work Act purports to restrict the taking or accruing of leave of absence while receiving workers’ compensation. Section 130 is in the following terms:

   “(1)  An employee is not entitled to take or accrue any leave or absence (whether paid or unpaid) under this Part during a period (a compensation period ) when the employee is absent from work because of a personal illness, or a personal injury, for which the employee is receiving compensation payable under a law (a compensation law ) of the Commonwealth, a State or a Territory that is about workers' compensation.

   (2)  Subsection (1) does not prevent an employee from taking or accruing leave during a compensation period if the taking or accruing of the leave is permitted by a compensation law.

   (3) Subsection (1) does not prevent an employee from taking unpaid parental leave during a compensation period.”

9. Section 130(2) of the Fair Work Act provides an exception to s.130(1) of the Fair Work Act if “the taking or accruing of the leave is permitted by a compensation law.” (emphasis added)

10. It is common ground that the Workers Compensation Act is a “compensation law” for the purposes of s.130(2) of the Fair Work Act.

11. The applicant contends that s.49 of the Workers Compensation Act is a law that permits the taking or accruing of leave during a compensation period for the purposes of s.130(2) of the Fair Work Act. The applicant submits, and I accept, that the “compensation period” for the purposes of s.130(1) of the Fair Work Act is defined by the fact of receipt of workers’ compensation payments. The applicant submits that s.49 of the Workers Compensation Act permits an employee to receive compensation payments even though the worker is entitled to receive other benefits, including accrual of annual holidays. The applicant submits that s.49 of the Workers Compensation Act allows the payment of compensation and receipt of a benefit with respect to annual leave to co-exist, because a “compensation period” is defined by reference to the receipt of compensation periods. The applicant submits that s.49 must be read as “permitting” the taking or accrual of annual leave during a “compensation period.”

12. The applicant submits that a contrary construction of s.49 of the Workers Compensation Act would deny s.49 any effect. The applicant submits that s.49 would never have any work to do because it would not be possible for an employee to receive compensation payments at the same time as an employee received or is entitled to receive other forms of leave, including annual leave. The applicant submits that s.130(2) of the Fair Work Act has the effect of providing an exception to such an employee enabling that employee to be able to take accrued leave during the period that the employee is receiving workers’ compensation if permitted to do so by a compensation law, such as s.49 of the Workers Compensation Act.

13. The applicant submits that the relevant provisions of the Fair Work Act and the Workers Compensation Act are properly to be regarded as beneficial legislation and to be construed accordingly. The applicant submitted that the legislation should be interpreted so as to give the fullest relief that a fair reading of its language would allow (see Bull v Attorney General (NSW) (1913) 17 CLR 370 at 384).

14. I accept that a liberal approach to statutory interpretation is appropriate when dealing with legislation aimed at protecting the safety of workers and providing for compensation to injured workers (see Waugh v Kippen (1986) 160 CLR 156 at 164-165, Amaca Pty Ltd v Cremer (2006) 66 NSWLR 400 at 411). It is well established that beneficial and remedial legislation should be given a “liberal construction” (see IW v The City of Perth (1997) 191 CLR 1 at 11).

15. However, in approaching a proper construction of the relevant legislation, I accept the respondent’s submission that, whilst it might be accepted that the remedial character of the Workers Compensation Act reflects a beneficial purpose requiring a beneficial construction in favour of an injured worker, it does not mean that every provision of the Workers Compensation Act has a beneficial purpose or is to be construed beneficially. Rather, “the purpose of the provision must be identified” (see Adco Constructions Pty Ltd v Goudappel [2014] HCA 18 at [29]).

16. The respondent contends that s.49 of the Workers Compensation Act creates no entitlement whatsoever to take leave or holidays or to accrue leave or holidays. The respondent contends that the restriction set out in s.130(1) of the Fair Work Act applies to extinguish the applicant’s claim in this proceeding for annual leave to have accrued while the worker was absent from work and receiving workers’ compensation benefits and that the exception in s.130(2) of the Fair Work Act is not enlivened.

17. The respondent submitted that for s.130(2) of the Fair Work Act to have any application, the relevant compensation law must itself permit the taking or accruing of annual leave or holidays and that s.49 of the Workers Compensation Act does not do so.

18. The Workers Compensation Act establishes a comprehensive scheme for the payment of compensation to workers who are injured in the course of their employment. Part 3, which includes s.49, provides for the payment of compensation benefits by way of weekly benefits, medical and related expenses, lump sum payment for permanent impairment and damage to property. The Workers Compensation Act sets out the way in which compensation entitlements must be assessed and paid, including the calculation and method of such payments and benefits.

