Federal Court of Australia

Colgrave v TT-Line Company Pty Ltd [2026] FCA 1232

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is allowed.

2.    The decision of the Administrative Review Tribunal dated 19 December 2025 is set aside, and the matter is remitted to the Tribunal to be decided again, with a direction that s 38(1) of the Seafarers Rehabilitation and Compensation Act 1992 (Cth) does not apply to the applicant and that compensation is payable to the applicant in accordance with s 38(2) of the Seafarers Act.

3.    Within 7 days, the applicant file and serve written submissions (of no more than 5 pages) on the question of costs, together with any evidence on which the applicant relies.

4.    Within 14 days, the respondent file and serve written submissions (of no more than 5 pages) on the question of costs, together with any evidence on which the respondent relies.

5.    Within 21 days, the applicant file and serve any written submissions (of no more than 3 pages) in reply on the question of costs.

6.    The question of costs be determined on the papers.

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

REASONS FOR JUDGMENT

HORAN J:

1    This appeal raises a narrow question of statutory construction in relation to s 38(1) and (2) of the Seafarers Rehabilitation and Compensation Act 1992 (Cth), which restrict the payment of compensation for injuries resulting in incapacity for work to an employee covered by that Act if the employee has reached pension age.

2    The respondent’s position is that compensation for incapacity is not payable to the applicant because he has reached pension age, relying on s 38(1) of the Seafarers Act. However, the applicant relies on s 38(2) as disapplying sub-s (1) if the employee has reached the age that is one year before pension age at the time that the injury is suffered, instead providing an entitlement to compensation for a maximum of 52 weeks during which the employee is incapacitated.

3    The Administrative Review Tribunal upheld the respondent’s construction, and affirmed the determination that compensation for incapacity was not payable to the applicant because he had reached pension age within the meaning of s 38(1) of the Seafarers Act.

4    The applicant appeals from the Tribunal’s decision on a question of law, namely, whether the Tribunal misconstrued or misapplied s 38 of the Seafarers Act. In essence, the applicant contends that the Tribunal erred by failing to apply s 38(2) on the basis that he had reached the age that was one year before pension age when he suffered the injury. He contends that the Tribunal should therefore have concluded that s 38(1) did not apply, and that compensation for incapacity was payable to him for a maximum of 52 weeks (whether consecutive or not) during which he was incapacitated.

5    The appeal turns on whether s 38(2) of the Seafarers Act should be construed as applying to an employee who is older than the age that is one year before pension age (as the applicant contends), or should be limited to an employee who has reached the age that is one year before pension age but has not reached pension age at the time when the injury is suffered (as the respondent contends).

6    For the reasons set out below, the applicant’s construction of s 38 of the Seafarers Act is correct, and the Tribunal erred in law in affirming the respondent’s decision that compensation was not payable to the applicant under Div 3 of Pt 2 of the Seafarers Act. Accordingly, the appeal is allowed. The Tribunal’s decision is set aside, and the matter is remitted to the Tribunal with a direction that compensation is payable to the applicant in accordance with s 38(2) of the Seafarers Act.

BACKGROUND

7    The applicant was born on 19 January 1955. He was employed by the respondent on a ship named the “Spirit of Tasmania II”, and was an “employee” within the meaning of s 4 of the Seafarers Act.

8    The applicant reached one year before pension age on 19 January 2020, when he turned 65 years of age, and reached pension age on 19 January 2021, when he turned 66 years of age: see Seafarers Act, s 3 (“pension age”); Social Security Act 1991 (Cth), s 23(5A); Acts Interpretation Act 1901 (Cth), s 37A.

9    On 30 April 2023, when the applicant was 68 years of age, he was injured while working for the respondent. The circumstances of the injury are not material for present purposes. It is sufficient to note that the applicant suffered post-traumatic stress disorder (PTSD) after having witnessed a person jump overboard who subsequently drowned, despite unsuccessful attempts by the applicant and others to resuscitate him.

10    On or about 2 November 2023, the applicant submitted a claim for compensation under the Seafarers Act. The applicant had sought medical treatment for PTSD on or about 16 October 2023, having ceased work on 12 October 2023. He relied on a certificate from his general practitioner which certified him as unfit for work from 11 October 2023 to 8 November 2023.

11    I note that the parties have proceeded on the basis that the relevant date of injury was 30 April 2023, when the workplace incident occurred. It is arguable that the injury was suffered either on the day on which the applicant’s PTSD resulted in his incapacity for work (12 October 2023) or the day on which the applicant first sought medical treatment (16 October 2023): Seafarers Act, s 3 (“ailment”, “disease” and “injury”) and s 10(4). However, nothing turns on this, in circumstances where it is not in dispute that, at all material times, the applicant had both reached pension age and, in so far as it is relevant, had reached the age that is one year before pension age at the time that the injury was suffered.

12    On 22 November 2023, the respondent relevantly determined that, although it was liable to pay compensation to the applicant in respect of his psychological injury under Div 1 of Pt 2 of the Seafarers Act (such as medical expenses under s 28), it was not liable to pay compensation under Div 3 of Pt 2 in respect of the applicant’s incapacity for work. This was because the applicant had reached “pension age” for the purposes of s 38(1) of the Seafarers Act.

13    On 27 November 2023, the applicant requested a reconsideration of the respondent’s determination.

14    On 13 December 2023, pursuant to s 78(4)(b) of the Seafarers Act, the respondent’s insurer requested assistance from Comcare in reconsidering the determination. Comcare is the statutory authority responsible for the administration of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act), and has a statutory duty to provide assistance to both the Safety, Rehabilitation and Compensation Commission established by the SRC Act and the Seafarers Safety, Rehabilitation and Compensation Authority established by the Seafarers Act.

