Industrial Relations Commission New South Wales

• Medium Neutral Citation: ACI Operations Pty Ltd v Field [2011] NSWIRComm 5
• Hearing dates: 10 December 2010
• Decision date: 18 February 2011
• Jurisdiction: Industrial Court of NSW
• Before: Boland P

Decision

The Court orders that the applicant's application for declaratory and injunctive relief is dismissed.

• Catchwords: STATUTORY INTERPRETATION - Worker employed under federal industrial instrument - Worker dismissed from his employment - Worker sought reinstatement under Pt 8 of the Workers Compensation Act 1987 (NSW) - Application by employer for declaratory and injunctive relief - Employer contended Industrial Relations Commission of NSW precluded from dealing with reinstatement claim - Employer contended that Workers Compensation Act inconsistent with federal laws and federal industrial instruments applying to worker's employment - Held no inconsistency - Application for relief dismissed
• Legislation Cited: Commonwealth Constitution s 109; Fair Work Act 2009 (Cth) s 26 s 27; Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) s 11; Industrial Arbitration Act 1940; Industrial Relations Act 1996 s 10 s 11 s 154; Industrial Relations (Further Amendment) Act 2006; Judiciary Act 1902 (Cth) s 78B; Work Choices Act 2006 (Cth); Workers Compensation Act 1987 s 240 s 241 s 242 s 243 s 244 s 248; Workplace Relations Act 1996 (Cth) s 16 s 17 s 170LT s 170LJ s 170 LZ s 327 s 643 s 651 s 659 s 672 s 674; Workplace Injury Management and Workers Compensation Act 1998 s 2A
• Cases Cited: Australian Salaried Medical Officers' Federation (NSW) v Central Sydney Area Health Services [2005] NSWIRComm 339; (2005) 147 IR 56; Craig Field v ACI Operations Pty Limited (O-I Sydney) [2008] AIRC 788; Deva v University of Western Sydney [2009] NSWSC 280; (2009) 229 FLR 380; Dickson v The Queen [2010] HCA 30; (2010) 270 ALR 1; Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] HCA 40; (2004) 221 CLR 309; Endeavour Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2007] FCAFC 177; (2007) 165 FCR 1; R v Credit Tribunal; Ex parte General Motors Acceptance Corporation Australia [1977] HCA 34; (1977) 137 CLR 545; State Rail Authority of New South Wales v Tyrrell (No 2) (1993) 51 IR 14
• Category: Principal judgment
• Parties: ACI Operations Pty Ltd (Applicant); Craig Field (Respondent); Attorney General of NSW (Intervenor); Unions NSW (Intervenor)
• Representation: SOLICITORS/ORGANISATIONS: Zeitz Workplace Lawyers (Applicant); The Australian Workers' Union of NSW (Respondent); Crown Solicitor (Intervenor)Unions NSW (Intervenor); APPEARANCES: Mr M C L Seck of counsel (Applicant); Mr J W Nolan of counsel (Respondent); Mr I Taylor of counsel (Intervenor); Ms E Madden, Industrial Officer for Unions NSW (Intervenor)
• File Number(s): IRC 1225 of 2010

Judgment

1 By amended application, ACI Operations Pty Ltd trading as O-I Sydney ("the applicant"), seeks declaratory relief under s 154(1) of the Industrial Relations Act 1996 and injunctive relief under the inherent or incidental jurisdiction of the Court.

2 The applicant contended, on a number of grounds, that the Industrial Relations Commission of New South Wales ("NSWIRC") was precluded from dealing with a claim under Pt 8 of the Workers Compensation Act 1987 ("WC Act") by Mr Craig Field ("the respondent"), a former employee, to be restored to his employment, by reason of a conflict between federal and State law. It was contended that the relevant provisions of the Fair Work Act 2009 (Cth) ("FW Act") "pre-empted" the WC Act in New South Wales insofar as the latter Act provides for reinstatement of an injured worker.

3 Because the proceedings raise matters arising under and involving the interpretation of s 109 of the Commonwealth Constitution, the applicant notified the Attorney-General of the Commonwealth and the Attorney-Generals of the States and Territories in accordance with s 78B of the Judiciary Act 1902 (Cth). Only the Attorney-General of New South Wales sought to intervene and make submissions.

4 Unions NSW, the peak body for employees, sought and was granted leave to intervene in support of the respondent.

5 The facts of this matter are not in contention, but in any event the facts may be drawn from the three affidavits tendered in the proceedings of Ms Nandi Segbedzi, the solicitor with care and conduct of the proceeding on behalf of the applicant.

6 Mr Field was injured at work in 2005. Shortly thereafter, the respondent made a workers' compensation claim. On 5 August 2005, the respondent was certified as fit to perform restricted duties. He undertook rehabilitation of his injury in accordance with a return to work plan.

7 During the rehabilitation and return to work period, the O-I Penrith Glassworker Certified Agreement 2006 ("the 2006 Agreement") applied to the respondent's employment. The 2006 Agreement was certified by the Australian Industrial Relations Commission ("AIRC") on 9 March 2006 under s 170LT of the Workplace Relations Act 1996 (Cth) ("WR Act") (as it then stood). The 2006 Agreement applied to the respondent's employment. The 2006 Agreement was replaced by the 2009 Agreement (made under s 327 of the WR Act), which commenced operation on 1 July 2009.

8 On 25 January 2008, the applicant terminated the respondent's employment, on the basis it was unable to accommodate duties to suit the respondent's injury. On 13 February 2008, the respondent made an application for relief in relation to his termination of employment in the AIRC. The application alleged that the respondent's termination of employment was:

(a) harsh, unjust or unreasonable under s 643(1)(a) of the Workplace Relations Act ; and

(b) unlawful because of a physical disability under s 659(2)(f) of the Workplace Relations Act .