19. The respondent submits that the Workers Compensation Act does not provide for the taking or accruing of annual leave. The respondent submits that s.49(1) confirms that compensation is payable and that s.49(2) identifies the amount of such compensation payable. The respondent submits that s.49 says nothing about the taking or accruing of leave or holidays during a period of absence on workers’ compensation and does not “permit” the taking or accruing of leave or holidays during the period of absence on workers’ compensation. The respondent submits that the focus of s.49 is upon the payment of compensation during the compensation period.

20. The respondent referred to other legislation in other States where an entitlement to compensation expressly does not restrict the taking or accrual of leave. For example, s.119A of the Workers Compensation and Rehabilitation Act 2003 (QLD) states as follows:

    “(1) This section applies to a worker who is entitled to compensation, including compensation payable as weekly payments.

    (2) The worker is entitled to take or accrue annual leave, sick leave and long service leave under an Industrial Act or industrial instrument during the period to which the compensation relates.

    Note— In relation to entitlements under the Fair Work Act 2009 (Cwlth), this section removes the restriction under section 130(1) of that Act.”

21. The notation to s.119A clearly states that s.119A is intended to remove the restriction under s.130(1) of the Fair Work Act. The respondent has identified the following entitlements as affected by s.130 under the National Employment Standards as stated in Part 2-2 of the Fair Work Act:

    a)annual leave;

    b)paid personal/carer’s leave;

    c)unpaid carer’s leave;

    d)paid compassionate leave;

    e)unpaid compassionate leave;

    f)public holidays;

    g)award derived long service leave terms (derived from pre-reform federal awards);

    h)unpaid community service leave;

    i)jury service make-up pay.

22. The narrow issue for consideration by the Court is whether or not s.49 of the Workers Compensation Act permits the taking or accruing of leave during the compensation period.

23. In considering whether s.49 of the Workers Compensation Act permits “the accrual of leave”, it is relevant to have regard to the purposes or objects of Acts and Statutory Rules. Section 33 of the Interpretation Act 1987 (NSW) states as follows:

    “In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.”

24. The applicant submits that s.130(2) of the Fair Work Act does not require that the entitlement to take or accrue leave arise from, or have its source in, the compensation law. The applicant submits that it is only necessary that the compensation law “permit” the taking or accrual of leave at the same time as the person is receiving workers compensation payments. The applicant submits that s.130(2) of the Fair Work Act has the effect that an employee is not prevented from taking or accruing leave during the compensation period if the taking or accrual of the leave during the period “is permitted by a compensation law”.

25. Section 130 of the Fair Work Act applies to leave taken or accrued “under this Part”, being the National Employment Standards. The applicant submits that s.130(2) of the Fair Work Act can only apply to leave entitlements conferred by the Fair Work Act itself and not where leave entitlements have another source, including workers’ compensation legislation.

26. The applicant submits that s.130(2) of the Fair Work Act applies where a compensation law allows an employee to receive compensation payments at the same time as taking or accruing leave to which the employee is otherwise entitled under the Fair Work Act.

27. The applicant submits that the effect of s.49(1) of the Workers Compensation Act is that compensation remains payable in that the employee remains in a compensation period, if the employee receives a “payment” for holidays by taking a period of leave or obtains a “benefit” by accruing annual leave during a period.

28. As stated above, s.49 of the Workers Compensation Act does not prevent the taking or accruing of leave during the compensation period.

29. The applicant concedes that s.130 of the Fair Work Act applies to other types of leave and absences dealt with in the National Employment Standards and identified by the respondent above. However, s.49 of the Workers Compensation Act applies only with respect to payments, allowances or benefits for “holidays, annual holidays or longer service leave” and not other types of leave. It is common ground that the accrual of annual leave is a “benefit”.

30. Section 130(1) of the Fair Work Act has the clear effect that during the compensation period an employee is not entitled to take or accrue any leave unless, pursuant to s.130(2) of the Fair Work Act, the taking or accruing of the leave is permitted by a compensation law.

31. Up until the introduction of s.130, the Fair Work Act did provide for the receipt or entitlement to receive annual holiday payments whilst receiving compensation during the compensation period.

1. As at the date of the introduction of s.130 of the Fair Work Act, s.49 of the Workers Compensation Act had the effect that compensation is payable to the worker for the compensation period, notwithstanding that the worker has received or is entitled to receive annual holidays.

2. Does that mean that s.49 has the effect of permitting receipt by an employee of those annual leave payments during the compensation period?

