Lennon v TNT Australia Pty Ltd  NSWCA 77
|Judgment date:||18 April 2013|
|Jurisdiction:||New South Wales Court of Appeal1|
- An employer licensed to pay compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) may still be liable to pay compensation to its employees under the Workers Compensation Act 1987 (1987 Act) for injuries caused by a gradual process, including binaural hearing loss.
- If an injury occurred after a licence under the SRC Act came into force, the SRC Act would apply. Any liability under the 1987 Act occurring before the licence came into force would be preserved, however, by virtue of s 108A(7) of the SRC Act.
- If an injury occurred before a licence under the SRC Act came into force, neither the SRC Act nor the licence would apply.
The worker, Mr Robert Lennon, was employed by TNT Australia Pty Ltd (TNT) as a driver for approximately 15 years. During the course of his employment, the worker was exposed to loud noises and consequently suffers from binaural hearing loss.
On 24 March 2011, the worker made a claim for lump sum compensation under the 1987 Act. The worker's claim was declined on the basis that from 1 July 2008, TNT had been licensed under the SRC Act to make compensation payments under the Commonwealth scheme.
The worker lodged an Application to Resolve a Dispute in the Workers Compensation Commission. The jurisdiction of the Commission to hear the dispute was identified as a preliminary issue. At the request of the parties, the Arbitrator agreed to refer the issue as a question of law to the President pursuant to s 351 of the Workplace Injury Management and Workers Compensation Act 1998 in the following terms:
On 30 March 2012, President Keating held that the worker's binaural hearing loss was deemed to have occurred on 24 March 2011 when the claim for lump sum compensation was made. Therefore the State scheme did not apply. The worker appealed from the President's answer to the question. The Attorney General for New South Wales intervened.
Court of Appeal
Basten JA (Macfarlan JA and Barrett JA agreeing) considered the question put to the President had been flawed in that its formulation likely led to the President dealing with it under the 1987 Act. Basten JA noted it was not in dispute that the worker was entitled to compensation under the 1987 Act unless that Act was inoperative because it was inconsistent with a commonwealth law, pursuant to s 109 of the Constitution. The answer to that question (and the liability of TNT) depended on the scope of the SRC Act and the terms of the licence.
The critical provisions were found in s 108A of the SRC Act which provides:
- a licensee is authorised to accept liability to pay compensation and other amounts under this Act in respect of particular injury, loss or damage suffered by, or in respect of the death of, some or all of its employees; and
- such injury, loss, damage or death occurs;
- the licensee is liable to pay compensation and other amounts under this Act in respect of that injury, loss, damage or death; and
- Comcare is not liable to pay compensation or other amounts under this Act in respect of that injury, loss, damage or death.
- If a licensee who is a corporation is authorised to accept liability to pay compensation and other amounts under this Act in respect of a particular injury, loss or damage suffered by, or in respect of the death of, some or all of its employees after the license comes into force then:
- no law of a State or Territory relating to workers compensation applies to a licensee in respect of such injury, loss, damage or death; and
- any liability or obligation of the corporation under a law of a State or Territory in respect of such injury, loss or damage suffered, or death occurring, before the licence came into force is unaffected."
Applying the principles of statutory construction, Basten JA held that if, by application of the SRC Act, the injury occurred after the licence took effect on 1 July 2008, the 1987 Act did not apply: s 108A(7)(a). If the injury had, by application of the SRC Act, arisen before the licence came into force, then that Act would not apply to it: that is, ss 108A(1) and (7) read together did not envisage a licence applying except in respect of an injury suffered after it comes into force2 .
Basten JA noted, at , that if the SRC Act did not apply that it would not be inconsistent with the 1987 Act. Since the tests under s 7(4) of the SRC Act (provisions relating to diseases) and s 17(1) of the 1987 Act (loss of hearing - special provisions) differ, a single injury of gradual onset could be taken to have occurred at different dates under each Act. Because the Acts must each be applied in their own terms, the result is not anomalous.
As to whether TNT had incurred a liability under the 1987 Act prior to its Commonwealth licence coming into force, Basten JA stated this would depend on the operation of s 17(1) of the 1987 Act. Basten JA also noted the worker had claimed lump sum compensation, the right to which accrued at the time of injury3 . It followed therefore that a right to compensation, with a correlative "liability" in TNT, arose when the injury occurred.
Section 17 of the 1987 Act provides:
- If an injury is a loss, or further loss, of hearing which is of such a nature as to be caused by a gradual process, the following provisions have effect:
- for the purposes of this Act, the injury shall be deemed to have happened:
- where the worker was, at the time when he or she gave notice of the injury, employed in an employment to the nature of which the injury was due-at the time when the notice was given, or
- where the worker was not so employed at the time when he or she gave notice of the injury-on the last day on which the worker was employed in an employment to the nature of which the injury was due before he or she gave the notice
- compensation is payable by:
- where the worker was employed by an employer in an employment to the nature of which the injury was due at the time he or she gave notice of the injury-that employer, or
- where the worker was not so employed-the last employer by whom the worker was employed in an employment to the nature of which the injury was due before he or she gave the notice."
Applying the reasoning in Russo v World Services and Constructions Pty Ltd4 and A & G Engineering Pty Ltd v Civitarese5 , Basten JA held that TNT was liable, not as the worker's employer at the time of giving notice, but as the last employer by whom the worker was employed in relevant employment, before he or she gave notice: s 17(1)(c)(ii) of the 1987 Act. Consistency therefore required that a similar reading be given to paragraph (a), so that the injury was deemed to have happened on the last day on which the worker was employed in relevant employment before he or she gave notice, which was 30 June 2008.
Basten JA further held that by virtue of s 31(2)(a) of the Interpretation Act 1987 (NSW), when TNT obtained the grant of a licence under the SRC Act, it ceased to be an "employer" within the meaning of that term in the 1987 Act. Basten JA therefore concluded that the worker had acquired an entitlement under the 1987 Act as at 30 June 2008. Moreover, even if under the SRC Act his injury was taken to have occurred after the licence took effect, that entitlement was preserved by s 108A(7)(b).
This decision confirms that injured workers' claims for compensation may still fall within the scope of the 1987 Act after a licence to pay compensation under the SRC Act has come into force. This is so, even if the injury is deemed to have occurred after the licence has taken effect.
Employers licensed under the SRC Act should take note that the State scheme may still be operative and manage claims accordingly.
1 Basten, Macfarlan and Barrett JJA
2 at 
3 Bresmac Pty Ltd v Starr (1992) 29 NSWLR 318 at 327, Priestley JA (Handley and Sheller JJA agreeing);
TNT Australia Pty Ltd v Horne (1995) 36 NSWLR 630; Perrott v Crisp  NSWCA 239
4  1 NSWLR 330
5 (1996) 41 NSWLR 41
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