15    On 10 January 2024, Comcare recommended that the determination be revoked, stating that the applicant was “entitled to a maximum of 52 weeks of incapacity compensation as [he had] sustained an injury resulting [in] incapacity after the age that is one year before pension age” for the purposes of s 38(2) of the Seafarers Act. The Comcare officer relevantly noted in her advice that “[i]t does not seem to me that the [respondent], in making the determination of 22 November 2023, has had regard to section 38(2) of the Seafarers’ Act [sic] when making the determination”, and recommended that the respondent revoke the determination “and ensure that the provisions of [s] 38 of the Seafarers’ Act [sic] are followed when determining the [applicant’s] weekly incapacity payments”.

16    On 19 January 2024, notwithstanding the advice provided by Comcare, the respondent affirmed the determination on the basis that the applicant was “not entitled to weekly payments from the incident on 30 April 2023 as he was over pension age at the time of the incident” (the reviewable decision).

17    On 13 May 2025, the applicant applied to the Tribunal for an extension of time to review the reviewable decision. On 19 December 2025, having granted an extension of time, the Tribunal affirmed the reviewable decision: Colgrave v TT-Line Company Pty Ltd [2025] ARTA 2918 (T).

18    By a notice of appeal dated 29 January 2026, the applicant appeals from the Tribunal’s decision on the question “[w]hether the Tribunal misconstrued and/or misapplied s 38 of the Seafarers Act”. The applicant alleges that the Tribunal erred in concluding that his entitlement to compensation in respect of incapacity for work was excluded by s 38(1) of the Seafarers Act, and should have concluded that, because he had reached the age that is one year before pension age at the time that he suffered the injury, compensation is payable under Div 3 of Pt 2 in respect of the injury to the extent that the Seafarers Act (other than s 38(1)) allows and for a maximum of 52 weeks (whether consecutive or not) during which he is incapacitated.

LEGISLATIVE PROVISIONS

19    The long title to the Seafarers Act is “[a]n Act relating to rehabilitation and workers’ compensation for seafarers and certain other persons, and for related purposes”.

20    A “seafarer” means “a seafarer, as defined in the Navigation Act 2012, who is employed in any capacity on a prescribed ship, on the business of the ship”: Seafarers Act, s 3. For such purposes, the Minister may declare a ship to be a “prescribed ship” by legislative instrument under s 3A(1) of the Seafarers Act.

21    The definition of “seafarer” in s 14(1) of the Navigation Act 2012 (Cth) covers “any person who is employed or engaged or works in any capacity (including that of master) on board a vessel on the business of the vessel”, with specified exceptions (such as licensed pilots, vessel owners, law enforcement personnel, special personnel in relation to a special purpose vessel, industrial personnel on board an industrial personnel vessel, persons temporarily employed on a vessel in port, and other prescribed persons).

22    A “seafarer” is an “employee” under s 4(1)(a) of the Seafarers Act.

23    Part 2 of the Seafarers Act deals with compensation. Division 1 confers entitlements to compensation for injuries, property loss or damage, and medical and related expenses. Division 2 deals with compensation for injuries resulting in death. Division 3 deals with injuries resulting in incapacity for work (as defined in s 8).

24    Within Div 3 of Pt 2, s 31 provides for weekly compensation payments to employees who are incapacitated for work as a result of an injury (subject to specific provisions dealing with employees who have retired and are in receipt of a superannuation pension or lump sum benefit, or who are maintained as a patient in a hospital or nursing home). In broad terms, the compensation entitlement is worked out by reference to the employee’s normal weekly earnings, less the amount that the employee is able to earn in suitable employment. The amount of compensation payable reduces after the first 45 weeks. It is unnecessary for present purposes to set out the detailed statutory formulae by which the entitlement is calculated.

25    Section 38 deals with certain circumstances in which compensation for incapacity is not payable. Relevantly to the present case, s 38(1) and (2) respectively deal with compensation payable to employees who have reached pension age, and employees who have reached the age that is one year before pension age when they suffer an injury:

38     Compensation for incapacity not payable in certain cases

(1)     Compensation is not payable under this Division to an employee who has reached pension age.

(2)     However, if an employee who has reached the age that is one year before pension age suffers an injury:

(a)     subsection (1) does not apply; and

(b)     compensation is payable under this Division in respect of the injury:

(i)     to the extent that this Act (other than subsection (1)) allows; and

(ii)     for a maximum of 52 weeks (whether consecutive or not) during which the employee is incapacitated.

…

26    The term “pension age” is defined in s 3 of the Seafarers Act by reference to ss 23(5A), (5B), (5C) or (5D) of the Social Security Act. Relevantly to the present case, a man born between 1 January 1954 and 30 June 1955 reaches “pension age” when he turns 66 years of age: Social Security Act, s 23(5A), item 3.

THE TRIBUNAL’S DECISION

27    There were no disputed issues of fact before the Tribunal. Rather, the parties advanced competing contentions on the proper construction of s 38(1) and (2) of the Seafarers Act. The respondent made, but did not ultimately press, an application for the dismissal of the proceeding under s 101(1)(b) of the Administrative Review Tribunal Act 2024 (Cth), on the ground that the application for review had no reasonable prospects of success: T [9]–[10]. Instead, the parties agreed that the substantive application should be determined on the question whether and how s 38 of the Seafarers Act applied to the facts of the case.

28    The applicant submitted that the legislature did not intend to “cut off those workers who were older than pension age, if they injured themselves”, nor to “abruptly terminate[]” the weekly incapacity payments of employees who were injured in the year prior to reaching pension age: T [33]. Rather, the applicant argued that the Parliament intended that such injured workers could “transition to retirement” by being provided with up to 52 weeks of incapacity compensation: ibid. In support of that submission, the applicant referred to the Explanatory Memorandum to the Comcare and Seacare Legislation Amendment (Pension Age and Catastrophic Injury) Bill 2017 (Cth), which relevantly stated that “[t]he policy behind limiting payments to 12 months, where an employee suffers an injury at age 64 or more, is to provide older, injured employees with sufficient time to recover and return to work or, if they are unable to recover, to transition into retirement” (emphasis added).

