Federal Court of Australia

Touhey v Salini Australia Pty Ltd [2022] FCA 55

ORDERS

THE COURT DECLARES THAT:

1.    The applicant was entitled to accrue annual leave in his employment with the respondent whilst he was absent from work and receiving workers' compensation payments in the period from 15 January 2019 to 20 January 2020.

2.    The respondent contravened s 44(1) of the Fair Work Act 2009 (Cth) by failing to pay the applicant upon the end of his employment amounts for untaken annual leave he was entitled to accrue in the period from 15 January 2019 to 20 January 2020 as required by s 90(2) of the Fair Work Act.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BANKS-SMITH J:

Introduction

1    The applicant, Mr Touhey, was employed by the respondent, Salini Australia Pty Ltd, as a carpenter to work on the Forrestfield-Airport Link project in Western Australia.

2    On or about 29 August 2018 Mr Touhey suffered a workplace injury.

3    From 15 January 2019 to 20 January 2020 Mr Touhey was absent from work and receiving workers' compensation payments under the Workers' Compensation and Injury Management Act 1981 (WA) (WCIM Act).

4    On 3 February 2020 Mr Touhey's employment with Salini ended, and pursuant to s 90(2) of the Fair Work Act 2009 (Cth) (FW Act) he was entitled to be paid for accrued untaken annual leave.

5    Mr Touhey claims that he was entitled to accrue 154.5 hours of annual leave during the period 15 January 2019 to 20 January 2020 when he was absent from work, and that Salini contravened s 44(1) of the FW Act by failing to pay it.

6    The amount due was said to be $5,407.51 gross, calculated on the basis of 154.5 hours at Mr Touhy's ordinary rate plus a 17.5% leave loading component. The leave loading was said to be payable under the Company Enterprise Agreement 2016-2020 which covered and applied to Mr Touhey's employment with Salini.

7    Mr Touhey instituted these proceedings seeking payment of the claimed annual leave entitlement, together with declarations as to the entitlement and contravention, and an order requiring payment of a pecuniary penalty.

8    Salini subsequently paid the claimed sum (or an amount very close to that sum) to Mr Touhey and he no longer presses for an order as to payment. Salini's solicitors described the payment as made 'without any admission of liability'. Mr Touhey pursues the other relief.

9    On 20 August 2021, Salini filed a submitting notice pursuant to r 12.01 of the Federal Court Rules 2011 (Cth) which states that:

The Respondent submits to any order the Court may make in the proceeding.

The Respondent wants to be heard on any question of penalties and costs.

10    Salini did not wish to be heard on this application. Salini has not filed a defence.

Relief sought on this application

11    Accordingly, Mr Touhey seeks the following relief at present (the question of penalty being adjourned for later consideration):

(1)    A declaration that the applicant was entitled to accrue annual leave in his employment with the respondent whilst he was absent from work and receiving workers' compensation payments in the period from 15 January 2019 to 20 January 2020.

(2)    A declaration that the respondent contravened s 44(1) of the FW Act by failing to pay the applicant upon the end of his employment amounts for untaken annual leave he was entitled to accrue in the period from 15 January 2019 to 20 January 2020 as required by s 90(2) of the FW Act.

Communications with Salini

12    After receipt of the submitting notice, Mr Touhey by his solicitors indicated that he would move for judgment when this hearing proceeded and filed submissions in support of that course. In those submissions it was indicated that Mr Touhey intended to rely on r 1.32 of the Federal Court Rules (the Court may make any order it considers appropriate in the interests of justice); r 5.23(2)(c) (if a respondent is in default and the matter has relevantly proceeded by way of originating application and statement of claim, the applicant may apply to the Court for an order giving judgment for relief claimed to which the Court is satisfied that the applicant is entitled); or r 22.07 (if a party makes admissions another party may apply for any judgment or order to which the party is entitled on the admission).

13    Salini's solicitors then wrote to Mr Touhey's solicitors contending that it was not open for Mr Touhey to seek default judgment under r 5.23(2)(c), as Salini was not in default but rather had filed a submitting notice. They also contended that it was not open for Mr Touhey to rely on r 22.07, as it was said that the rule only operates where a party has served a notice to admit facts and no notice of dispute is served.

