Touhey v Salini Australia Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Touhey v Salini Australia Pty Ltd [2022] FCA 55

File number: WAD 165 of 2021
Judgment of: BANKS-SMITH J
Date of judgment: 4 February 2022
Catchwords:

INDUSTRIAL LAW - whether employee entitled to payment of untaken accrued annual leave entitlements for period when workers' compensation payments received - statutory construction - whether 'permitted' by s 80 of the Workers' Compensation and Injury Management Act 1981 (WA) to accrue annual leave - whether appropriate to make declarations as to entitlements - declarations made

PRACTICE AND PROCEDURE - where respondent filed submitting notice - whether deemed admissions or whether court required to enquire in context of declaratory relief - whether respondent in position of contradictor - whether respondent in default for purpose of any default judgment

Legislation:

Fair Work Act 2009 (Cth) ss 22, 44, 87, 90, 130

Federal Court of Australia Act 1976 (Cth) s 21

Federal Court Rules 2011 (Cth) rr 1.32, 5.23, 12.01, 22.07

Workers Compensation Act 1987 (NSW) s 49

Workers' Compensation and Injury Management Act 1981 (WA) ss 3, 80

Uniform Civil Procedure Rules 2005 (NSW) r 6.11

Cases cited:

Anglican Care v NSW Nurses and Midwives' Association [2015] FCAFC 81; (2015) 231 FCR 316

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; (2017) 254 FCR 68

Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427

Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; (2007) 161 FCR 513

Australian Competition and Consumer Commission v Fisher & Paykel Customer Services Pty Ltd [2014] FCA 1393

Australian Competition and Consumer Commission v Panthera Finance Pty Ltd [2020] FCA 340

Australian Competition and Consumer Commission v Sampson [2011] FCA 1165

Centennial Northern Mining Services Pty Ltd v Construction, Forestry, Mining and Energy Union [2015] FCAFC 100; (2015) 231 FCR 298

Clarence City Council v Commonwealth of Australia [2020] FCAFC 134; (2020) 280 FCR 265

EEU20 v Meat Industry Employees' Superannuation Fund Pty Ltd (Trustee) (No 2) [2020] FCA 1536

Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421

IPC Global Pty Ltd v Pavetest Pty Ltd (No 2) [2016] FCA 1332

Kisimul Holdings Pty Ltd v Clear Position Pty Ltd (No 2) [2014] NSWCA 317; (2014) 86 NSWLR 645

NSW Nurses and Midwives' Association v Anglican Care [2014] FCCA 2580

Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438

Trewin v Comcare (1998) 84 FCR 171

Trust Co of Australia Ltd v Perpetual Trustees (WA) Ltd (No 2) (1995) 36 NSWLR 654

Division: Fair Work Division
Registry: Western Australia
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 66
Date of hearing: 16 December 2021
Counsel for the Applicant: Mr DJ Rafferty
Solicitor for the Applicant: Eureka Lawyers
Counsel for the Respondent: The Respondent filed a submitting notice save as to costs

ORDERS

WAD 165 of 2021
BETWEEN:

GERALD TOUHEY

Applicant

AND:

SALINI AUSTRALIA PTY LTD (ACN…

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Details
Case
[2022] FCA 55
Decision Date

CaseChat Overview and Summary

In Touhey v Salini Australia Pty Ltd, the dispute centred around whether an employee was entitled to payment for untaken accrued annual leave while receiving workers' compensation payments. The Federal Court was tasked with interpreting the relevant statutory provisions to determine if such leave could accrue during periods of incapacity for work due to injury. The court had to consider the Workers' Compensation and Injury Management Act 1981 (WA) and the Fair Work Act 2009 (Cth), particularly sections 80 and 87, to ascertain whether annual leave could accrue during periods when the employee was receiving workers' compensation. Additionally, the court examined the procedural implications of the respondent's submitting notice and its effect on the ability to make default judgments or rely on admissions.

The court addressed several key legal issues, including whether the statutory provisions permitted the accrual of annual leave during periods of incapacity for work and whether the filing of a submitting notice precluded the respondent from contradicting the applicant's claims or default judgment. The court also needed to determine if the respondent was in default for any purpose and whether it could grant declaratory relief based on admissions made by the respondent. The court considered authorities and statutory interpretation principles to resolve these issues.

The court concluded that the filing of a submitting notice meant the respondent was not required to file a defence or otherwise participate in the proceedings, and thus, the court could not rely on r 5.23(2)(c) to grant a default judgment. However, the court found that it was open to it to grant declaratory relief based on the respondent's admissions under r 22.07 of the Federal Court Rules 2011. The court determined that the statutory provisions allowed for the accrual of annual leave during periods when the employee was receiving workers' compensation, as these periods were not excluded under the Fair Work Act. Consequently, the court made the appropriate declarations regarding the employee's entitlements.

