Vehicle Builders Employees Federation of Australia Ford Australia Vehicle Industry Awards 1974, 76, 78 Application for an interpretation of the above award

[1980] FCA 63

Re: IN THE MATTER OF THE CONCILIATION AND ARBITRATION ACT 1904
And: IN THE MATTER OF THE VEHICLE BUILDERS EMPLOYEES' FEDERATION OF AUSTRALIA
And: IN THE MATTER OF FORD AUSTRALIA VEHICLE INDUSTRY AWARDS 1974, 1976 and
1978
And: IN THE MATTER OF AN APPLICATION FOR AND INTERPRETATION OF THE ABOVE
AWARD
V. No. 2 of 1980
Interpretation of Award

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
Smithers J.

CATCHWORDS

Interpretation of Award - Conciliation and Arbitration Act 1904 s.110 - Award entitlements conditional on payment of workers' compensation - payments made in settlement of claim for workers' compensation with a denial of liability - whether a payment of workers' compensation.

HEARING

MELBOURNE

#DATE 13:5:1980

ORDER

(a) upon the true meaning and interpretation of clause 13 of the Ford Australia Vehicle Industry Awards 1974, 1976 and 1978 an employee who receives payment which is in fact a payment of workers' compensation in the terms of relevant State legislation is an employee receiving payment of workers' compensation in the terms of the relevant legislation within the meaning of clause 13 of the said awards notwithstanding that such payment is made with a denial of liability and received as being so made.

(b) there be general liberty to apply.

JUDGE1

Application made by the Vehicle Builders Employees'Federation of Australia under s.110 of the Conciliation and Arbitration Act 1904 (the Act) is before this Court. It is in the following terms:-

" Application for Interpretation of an Award

Application is hereby made by the Vehicle Builders Employees' Federation of Australia for an interpretation of the following provision of the abovementioned Awards:-

Clause 13,

The Applicant submits that the provision should be interpreted in the following manner:-

The words 'payment of workers' compensation in the terms of the relevant State Legislation' include a payment made with a denial of liability by the company to an employee of an amount equivalent to the employee's claim instituted under the relevant state legislation when the employee consents to such claim being struck out.

Annexed is an Affidavit by Clifford Jarrad verifying this Application and the facts in relation to which the interpretation is sought."

Section 110 of the Act is in the following terms:-

"110. Interpretation of awards.

(1) The Court is empowered, subject to this section, to give an interpretation of an award.

(2) An application for the interpretation of an award may be made by the Minister or an organization or person bound by the award.

(3) The decision of the Court upon the application is final and conclusive and is binding on all organizations and persons bound by the award which or who have been given an opportunity of being heard by the Court."

The Ford Motor Company of Australia Ltd. (the Company) and Ensite Auto Castings Pty. Ltd are employers to whom the Ford Australia Vehicle Industry Award 1974, 1976 and 1978 apply in respect of employees being members of the abovementioned Union. In this proceeding the Union was represented by Mr. Ryan and Miss Hickey. The Company was represented by Mr. Barnard Q.C. and Mr. Hayne.

Clause 13 of the said award of 1976 is, so far as material in the following terms:-

"13 - MAKE UP OF WORKERS' COMPENSATION PAYMENTS

Subject at all times to the provisions of this clause, an employee upon receiving payment of workers' compensation in the terms of the relevant State legislation and continuing to receive such payment in respect of a weekly incapacity within the meaning of the relevant State legislation shall be paid accident pay by the Company which is liable to pay workers' compensation under the relevant State legislation, which said liability by the Company for accident pay may be discharged by another person on his behalf, provided that: . . . "

From affidavits submitted by the parties it appears that:

(a) it is a frequent occurrence that members of the Union employed by the Company claim payments of workers' compensation from the Company in respect of injuries alleged to be suffered in the course of employment.

(b) Under the provisions of the Victorian Workers Compensation Act 1958, a weekly payment of a specified amount is prescribed where an employee's total or partial incapacity for work results from or is materially contributed to by the injury and, in addition, the payment of the reasonable costs of medical, hospital, nursing and ambulance services incurred by reason of the injury is provided for by the Act.