9 On 10 October 2008, the AIRC determined that the applicant had a valid reason for the dismissal. It was, therefore, determined that the respondent's dismissal was not harsh, unjust or unreasonable : Craig Field v ACI Operations Pty Limited (O-I Sydney) [2008] AIRC 788 at [36]. In making his findings, Commissioner Harrison concluded that the respondent's medical condition "rendered him unable to perform all the inherent requirements of his position": at [27]

10 On 18 December 2009, the respondent made an application to the applicant requesting reinstatement to his former position under s 241 of the WC Act. The respondent produced a medical certificate stating that he was fit for pre-injury employment. On 22 February 2010, the applicant refused the respondent's application for reinstatement on the basis of medical advice that the respondent would be placed at a significant risk of re-injury.

11 On 23 March 2010, the respondent made an application for reinstatement under s 242(1) of the WC Act to the Industrial Relations Commission of New South Wales. The matter was conciliated but the conciliation was unsuccessful.

12 On 4 November 2010, the applicant made its application for declaratory and injunctive relief in this Court.

Amended application

13 The amended application sought the following relief:

1. AN ORDER declaring that the Respondent commenced the proceedings matter No IRC 206 of 2010 in the Industrial Relations Commission of New South Wales in contravention of s. 672(2) of the Workplace Relations Act 1996 (Cth);

2. AN ORDER declaring that the Respondent commenced the proceedings matter No IRC 206 of 2010 in the Industrial Relations Commission of New South Wales in contravention of s. 674(2) of the Workplace Relations Act 1996 (Cth)

3. AN ORDER declaring that Part 8 of the Workers Compensation Act 1987 (NSW) is invalid and has no legal effect;

4 . AN ORDER declaring that the Industrial Relations Commission of New South Wales does not have jurisdiction to hear, determine and grant relief in respect of matter No. IRC 206 of 2010;

5 . AN ORDER declaring that the Respondent is prohibited from commencing from the proceedings matter No IRC 206 of 2010 in the Industrial Relations Commission of New South Wales;

6 . AN ORDER restraining the Respondent from taking any further action in matter No IRC 206 of 2010;

7 . Costs.

Legislation

14 The relevant legislative provisions are set out below:

(1) Section 154 of the Industrial Relations Act :

154 Declaratory jurisdiction

(1) The Commission in Court Session may make binding declarations of right in relation to a matter in which the Commission (however constituted) has jurisdiction. The Commission in Court Session may do so, whether or not any consequential relief is or could be claimed.

(2) Proceedings before the Commission in Court Session are not open to objection on the ground that a declaration of right only is sought.

(2) Sections 241 and 242 of the WC Act:

241 Application to employer for reinstatement of dismissed injured worker

(1) If an injured worker is dismissed because he or she is not fit for employment as a result of the injury received, the worker may apply to the employer for reinstatement to employment of a kind specified in the application.

(2) The kind of employment for which the worker applies for reinstatement cannot be more advantageous to the worker than that in which the worker was engaged when he or she first became unfit for employment because of the injury.

(3) The worker must produce to the employer a certificate given by a medical practitioner to the effect that the worker is fit for employment of the kind for which the worker applies for reinstatement.

242 Application to Industrial Relations Commission for reinstatement order if employer does not reinstate

(1) If an employer does not reinstate the worker immediately to employment of the kind for which the worker has so applied for reinstatement (or to any other kind of employment that is no less advantageous to the worker), the worker may apply to the Industrial Relations Commission for a reinstatement order.

(2) An industrial organisation of employees may make the application on behalf of the worker.

(3) The Industrial Relations Commission may not make a reinstatement order, except in special circumstances, if the application to the employer for reinstatement was made more than 2 years after the injured worker was dismissed.

(3) Sections 16 and 17(2) of the WR Act:

16 Act excludes some State and Territory laws

(1) This Act is intended to apply to the exclusion of all the following laws of a State or Territory so far as they would otherwise apply in relation to an employee or employer:

(a) a State or Territory industrial law;

(b) a law that applies to employment generally and deals with leave other than long service leave;

(c) a law providing for a court or tribunal constituted by a law of the State or Territory to make an order in relation to equal remuneration for work of equal value (as defined in section 623);

(d) a law providing for the variation or setting aside of rights and obligations arising under a contract of employment, or another arrangement for employment, that a court or tribunal finds is unfair;

(e) a law that entitles a representative of a trade union to enter premises.

...

State and Territory laws that are not excluded

(2) However, subsection (1) does not apply to a law of a State or Territory so far as:

...

(c) the law deals with any of the matters (the non-excluded matters ) described in subsection (3).

(3) The non-excluded matters are as follows:

...

(b) workers compensation;

...

This Act excludes prescribed State and Territory laws

(4) This Act is intended to apply to the exclusion of a law of a State or Territory that is prescribed by the regulations for the purposes of this subsection.

...

17 Awards, agreements and Commission orders prevail over State and Territory law etc.

(1) An award or workplace agreement prevails over a law of a State or Territory, a State award or a State employment agreement, to the extent of any inconsistency.

(2) However, a term of an award or workplace agreement dealing with any of the following matters has effect subject to a law of a State or Territory dealing with the matter, except a law that is prescribed by the regulations as a law to which awards and workplace agreements are not subject:

...

(b) workers compensation;

...

(4) Sections 672(1) to 672(3), 674(1) to 674(3) of the WR Act:

672(1) An application under subsection 643(1) alleging termination of employment on the ground referred to in paragraph 643(1)(a), or grounds that include that ground, must not be made if other termination proceedings have already been commenced in respect of the termination of employment, unless the other termination proceedings:

(a) have been discontinued by the employee who commenced the proceedings; or

(b) have failed for want of jurisdiction.

