Schlumberger Australia Pty Ltd v Workers' Compensation Regulator - [2023] ICQ 7

INDUSTRIAL COURT OF QUEENSLAND

CITATION:

Schlumberger Australia Pty Ltd v Workers’ Compensation Regulator [2023] ICQ 007

PARTIES:

SCHLUMBERGER AUSTRALIA PTY LTD

(appellant)

v
WORKERS’ COMPENSATION REGULATOR

(respondent)

FILE NO:

C/2022/33

PROCEEDING:

Appeal

DELIVERED ON:

15 May 2023

HEARING DATE:

19 April 2023

MEMBER:

Davis J, President

ORDERS:

1.   Appeal dismissed.

2.   Parties file and exchange written submissions on costs by 29 May 2023.

3.   Each party has leave to file an application for leave to make oral submissions on costs by 5 June 2023.

4.   In the absence of any application for leave to make oral submissions on costs by 12 June 2023, the issue of costs will be determined on any written submissions filed and with no oral hearing.

CATCHWORDS:

WORKERS’ COMPENSATION – INSURANCE AND LEVIES – PREMIUMS AND CONTRIBUTIONS TO INSURANCE FUNDS – where the appellant is an employer – where the appellant is liable for workers’ compensation insurance premiums under the Workers’ Compensation and Rehabilitation Act 2003 – where premiums are calculated upon classification of an employer’s business type – where the appellant’s business was classified as “Other Mining Support Services” – where the appellant contends that its business is “Oil and Gas Extraction” – whether the correct procedure for classification was adopted – whether the appellant’s business was correctly classified

Electrical Safety and Other Legislation Amendment Act 2011, s 66
Electrical Safety and Other Legislation Amendment Bill 2011
Industrial Relations Act 2016, s 407, s 556, s 557, s 558
Uniform Civil Procedure Rules 1999
Workers’ Compensation and Rehabilitation Act 2003, s 5, s 46, s 48, s 54, s 56, s 380, s 381, s 383, s 384, s 540, s 541, s 542, s 546, s 548A, s 549, s 551, s 553, s 554, s 558, s 561, s 567, s 651

CASES:

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27, cited
Aldrich v Ross [2001] 2 Qd R 235, cited
Burton v Workers’ Compensation Regulator [2022] ICQ 017, considered
Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616, cited
Capilano Honey Ltd v Workers’ Compensation Regulator [2018] ICQ 002, followed
Lee v Lee (2019) 266 CLR 129, cited
Nutley v President, Industrial Court (2019) 1 QR 354, cited
Otis Elevator Company v WorkCover Queensland (2001) 166 QGIG 424, followed
R v A2; R v Magennis; R v Vaziri (2019) 269 CLR 507, cited
Schlumberger Australia Pty Ltd v Workers’ Compensation Regulator unreported, Magistrate Merrin, 4 December 2022, related
SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936, cited
Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281, cited
WorkCover Queensland v Shagadelic Pty Ltd (2001) 166 QGIG 422, followed

COUNSEL:

M Trim for the appellant

P B O’Neill for the respondent

SOLICITORS:

Gilchrist Connell for the appellant

Workers’ Compensation Regulator directly briefing Mr O’Neill of Counsel

Schlumberger Australia Pty Ltd, the appellant, appeals the decision of an…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] ICQ 7
Decision Date: 15 May 2023

CaseChat Overview and Summary

In Schlumberger Australia Pty Ltd v Workers' Compensation Regulator, Schlumberger Australia Pty Ltd, an employer, challenged the classification of its business for the purposes of determining workers' compensation insurance premiums. The classification, which was determined by the Workers' Compensation Regulator, assigned Schlumberger's business to the "Other Mining Support Services" category, rather than the "Oil and Gas Extraction" category as Schlumberger contended. The dispute was brought before the Court of Appeal for rehearing on the materials below. The primary legal issue for the court was whether the correct procedure was followed in classifying Schlumberger's business and whether the classification was appropriate given the nature of its operations.

The court conducted a detailed review of the evidence presented, including the testimonies of Schlumberger's East Coast and Papua New Guinea Country Manager, Finance Manager, and a Senior Appeals Officer of the Regulator. The court found that Schlumberger, while providing services and products that enable oil and gas extraction, does not itself engage in the extraction process, nor does it own or operate any oil or gas fields. The court upheld the industrial magistrate's findings that Schlumberger's business predominantly involves supplying services and products to facilitate oil and gas extraction by other entities. The evidence showed that over 70% of Schlumberger's employees and expenditures were related to enabling extraction by other companies. Therefore, the classification of Schlumberger's business as "Other Mining Support Services" was deemed appropriate.

The court dismissed the appeal, affirming the classification and the subsequent determination of premiums. The parties were directed to file written submissions on costs, with an option for oral submissions if an application was made by 5 June 2023. If no such application was received by 12 June 2023, the issue of costs would be decided based on the written submissions alone, without an oral hearing. This decision highlights the importance of accurately classifying businesses for workers' compensation purposes to ensure appropriate premium calculations.

