Australia: No Compensation In Respect Of Injury Which Occurred Arising From Events Prior To Licence Coming Into Force

Last Updated: 5 August 2009
Article by Natalie Fisher

AAT determines that a licensed corporation is not liable to pay compensation in respect of any injury which occurred arising from events before the licence came into force.

Grixti and Linfox Australia Limited [2009] AATA 566

In Brief

  • Commonwealth corporation not to pay compensation referable to an "injury" suffered outside the licence period – no compensable injury to which the SRC Act applies – possibility that applicant has no remedy under the Workers Compensation Act 1987 (NSW) is not a basis to construe the SRC Act so as not to defeat the claim


Mr Grixti suffered from hearing loss for which he had received permanent impairment lump sums. Mr Grixti commenced employment with Linfox in 1993 as a truck driver in a number of noisy jobs. There was no dispute that his work contributed to further hearing loss in subsequent years. On 11 April 2006 Mr Grixti was examined by Dr Scoppa who assessed him as suffering binaural hearing loss due to industrial deafness of 15.4%. Based upon Dr Scoppa's report a claim for worker's compensation under the Workers Compensation Act 1987 (NSW) was made on 30 June 2006. The claim was rejected on the basis that Linfox had become self-insured on 3 April 2006 under the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the SRC Act").

A claim directly against Linfox under the SRC Act was sent to Linfox on 29 January 2007. The claim was based on Dr Scoppa's assessment. The claim was rejected on 24 December 2007 upon the basis that Mr Grixti's exposure to noise between the time that Linfox became self insured on 3 April 2006 and Dr Scoppa's medical examination on 11 April 2006 would not have contributed to Mr Grixti's "disease" to a significant degree. A reviewable decision dated 6 February 2008 affirmed the initial determination.

Linfox contended that Mr Grixti's hearing loss was not compensable under the SRC Act because the period before Linfox became self insured under the provisions of the SRC Act could not be taken into account. Dr Scoppa saw Mr Grixti only eight days after the respondent became self-insured. His evidence was that any hearing loss in that period would not be measurable.

Relevant Legislation

Apart from its application to employees of the Commonwealth, the SRC Act also applies to employees of corporations who apply for, and are granted, a licence under Part VIII of the SRC Act by the Safety, Rehabilitation and Compensation Commission established under section 89A of the SRC Act ("the SRC Commission").

Sections 108 and 108A provide:

108(1) A licence may provide that the 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 under this Act.

(2) The scope of the licence, so far as it authorises acceptance of liability to pay such compensation and other amounts, may be determined by the Commission.

(3) The Commission may determine, as part of the scope of the licence, that the licensee may accept such liability in respect of such injury, loss, damage or death occurring at a time before the licence came into force.

108A (1) If:

  1. 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
  2. such injury, loss, damage or death occurs; then:
  3. the licensee is liable to pay compensation and other amounts under this Act in respect of that injury, loss, damage or death; and
  4. Comcare is not liable to pay compensation or other amounts under this Act in respect of that injury, loss, damage or death."

Section 108A(2) provides:

Nothing in subsection (1) affects Comcare's liability to pay compensation or other amounts under this Act in respect of a particular injury, loss, damage or death for which Comcare would have been liable, but for the operation of the licence, to the extent that the liability is not a liability that the licensee is authorised to accept."

Clauses 4A and 4C of the licence granted by the SRC Commission to Linfox state:

Scope Of Licence – Acceptance Of Liability

4A. The Commission determines, under section 108 of the SRC Act that the Licensee is authorised to accept liability to pay compensation and other amounts under the SRC Act in respect of all injuries, loss or damage suffered by, or in respect of the death of, any of the employees of the Licensee, where such injuries, loss, damage or death occur within the scope of the licence, except in respect of any injuries, loss or damage suffered by, or in respect of the death of, any employees of the Licensee who are:

  1. labour hire workers; or
  2. independent contractors.

4B. ...

4C. The Licensee is authorised to pay compensation and other amounts under the SRC Act in respect of all injuries, loss or damage suffered by, or in respect to the death of, all of the employees covered by the scope of this licence where such injuries, loss, damage or death occur within the period of this licence."

The Decision

The SRC Commission initially granted a licence to Linfox on 15 March 2006, to operate from 3 April 2006 to 30 June 2007. Justice Buchanan and Dr Alexander concluded that section 108A(1) imposes a liability to pay compensation on the licensee and relieved Comcare of a liability it would otherwise have under Part II of the SRC Act to pay compensation to "employees". The liability imposed on a corporation, such as Linfox, to pay compensation is identified by the scope of its authority to accept liability. The SRC Commission may also determine that a licensee may accept liability arising from injury before the licence came into force (s 108(3)), but the Tribunal noted that there was no suggestion it has done so, either generally or so far as Linfox was concerned.

The SRC Commission was obliged by s 103, and expressly empowered by s 108(2), to determine the scope of Linfox's licence to accept liability to pay compensation. That was done by clauses 4A, and 4C of a licence to operate from 3 April 2006 to 30 June 2007. The Tribunal determined that Linfox was not authorised by this licence, in accordance with section 108(3), to accept liability or pay compensation arising from events before the licence came into force. To the contrary, it was explicitly denied any such discretion or authority. It follows that it was not, during the currency of this licence, authorised or liable to pay compensation referable to an "injury" suffered before 3 April 2006. Neither is it so authorised now.

The Tribunal determined that Mr Grixti could not succeed in his present claim. He had not established that he suffered a compensable injury to which the SRC Act applied.

It was also noted that a submission made for Mr Grixti that he could not now seek any remedy under the New South Wales Act. Based on that contention it was submitted that Linfox was under some obligation not to resist his claim and that the provisions of the SRC Act should be construed so as not to defeat it. Justice Buchanan and Dr Alexander considered that neither submission was tenable.


This is the first decision by the Tribunal dealing with injuries sustained by an employee of a licensed corporation prior to its SRC licence. The decision makes it clear that depending on the scope of a particular licence, a corporation will not be found liable for injuries occurring before the commencement of that corporation's licence. The Minister, in dealing with the SRC Commission regarding the granting of licences to corporations, directed that corporations granted licences not be given the authority to accept liability for injuries prior to the commencement of those licenses. As such any liability regarding prior injuries will lie under the previous workers compensation arrangements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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