...

672(2) An employee must not commence other termination proceedings in respect of a termination of employment if an application under subsection 643(1) alleging termination of employment on the ground referred to in paragraph 643(1)(a), or on grounds that include that ground, has already been made, unless the application:

(a) has been discontinued by the employee; or

(b) has failed for want of jurisdiction.

672(3) In this section:

other termination proceedings means proceedings, in respect of a termination of the employment of an employee:

(a) for a remedy in respect of the termination:

(i) under a provision of this Act other than section 643; or

(ii) under another law of the Commonwealth; or

(iii) under a provision of a law of a State or Territory that is not excluded by section 16; and

(b) that allege that the termination was unlawful for any reason (other than a failure by the employer to provide a benefit to which the employee was entitled on the termination).

...

674(1) An application alleging unlawful termination of employment must not be made by an employee if other termination proceedings have already been commenced in respect of the termination of employment, unless the other termination proceedings:

(a) have been discontinued by the employee; or

(b) have failed for want of jurisdiction.

Note: Subsection (3) defines an application alleging unlawful termination and other termination proceedings .

674(2) An employee must not commence other termination proceedings in respect of a termination of employment if an application alleging unlawful termination of the employment has already been made, unless the application:

(a) has been discontinued by the employee; or

(b) has failed for want of jurisdiction.

674(3) In this section:

"application alleging unlawful termination" means an application under section 643, in respect of a termination of employment, on the ground that the termination constitutes a contravention of section 659 because it was done for a reason set out in subsection 659(2).

"other termination proceedings" means proceedings, in respect of a termination of employment:

(a) for a remedy in respect of the termination:

(i) under a provision of this Act other than section 643; or

(ii) under another law of the Commonwealth; or

(iii) under a provision of a law of a State or Territory that is not excluded by section 16; and

(b) that allege that the termination was:

(i) harsh, unjust or unreasonable (however described); or

(ii) unlawful;

for any reason (other than a failure by the employer to provide a benefit to which the employee was entitled on the termination).

(5) Section 26 of the FW Act:

Act excludes State or Territory industrial laws

(1) This Act is intended to apply to the exclusion of all State or Territory industrial laws so far as they would otherwise apply in relation to a national system employee or a national system employer.

(2) A State or Territory industrial law is:

(a) a general State industrial law; or

(b) an Act of a State or Territory that applies to employment generally and has one or more of the following as its main purpose or one or more of its main purposes:

...

(v) providing for rights and remedies connected with the termination of employment;

...

...

(3) Each of the following is a general State industrial law :

(a) the Industrial Relations Act 1996 of New South Wales;

...

(4) A law or an Act of a State or Territory applies to employment generally if it applies (subject to constitutional limitations) to:

(a) all employers and employees in the State or Territory; or

(b) all employers and employees in the State or Territory except those identified (by reference to a class or otherwise) by a law of the State or Territory.

For this purpose, it does not matter whether or not the law also applies to other persons, or whether or not an exercise of a power under the law affects all the persons to whom the law applies.

(6) Section 27 of the FW Act :

State and Territory laws that are not excluded by section 26

...

(1) Section 26 does not apply to a law of a State or Territory so far as:

...

(c) the law deals with any non-excluded matters; or

...

(2) The non-excluded matters are as follows:

...

(b) workers compensation;

...

(7) Section 11(1) of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth):

(1) The WR Act continues to apply, on and after the WR Act repeal day in relation to conduct that occurred before the WR Act repeal day.

Grounds relied on by the applicant

15 The applicant relied on four grounds:

(1) as the respondent made an application for relief in respect of the termination for both unfair dismissal and unlawful termination under the WR Act, ss 672(2) and 674(2) prohibits the respondent from commencing "other termination proceedings". It was submitted that the proceedings for relief under s 242 of the WC Act constituted "other proceedings" for the purposes of ss 672(2) and 674(2) of the WR Act. Section 672(2) applies to unfair dismissal applications made under s 643(1)(a) of the WR Act. Section 674(2) applies to unlawful termination applications made under s 659(2) of the WR Act;

(2) by virtue of s 16 of the WR Act, that Act "covers the field" thereby excluding the inconsistent provisions of a State law, namely, Pt 8 of the WC Act ;

(3) the federal workplace agreements governing the respondent's employment prevail over Pt 8 of the WC Act; and

(4) the federal workplace agreements governing the respondent's employment contain a clause which prohibits the parties from pursuing any extra claims relating to matters related to the employment of employees, whether dealt with in the Agreements or not. By the respondent making the application for the NSWIRC to make an order relating to the reinstatement of the respondent to his previous position, the respondent is making an extra claim relating to his employment in breach of the agreements.

Whether the application is statute barred by ss 672 and 674 of the WR Act

16 As the Attorney observed, presumably the applicant relies on s 11 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), which provides in subsection (1) as follows:

The WR Act continues to apply, on and after the WR Act repeal day in relation to conduct that occurred before the WR Act repeal day.

17 Accepting that s 672 of the WR Act applies for that reason, it would prevent the respondent from bringing the s 242 proceedings if those proceedings were to be regarded as "other termination proceedings" as defined in s 672(3). It will be recalled s 672(3) provides:

In this section:

" other termination proceedings " means proceedings , in respect of a termination of the employment of an employee :

(a) for a remedy in respect of the termination:

(i) under a provision of this Act other than section 643; or

(ii) under another law of the Commonwealth; or

(iii) under a provision of a law of a State or Territory that is not excluded by section 16; and

(b) that allege that the termination was unlawful for any reason (other than a failure by the employer to provide a benefit to which the employee was entitled on the termination).