(c) As the majority of claims by employees for weekly payments are satisfied by employers or their insurers without dispute, workers' compensation is paid without the institution of proceedings before the Workers' Compensation Board and without any consequential order or determination by that Board. Generally, an employer is not permitted to cease making such weekly payments without an order of the Board unless an employee who has been in receipt of weekly payments in respect of total incapacity has actually returned to work.

(d) Where an employee makes a claim in the proper way for the payment of a weekly payment or the cost of medical, hospital, nursing or ambulance services and the employer or his insurer refuses to meet the claim, the procedure is that the employee institutes proceedings before the Workers' Compensation Board by lodging with the Registrar and serving on his employer an application for determination. Where such an application is filed and the employer desires to dispute the question of his liability in respect of the matters raised by the application for determination, the employer is required to file with the Workers Compensation Board an answer stating the grounds on which and the extent to which he denies liability. Subject to an order of the Board, extending the time for filing an answer, an employer's liability to pay compensation under the Act is taken to have been admitted save insofar as it is expressly denied in such an answer.

(e) On the 12th day of May 1977 the applicant caused an application for determination to be filed in the Workers' Compensation Board in relation to the claim by one Dimitria Vulin for the payment of weekly payments for total incapacity for work against his employer, Ford Motor Company of Australia Ltd. An appearance was entered on behalf of the respondent employer and it was represented on each occasion upon which the matter proceeded before the Workers' Compensation Board viz. 11th August 1977, 21st October 1977, 6th March 1978, 8th May 1978 and 16th August 1978. On the lastmentioned date the insurer of the respondent employer having agreed to pay the applicant's claim in full together with the applicant's costs, the matter was struck out, with the Board noting that the respondent denied liability.

(f) Where a respondent to such an application agrees to pay the claim in full, it is the general practice of the Board to strike out the application for determination with a right of reinstatement noting that the respondent has agreed to pay the claim in full and making no further order.

(g) In the event that the Claim Review Committee of the Company denies liability for any claim (except in very rare circumstances; for example, a serious factual error in an investigator's report on which the Committee has relied) any further action in respect of such claim is a matter for the Company's insurer. In all cases advice or correspondence relating to legal action involving payment of workers' compensation received by the company are immediately referred to the Company's insurer and it is the responsibility of the insurer's legal advisers to deal with proceedings before the Workers' Compensation Board.

(h) In some cases the Company's insurers settle claims for compensation made to the Workers' Compensation Board before any determination is made by the Board on the question of whether the Company is liable to pay compensation. In some such cases, although the Company considers that it is not liable to pay compensation and thus denies that it is so liable, payment is made of all medical and other expenses by the insurers together with an amount equal to the weekly payments which the claimant would have received had the Company been liable to pay workers' compensation pursuant to the provisions of the Victorian Workers' Compensation Act. Such payments are made with a denial of liability. The claims made by the employees in such cases are then struck out by consent by the Workers' Compensation Board with a right of reinstatement. In such cases accident pay as provided for in Clause 13 of the Ford Australia Vehicle Industry Award is not paid.

It is to be observed that the interpretation sought proceeds on the assumption that where a payment is made to an employee of the amount equivalent to a claim for workers' compensation instituted by him under the relevant State legislation and nothing more appears it is to be inferred as a matter of fact that what has been received by the employee is payment of workers' compensation in the terms of the relevant State legislation. That may well be correct. However, the interpretation sought concerns not that simple set of facts but those facts in conjunction with other facts and seeks an assertion by the Court that in cases where that totality of facts exists it is still true to say that it is to be inferred that the employee has received payment of workers' compensation in the terms of the relevant State legislation.

But the drawing of inferences is essentially an exercise in fact finding. It is clear also that the facts constituting the other facts mentioned above suggest that in the situation postulated there are still other facts relevant to the question of the proper inference to be drawn. It is difficult to contemplate that the payment of the money in the context of the totality of the facts mentioned in the interpretation sought, proceeded without preliminary communications which may well be of importance in relation to the decision as to the character of the payment made.