29    The respondent, on the other hand, contended that s 38 was intended “to exclude those workers who have other means of statutory financial support” in that they were eligible for the age pension: T [35]–[37]. While the respondent accepted that an employee who was injured in the year prior to reaching pension age would be entitled to 52 weeks of incapacity compensation payments, it submitted that an employee who suffered an injury after reaching pension age would not be entitled to compensation in respect of incapacity for work, because the legislative intention was “to move people from the income compensation system to the [age] pension scheme”: T [37].

30    The Tribunal treated s 38 as an “exclusionary provision”, the purpose of which was “to limit the payment of compensation for incapacity for certain groups of employees, who would otherwise be entitled to that compensation upon suffering an injury resulting in incapacity for work”: T [46]. In rejecting the construction advanced by the applicant, the Tribunal stated (at T [50]):

The meaning of s 38(1) is that you are no longer entitled to compensation payments for incapacity once you have reached (or turned) pension age. If you are older than pension age, you have no eligibility.

31    Accordingly, the Tribunal concluded that compensation for incapacity was not payable to the applicant. The critical part of the Tribunal’s reasoning was expressed as follows:

55.     I can see no reason why s 38(1) would not apply to the Applicant. He was 68 years old at the time of his compensable injury, which means that he had “reached pension age”, and had, in fact, exceeded it by 2 years. Whether or not he suffered an injury at the age of 66 years and 1 day, or 75 years old, he was still excluded by s 38(1) from compensation for incapacity for that injury. The only time that s 38(2) could have applied to the Applicant was if he had suffered a compensable injury in the period between when he turned 65 years old and 66 years old.

56.     Section 38(1) would have to be entirely ignored – be non-existent – for the wording of s 38(2) to be interpreted in the manner submitted by the Applicant.

57.     The subsections must be read in context. The words “or more” in the [Explanatory Memorandum] do not function to erase the application of s 38(1). They also do not extend the application of s 38(2) to individuals past the pension age, such as the Applicant. The [Explanatory Memorandum], the public policy reasons expressed in the [Explanatory Memorandum], and the previous version of s 38(1) and (2) support an interpretation giving the phrase “reached pension age” its ordinary meaning. The correct interpretation of s 38(2) must logically be that it is applied only when an individual, who is the age of 1 year prior to pension age, suffers an injury. It cannot be applied to individuals who are older than the pension age, because s 38(1) then applies as the individual has “reached pension age”. It cannot be applied to the Applicant’s circumstances.

58.     The Applicant is not entitled to compensation under the Act because at the time of his injury in 2023, he was 68 years old. He had reached pension age and was thereby excluded by s 38(1) of the Act. For those reasons, which are the same reasons expressed by the Respondent in its reviewable decision, the correct and preferable decision is for the Tribunal to affirm the Respondent’s reviewable decision.

CONSIDERATION

Principles of statutory interpretation

32    The principles by which the meaning of s 38(1) and (2) is to be ascertained are not in dispute. The starting point is the statutory text, which must be construed in the light of its context and purpose, including by reference to any relevant legislative history and extrinsic material: see SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at [14] (Kiefel CJ, Nettle and Gordon JJ), [37]–[39] (Gageler J); ENT19 v Minister for Home Affairs (2023) 278 CLR 75 at [86]–[87] (Gordon, Edelman, Steward and Gleeson JJ); DZY (a pseudonym) v Trustees of the Christian Brothers (2025) 282 CLR 495 at [23] (Gageler CJ, Gordon, Edelman and Gleeson JJ); Palmanova Pty Ltd v Commonwealth [2025] HCA 35; (2025) 99 ALJR 1362 at [4]–[5] (Gageler CJ, Gordon, Jagot and Beech-Jones JJ).

33    An interpretation that would best achieve the legislative purpose or object of an Act (whether or not that purpose or object is expressly stated) is to be preferred: Acts Interpretation Act, s 15AA.

34    The meaning of s 38(1) and (2) must be determined by reference to the Seafarers Act viewed as a whole, and consistently with the language and purpose of all of the provisions of the statute: Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] (McHugh, Gummow, Kirby and Hayne JJ). Any constructional choice between multiple potential meanings may demand an “evaluation of the relative coherence of the alternatives with identified statutory objects or policies”: Taylor v Owners – Strata Plan No 11564 (2014) 253 CLR 531 at [66] (Gageler and Keane JJ); see also SAS Trustee Corporation v Miles (2018) 265 CLR 137 at [20] (Kiefel CJ, Bell and Nettle JJ). In the event of any apparent inconsistency between particular provisions, “the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions”: Project Blue Sky at [70]. This may require a determination as to the “hierarchy” of the provisions, that is, which provision must give way to the other: ibid.

35    In construing statutory provisions, a court “must strive to give meaning to every word of the provision”, and to avoid a construction by which a word or clause would be rendered superfluous: Project Blue Sky at [71]; see, e.g., Northern Land Council v Quall (2020) 271 CLR 394 at [61]–[62] (Kiefel CJ, Gageler and Keane JJ). Further, the same words appearing in different provisions should ordinarily be given the same meaning, or at least a consistent meaning, unless there is a reason not to do so: R v Jacobs Group (Australia) Pty Ltd (2023) 280 CLR 170 (Kiefel CJ, Gageler, Gordon, Steward, Gleeson and Jagot JJ).

36    As a statute directed to the rehabilitation and compensation of injured employees, the Seafarers Act is in a class of legislation that is remedial in character, and should be construed beneficially: Bird v The Commonwealth (1988) 165 CLR 1 at 9 (Deane and Gaudron JJ); Esam v ASP Ship Management (1998) 87 FCR 82 at 85 (Tamberlin J). Accordingly, in choosing between possible interpretations, a construction that is favourable to employees should be preferred: Wilson v Wilson’s Tile Works Pty Ltd (1960) 104 CLR 328 at 335 (Fullagar J).