18 Thus, in order to be "other termination proceedings" the proceedings relevantly need to be both:

(a) for a remedy in respect of a termination of employment under a provision of a law of a State, being a law that is not otherwise already excluded by s 16; and

(b) proceedings that allege that the termination is unlawful for any reason (other than a failure by the employer to provide a benefit to which the employee was entitled on the termination).

19 Under s 674(3)(b) the other proceedings must allege that the respondent's termination of employment was "harsh, unjust or unreasonable (however described)" or "unlawful for any reason".

20 The critical question is whether the s 242 of the WC Act proceedings alleged that the termination was unlawful for any reason.

21 The applicant's submissions in relation to this question may be summarised in the following terms:

(a) sections 672 and 674 are designed to effect an exhaustive exclusion of second proceedings in respect of the same termination of employment where unfair dismissal or unlawful dismissal applications have already been made under the WR Act (other than benefits payable upon termination of employment);

(b) the purpose, context and subject-matter of these provisions suggests that the term "unlawful" under ss 672 and 674 should be given a broad meaning to refer to a termination which is not constrained by legal interference of the pre-existing rights and freedoms rather than a termination of employment that is strictly forbidden by law;

(c) by seeking reinstatement, the respondent seeks orders interfering with the ordinary common law legal right of dismissal. It restricts the applicant's existing freedom by empowering the Commission to restore the status quo ante prior to the termination of employment or order that the applicant create a different kind of employment for which the respondent is fit to perform. The proceedings therefore have the consequence of challenging the lawfulness of the respondent's termination of employment;

(d) the secondary material (parliamentary debate on the Industrial Relations Bill, May 1996) makes clear that Parliament intended the protection of injured employee provisions to establish an unlawful termination regime that applied to the special circumstances of injured employees;

(e) even if the NSWIRC proceedings do not allege that the termination was "unlawful", they allege that the dismissal was "harsh, unjust or unreasonable (however described) ... for any reason" for the purposes of s 674(3)(b)(i). The test of whether a dismissal is "harsh, unjust or unreasonable" involves a broad consideration of a range of matters in determining the fairness of the dismissal: Deva v University of Western Sydney [2009] NSWSC 280; (2009) 229 FLR 380;

(f) it is not necessary that the NSWIRC's jurisdiction to determine whether to order reinstatement is governed by the same criteria of "harsh, unjust or unreasonable" as s 643(1)(a) of the WR Act. The words "however described" in parentheses is plainly designed to encapsulate similar discretionary jurisdictions which determine whether reinstatement should be ordered by reference to general and flexible notions of justice and fairness. Even though the NSWIRC's jurisdiction under Part 8 of the WC Act is specially attenuated to dismissed injured workers, the substance of the NSWIRC's jurisdiction to order reinstatement is largely the same other than it has enhanced powers to reinstate into other "kinds of employment";

(g) so, even if the respondent's application in the NSWIRC proceedings do not amount to proceedings alleging that the termination was unlawful, he seeks reinstatement based on its discretionary jurisdiction by reference to the same general notions of fairness relevant in unfair dismissal proceedings. It is, therefore, barred under s 674(2) of the WR Act.

22 I am unable to accept that the s 242 proceedings allege that the termination was unlawful. The application by the respondent does not allege unlawfulness and s 242 does not require any allegation of unlawfulness to be made.

23 Part 8 of the WC Act is directed to the protection of injured workers. Section 241 provides that if an injured worker is dismissed because he or she is not fit for employment as a result of the injury received, the worker may apply to the employer for reinstatement to employment. Reinstatement includes re-employment: s 240. The worker must produce to the employer a certificate given by a medical practitioner to the effect that the worker is fit for employment of the kind for which the worker applies for reinstatement: s 241(3).

24 If an employer does not reinstate the worker immediately, the worker may apply to the NSWIRC for a reinstatement order: s 242(1). The NSWIRC may not make a reinstatement order, except in special circumstances, if the application to the employer for reinstatement was made more than two years after the injured worker was dismissed: s 242(3).

25 The NSWIRC may order the employer to reinstate the worker of the kind for which the worker has so applied for reinstatement (or to any other kind of employment that is no less advantageous to the worker), but only if the NSWIRC is satisfied that the worker is fit for that kind of employment: s 243(1) and (2).

26 Thus, the scheme of Pt 8 is directed to enabling injured workers, who have been dismissed from their employment because they are not fit for employment as a result of an injury received, to apply first to their employer to be reinstated. Some time may have passed since they were dismissed and the injury that led to the dismissal in the first place may no longer make them unfit for employment. There is no suggestion in Pt 8 that the dismissal is to be regarded as unlawful. It is to be presumed that the injured worker was dismissed because he or she was not fit for employment as a result of the injury received: s 244(1). That the worker may have been unfit may have been a completely lawful and legitimate basis to terminate the worker's employment (except in circumstances dealt with in s 248, which provides that it is an offence if a worker is dismissed within six months of incurring an injury).

27 Part 8 recognises, however, the worker's circumstances may change and the worker may have recovered from the injury that led to dismissal. In which case the worker may apply for his or her job back and if the application is refused by the employer the worker may apply to the NSWIRC for reinstatement. If the NSWIRC finds the employee is fit for employment and the relevant kind of employment is available, the NSWIRC may order reinstatement.

28 Even accepting the applicant's extended definition of "unlawful" there is no basis upon which it could be concluded that proceedings under Pt 8 involve an allegation that the termination was unlawful except in circumstances where s 248 applies and that is not the case here. If the worker needs to resort to an application to the NSWIRC for reinstatement, the application is not founded on any unlawful termination, but rather on the basis the worker is now fit for employment of the relevant kind.

