The WorkCover Corporation (San Remo Macaroni Co Pty Ltd) v Liang Da Ping No. SCGRG 93/1755 Judgment No. 4466 Number of Pages 4 Workers' Compensation Contracts

[1994] SASC 4466

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ(1), BOLLEN(2) AND MULLIGHAN(3) JJ

CWDS
Workers' compensation - Entitlement to a liability for compensation - illegal migrant injured in course of employment - performance of work prohibited by statute - contract of service illegal and void - not worker within meaning of Workers Compensation and Rehabilitation Act. Migration Act (Cth) sections 14 and 83 and Workers Rehabilitation and Compensation Act (SA) sections 3 and 30(1).

Contracts - Illegal and void contracts - Migration Act (Cth) section 83(2) - whether implied prohibition of contract of service. Migration Act (Cth) section 83(2). Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd
(1978) 139 CLR 410 esp per Gibbs CJ at 413-16; Hurst v Vestcorp Ltd (1988) 12 NSWLR 394 and St John Shipping Corporation v Joseph Rank Ltd (1957) 1 QB 267, applied.

HRNG ADELAIDE, 11 February 1994 #DATE 30:3:1994

Counsel for appellant:     Mr D M Quick QC with Mr N J Iles

Solicitors for appellant:    Piper Alderman

Counsel for respondent:     Mr R C White

Solicitors for respondent: Tindall Gash Bentley

ORDER
Appeal allowed.

JUDGE1 KING CJ The question which arises on this appeal is whether the respondent, who was an illegal migrant at the time of sustaining his injury at work, was a worker within the meaning of the Workers Rehabilitation and Compensation Act and therefore entitled to compensation. The appellant rejected his claim. This decision was reversed by a Review Officer. An appeal to the Workers Compensation Appeal Tribunal was dismissed. The corporation has appealed to this Court.

2. The respondent is a citizen of China. He entered Australia on a temporary student visa. He commenced employment with San Remo Macaroni Co Pty Ltd on 12th June 1990. He worked 40 hours per week although his visa permitted him to work only 20 hours per week. The visa expired in July 1990. Thereafter he was an illegal entrant by virtue of s.14(2) of the Migration Act 1958 (Cth). He continued to work for San Remo without the required official permission. On or about 12th May 1992 when performing duties for San Remo he sustained an injury to his right hand.

3. Section 83(2) of the Migration Act is as follows:
    "Where a person who is an illegal entrant performs any work
    in Australia without the permission, in writing, of the
    Secretary, the person commits an offence against this
    subsection."

4. The penalty for an offence against the subsection is prescribed by subsection (5) and is a fine not exceeding $5,000. By s.30(1) of the WorkersRehabilitation and Compensation Act (SA) 1986 "a disability is compensable if it arises from employment". The various entitlements to compensation conferred by the following sections are conferred on a "worker". The definition of employment in s.3, so far as is material, is "work done under a contract of service". "Worker" is defined to mean, so far as is material, "a person by whom work is done under a contract of service". The entitlement to compensation therefore depends upon the existence of a valid contract of service; Kemp v Lewis (1914) 3 KB 543. The question is whether the purported contract of service under which the respondent was working was illegal and void by virtue of s.83(2) of the Migration Act.

5. A contract which is expressly or impliedly prohibited by statute is void except for the rare case in which the statute provides, expressly or impliedly, that the contract will be valid and enforceable notwithstanding the prohibition; Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd
(1978) 139 CLR 410 per Gibbs ACJ at p.413. His Honor went on to say:
    "Where a statute imposes a penalty upon the making or
    performance of a contract, it is a question of construction
    whether the statute intends to prohibit the contract in this
    sense, that is to render it void and unenforceable, or
    whether it intends only that the penalty for which it
    provides shall be inflicted if the contract is made or
    performed. The question whether a statute, on its proper
    construction, intends to vitiate a contract made in breach
    of its provisions, is one which must be determined in
    accordance with the ordinary principles that govern the
    construction of statutes."

6. An important consideration is whether the object of the statute - or one of its objects - is the protection of the public or whether the object is simply to secure the revenue (IBID p.414) "The fundamental question is whether the statute means to prohibit the contract"; St John Shipping Corporation v Joseph Rank Ltd (1957) 1 QB 267 at p.287.

7. A contract for the employment of an illegal entrant is not prohibited expressly. What is prohibited by s.83(2) is the performance of such a contract by the illegal entrant. A contract which does not by reason of its terms come within a statutory prohibition may nevertheless become a prohibited contract in consequence of the manner of its performance. "But whether it is the terms of the contract or the performance of it that is called in question, the test is just the same: is the contract, as made or as performed, a contract that is prohibited by statute?"; St John Shipping Corporation v Joseph Rank Ltd supra at p.284. There being no express prohibition of the contract of service, the question is whether such a prohibition is to be implied.

8. There are many cases in which it has been held that where the very act prohibited by the statute was the act to be performed under the contract, there was an implied prohibition and the contract was illegal and void. A number of such cases are cited in the judgment of Gibbs ACJ in the Yango case at p.416. Further citation is unnecessary but I would add a reference to Hurst v Vestcorp Ltd (1988) 12 NSWLR 394. "The statute is to be construed in the ordinary way: one must have regard to all relevant considerations and no single consideration, however important, is conclusive." St John Shipping Corporation v Joseph Rank Ltd supra at p.287. Nevertheless the consideration that the act to be performed under the contract, namely the performance of work, is the very act forbidden by the statute is a very strong consideration in favour of the implication of a prohibition rendering the contract void.

9. The penalty prescribed by s.82(5) is a fine, but there can be no question of this statutory provision being intended merely to secure the revenue. The section appears in Division 7 which contains a group of sections creating offences in relation to entry into and remaining in Australia. They are clearly designed to prevent persons entering and remaining in Australia illegally. It must be taken that, in the judgment of the legislature, the enforcement of migration restrictions is for the protection of the public.

10. The purported contract of service between the respondent and San Remo could not be lawfully performed by the respondent. He was not obliged to perform it, because performance would have been an illegal act, and San Remo could not insist on performance for the same reason. The statute discloses an intention of the legislature to prohibit such performance in the public interest. That being so the implication that the contract itself is prohibited and void, seems plain.

11. If that be so, the respondent, as an illegal migrant who was not working under a valid contract of service, was not a worker to whom the entitlements under the Workers Rehabilitation and Compensation Act apply and his relationship with San Remo was not "employment" under the Act for the purpose of attracting entitlement to compensation. In New South Wales, the entitlement of a person working under an illegal contract, has been dealt with in s.24 of the Workers Compensation Act (NSW) 1987. Counsel referred us to s.30(7) of the South Australian Act. That subsection, however, is concerned with the issue whether an injury occurs in the course of the employment and has no bearing on whether a purported contract of service is void for illegality. I can find nothing in the Act to suggest that an illegal migrant who is not entitled to work in this country but who works under a purported contract which is void for illegality, is entitled to the benefits of workers compensation in respect of an injury sustained while he is engaged in his unlawful activity.

12. In my opinion the appeal should be allowed, the judgment appealed from should be set aside and the decision of the Corporation rejecting the claim for compensation should be restored.

JUDGE2 BOLLEN J I agree with the reasons of, and the order proposed by, the Chief Justice.

JUDGE3 MULLIGHAN J I agree that the appeal should be allowed for the reasons expressed by the Chief Justice and I agree with the orders which he proposes.