37    Nevertheless, while s 38(1) and (2) of the Seafarers Act should “receive as generous a construction as the actual language of those provisions permits” (Legal Services Board v Gillespie-Jones (2013) 249 CLR 493 at [50] (French CJ, Hayne, Crennan and Kiefel JJ)), this does not displace the central question of “determining the meaning the relevant words used require”: Victims Compensation Fund Corp v Brown (2003) 77 ALJR 1797 at [33] (Heydon J, with whom McHugh ACJ, Gummow, Kirby and Hayne JJ agreed). As Mason, Brennan, Deane and Dawson JJ observed in Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638, “the rule that remedial provisions are to be beneficially construed so as to provide the most complete remedy of the situation with which they are intended to deal must, as has been said, be restrained within the confines of ‘the actual language employed’ and what is ‘fairly open’ on the words used”. Further, to say that the Seafarers Act as a whole has a beneficial purpose in favour of employees “does not mean that every provision or amendment to a provision has a beneficial purpose or is to be construed beneficially”: ADCO Constructions Pty Ltd v Goudappel (2014) 254 CLR 1 at [29] (French CJ, Crennan, Kiefel and Keane JJ). It remains necessary to consider the purpose of the particular provisions in question.

The text of s 38(1) and (2)

38    Starting with the statutory text, s 38(1) provides that compensation is not payable under Div 3 of Pt 2 to an employee who has “reached pension age”. It is common ground that this covers any employee who exceeds the pension age – for example, if the pension age is 66 years, s 38(1) applies to an employee who is 66 years of age or older. The effect of s 38(1) is that an employee who is incapacitated for work as a result of an injury is not entitled to weekly compensation payments once he or she has reached pension age.

39    Section 38(2) operates as a qualification on and exception to the general rule under s 38(1), in circumstances where an employee who has “reached the age that is one year before pension age” suffers an injury. Textually, sub-s (2) commences with the word “However”, and paragraph (a) then proceeds to disapply sub-s (1). The plain meaning of the language used in this provision is that sub-s (1) has no operation where an injury is suffered by an employee who has “reached the age that is one year before pension age”. Instead, s 38(2)(b) prescribes a specific rule that applies in those circumstances, providing that compensation is payable under Div 3 of Pt 2 in respect of the injury to the extent that the Act (other than s 38(1)) allows, but for a maximum of 52 weeks (whether consecutive or not) during which the employee is incapacitated as a result of the injury. For such purposes, the word “reached” in sub-s (2) should prima facie be given a meaning that is consistent with its use in sub-s (1), namely, covering an employee who is aged one year less than pension age or is beyond that age.

40    At first blush, the relationship between the general exclusionary rule in s 38(1) and the specific conferral of an entitlement to compensation by s 38(2) gives rise to an apparent paradox, in that any employee who has reached pension age must necessarily also have reached the age that is one year before pension age. However, when proper attention is given to the manner in which each subsection operates, it becomes clear that the specific rule in sub-s (2) does not in fact swallow or render otiose the general rule in sub-s (1). Subsection (2) operates by reference to the age of the employee at the time that the injury is suffered, as opposed to the time at which compensation is payable under Div 3 of Pt 2. This leaves work for sub-s (1) to do, in circumstances where an employee suffers an injury before having reached the age that is one year before pension age (or, in other words, more than one year before reaching pension age). Such an employee will only be entitled to compensation in respect of incapacity until he or she reaches pension age. But if an employee suffers an injury after having reached the age that is one year before pension age, he or she will be entitled to compensation in respect of incapacity in accordance with the conditions in sub-s (2) – that is, for a maximum of 52 weeks (whether consecutive or not) during which he or she is incapacitated as a result of the injury.

41    It is necessarily implicit in s 38(2)(a) that sub-s (1) would otherwise be capable of application to an employee who has reached the age that is one year before pension age. That must be because an employee who has reached pension age will also have reached the age that is one year before pension age. If such an employee suffers an injury, their entitlement to compensation for incapacity is governed by the specific provision in s 38(2), and not by the general provision in s 38(1).

42    As the applicant stated in his written submissions in reply, the language “has reached” in s 38(1) and (2) “denotes an action or event that occurred in the past but creates a state of affairs that continues into and exists in the present”, so as to describe “a cumulative and ongoing status”. In relation to s 38(2), the applicant relevantly submitted:

… a person who is 68 years of age has, as a matter of inescapable physical and chronological fact, reached the age of 65 (for example). A person does not “un-reach” the age of 65 when they turn 66, 67, 68 or older. The status of having reached that age milestone remains a continuous, cumulative reality.

43    I respectfully agree with those submissions. The use of the present perfect tense (“has reached”) in s 38(1) and (2) denotes an event that occurred in the past which creates a state of affairs that has relevance to the present: see Palmanova at [63]–[65] (Gageler CJ, Gordon, Jagot and Beech-Jones JJ); Commonwealth v Palmanova Pty Ltd (2024) 304 FCR 163 at [24] (Banks-Smith and Abraham JJ); see also Michael Swan, Practical English Usage (Oxford University Press, 4th ed, 2016), 47, who notes that “[w]e use the present perfect especially to say that a finished action or event is connected with the present in some way”; Randolph Quirk et al, A Comprehensive Grammar of the English Language (Longman, 1985), [4.18] (“the present perfective signifies past time ‘with current relevance’”), [4.20] (“the present perfective differs from the simple past in relating a past event/state to a present time orientation”).

44    In the context of s 38(1) and (2), the use of the present perfect signifies a historical fact as a criterion of operation for the application of the statutory limits on the payment of compensation to present circumstances, with no further temporal limitation. It is an example of “the perfect of continuing result”: Rodney Huddleston and Geoffrey K Pullum, The Cambridge Grammar of the English Language (Cambridge University Press, 2002), 145 [5.3.3]. This is consistent with the ordinary usage of a person having “reached” (or “attained”) a specified age to mean that the person is that age or older: compare, in relation to attaining or reaching full age or the age of majority, Prowse v McIntyre (1961) 111 CLR 264; King v Jones (1972) 128 CLR 221. In this respect, the attainment of an age is not so much an event, but “merely a way of saying that a certain period of time … has passed since [the person] was born”: Prowse at 278 (Windeyer J).

