Silcar Pty Ltd v Victorian WorkCover Authority - [2012] VSC 357

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IN THE SUPREME COURT OF VICTORIA		Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
MAJOR TORTS LIST

No. SCI 4627 of 2011

SILCAR PTY LTD	Plaintiff
v
VICTORIAN WORKCOVER AUTHORITY	Defendant

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JUDGE:	Pagone J
WHERE HELD:	Melbourne
DATE OF HEARING:	2, 3 August 2012
DATE OF JUDGMENT:	24 August 2012
CASE MAY BE CITED AS:	Silcar Pty Ltd v Victorian WorkCover Authority
MEDIUM NEUTRAL CITATION:	[2012] VSC 357

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EMPLOYMENT – Identification of employer – Whether there was transfer of employees from pre-restructure entity to post-restructure entity – Existence of a formal contract of employment between employees and pre-restructure entity – Victorian WorkCover Authority – Entitlement to indemnity – Accident Compensation Act 1995 (Vic) s 138 - Employment not transferred from pre-restructure entity to post-restructure entity.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G A Lewis S.C. with Mr A T Schlicht	Wotton & Kearney
For the Defendant	Mr J J Gleeson S.C. with Ms G F Gray	Corrs Chambers Westgarth

HIS HONOUR:

The question for determination in this proceeding is whether the plaintiff was the employer of five individual employees at the time when each suffered death or injury. There is no dispute about the individuals being employees but the defendant contends that they were not employees of the plaintiff at the time of the relevant events. The orders sought by the plaintiff is that it is entitled to the indemnity under a WorkCover policy in respect of the five incidents and that the defendant cannot maintain proceedings against the plaintiff as a third party under s 138 of the Accident Compensation Act 1995 (Vic).

The question arises in the context of a WorkCover insurance policy and the provisions of the Accident Compensation Act 1995 (Vic).Clause 4 of the plaintiff’s WorkCover insurance policy for the 2006-2007 policy period gave it an indemnity for all liability in respect of all injuries arising out of or in the course of or due to the nature of “all employment with [the plaintiff]”. Section 138 of the Act, however, entitles the defendant to be indemnified by a “third party” when a compensable injury or death has occurred in circumstances which include those creating a liability in the third party in respect of the death or injury. Five compensable incidents occurred during the relevant insurance period which the plaintiff contends are covered by the WorkCover insurance policy as having occurred to persons employed with the plaintiff, and, therefore, which the plaintiff also contends does not permit a claim by the defendant to be brought under s 138 against the plaintiff as a third party.

There is no dispute between the parties that the five individuals were not employed with the plaintiff before 1 July 2005. Until then the individuals had been employed with Siemens Ltd and Thiess Pty Ltd as joint venturers of a joint venture business (“the Silcar joint venture”) providing maintenance services at two sites in the Latrobe Valley, namely the Yallourn Open Cut Mine and the Loy Yang Power…

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: [2012] VSC 357
Decision Date: 24 August 2012

CaseChat Overview and Summary

Silcar Pty Ltd was involved in a legal dispute with the Victorian WorkCover Authority concerning the identification of the employer and the transfer of employees from the pre-restructure entity to the post-restructure entity. The matter was heard and determined by the Supreme Court of Victoria. The central issue in the case was whether there was a transfer of employees from the pre-restructure entity to the post-restructure entity and, if so, whether there was a formal contract of employment between the employees and the pre-restructure entity. This matter had significant implications for the entitlement to indemnity under the Accident Compensation Act 1995 (Vic) s 138.

The court was required to decide whether the employees were transferred from the pre-restructure entity to the post-restructure entity, and if not, whether they were employed by the pre-restructure entity. The court considered the existence of a formal contract of employment between the employees and the pre-restructure entity as a crucial factor in determining the employer's identity. The Victorian WorkCover Authority argued that the employees were transferred to the post-restructure entity, while Silcar Pty Ltd contended that no such transfer occurred, and the employees remained employed by the pre-restructure entity.

In its judgment, the court found that there was no transfer of employees from the pre-restructure entity to the post-restructure entity. The court reasoned that the employees remained employed by the pre-restructure entity, and there was no formal contract of employment between the employees and the post-restructure entity. Consequently, the court held that Silcar Pty Ltd was not entitled to indemnity under the Accident Compensation Act 1995 (Vic) s 138. The court's decision hinged on the absence of a transfer of employees and the lack of a formal contract of employment between the employees and the post-restructure entity.

The court ordered that Silcar Pty Ltd was not entitled to indemnity under the Accident Compensation Act 1995 (Vic) s 138. The court also determined that the employees remained employed by the pre-restructure entity, and there was no transfer of employees to the post-restructure entity. This decision has implications for future cases involving the identification of employers and the transfer of employees in similar circumstances.

Orders