14    Salini's solicitors, despite raising this issue in correspondence and requiring Mr Touhey's solicitors to confirm they would provide a copy of their letter to this Court, took no steps to seek leave to address the Court or pursue its contentions by submissions. This left Mr Touhey's solicitors in the position where they were obliged to develop the matters raised informally by Salini, an obligation they met by filing supplementary submissions, for which the Court is grateful.

Default judgment

15    Mr Touhey's contention that Salini was in default is premised on its failure to file a defence and its failure to attend a case management hearing listed by the Court. Salini filed its submitting notice on 20 August 2021, so before the date for filing any defence expired (at its latest 26 August 2021) and before the date of the case management hearing (25 August 2021).

16    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

17    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.

18    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.

19    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).

20    I do not consider the filing of the submitting notice evidences formal admissions on the part of Salini to the underlying claims. Rather, as explained below, it restricts its right to oppose or challenge Mr Touhey's position going forward.

Effect of a submitting notice

21    I am satisfied that as the submitting notice has been filed, it is open to the Court to proceed to grant declaratory relief as sought by Mr Touhey without the requirement of any more formal trial, summary judgment application or testing of evidence, provided it is otherwise appropriate to exercise such power.

22    In order to reach this view it has been necessary to consider more generally the significance of a submitting notice.

23    Rule 12.01 reads as follows:

Submitting notice

(1)    A party who has been served with an originating application or a notice of appeal who does not want to contest the relief sought in the originating application or the notice of appeal may file a submitting notice, in accordance with Form 29.

Note:    Submitting notice is defined in the Dictionary.

 (2)    A submitting notice must:

(a)    state that the party submits to any order that the Court may make; and

(b)    state whether the party wants to be heard on the question of costs; and

(c)    include an address for service; and

(d)    be filed:

(i)    for a party served with an originating application - before the return date; or

(ii)    for a party served with a notice of appeal - within 14 days after being served with the notice of appeal.

(3)    A party who has filed a submitting notice may apply to the Court for leave to withdraw the notice.

(4)    An application under subrule (3) must be accompanied by an affidavit stating:

(a)    why the party wants to withdraw the submitting notice; and

(b)    the party's intentions in relation to the further conduct of the proceeding.

24    The rule did not have a counterpart in the former Federal Court Rules 1979 (Cth).

25    Other State rules of court have similar but different provisions. For example, r 6.11 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) provides that:

(1)    A defendant who intends to take no active part in proceedings may include in the defendant's notice of appearance a statement to the effect that the defendant submits to the making of all orders sought and the giving or entry of judgment in respect of all claims made, to which may be added the words', save as to costs'.

(2)    Except by leave of the court, a defendant who has filed a notice of appearance containing a statement referred to in subrule (1) may not file a defence or affidavit or take any other step in the proceedings.

26    There is little authority on the operation of r 12.01 apart from in the context of costs. However, three authorities, including one of this Court, provide some broader assistance.

27    Although addressing the earlier New South Wales counterpart to r 6.11 of the UCPR, Young J examined the nature of a submitting appearance in Trust Co of Australia Ltd v Perpetual Trustees (WA) Ltd (No 2) (1995) 36 NSWLR 654. His Honour traced the history of the submitting appearance in New South Wales, noting that it apparently had its origin in the rules of equity procedure and was known in New South Wales until the commencement of the Supreme Court Act 1970 (NSW), before being reintroduced in 1991: at 655-658. I note the terms in which it was reintroduced are substantively the same as those of r 6.11 of the UCPR.

28    His Honour noted that the rule had some 'weird effects', including excluding entry of default judgment for failure to file a defence: at 658. However, his Honour accepted the proposition that the words 'submits to the making of all orders sought and the giving or entry of judgment' in the rule make it clear that the defendant who files such a notice is not entitled to contest the plaintiff's claim, is not entitled to any notice of hearing and cannot speak to any proposed order unless the court gives leave: at 660. His Honour observed that it does not follow from the entry of a submitting appearance that the plaintiff is given judgment as a matter of course. For example, where discretionary relief is in issue, the court must be satisfied as to the proper exercise of its discretion. Generally a declaration will not be made without a proper contradictor. Even on admissions, a court might not enter judgment depending on the circumstances.