Orders

Orders of the court

1. Appeal dismissed.

2. Parties file and exchange written submissions on costs by 29 May 2023.

3. Each party has leave to file an application for leave to make oral submissions on costs by 5 June 2023.

4. In the absence of any application for leave to make oral submissions on costs by 12 June 2023, the issue of costs will be determined on any written submissions filed and with no oral hearing.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The appeal proceeded on the basis that it was by way of rehearing on the materials below, where I must conduct my own review of the evidence and findings below and where I can draw my own conclusions on the facts recognising any advantage of the industrial magistrate having seen and heard the witnesses.[27][27]See generally Lee v Lee (2019) 266 CLR 129.The hearing and decision below The evidence before the industrial magistrate came from three witnesses:1.Matthew Loth, who was the East Coast and Papua New Guinea Country Manager for the appellant;2.Nargy Sokar, who was the appellant’s Finance Manager;[28]3.Ruth Alison Moroney, who is a Senior Appeals Officer of the respondent.[29][28]Mr Loth and Mr Sokar were witnesses for the appellant.[29]Ms Moroney was a witness for the respondent. Affidavits of each witness were received and Mr Loth was cross-examined. Neither Mr Sokar nor Ms Moroney gave oral evidence. The industrial magistrate identified, as her functions:1.to determine the predominant business activity of the appellant;2.then determine the WIC which corresponds to or most closely describes the predominant business activity of the appellant.[30][30]Schlumberger Australia Pty Ltd v Workers’ Compensation Regulator, unreported, Magistrate Merrin, 4 December 2022 at [13]-[14] quoting Capilano Honey Ltd v Workers Compensation Regulator [2018] ICQ 002. Observing that the appellant did not own or operate any oil or gas extraction sites or businesses[31] (which finding is not controversial), the industrial magistrate made the critical factual findings:[31]Schlumberger Australia Pty Ltd v Workers’ Compensation Regulator, unreported, Magistrate Merrin, 4 December 2022 at [38].“[39] Relevantly the evidence establishes:a)SAPL[32] is an oil and gas services company and its primary role on client projects is to enable the extraction of oil and gas through the supply of specialist engineering services, technologies, equipment, software and data solutions and other assorted services. These were the words used by Mr Loth. The products and services, in all of their forms, provided by SAPL are to enable and facilitate their clients to undertake oil and gas extraction;b)The services and products cover all stages of oil and gas extraction, from exploration to production and commercialization of subterranean assets. Schlumberger - including in Queensland can supply products and services that encompass all aspects of the operation of oil and gas wells relating to extraction. These includes downhole pump services, wells, directional drilling, surface production equipment, reservoir performance enhancement and the provision of products and other services.c)SAPL’s website and adverting in trade publications confirm that the company provides products, including infrastructure and consumable products, as well as the services and technology and project management necessary to enable the extraction of oil and gas by their clients;d)The revenue of the company is derived from if not exclusively, then almost so, from clients that themselves perform the extraction processes;e)More than 70% of SAPL’s employees are involved in the provision, design, installation and oversight of products used by other companies or in the provision of services to clients to enable them to extract oil and gas at sites owned or operated by those entities;f)More than 70% of SAPL’s expenditure on wages is allocated to the employees carrying out these aspects of its business;g)Employees of SAPL do not undertake activities that are directly involved in the extraction of oil and gas;h)SAPL does not own or operate any oil or gas fields or sites.”[32]A reference to the appellant.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Schlumberger Australia Pty Ltd v Workers’ Compensation Regulator [2023] ICQ 007
PARTIES:	SCHLUMBERGER AUSTRALIA PTY LTD (appellant) v WORKERS’ COMPENSATION REGULATOR (respondent)
FILE NO:	C/2022/33
PROCEEDING:	Appeal
DELIVERED ON:	15 May 2023
HEARING DATE:	19 April 2023
MEMBER:	Davis J, President
ORDERS:	1. Appeal dismissed. 2. Parties file and exchange written submissions on costs by 29 May 2023. 3. Each party has leave to file an application for leave to make oral submissions on costs by 5 June 2023. 4. In the absence of any application for leave to make oral submissions on costs by 12 June 2023, the issue of costs will be determined on any written submissions filed and with no oral hearing.
CATCHWORDS:	WORKERS’ COMPENSATION – INSURANCE AND LEVIES – PREMIUMS AND CONTRIBUTIONS TO INSURANCE FUNDS – where the appellant is an employer – where the appellant is liable for workers’ compensation insurance premiums under the Workers’ Compensation and Rehabilitation Act 2003 – where premiums are calculated upon classification of an employer’s business type – where the appellant’s business was classified as “Other Mining Support Services” – where the appellant contends that its business is “Oil and Gas Extraction” – whether the correct procedure for classification was adopted – whether the appellant’s business was correctly classified Electrical Safety and Other Legislation Amendment Act 2011, s 66 Electrical Safety and Other Legislation Amendment Bill 2011 Industrial Relations Act 2016, s 407, s 556, s 557, s 558 Uniform Civil Procedure Rules 1999 Workers’ Compensation and Rehabilitation Act 2003, s 5, s 46, s 48, s 54, s 56, s 380, s 381, s 383, s 384, s 540, s 541, s 542, s 546, s 548A, s 549, s 551, s 553, s 554, s 558, s 561, s 567, s 651
CASES:	Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27, cited Aldrich v Ross [2001] 2 Qd R 235, cited Burton v Workers’ Compensation Regulator [2022] ICQ 017, considered Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616, cited Capilano Honey Ltd v Workers’ Compensation Regulator [2018] ICQ 002, followed Lee v Lee (2019) 266 CLR 129, cited Nutley v President, Industrial Court (2019) 1 QR 354, cited Otis Elevator Company v WorkCover Queensland (2001) 166 QGIG 424, followed R v A2; R v Magennis; R v Vaziri (2019) 269 CLR 507, cited Schlumberger Australia Pty Ltd v Workers’ Compensation Regulator unreported, Magistrate Merrin, 4 December 2022, related SZTAL v Minister for Immigration and Border Protection (2017) 91 ALJR 936, cited Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281, cited WorkCover Queensland v Shagadelic Pty Ltd (2001) 166 QGIG 422, followed
COUNSEL:	M Trim for the appellant P B O’Neill for the respondent
SOLICITORS:	Gilchrist Connell for the appellant Workers’ Compensation Regulator directly briefing Mr O’Neill of Counsel