29 I note that on 19 March 2008 the respondent made an election under s 651 of the WR Act. The election was to proceed to arbitration under s 643(1)(a) (that the termination was harsh, unjust or unreasonable) and not s 659, which deals with unlawful termination. There might be a question as to whether s 674 has any work to do given the respondent's election to take unfair rather than unlawful proceedings and thereby, in effect, discontinued the unlawful proceedings. But nothing really turns on this, because what I have said regarding the term "unlawful" applies equally to s 672 and s 674.

30 In the alternative, the applicant contended the s 242 proceedings alleged that the dismissal was "harsh, unjust or unreasonable (however described)... for any reason" for the purposes of s 674(3)(b)(i). Given that s 242 operates without regard as to whether the dismissal was one that was harsh, unjust or unreasonable (however described), s 674(3)(b)(i) does not lead to a different conclusion. It is not to the point that it is unnecessary for Pt 8 to refer precisely to the words "harsh, unjust or unreasonable" because of the words that follow in parentheses in s 674(3)(b)(i). Part 8 does not depend for its operation on notions of fairness in the context of a dismissal, but rather on an objective consideration of whether the worker is fit for the relevant kind of employment. If notions of fairness in the context of dismissal were the criteria it is difficult to see why the legislature would not have left the issues that might arise under Pt 8 to be dealt with under the unfair dismissal provisions of Pt 6 of Ch 2 of the Industrial Relations Act . Unfair dismissal considerations simply do not enter the picture.

Whether Fair Work Act covers the field

31 The applicant's second main contention was that, by operation of s 109 of the Commonwealth Constitution , Pt 8 of the WC Act is rendered inoperative by the WR Act (and to the extent necessary, the FW Act ). The applicant's submissions proceeded on the basis that the relevant federal provision is s 16 of the WR Act. The better view is that at the time that the s 242 proceedings were commenced, the relevant federal Act was the FW Act . As the Attorney submitted, s 11 of the Fair Work (Transitional Provisions and Consequential Amendments) Act gives the WR Act contingent operation in respect of conduct that occurred before WR Act repeal day, however for the purpose of the applicant's second argument the relevant " conduct " would appear to be the bringing of the s 242 proceedings and, accordingly, s 11 of the Fair Work (Transitional Provisions and Consequential Amendments) Act has no application.

32 However, as the Attorney again pointed out, little turns on this given that ss 26 and 27 of the FW Act relevantly replicate the provisions of ss 16(1) and 16(2) of the WR Act, which are the focus of the applicant's submissions.

33 The applicant's submissions may be summarised as follows:

(a) The inconsistency is created by s 16 of the WR Act which defines the scope of the provisions of the enactment for the purposes of excluding State and Territory laws;

(b) The WC Act is a State or Territory industrial law for the purposes of s 16(1)(a) of the WR Act. A "State or Territory industrial law" includes "an Act of a State or Territory that applies to employment generally and has one or more of the following as its main purpose or one or more of its main purposes ... providing for rights and remedies connected with the termination of employment": s 4 of the WR Act. Even though the WC Act does not contain a provision setting out its objects or purposes, by the insertion of Pt 8, one of the main purposes of the WC Act is providing for "rights and remedies connected with the termination of employment" (s ee Second Reading Speech of the Industrial Relations Further Amendment Bill 2006, Hansard , Legislative Assembly, 24 October 2006, at p 3289; Hansard , Legislative Council, 15 November 2005, at p 3920);

(c) section 16(2) of the WR Act excludes a law of the State "so far as", inter alia , the law deals with a "non-excluded matter" set out in s 16(3): see s 16(2)(c) of the WR Act. One of the non-excluded matters is "workers compensation": see s 16(3)(b) of the WR Act. The central question, then, is whether Pt 8 is a law "dealing with" workers compensation;

(d) a law which deals with a matter under s 16(3) of the WR Act "must deal with the matter itself and directly in the sense that the express subject-matter of the legislation is the specified matter (or perhaps one of them)": Endeavour Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2007] FCAFC 177; (2007) 165 FCR 1 at 17. To be a non-excluded matter, the law of the State or Territory is only saved "so far as" it relates to the non-excluded matter;

(e) Part 8 of the WC Act is not a matter dealing directly with the matter of "workers compensation". In reality, the provisions do not concern the compensation of injured workers but the restoration of the employment relationship of employees who are no longer incapacitated but fit for re-employment;

(f) nothing in Pt 8 of the WC Act expressly prohibits the termination of employment of injured workers during the rehabilitation process. The provisions merely provide a remedy where a worker's employment has been dismissed because he or she is not fit for employment as a result of a workplace injury;

(g) reinstatement is conditioned on the injured worker having been rehabilitated after dismissal has taken place. Part 8 does not mandate that an injured worker be reinstated to compel an employer to develop a return to work plan or implement workplace rehabilitation. These obligations arise under Ch 3 of the Workplace Injury Management and Workers Compensation Act 1998 and not Pt 8 of the WC Act. They apply regardless of whether the worker continues or has ceased employment;

(h) once it is recognised that s 242 of the WC Act does not have a direct or rational link to the rehabilitation of injured workers and these rights and obligations are explicitly dealt with elsewhere, then the true and distinct nature of the proceedings become clearer. Its real purpose is employment security and protection. It is designed to redress the potentially harsh outcome of an employer dismissing a worker because of a workplace injury once the employee demonstrates his or her fitness for employment;

(i) it follows that s 242 and its associated provisions under Pt 8 of the WC Act do not deal with the matter of workers compensation. The provisions therefore are not "non-excluded matters" for the purposes of s 16(2)(c) of the WR Act. By operation of s 109 of the Commonwealth Constitution, the WR Act excludes Pt 8 of the WC Act.