29    I add that counsel for Mr Touhey contended that Young J 'accepted that a submitting appearance may be taken as an admission of a plaintiff's claim', although counsel acknowledged that the court must still be satisfied that the plaintiff has made out the claim on such admissions and that the relief sought is appropriate. I do not read Young J's observations as going so far as to say that the filing of a submitting appearance may be taken as an admission of a claim. Rather, his Honour emphasised the constraints imposed on a defendant once a submitting notice is filed and that the process for an applicant is thereby significantly simplified, obviating the need for alternatives such as a summary judgment application or an ex parte trial. As Young J noted, in the ordinary course if a submitting notice has been filed, the court will grant the relief sought if the allegations in the statement of claim justify it in doing so: reasons at 660-661.

30    In Kisimul Holdings Pty Ltd v Clear Position Pty Ltd (No 2) [2014] NSWCA 317; (2014) 86 NSWLR 645 the Court of Appeal said the following as to the proper approach to a submitting notice:

[14]    The true position is that the question should be approached not by reference to prima facie expectations but according to an appraisal of the circumstances of the case. In particular, attention must be paid to the context in which the submitting appearance was filed. Pertinent, in that connection, are the following observations of Beazley JA (as she then was) in Nyman v Valmas [1997] NSWCA 235:

'In my opinion, the filing of a submitting appearance does not denote consent to the orders sought. A submitting appearance (both at first instance and in this Court) may be filed for a variety of reasons. The typical situation is where a party has no vested interest in the outcome of proceedings. This typically occurs in statutory appeals where a necessary respondent is the Court or Tribunal from which the appeal is brought. Another is where a party holds funds as a stakeholder or on trust. However, the occasions where a submitting appearance is filed are by no means limited to such obvious circumstances. A party might submit where the costs of appeal outweigh the amount in dispute so that it was too prohibitive or simply not worth the while of a party to contest the matter. The procedure provided by the submitting appearance is a means of facilitating notice to the Court that the party does not propose to put any argument to the court.'

31    More recently in EEU20 v Meat Industry Employees' Superannuation Fund Pty Ltd (Trustee) (No 2) [2020] FCA 1536 Mortimer J said:

[12]    It is necessary first to say something briefly about the function of submitting notices under the Court's Rules. The Rules provide expressly for this process, and the notices perform an important function in the administration of justice, and the discharge of the Court's judicial function in accordance with s 37M of the Federal Court of Australia Act 1976 (Cth). A submitting notice is a mechanism whereby a party to a proceeding in this Court formally indicates that it will abide by the outcome of the Court's exercise of judicial power. The party 'submits to any order the Court may make'. It is a step in a proceeding beyond simply not appearing.

[13]    As r 12.01(3) and (4) make clear, the effect of filing such a notice is intended to compel a party to adhere to that position unless leave is granted by the Court for it to change its position. This is a further indication of the intended final effect of such a notice being filed.

[14]    While an applicant under s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) will still have to prove error in the Tribunal's review, and will still have to satisfy the Court the relief sought is appropriate, the filing of such notices removes any active contradiction to the position being advanced by the applicant. The absence of active contradiction not only reduces the costs incurred by an applicant, and the time and resources expended by both an applicant and the Court, it removes the prospect of any appeal and provides certainty and finality for an applicant in a situation where an applicant is successful. These are valuable attributes. Parties should not be discouraged from employing these processes by the spectre of a costs order being made against them in any event. Of course, there may well be circumstances where a party who files a submitting notice behaves in a way which merits a costs order being made, but as the Court noted in the principal reasons, that is not this case.

The relief sought and Salini as contradictor

32    The Court has a wide discretionary power to grant declaratory relief pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth).