45    Further, as a general observation, the language “has reached” a particular age is commonly used in Commonwealth legislation to refer to persons who have passed that age, that is, as a current and ongoing status: see, e.g., Public Service Act 1999 (Cth), ss 30(1), 37(1A); Commonwealth Electoral Act 1918 (Cth), s 163(1)(a); Veterans’ Entitlements Act 1986 (Cth), s 36(1)(c); Superannuation Act 1976 (Cth), s 110R(2)(a); Social Security (Administration) Act 1999 (Cth), s 40R(1); Superannuation (Unclaimed Money and Lost Members) Act 1999 (Cth), ss 7, 12(1)(a); Social Security Act, ss 43, 593, 1061PK, 1068–1068B, 1121B(1)(a), 1209Z(1)(b), 1209ZB(1)(b).

Context and purpose

46    When first enacted, s 38(1) and (2) effected a clear demarcation based on whether or not an employee had reached 64 years of age at the time that he or she suffered an injury. In its original form, s 38 relevantly provided:

Compensation for incapacity not payable in certain cases

38.(1) If an employee who has not reached 64 suffers an injury, compensation is not payable under this Division for the injury after the person reaches 65.

(2) If an employee who has reached 64 suffers an injury, compensation is not payable under this Division for the injury after the end of the period of 12 months starting on the day on which the injury happened.

Thus, if an employee had not “reached 64” (viz. the age that was one year before pension age) at the time of injury, compensation was not payable after he or she reached 65 (viz. pension age). However, if an employee had “reached 64” when he or she suffered the injury, compensation was payable for a 12-month period, and not thereafter.

47    As was stated in the Explanatory Memorandum to the Seafarers Rehabilitation and Compensation Bill 1992 (Cth), cl 38 relevantly provided:

… that weekly compensation benefits will not be payable to an employee who:

•    has attained 65 years of age, unless the employee is 64 years of age or over when the injury occurs, in which case benefits will only be payable for a maximum period of 12 months, starting on the day on which the injury happened;

(Emphasis added.)

48    Section 38(1) and (2) were enacted in their current form by the Comcare and Seacare Legislation Amendment (Pension Age and Catastrophic Injury) Act 2017 (Cth) (2017 Amendment Act), in the context of amendments to align the Comcare and Seacare workers’ compensation schemes with the “pension age” under s 23(5A), (5B), (5C) and (5D) of the Social Security Act, pursuant to which the qualifying age for the age pension was to be incrementally increased from 65 to 67 years. As was stated in the Second Reading Speech, because compensation payments for incapacity under the Seafarers Act had generally ceased at 65 years of age, the amendments ensured “that those on income replacement payments will continue to get those payments until they reach the age when they can [qualify] for the age pension”: Commonwealth, Parliamentary Debates, House of Representatives, 11 May 2017, 4320.

49    The Explanatory Memorandum relevantly stated (at 1):

This Bill amends the SRC Act and the Seafarers Act to ensure that injured employees in receipt of weekly compensation payments for incapacity can continue to receive those payments until they reach ‘pension age’ as defined in the Social Security Act 1991. The qualifying age for the age pension under the Social Security Act 1991 will begin to increase on 1 July 2017. By linking compensation for incapacity with the pension age rather than age 65, these amendments will ensure there is no gap between the cessation of compensation for incapacity and eligibility for receipt of the age pension.

Similarly, in the Statement of Compatibility with Human Rights, the Explanatory Memorandum stated (at 2):

The Bill promotes the right to social security by ensuring that injured employees covered by the SRC Act or the Seafarers Act will not be left without financial support prior to becoming eligible for the age pension.

50    In relation to the amendments to s 38(1) and (2), the Explanatory Memorandum stated:

37.    This item aligns the cut-off provisions in section 38 of the Seafarers Act with the qualifying age of the age pension in the Social Security Act.

38.     Currently, subsection 38(1) provides that weekly compensation for incapacity payments are not payable to an employee who has reached 65 years – the standard retirement age when the Seafarers Act commenced in 1992. Current subsection 38(2) allows employees who suffer an injury at age 64 or more to receive incapacity payments for a maximum of 12 months from the date of injury, while they are incapacitated.

39.     The policy behind ceasing weekly compensation for incapacity payments at 65 years is that once the employee has reached 65 years he or she may become eligible to apply for age pension payments. The policy behind limiting payments to 12 months, where an employee suffers an injury at age 64 or more, is to provide older, injured employees with sufficient time to recover and return to work or, if they are unable to recover, to transition into retirement.

40.     However, the qualifying age for the age pension under the Social Security Act for both men and women will rise incrementally from 65 years to 67 years between 1 July 2017 and 1 July 2023.

41.     These amendments are necessary to ensure that there is no gap for injured employees aged 65 years or more who would otherwise be unable to receive weekly compensation for incapacity payments due to section 38 and unable to access the age pension until he or she reached ‘pension age’ under the Social Security Act.

51    The mischief addressed by the amendments was to replace the references to fixed ages in s 38(1) and (2) with ambulatory references to the “pension age” under the Social Security Act. In doing so, however, the linguistic structure of the provision was altered to match the equivalent provision in s 23(1A) of the SRC Act, which had been introduced by amendments made to that Act on the commencement of the Public Service Act and the abolition of compulsory retirement for Australian Public Service (APS) employees at 65 years of age: see Public Employment (Consequential and Transitional) Regulations 1999 (Cth), reg 6.1(i) and Pt 9 of Sch 1. Section 23(1) of the SRC Act similarly provided that compensation for incapacity was not payable to a person who had reached 65. Under s 23(1A) of the SRC Act, however, if an APS employee who had “reached 63” suffered an injury, the general exclusion of compensation entitlements under s 23(1) did not apply and compensation for incapacity was payable for a maximum of 104 weeks (whether consecutive or not) during which the employee was incapacitated. Although the amendments to s 38(1) and (2) of the Seafarers Act maintained the shorter time period (52 weeks instead of 104 weeks), they copied the language and structure of the pre-existing provisions in the SRC Act. At the same time, the 2017 Amendment Act also made amendments to s 23(1) and (1A) of the SRC Act to align those provisions also with the pension age under the Social Security Act (but referring to “the age that is 2 years before pension age”).