It is therefore doubly inappropriate that while purporting to interpret the award the Court should engage in the exercise merely of deciding a question of fact in relation to limited particular hypothetical circumstances.

It appears to me that the simple approach adopted in the application assumes that the question is what effect the denial of liability has in respect of a payment already characterised as a payment of workers' compensation. But this begs the question. It is not a question of taking a payment of compensation and asking does clause 13 apply in respect of it if there is a denial of liability. If there is a payment of compensation then certainly clause 13 applies. The question is whether when there is a payment by way of settlement or satisfaction of a claim made for workers compensation, one of the terms of which is that the payment is made with a denial of liability, there is a payment of compensation in the terms of the relevant State legislation, according to the ordinary and natural meaning of that expression. The answer to that question depends on the whole of the circumstances. The mere fact that one of the terms of the settlement was that it was made with a denial of liability would not be decisive. In each case the answer depends on the whole of the circumstances surrounding the payment, the form of the documents filed and delivered, the communications between the parties, written or verbal and any other relevant matter. When the relevant facts are ascertained the question is, what is the inference proper to be drawn from those facts as to the character of the payments received by the employee and that is an exercise in fact finding. If a party says, "I will pay you the workers compensation you claim and pay it to you as such, but at the same time I deny that I am liable to pay it", and that is all, the payment would be accorded the character of a payment of workers' compensation. If a party says, "I deny that I am liable to pay you any workers' compensation and I will not pay any workers' compensation, but if you suspend your proceedings against me for workers' compensation I will pay you an amount equal to your claim", and the payment is accepted on that basis, the inference would be that the payment was not a payment of workers' compensation. No doubt, seldom would the problem be so clear cut. It is apparent therefore that the real problem does not arise out of any difficulty in construing the expression "payment of workers' compensation in terms of the relevant state legislation", but in drawing the appropriate inference from the relevant facts as to the character of a payment made and received in settlement of a claim. When the facts concerning any particular payment are ascertained the question whether that payment was a payment of workers' compensation may be difficult to answer because it may be difficult to determine what is the correct inference to draw from the facts. But the difficulty will not be caused by any ambiguity in the meaning of the expression "payment of workers' compensation according to the terms of the relevant State legislation."

It appeared to me from the arguments presented in this case that there was a suggestion that assistance on the question of the effect on the accident pay liability imposed by clause 13 of a payment being made with a denial of liability might be gained by determining the sense in which the word "liable" is used in the relevant provision in clause 13. I do not think this is so and the Court is not asked to give an interpretation of clause 13 in this respect. It follows from the foregoing that once it is clear on the facts that the employee has received a payment, whether subject to a denial of liability or not, which is properly to be characterised as a payment of workers' compensation in terms of the relevant State legislation, the provisions of clause 13 which are dependent upon that fact commence to operate according to their terms.

In the light of the foregoing it could well be appropriate to refrain from exercising the jurisdiction conferred on the Court by s.110 of the Act. However in substance the question sought to be solved by the applicant in these proceedings is really the limited question whether where a payment is made with a denial of liability by way of settlement of a claim for Workers' compensation and is received by the employee as a payment made with that denial, the receipt by the employee of that payment, is or can be a receipt of payment of workers' compensation in the terms of the relevant State legislation within the meaning of that expression in clause 13. The question so posed does raise a genuine question of interpretation of clause 13. For reasons to be gathered from the foregoing the question cannot be answered yea or nay. For those same reasons it may be answered by saying that where a payment is made in discharge or settlement of a claim of an employee for workers' compensation under relevant State legislation in circumstances that, notwithstanding that it was made with a denial of liability, the payment had the character of a payment of workers' compensation, the employee receiving such payment does receive payment of workers' compensation in the terms of the relevant State legislation within the meaning of that expression in clause 13 of the Award. I think so to declare this interpretation of clause 13 may serve a useful purpose. I therefore so declare.