34 As the Attorney submitted, it is open to the Commonwealth Parliament to give a clear statement of intention that an Act "is not intended to cover the field, thereby leaving room for the operation of such State laws as do not conflict with Commonwealth law": R v Credit Tribunal; Ex parte General Motors Acceptance Corporation Australia [1977] HCA 34; ( 1977) 137 CLR 545 at 563 per Mason J (with whom Barwick CJ, Gibbs, Stephen and Jacobs JJ agreed); Dickson v The Queen [2010] HCA 30; (2010) 270 ALR 1 at [33] . Where such a statement of intention is expressed, State law in respect of that field will not be rendered inoperative by the Commonwealth law unless there is direct inconsistency: Dickson at [35].

35 Sections 27(1) and (2) of the FW Act are a clear statement of intention that the Act is not intended to cover the field insofar as that field includes the subjects listed in s 27(2), thereby leaving room for the operation of such State laws as do not conflict with Commonwealth law in respect of that subject matter.

36 The Explanatory Memoranda to the Fair Work Bill 2008 stated in respect of what became s 27:

[138] Clause 27 'saves' certain State or Territory laws that might otherwise be excluded by making clear that they are not part of the field covered by clause 26 and are intended to apply to national system employers and national system employees.

...

[142] Paragraph 27(1)(c) saves State or Territory laws dealing with the following non-excluded matters, which are set out in sub-clause 27(2):

...

Workers compensation;

...

37 As the applicant correctly submitted, the question of when a State law will be considered to "deal with" an excluded subject matter was considered in Endeavour Coal. There the Court considered whether s 16(2) of the WR Act preserved the effect of ss 10 and 11 of the Industrial Relations Act insofar as they provided power to make an award in respect of an excluded subject matter, namely, long service leave. The Court considered the expression "deals with" as requiring the law to deal with the subject matter "directly ", stating at [65]:

[65] ... In this section [s 16 of the WR Act], a distinction is drawn between a law which deals with a subject matter (s 16(1)(b) and s 16(2)(c)), and laws which might authorise a tribunal or court to make an order or determination concerning a specified subject matter. Provisions of the latter type are s 16(1)(c) and s 16(1)(d). This suggests a "law deal[ing]" with one of the matters specified in s 16(3) must deal with the matter itself and directly in the sense that the express subject matter of the legislation is the specified matter (or perhaps one of a number of them). On this approach, a law which may authorise a tribunal or court to deal with the subject matter is not a law dealing with the matter. Also, it must be remembered that not only do ss 10 and 11 not deal with long service leave in any direct or obvious way, but the powers they confer might never be exercised to deal with that matter or any of the other matters specified in s 16(3). It is difficult to accept that the Commonwealth Parliament had contemplated that these empowering provisions were "dealing with" those matters in circumstances where none of those matters might be addressed by an award or order made in exercise of the power.

38 In Endeavour Coal, the Court drew a distinction between a law which deals with a subject matter and laws which might authorise a tribunal or court to make an order or determination concerning a specified subject matter. The Court held that ss 10 and 11 of the Industrial Relations Act merely provided power to make an award in respect of an excluded subject matter, namely long service leave. Accordingly, ss 10 and 11 were not laws dealing directly with long service leave.

39 The law with which the Court is presently concerned is Pt 8 of the WC Act. The relevant question is whether Pt 8 is dealing directly with the matter of workers' compensation.

40 Part 8 is to be found in a statute the long title of which is:

An Act to provide for the compensation and rehabilitation of workers in respect of work related injuries; to repeal the Workers' Compensation Act 1926 and certain other Acts; and for other purposes.

41 The WC Act is to be construed with, and as if it formed part of, the Workplace Injury Management and Workers Compensation Act 1998: s 2A. The Workplace Injury Management and Workers Compensation Act is an Act "to provide for the effective management of work-related injuries and injury compensation for workers in respect of such injuries; and for other purposes." The two Acts, therefore, constitute together a scheme regulating the compensation and rehabilitation of workers in respect of work-related injuries; the effective management of work-related injuries; and injury compensation for workers in respect of such injuries.

42 The reference to "workers compensation" in s 26(2)(b) of the FW Act cannot, in my view, be construed narrowly. In enacting the provision the Commonwealth Parliament must be taken to have known that the laws of the State and Territories, in particular New South Wales, dealing with workers compensation were not limited to regulating payments by way of compensation to injured workers, but extended to rehabilitation and other matters relating to the management of workers suffering workplace injury.

43 Part 8 of the WC Act may be regarded as an essential part of the scheme's purpose to rehabilitate injured workers. In State Rail Authority of New South Wales v Tyrrell (No 2) (1993) 51 IR 14 the Full Court of the Industrial Court of New South Wales considered the construction of Part XV, Protection of Injured Employees in the Industrial Arbitration Act 1940. The legislation considered by the Full Court in that case is relevantly and sufficiently similar to Part 8. At 19 the Full Court stated that the "apparent purpose" of the Part was "... assisting in the rehabilitation of injured workers."

44 In Australian Salaried Medical Officers' Federation (NSW) v Central Sydney Area Health Services [2005] NSWIRComm 339; (2005) 147 IR 56 the Full Bench of the NSWIRC considered the provisions of Pt 7, Protection of Injured Employees found in Ch 2 of the Industrial Relations Act , being provisions which are relevantly the same as the provisions now found in Pt 8 of the WC Act. The Full Bench had to determine the meaning of the expression "injured employee" and reached a conclusion that the Full Bench considered to be "consistent with the statutory purpose" of the injured worker provisions, namely (at [72]):

[72] ... to promote rehabilitation and return to work of employees injured at work by providing some measure of protection to them from dismissal on the basis of work-related injury provided the employee establishes a relevant level of fitness for work and the application is brought within a reasonable time after the dismissal.