52    The manner in which s 23(1) and (1A) of the SRC Act operated was understood at the time that s 38(1) and (2) of the Seafarers Act were inserted in their current form. The Explanatory Statement to the Public Employment Regulations had explained the operation of s 23 of the SRC Act as follows:

Schedule 1 inserts a new subsection 23(1A) in the SRC Act, which introduces a limited eligibility for incapacity benefits for APS employees aged over 65.

The new Act abolishes compulsory age retirement for APS employees. Sections 19-22 of the SRC Act provide for weekly compensation payments to a person incapacitated for work as a result of an injury. Subsection 23(1) of the SRC Act, however, provides that compensation is not payable under sections 19-22 to a person who has reached age 65. Persons aged 65 and over have access to all other benefits under the SRC Act.

This regulation allows an APS employee aged over 63 years to access incapacity benefits for a limited period of time. The regulation amends section 23 of the SRC Act so that:

*     if an APS employee is incapacitated for work as the result of an injury occurring when he or she is aged 63 years or less, subsections 19-22 benefits are not payable after the employee reaches 65; and

*     if an APS employee is incapacitated for work as the result of an injury occurring when he or she is aged more than 63 years, subsections 19-22 benefits are payable in accordance with the SRC Act for a maximum of 104 weeks incapacity payments.

The regulation applies to APS employees injured after the commencing time and to APS employees aged 63 years or more who are receiving benefits under the SRC Act, or who are eligible to apply for such benefits, when the regulation commences.

(Emphasis added.)

53    The explanation in the bullet points set out above reveals some confusion in relation to what was meant by “reached 63” in new s 23(1A) of the SRC Act – the reference to an employee being “aged 63 years or less” was an inexact description of the effect of s 23(1) and (1A), and should more accurately have referred to “aged less than 63 years”. Similarly, the reference to “aged more than 63 years” should probably be understood as meaning “aged 63 years or more” or, as stated elsewhere, “aged over 63 years”. Nevertheless, the central distinction drawn by s 23(1) and (1A) was manifestly clear – while an employee who had not reached 63 years of age when he or she suffered an injury resulting in incapacity for work could not receive compensation after he or she reached 65, an employee who was aged over 63 years when the injury occurred could receive compensation payments for a limited period of time, being a maximum of 104 weeks.

54    There can be no doubt that the construction of s 38(1) and (2) of the Seafarers Act is properly informed by the equivalent provisions in the SRC Act, which may be treated as cognate legislation: Commonwealth v Snell (2019) 269 FCR 18 at [34] (Allsop CJ, Reeves and Derrington JJ); see also Seafarers Safety, Rehabilitation and Compensation Authority v Associated Steamships Pty Ltd [2019] FCAFC 232; (2019) 167 ALD 1 at [1] (Perram, Robertson and Rangiah JJ). The Seafarers Act was originally enacted in order to replace the “outdated and inadequate” scheme under the Seamen’s Compensation Act 1911 (Cth) with “modern and comprehensive rehabilitation and compensation arrangements similar to those applicable to Commonwealth employees”: Commonwealth, Parliamentary Debates, House of Representatives, 14 October 1992, 2145. The Act was intended to restore “the former nexus with workers compensation legislation applicable to Commonwealth employees”, and to align the benefits “with those currently payable to injured public sector workers covered by the [SRC Act]”: ibid.

55    Further, the current form of s 38(1) and (2) as introduced by the 2017 Amendment Act was drawn directly from s 23(1) and (1A) of the SRC Act, and was plainly intended to mirror the effect of those provisions. No reason has been suggested as to why there should be any distinction between the position of employees covered by the Seafarers Act and APS employees in this regard (apart from the difference in the length of the period during which compensation is payable for incapacity), and there is no indication in the extrinsic materials of any such distinction having been intended.

56    In summary, the 2017 Amendment Act addressed the potential “gap” arising from the amendments by which the pension age was to be incrementally increased from 65 to 67 years. Those amendments were remedial in nature and not restrictive of benefits. They were not intended to alter the pre-existing position so as to reduce the entitlements to compensation of injured employees, including those employees who were injured after having reached the age of 64 years (viz. one year before the pension age).

The respondent’s preferred construction

57    The construction for which the respondent contends, and which was upheld by the Tribunal, is not consistent with the text of s 38(1) and (2), nor with the context and purpose of those provisions.

58    The respondent argues that, because the applicant had reached pension age for the purposes of s 38(1), he cannot have been an employee who had reached the age that is one year before pension age when he suffered his injury within the meaning of s 38(2). On this argument, s 38(2) would only apply if the employee was aged one year less than pension age, but had not reached pension age, when the injury was suffered. The respondent accepts that, in such circumstances, compensation for incapacity would be payable after the employee reaches pension age for a maximum of 52 weeks during which the employee is incapacitated. This would give some, albeit limited, operation to the disapplication by s 38(2)(a) of the general exclusionary rule in s 38(1). However, an employee who was over the pension age when he or she suffered an injury would not be entitled to any compensation for incapacity under Div 3 of Pt 2 of the Seafarers Act, and would instead have to rely on the entitlement to the age pension.

59    The respondent erroneously seeks to give overriding primacy to s 38(1), in circumstances where s 38(2) expressly qualifies and provides an exception to sub-s (1). The thrust of the respondent’s submissions was that s 38(2) should be construed as limited by an implication drawn from s 38(1), which provides the general rule that compensation for incapacity is not payable to an employee who has reached pension age. The respondent argues that, once an employee has reached pension age, the age pension is available as a “safety net” for an employee who is incapacitated as the result of an injury. In such circumstances, the respondent submits that s 38(2) provides an exception only for the “subcategory” of employees who suffer an injury within one year before pension age.