The court ordered that the employee was entitled to payment for untaken accrued annual leave during the period when they were receiving workers' compensation, in accordance with the statutory provisions of the Fair Work Act. The court further clarified that the filing of a submitting notice did not preclude it from granting declaratory relief based on admissions made by the respondent.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

I accept that the filing of a submitting notice on 20 August 2021 has the effect that Salini was not obliged to file a defence or otherwise participate in the proceedings. By removing such requirements, in the absence of some other order compelling compliance, it appears that r 5.23(2)(c) does not apply to allow default judgment.Judgment on admissions I do not accept that r 22.07 only operates where a notice to admit facts has been served. The text of the rule does not limit its scope in that manner and the authorities do not support a narrow understanding of the rule. In IPC Global Pty Ltd v Pavetest Pty Ltd (No 2) [2016] FCA 1332 Moshinsky J considered that r 22.07 could be invoked in circumstance where an admission was relevantly made by counsel during the hearing, and in circumstances where there was no notice to admit. His Honour said:[16]There is no issue between the parties as to the Court's power to make final orders in respect of the relevant part of the proceeding on the basis of the respondents' admissions. Nevertheless, for completeness I note the following matters. Rule 22.07 of the Federal Court Rules 2011 provides:If a party makes an admission, another party may apply to the Court for any judgment or order to which the party is entitled on the admission.[17]Rule 22.07 replaced Order 18, rule 4 of the Federal Court Rules 1979 which was in the following terms:(1)If an admission is made by a party, whether by a pleading or otherwise, the Court may pronounce any judgment or make any order to which the applicant is entitled on the admission.(2)The Court may exercise its powers under subrule (1) notwithstanding that other questions in the proceeding have not been determined.[18]This wording corresponds to the current wording of the relevant rule in the Uniform Civil Procedure Rules 2005 (NSW), namely rule 17.7.[19]Although the current rule in the Federal Court Rules omits the wording of the former subrule (2), I do not think this was intended to effect a substantive change in the rule. Generally, the aim of the current version of the Federal Court Rules, as introduced in 2011, was not to substantially alter existing practice and procedure but rather to explain it in a way that could be more easily followed and applied: see the explanatory statement to the Federal Court Rules 2011, p 5. The wording of the current rule refers to 'any' judgment or order. I think that this supports the view that rule 22.07 embraces the power to pronounce any judgment or make any order notwithstanding that other questions in the proceeding have not been determined. For completeness I note that there would, of course, be power to make an order for the determination of a separate question and then give judgment on that question. But I do not think it is necessary to invoke this power. The rule has also been invoked for entry of judgment where there are joint statements of agreed facts, and where there is no suggestion that such joint statements resulted from the formal process of issuing a notice to admit: for example Australian Competition and Consumer Commission v Fisher & Paykel Customer Services Pty Ltd [2014] FCA 1393 at [3] (Wigney J); and Australian Competition and Consumer Commission v Panthera Finance Pty Ltd [2020] FCA 340 at [1], [16] and Appendix A to reasons (Jagot J).

Ratio Decidendi

Legal Principle Established

I therefore consider it is open to me to grant the declaratory relief sought, provided I am otherwise satisfied that it is appropriate to do so.Consideration Mr Touhey as Salini's employee was entitled to accrue and take annual leave in accordance with Division 6 of Part 2-2 of Chapter 2 of the FW Act. This division constitutes part of the National Employment Standards, being the minimum standards applying to the employment of an employee, as s 61 of the FW Act provides. Section 44(1) of the FW Act provides that an employer must not contravene a provision of the National Employment Standards. It is a civil remedy provision. Section 87 of the FW Act, which falls within Part 2-2, relevantly provides as follows:Entitlement to annual leaveAmount of leave(1)For each year of service with an employer (other than periods of employment as a casual employee of the employer), an employee is entitled to:(a) 4 weeks of paid annual leave; or…Accrual of leave(2)An employee's entitlement to paid annual leave accrues progressively during a year of service (other than periods of employment as a casual employee of the employer) according to the employee's ordinary hours of work, and accumulates from year to year.… The effect of s 87 is that an employee is entitled to accrue four weeks' paid annual leave for each year of 'service' with an employer. The term 'service' is relevantly defined in s 22 of the FW Act as a period of service by an employee during which time the employee is employed by the employer, but does not include any 'excluded period'. Excluded periods are set out in s 22(2) and include any period of unauthorised absence, any period of unpaid leave or unpaid unauthorised absence (other than a period of community service leave under Division 8 or Part 2-2 or a period of stand down), or any other period of a kind prescribed by the regulations. None of the excluded periods are applicable in this matter. Importantly, time spent absent from work but whilst receiving workers' compensation payments are not excluded by s 22(2). Section 90, also in Part 2-2, addresses when payments for untaken accrued annual leave are to be made, and provides as follows:Payment for annual leave(1)If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period.(2)If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave. The effect of s 90 is that upon termination of employment, an employee is entitled to be paid the value of any untaken accrued annual leave equivalent to the amount the employee would have been paid had the employee taken the leave. If there is an applicable modern award or enterprise agreement which provides for payment of annual leave at a higher rate than the minimum rate prescribed by s 90(1), then that higher rate is the rate at which the untaken accrued annual leave must be paid upon termination per s 90(2). This construction of s 90(2) was confirmed in Centennial Northern Mining Services Pty Ltd v Construction, Forestry, Mining and Energy Union [2015] FCAFC 100; (2015) 231 FCR 298 at [38] (Tracey, Flick and Katzmann JJ).