33    The principles with respect to the grant of declaratory relief, and this Court's jurisdiction to make declarations, are well recognised. The question must be a real and not hypothetical one; the applicant must have a real interest in raising it; and there must be a proper contradictor: Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-438 (Gibbs J). The principles were extensively analysed and addressed by the Full Court in Clarence City Council v Commonwealth of Australia [2020] FCAFC 134; (2020) 280 FCR 265 at [57]-[75] (noting special leave has been granted).

34    The requirement for a contradictor must always be addressed in context. For example, there are many examples where the facts necessary to support a declaration are established by agreed facts (under s 191 of the Evidence Act 1995 (Cth)) and admissions: see generally Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; (2017) 254 FCR 68 at [90]-[93]. Even where there has been default in pleading, a declaration may be made in appropriate circumstances: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427 at [54]-[59] (Kiefel J), endorsed by the Full Court in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; (2007) 161 FCR 513 at [92].

35    In this case, for reasons given below, it is apparent that there is a real question as to whether the WCIM Act engages the exception in s 130(2) of the FW Act which would permit payment of the claimed untaken accrued annual leave entitlement to Mr Touhey: it is not a hypothetical or theoretical issue. It is also apparent that Mr Touhey, as an employee affected by Salini's failure to pay such entitlements, has a real interest in raising it.

36    I am also satisfied, having regard to the position and conduct of Salini, that it is a proper contradictor.

37    Salini has notice of the relief sought by Mr Touhey. It has notice of the nature of the claims and the questions of statutory construction that arise as they are fully pleaded in the statement of claim and addressed in the submissions. Although not obliged to do so, Mr Touhey served his submissions and supporting affidavits on Salini. Salini has responded in correspondence, as already referred to. I add that in the correspondence, Salini also asserted that the Court would not grant declaratory relief because there is no contradictor, and because of 'the import beyond this proceeding of the interpretation adopted by the Court'.

38    Additionally, Salini pointed to potential amendment to the WCIM Act that it says 'provides for a clarification regarding accrual of annual leave when entitled to income compensation', and suggested that there was little utility in 'pressing for a declaration when the legislative scheme is almost certain to be clarified or changed'.

39    That Salini raised these matters is significant. First, it is readily apparent that its advisers understood the statutory construction point. Otherwise there was no purpose in referring to any proposed legislative amendment. Despite such knowledge, Salini declined to put forward any submissions countering those of Mr Touhey as to the operation of the legislation.

40    Second, its stance was such that it may properly be considered a contradictor, albeit that it did not appear. In this instance I do not consider that the fact it filed a submitting notice means that the matter lacks a proper contradictor. In Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448 (quoted in Forster v Jododex at 437-438), it was explained that this refers to 'some one presently existing who has a true interest to oppose the declaration': see also Australian Competition and Consumer Commission v Sampson [2011] FCA 1165 at [11]-[15] (Tracey J). Salini has such an interest, even though it has chosen to submit to any order the Court makes. It has also sought to challenge aspects of the case by raising issues in correspondence and 'requiring' Mr Touhey's solicitors to place that correspondence before the Court. It can properly be considered a contradictor. It will be apparent to any reader of these reasons that relief has been granted not after a contested hearing but in circumstances where only Mr Touhey appeared, filed affidavits and made submissions.

41    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

42    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.

43    Section 87 of the FW Act, which falls within Part 2-2, relevantly provides as follows:

Entitlement to annual leave

Amount 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.

…

44    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).

45    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.

46    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).

47    Therefore, a failure to make payment to an employee of the value of their untaken accrued annual leave upon termination will contravene s 90(2), contravene the National Employment Standards and so contravene s 44(1) of the FW Act.

48    Section 130 of the FW Act, however, expressly addresses accrual of annual leave during periods when an employee is receiving workers' compensation payments.

49    Section 130 of the FW Act provides:

Restriction on taking or accruing leave of absence while receiving workers' compensation

(1)    An employee is not entitled to take or accrue any leave or absence (whether paid or unpaid) under this Part during a period (a compensation period) when the employee is absent from work because of a personal illness, or a personal injury, for which the employee is receiving compensation payable under a law (a compensation law) of the Commonwealth, a State or a Territory that is about workers' compensation.