60    The respondent’s submissions downplay the operation of s 38(2)(a), which expressly disapplies s 38(1) if an employee has reached the age that is one year before pension age when he or she suffers the injury, and stand the provisions on their head by reading s 38(2) as subject to s 38(1) rather than the other way around. In the light of the express terms of s 38(2)(a), sub-s (1) cannot be treated as the “leading provision” to which sub-s (2) must give way: see Project Blue Sky at [70] (McHugh, Gummow, Kirby and Hayne JJ), quoting Institute of Patent Agents v Lockwood [1894] AC 347 at 360 (Lord Herschell LC).

61    The respondent’s preferred construction does not explain why the phrase “reached pension age” in s 38(1) should be construed as covering any employees who are older than the pension age, but the same language in s 38(2) should be construed as not covering employees who are older than one year before pension age when the injury occurs. The respondent places undue weight on the words “one year before pension age” in s 38(2), without recognising that those words were introduced to replace the reference to an employee who had “reached 64” with an ambulatory term to accommodate the incremental increase in the pension age under the Social Security Act. Given the way in which the term “reached” is used in s 38(1) and (2), it was unnecessary to include the words “or older” after the words “reached the age that is one year before pension age”.

62    The respondent’s construction does not find any support in the Explanatory Memorandum. The amendments were intended to prevent any gap between the cessation of weekly compensation payments for incapacity and eligibility for the age pension under the Social Security Act, in circumstances where the pension age was being incrementally increased above the age of 65 years. This was effected by “linking compensation for incapacity with the pension age rather than age 65”: Explanatory Memorandum, 1. However, contrary to the respondent’s submissions, there was no general legislative policy to prevent injured employees from receiving compensation payments for incapacity if they were also eligible for the age pension, nor to move such employees “from the income compensation system to the pension scheme” (cf. Respondent’s Outline of Submissions, paragraphs 32, 37, 42). On the contrary, s 38 of the Seafarers Act (like the equivalent provisions in s 23 of the SRC Act) had long contemplated that compensation for incapacity was payable for a specified period if the employee had reached 64 years of age (in the sense of being aged 64 or more) when the injury was suffered. There was no legislative intention to alter that long-standing position, other than to link the entitlement to “the age that is one year before pension age”, rather than 64 years of age.

63    Paragraphs 38 and 39 of the Explanatory Memorandum (set out above at paragraph 50) referred to the pre-existing provisions in former s 38(1) and (2), and identified the policy behind each of those subsections. While the policy behind sub-s (1) was to cease compensation for incapacity payments once an employee reached the (then) “standard retirement age” of 65 years, the 12-month limit on payments where an employee suffered an injury “at age 64 or more” reflected a policy of providing “older, injured employees with sufficient time to recover and return to work or, if they are unable to recover, to transition into retirement”. That policy continued to apply in relation to s 38(2) in its amended form. It is broadly consistent with the objects of the Seafarers Act as a statute relating to rehabilitation and workers’ compensation for seafarers, in a context where there is no compulsory retirement age. An employee who is incapacitated for work as a result of an injury suffered after reaching or approaching pension age ought not to be encouraged into premature retirement by the denial of compensation payments just because he or she happens to be eligible for the age pension. Rather, s 38(2) confers on such an employee an entitlement to receive compensation for incapacity for up to 52 weeks before being required to move onto the age pension for ongoing financial support. The policy is to provide income replacement payments until the employee can either return to work, or transition to retirement. Such a policy is equally applicable in relation to employees who have reached the pension age.

64    Further, I do not accept the respondent’s submission that the reference to “age 64 or more” in paragraphs 38 and 39 of the Explanatory Memorandum was in contemplation of the incremental increase in the pension age. Nor do I consider that the term “or more” was directed to employees who have attained the age of 64 or older, but who are still within one year before pension age and no older than pension age. The relevant paragraphs were addressing the prevailing position under s 38(1) and (2) as originally enacted, prior to the amendments consequent upon the increase in the qualifying age for the age pension under the Social Security Act. The ordinary meaning of the reference to “age 64 or more” was to the pre-existing position under s 38(2) in its application to employees who were “64 years of age or over” (to employ the language used in the Explanatory Memorandum to the Seafarers Rehabilitation and Compensation Bill 1992 (Cth)). The words “or more” were not concerned with the incremental increase in the pension age, as made clear by the absence of such words in the first sentence of paragraph 39 when referring to “[t]he policy behind ceasing weekly compensation for incapacity payments at 65 years” (rather than 65 years “or more”).

65    Finally, while counsel for the respondent initially submitted that s 38(1) and (2) as originally enacted had the same operation as the current provisions, save for the change in the pension age, it is telling that there was nothing in the original s 38(1) or (2) to exclude the payment of compensation to an employee who was incapacitated as the result of an injury suffered after he or she had reached 64 (viz. one year before pension age), as opposed to the cessation of compensation “after the end of the period of 12 months starting on the day on which the injury happened”. Counsel for the respondent suggested that the failure to deal expressly with employees who had reached 65 might have been a “lacuna” in the previous provisions. However, there was no such lacuna. The original form of s 38(1) and (2) established a dichotomy between those employees who had not reached 64 when they suffered an injury (in which case compensation was not payable after they reached 65) and those employees who had reached 64 when the injury was suffered (in which case compensation was payable for a 12-month period). This was a binary distinction which comprehensively covered the universe of injured employees.

The errors in the Tribunal’s decision

66    The Tribunal concluded that the applicant was not entitled to compensation for incapacity under Div 3 of Pt 2 of the Seafarers Act because “[h]e had reached pension age and was thereby excluded by s 38(1)”: T [58]. In so far as the Tribunal based this conclusion on the applicant’s age “at the time of his injury”, it appears to have confused the operation of sub-s (1) and (2) respectively. However, this is the least of the problems embodied in the Tribunal’s reasoning.