45 At [73] the Full Bench added:

[73] The statutory purpose we have identified emerges from an examination of the legislation itself. It is also confirmed by the various Second Reading Speeches referred to in the Minister's submissions, to which we have earlier referred. We do observe however that in the then Minister's Speech of May 1987 there is reference to workers being given "protection against unfair dismissal while on workers' compensation". Although it might be thought that choice of words supports the contentions of the third respondent, to take a narrow view of that part of the Minister's Speech would be to fail to give appropriate weight to the balance of the speech which provides not only the context in which that part of the speech is to be considered, but also a clear statement of the purpose of the legislation.

46 Part 8 was inserted into the WC Act by the Industrial Relations (Further Amendment) Act 2006. The essential terms of Pt 8 originally appeared as Pt 7 of Ch 2 of the Industrial Relations Act but a decision was taken to transfer those provisions into the WC Act. In the second reading speech relating to the Industrial Relations Further Amendment Bill 2006 ( Hansard , Legislative Assembly, 24 October 2006 at p 3289) the Minister for Water Utilities, Minister for Small Business, Minister for Regional Development, and Minister for the Illawarra, Mr David Campbell MLA, stated:

I deal now with the second bill, the Industrial Relations Further Amendment Bill, which aims to counteract the destructive effects of the Federal Government's WorkChoices legislation.

...

The bill also transfers the injured worker protection provisions contained in chapter 2 part 7 of the Industrial Relations Act 1996 to the Workers Compensation Act 1987. Those provisions provide an injured worker with the remedy of reinstatement if that worker is dismissed from employment because he or she is not fit for employment because of that injury. The provisions also create an offence when an employer dismisses a worker because that worker is not fit for employment because of the injury and dismissal takes place within six months of the worker becoming unfit for employment.

The injured worker protections contained in the bill are an integral part of the workers compensation scheme to get injured workers back to work and to ensure employers are engaged in this process. The duties of employers to find injured workers suitable duties, to commence workplace rehabilitation programs, and develop return-to-work programs would become meaningless if an employer was simply able to dismiss the worker to avoid these obligations. The protections for injured workers in the bill are an essential element of the workers compensation scheme in this State. It is appropriate that the bill provides for these protections to sit appropriately within State workers compensation legislation. These initiatives will guarantee that these important remedial provisions live on, providing reassurance to employers and their workers regarding their rights and responsibilities, given the current climate of confusion.

47 It is apparent that the Government was concerned that an "integral part of the workers compensation scheme", namely, getting injured workers back to work and ensuring employers were engaged in that process, might be lost as a consequence of the Work Choices legislation, in particular s 16 of the WR Act. It is also apparent the Government's objective was to ensure the protection of injured worker provisions, which had resided in the Industrial Relations Act (an Act that had been specifically targeted by the Commonwealth as one excluded by the operation of the WR Act), would continue to apply in New South Wales as " an essential element of the workers compensation scheme in this State."

48 The FW Act re-enacted s 16 in essentially the same terms in ss 26 and 27. It can be presumed, as the Attorney and the respondent submitted, that the Commonwealth Parliament was aware that the injured worker provisions had been moved into Pt 8 of the WC Act by that time. Had the Commonwealth Parliament wished to invalidate Pt 8 it could readily have done so. The absence of an invalidating provision in s 26 or the Regulations support the view that the Commonwealth Parliament did not intend to oust the effect of Pt 8 of the WC Act.

49 In this respect, the respondent referred to Electrolux Home Products Pty Ltd v Australian Workers' Union [2004] HCA 40; (2004) 221 CLR 309 at [81] per Gleeson CJ:

[81] Because the Federal Parliament enacted the Act two years after the Re Alcan decision, the drafters of the Act almost certainly knew of the decision and the interpretation applied by this Court to the expression "about matters pertaining to the relationship between employers and employees". The principle that the re-enactment of a rule after judicial consideration is to be regarded as an endorsement of its judicial interpretation has been criticised, and the principle may not apply to provisions re-enacted in "replacement" legislation. However, industrial relations is a specialised and politically sensitive field with a designated Minister and Department of State. It is no fiction to attribute to the Minister and his or her Department and, through them, the Parliament, knowledge of court decisions - or at all events decisions of this Court - dealing with that portfolio. Indeed, it would be astonishing if the Department, its officers and those advising on the drafting of the Act would have been unaware of Re Alcan. (references omitted)

50 There is no reason to view Pt 8 as being anything other than an "integral part of the workers compensation scheme", designed to ensure that injured workers are provided with every opportunity to be rehabilitated and to resume their employment after they have become fit for duty within the relevant time period provided. The correctness of this approach, as the Attorney submitted, is confirmed by giving the exclusion for " workers compensation" in the FW Act a beneficial and broad interpretation, which is appropriate in light of the public policy purpose of workers compensation.

51 I find that Pt 8 of the WC Act is a law that deals with workers compensation.

Whether federal industrial instruments prevail over Part 8 of WC Act

52 In the alternative, the applicant submitted that the federal workplace agreements governing the respondent's employment prevail over Pt 8 of the WC Act. These agreements are a 2006 Agreement made under s 170LJ of the WR Act, which was replaced by a 2009 Agreement made under s 327 of the WR Act and which commenced operation on 1 July 2009. The Agreements bind the applicant, the Australian Workers' Union and all employees subject to the provisions of the Glass Industry - Glass Production - Award 1998. That Award, as at 1 December 2005, is incorporated into the Agreements. The Award provides in cl 12 that the applicant:

[M]ay direct an employee to carry out such duties as are within the limits of the employee's skill, competence and training.