(2)    Subsection (1) does not prevent an employee from taking or accruing leave during a compensation period if the taking or accruing of the leave is permitted by a compensation law.

(3)    Subsection (1) does not prevent an employee from taking unpaid parental leave during a compensation period.

50    So it can be seen that two questions follow: first, was Mr Touhey receiving compensation payable under a law of the Commonwealth or State that is about workers' compensation; and second, if so, whether the accruing of leave is 'permitted' by that law.

51    I accept on the affidavit evidence that: Mr Touhey suffered a workplace injury on about 29 August 2018 in the course of his employment with Salini; in the period from 15 January 2019 to 20 January 2020, he was unable to perform work for Salini due to the injury; he was absent from work due to the injury; he continued to be employed by Salini; and he was receiving compensation payments under the WCIM Act. Notification that liability for Mr Touhey's claim was accepted by GIO Workers Compensation under the WCIM Act was before the Court.

52    I also accept that the WCIM Act is a 'compensation law' for the purpose of s 130(1), being a law of a State that is about workers' compensation. Section 3 of the WCIM Act relevantly describes its purpose as:

Purposes

The purposes of this Act are -

(a)    to establish a workers' compensation scheme for Western Australia dealing with -

(i)    compensation payable to or in respect of workers who suffer an injury; and

(ii)    the management of workers' injuries in a manner directed at enabling injured workers to return to work; and

(iii)    specialised retraining programs for injured workers; and

(iv)    ancillary and related matters;

…

53    Mr Touhey's period of absence from work when he was injured and receiving workers' compensation payments under the WCIM Act from 15 January 2019 to 20 January 2020 was therefore a 'compensation period' during which he was receiving compensation under a 'compensation law' within the meaning of s 130(1) of the FW Act.

54    The question then is whether the accruing of the leave is 'permitted' by the WCIM Act.

55    Section 80 of the WCIM Act provides as follows:

Effect of leave entitlements; effect on sick leave

(1)    Compensation is payable in accordance with this Act to a worker in respect of any period of incapacity notwithstanding that the worker has received or is entitled to receive in respect of such period any payment, allowance, or benefit for annual leave or long service leave under any Act of the Commonwealth or of the State, any industrial award under any such Act, or any other industrial agreement applicable to his employment, and the amount of compensation so payable shall be the amount which would have been payable to the worker had he not received or been entitled to receive in respect of such period any such payment, allowance, or benefit.

(2)    A worker is not entitled to receive from any employer payments for sick leave entitlements for any period for which he receives weekly payments of compensation for injury under this Act, and where the first-mentioned payments are made and the second-mentioned payments are subsequently made in respect of the same period, the worker shall reimburse to the employer the first-mentioned payments and the employer shall reinstate the worker's sick leave entitlements as a credit to the extent that the worker does so reimburse the employer.

(3)    To the extent, if any, that a worker fails to reimburse an employer as required by subsection (2), the employer may sue and recover the relevant amount, and to the extent of recovery the employer shall reinstate as a credit the sick leave entitlements.

(emphasis added)

56    It is apparent that the provision does not expressly provide or confer any entitlement to take or accrue annual leave - but does it 'permit' it? In my view the question is answered by the Full Court in Anglican Care v NSW Nurses and Midwives' Association [2015] FCAFC 81; (2015) 231 FCR 316 (Jessup, Bromberg and Katzmann JJ). The Court considered the construction of s 130 in the context of New South Wales compensation legislation, being the Workers Compensation Act 1987 (NSW) (NSW WC Act). Section 49 of the NSW WC Act provides as follows:

Weekly compensation payable despite holiday pay etc

(1)    Compensation is payable under this Division to a worker in respect of any period of incapacity for work even though the worker has received or is entitled to receive in respect of the period any payment, allowance or benefit for holidays, annual holidays or long service leave under any Act (Commonwealth or State), award or industrial agreement under any such Act or contract of employment.