67    The Tribunal criticised the applicant’s submissions as relying “on an alternative understanding to the word ‘reached’ in the context of aging”, such as where a person is eligible for the age pension from the date that they reach pension age and thereafter, whereas the word “reached” was used in s 38(1) of the Seafarers Act “in the context, and for the purpose of cutting off eligibility for an entitlement”: T [49]–[50]. However, it is difficult to understand how this relevantly limits the meaning of the term “reached” in the context of s 38(1) of the Seafarers Act, the effect of which was paraphrased by the Tribunal as “[i]f you are older than pension age, you have no eligibility” for compensation payments for incapacity. As mentioned above, it is common ground that s 38(1) applies to any employee who has reached pension age, in the sense that they are pension age or older. If “reached” can have that meaning in s 38(1), there is no reason why it cannot be given a similar meaning in s 38(2).

68    It is possible that the Tribunal was contemplating that s 38(1) operates at a point in time, so as to “cut off” eligibility for compensation payments once the employee reaches (or turns) pension age. However, this would assume that s 38(1) applies to employees who were incapacitated as a result of an injury suffered before reaching pension age, subject to the qualification in s 38(2) in respect of employees who have reached the age that is one year before pension age when they suffer an injury. It would not accommodate the respondent’s submission that s 38(1) is capable of applying to an employee who had already reached pension age at the time of the injury. That submission must treat “reached pension age” in s 38(1) as having a meaning similar to that “in the context of aging”, that is, an employee who is pension age or older. But in that case, why should the same word be construed differently in s 38(2)?

69    The Tribunal stated that it could “see no reason why s 38(1) would not apply to the Applicant”, given that he was 68 years old at the time of his injury and therefore had “reached pension age”: T [55]. This begs the question as to the meaning to be given to s 38(2), which expressly disapplies sub-s (1) if the employee “has reached the age that is one year before pension age”. The Tribunal was driven to the proposition that “[t]he only time that s 38(2) could have applied to the Applicant was if he had suffered a compensable injury in the period between when he turned 65 years old and 66 years old”: T [55]. However, no basis is provided for that conclusionary assertion, which rewrites the language used in s 38(2).

70    The Tribunal proceeded to state that “[t]he correct interpretation of s 38(2) must logically be that it is applied only when an individual, who is the age of 1 year prior to pension age, suffers an injury” (emphasis added), and that s 38(2) “cannot be applied to individuals who are older than the pension age, because s 38(1) then applies as the individual has ‘reached pension age’”: T [57]. Again, this rewrites the statutory text by substituting “an employee who has reached the age that is one year before pension age” with an employee who is that age (and no older), and by introducing a temporal limitation that has no foundation in the statutory language.

71    In so far as s 38(2) was read down by reference to s 38(1), so as to exclude from the former any employee who had reached pension age, the Tribunal wrongly treated s 38(2) as the “subordinate” provision and failed to give effect to s 38(2)(a). Further, by relying on an overriding policy “regarding the ceasing of incapacity payments upon an individual attaining the age at which they are eligible for the age pension” (T [54]), as given effect by s 38(1), the Tribunal failed to recognise the policy behind s 38(2), under which compensation for incapacity is payable for a specified period to an employee who has reached the age that is one year before pension age when the injury is suffered. The statutory text, context and purpose do not provide any basis on which the application of s 38(2) should be limited to employees who were injured in the year before reaching pension age. For example, if the pension age is 66 years, an employee would be entitled to compensation payments for incapacity for a maximum of 52 weeks under s 38(2) whether he or she was aged 65 years and 11 months when the injury occurred, or aged 66 years and one month, or older.

72    Contrary to the Tribunal’s reasons, this construction of s 38(2) does not require s 38(1) to be “entirely ignored” or treated as “non-existent”. Section 38(1) continues to apply to any employee who has not reached the age of one year before pension age at the time that the injury was suffered. When such an employee has reached pension age, compensation is no longer payable under Div 3 of Pt 2. This replicates the effect of former s 38(1) as originally enacted, save that the provision now operates by reference to the “pension age” under the Social Security Act.

73    Section 38(2), on the other hand, governs the payment of compensation for incapacity to employees who suffer an injury after they have reached the age that is one year before pension age. The entitlement of such an employee to compensation payments is limited to a maximum of 52 weeks (whether consecutive or not) during which the employee is incapacitated. In this way, the “purpose and language” of each of sub-s (1) and sub-s (2) is given effect while “maintaining the unity” of those provisions and the statutory scheme, on the basis that the provisions of that statutory scheme are intended to give effect to harmonious goals: Project Blue Sky at [70].

74    Having regard to the text, context and purpose of the Seafarers Act, the meaning and operation of s 38(1) and (2) is clear and unambiguous. However, to the extent that there is any ambiguity, the construction for which the applicant contends is to be preferred as best achieving the statutory purpose or object, and as the construction that is most beneficial to employees covered by the Act.

The present case

75    The applicant was aged 68 at the time that he suffered the injury. The applicable pension age in relation to the applicant was 66 years. Accordingly, he had “reached pension age” and, but for s 38(2) of the Seafarers Act, would not be entitled to compensation payments for incapacity for work.

76    However, as the applicant had reached the age of 65 when he suffered the injury, s 38(1) did not apply and compensation was payable under s 38(2) of the Seafarers Act to the extent that the Act (other than s 38(1)) allowed, for a maximum of 52 weeks (whether consecutive or not) during which the applicant was incapacitated as a result of his injury.

77    Accordingly, the Tribunal misconstrued s 38(1) and (2) of the Seafarers Act. The Tribunal erroneously concluded that the applicant’s entitlement to compensation was excluded by s 38(1), and should have found that compensation was payable to the applicant under s 38(2)(b).

CONCLUSION

78    The appeal is allowed. The decision of the Tribunal is set aside, and the matter is remitted to the Tribunal to be decided again, with a direction that s 38(1) of the Seafarers Act does not apply to the applicant and that compensation is payable to the applicant in accordance with s 38(2) of the Seafarers Act. At the request of the applicant, the parties will be given an opportunity to be heard on the question of costs.

Associate:

Dated:    10 September 2026