53 Under s 170LZ(1) of the WR Act (as applied before the enactment of the Work Choices Act in 2006), a certified agreement prevailed over the terms and conditions of employment specified in a State law to the extent of any inconsistency. Similarly, under s 17(1) of the WR Act, the 2009 Agreement prevailed over a State law to the extent of any inconsistency. These arrangements continue to apply: see Item 5A of Sch 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act .

54 The applicant submitted that cl 12 of the Award (as incorporated into the Agreements) empowered the applicant to determine the kind of work and employment that the respondent was to perform. It was submitted this conflicted with the NSWIRC's power to order reinstatement under Pt 8 of the WC Act. The applicant submitted the power under Pt 8 impaired and detracted from the applicant's power to make directions to employees under the Award to perform any duties within their skill, competence and training. It therefore gave rise to a direct collision. As federal agreements had primacy over inconsistent State laws, the federal agreements prevailed over the inconsistent provisions of Pt 8 of the WC Act.

55 The power under Pt 8 is the power to order the worker to be reinstated to employment of the kind for which the worker has so applied for reinstatement (or to any other kind of employment that is no less advantageous to the worker), but only if the NSWIRC is satisfied that the worker is fit for that kind of employment: s 243(2); or under s 243(3) the power to order the worker to be reinstated to employment of any other kind for which the worker is fit, being:

(a) employment of a kind that is available but that is less advantageous to the worker, or

(b) employment of a kind that the Commission considers that the employer can reasonably make available for the worker (including part-time employment or employment in which the worker may undergo rehabilitation).

56 There is a clear distinction between a power to reinstate a person in employment and a power to direct an employee to carry out duties within their skill, competence and training, so it is not readily apparent that a direct inconsistency arises. It is possible (indeed probable) an order made reinstating an employee under Pt 8 in employment is employment of a kind that is within the employee's skill, competence and training. If the employee is not fit to undertake certain duties it seems to me the employee would not be competent to perform that work, that is, the employee would not be "capable" (see definition of "competent" in Macquarie Dictionary Online, 2011).

57 In any event, as pointed out by the Attorney, any direct inconsistency in respect of the federal instrument made under the WR Act is removed by s 17(2) of the WR Act (the interaction rules provided by s 17 continue to apply pursuant to Item 5A of Sch 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act ). Section 17(2) is in the following terms:

However, a term of an award or workplace agree m ent dealing with any of the following matters has effect subject to a law of a State or Territory dealing with the matter, except a law that is prescribed by the regulations as a law to which awards and workplace agreements are not subject:

(a) occupational health and safety;

(b) workers compensation;

(c) training arrangements;

(d) a matter prescribed by the regulations for the purposes of this paragraph.

58 For the reasons earlier given, Pt 8 of the WC Act is a law dealing with workers compensation. The effect of s 17(2) is to have a law of a State that deals with one of the enumerated subject matter, including workers compensation, prevail over an inconsistent term of an award or workplace agreement. Section 17(2) renders the term of a federal instrument inoperative to the extent of inconsistency with a State law that deals with, for example, workers compensation. Thus, even if it were correct that an inconsistency existed between Pt 8 of the WC Act in respect of the Commission's power to reinstate a person in employment and the terms of cl 12 of the Glass Award (as incorporated into the Agreements), the terms of cl 12 is rendered inoperative to the extent of the inconsistency.

No extra claims

59 The applicant's final contention was that both Agreements contain a clause that prohibits the parties from pursuing any extra claims concerning matters related to the employment of employees whether dealt with in the Agreements or not (cl 10 of the Agreements). It was submitted that by the respondent making the application for a reinstatement order under Pt 8 of the WC Act the respondent was making an extra claim in breach of the Agreements. By force of s 109 of the Constitution, the Agreements "restrain" the respondent from making the application.

60 The Court agrees with the Attorney's submission: no relevant inconsistency arises. The No Extra Claims clause has its origins in the federal Metal Industry Award, when a no extra claims clause was inserted in the Award in 1982 as part of an agreement which required the unions to refrain from making any future claims regarding increased wages and reduced working hours for 12 months. The concept was subsequently adopted more widely and became an important element of wage fixing principles applied by federal and State tribunals. The clause was only intended to be construed as restricting the relevant union, or the employees individually or collectively, from bringing claims to improve terms and conditions of employment beyond those contained within the industrial instrument for the period during which the instrument operated.

61 The provision is not to be construed as intending to limit the rights of an individual employee to bring proceedings to enforce or obtain statutory rights which exist independently of the federal industrial instrument. In any event s 17(2) of the WR Act would apply.

Conclusion

62 There is no basis for making the orders sought by the applicant. No inconsistency arises between Pt 8 of the WC Act and any federal law. The respondent is not prevented from bringing further proceedings pursuant to Pt 8.

Costs

63 The respondent has 14 days to file and serve written submissions on the question of costs. The applicant and intervenors have a further 14 days in which to respond. Unless application by a party or intervenor is made to be heard orally, the question of costs will be determined on the papers.

Orders and directions

64 The Court orders that the applicant's application for declaratory and injunctive relief is dismissed.

65 The Court directs that the respondent has 14 days to file and serve written submissions on the question of costs. The applicant and intervenors have a further 14 days in which to respond. Unless application by a party or intervenor is made to be heard orally, the question of costs will be determined on the papers.

_______________________________________

Decision last updated: 18 February 2011