3. Whilst I accept the respondent’s submission that in itself the Workers Compensation Act, particularly s.49, does not create a right to receive annual leave payments during a period of receipt of workers’ compensation.

4. In fact, s.49 does more than merely not prevent a worker from receiving those entitlements. It expressly provides the opportunity for the worker to receive both workers’ compensation and accrue annual leave.

5. In Building Workers Industrial Union v Master Builders’ Association (NSW) (1987) 20 IR 226 at 230-231, Evatt J stated that s.7(2B) of the Workers Compensation Act 1926 (NSW) (now s.49) “expressly contemplates the prospect of worker's compensation payments being made in addition to award or statutory rights when the contract of employment subsists during any period of incapacity arising from injury.”

6. In Construction, Forestry, Mining and Energy Union v Cooks Construction Pty Ltd (C2005/4157), Senior Deputy President Drake stated at [21-23] as follows:

   “21. Cases involving a consideration of s.49 of the 1987 Act and its predecessor, s.7(2B), have recognised that the purpose of this provision is to protect and employee’s entitlement to both annual leave and workers’ compensation payments during a period of “incapacity for work” as defined by the Workers Compensation Acts.

   22. In BWIU v Master Builders’ Association (NSW) and Anor, a case which considered whether or not an employee was entitled to annual leave payments in full for public holidays whilst in receipt of workers compensation payments, Evatt J noted:

   “…there should be no reading down of clear and express provisions of an Act by reason of some suggested absurdity or anomaly resulting in what might be called a ‘double payment’ …Again, s s 7(2B) of the NSW Workers Compensation Act expressly contemplates the prospect of workers’ compensation payments being made in addition to award or statutory rights when the contract of employment subsists during any period of incapacity arising from injury.”

   23. The effect of s49 of the 1987 Act is that employees on workers compensation leave are prima facie entitled to the ordinary rights and incidentals arising from their employment, on the basis that their “contract of employment subsists” during that time. This is predicated on the right to annual leave being “clear and express.””

7. The purpose or object of s.130 is clearly to deny to an employee the benefit of accruing leave during the period of receipt of workers compensation unless such accrual is permitted by a compensation law. However, s.49 of the Workers Compensation Act does not prevent a worker from receiving both compensation and accruing annual leave. In that sense, on a beneficial construction, s.49 permits receipt of those payments by the worker. The Fair Work Act provides to the worker the benefit of the accrual of annual leave.

Conclusion

1. In circumstances where s.49 of the Workers Compensation Act does not prevent the worker from receiving both, and, indeed expressly contemplates receipt of both workers compensation and accrued leave, a beneficial construction of s.130(2) of the Fair Work Act would allow for s.130(2) to be enlivened by reason of s.49 of the Workers Compensation Act because s.49 does not prevent it. In that sense, s.49 “allows” or “permits” the receipt of both.

2. Accordingly, the Workers Compensation Act, being a compensation law, “permits” receipt of the benefit of accruing annual leave whilst in receipt of compensation payments for the compensation period.

3. In accordance with the Agreed Facts, in the event that the applicant was successful, the parties agreed that the respondent pay Ms Copas the sum of $2,993.26 in addition to the amount already paid on termination, as reflective of the accrual of annual leave due to Ms Copas under the Fair Work Act during the period from 1 January 2010 to 23 May 2011.

4. Further, at the commencement of the hearing, the applicant conceded that, in the event that the applicant was successful, the applicant would not seek a pecuniary penalty in addition to the declarations sought and orders for the payment of the accrued leave.

5. In the circumstances, the applicant should be entitled to the following relief:

   a)A declaration that the Association’s member, Lynnette Copas, was entitled to accrue annual leave whilst she was absent from work and receiving workers’ compensation payments in the period between 17 December 2009 and 23 May 2011;

   b)A declaration that the respondent contravened s.44(1) of the Fair Work Act 2009 (Cth) by failing to pay the Association’s member, Lynette Copas, an amount with respect to her untaken annual leave accrued in the period between 17 December 2009 and 23 May 2011 when her employment came to an end in accordance with s.90(2) of that Act;

   c)An order pursuant to s.545 of the Fair Work Act 2009 (Cth) that the respondent pay Lynnette Copas the sum of $2,993.26 when her employment came to an end on 23 May 2011 with respect to the annual leave she was entitled to accrue in the period between 17 December 2009 and 23 May 2011;

   d)An order pursuant to s.547 of the Fair Work Act 2009 (Cth) that interest be paid upon the sum referred to in Order (c) up to the date of judgment.

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Emmett

Associate: 

Date:             11 November 2014