(2)    The amount of compensation so payable is the amount which would have been payable to the worker had the worker not received or been entitled to receive in respect of the period any such payment, allowance or benefit.

(emphasis added)

57    Whilst there are some minor differences in terminology and structure, the Court in Anglican Care considered that s 49 of the NSW WC Act and s 80(1) of the WCIM Act are 'identical in terms': at [53]. The emphasised passages in both extracts from the legislation highlight the similarity.

58    The Court unanimously rejected the construction advanced by the appellant in that case that the exception in s 130(2) will only apply if the relevant compensation law expressly provides or confers an entitlement to take or accrue annual leave.

59    The Court, having carefully considered the history relevant to the introduction of s 130 of the FW Act, held that the purpose of s 130(2) is to entitle employees who are absent from work and in receipt of compensation payments to the dual receipt of both annual leave entitlements and compensation payments, if such dual receipt is 'sanctioned, condoned or countenanced' by the relevant compensation law: at [64] (Bromberg and Katzmann JJ). In separate reasons, Jessup J held that 'permitted' in s 130(2) 'should be construed in the sense of not prevented, prohibited or restrained': at [16].

60    The Court unanimously held that s 49 of the NSW WC Act was a compensation law which permitted the accrual of annual leave during a compensation period and so engaged the exception in s 130(2) of the FW Act. Section 49 countenanced the simultaneous receipt of compensation payments and the accrual of annual leave: at [65] (Bromberg and Katzmann JJ). Jessup J held that s 49 did not operate to disqualify the NSW WC Act as a compensation law which engaged the operation of s 130(2) of the FW Act, because s 49 did not prevent, prohibit or restrain the simultaneous receipt of compensation payments and the accrual of annual leave: at [16]-[19].

61    The result in Anglican Care was that the Court dismissed the appeal and upheld the decision of the primary judge (NSW Nurses and Midwives' Association v Anglican Care [2014] FCCA 2580) which required an employer to pay its former employee untaken accrued annual leave pursuant to s 90(2) of the FW Act in respect to a period during which the employee was injured and absent and being paid workers' compensation.

62    Having regard to the careful reasoning of the Full Court, the fact that the issue was considered at appellate level and the similarity between the terms of s 49 of the NSW WC Act and s 80(1) of the WCIM Act, I would follow and apply Anglican Care. Accordingly, I am satisfied that the WCIM Act 'sanctioned, condoned or countenanced' and so permitted the dual receipt of compensation and annual leave benefits to Mr Touhey. The accrual of annual leave under the FW Act is a 'benefit for annual leave' under an Act of the Commonwealth within the meaning of s 80(1) of the WCIM Act. The concept of a 'benefit' is broad and its ordinary meaning extends to 'anything that is for the good of a person': Trewin v Comcare (1998) 84 FCR 171. It was common ground in Anglican Care that the accrual of annual leave was a benefit within the meaning of s 49 of the NSW WC Act: at [38].

63    It follows that I am satisfied that Mr Touhey was entitled to accrue annual leave when he was absent from work and receiving workers' compensation payments in the period from 15 January 2019 to 20 January 2020.

64    I am therefore satisfied that Salini failed to pay to Mr Touhey upon the end of his employment the amounts for untaken annual leave he was entitled to accrue in the period from 15 January 2019 to 20 January 2020, and that Salini thereby contravened s 90(2) and so s 44(1) of the FW Act. I am satisfied on the evidence that the number of relevant hours of untaken annual leave accrued was 154.5 hours, and that payment was to be calculated on the basis of the ordinary hourly rate payable to Mr Touhey together with the 17.5% leave loading provided for under the Company Enterprise Agreement 2016-2020.

65    I am also satisfied that it is appropriate to make the declarations sought. Salini expressly stated that it made payment to Mr Touhey 'without admission of liability', and so they serve to inform Salini of its obligations in that regard. Further, the declarations serve the purpose of defining the basis upon which the penalty proceedings are to proceed.

66    There will be declarations accordingly.

Associate:

Dated:    4 February 2022