Attorney-General for the Northern Territory v Chaffey

Attorney-General for the Northern Territory v Chaffey - [2007] HCA 34 - HCA 2007 case summary — Zoe

[25]

The Work Health Act repealed the Workmen's Compensation Act 1949 (NT) and commenced on 1 January 1987. Part II thereof (ss 6‑15) constitutes the Work Health Authority ("the Authority") as the body to administer and enforce the statute. Part V (ss 49‑91A) establishes a scheme of workers' compensation. Part VII (ss 117‑177) provides for the funding of the scheme, with compulsory insurance to be taken out by employers with an insurer approved by the Authority (s 126), and with provision also for approved self-insurers (s 120) and for the establishment of a Nominal Insurer (s 150) to administer the Nominal Insurer's Fund (s 162). The stated purpose of ss 75‑78 is to ensure rehabilitation of injured workers. An assignment of compensation payable under the statute is void and against an employer or an insurer (s 186). A Scheme Monitoring Committee, with a representative of the Authority and the other members appointed by the responsible Minister, is to monitor the viability and performance of the scheme (ss 141, 145).
Two provisions of Pt V are of immediate importance. First, s 52 states that the statutory regime operates with effect from 1 January 1987 to the exclusion of certain common law actions for damages which otherwise would have arisen thereafter.
Secondly, s 53 provides that "[s]ubject to this Part", where a worker suffers an injury which results in or materially contributes to the death, impairment or incapacity of that worker, "there is payable by [the] employer to the worker or the worker's dependants, in accordance with this Part, such compensation as is prescribed." (emphasis added). The term "prescribed" means prescribed by the Work Health Act or by an instrument of a legislative or administrative character made under that statute. This follows from the Interpretation Act (NT), s 18 ("the Interpretation Act"). Section 187(g) of the Work Health Act confers upon the Administrator of the Territory the power to make regulations "prescribing the amount of compensation payable or by reference to which compensation is to be calculated".
Section 65 of the Work Health Act provides that, in certain cases of long term incapacity, compensation is to be paid until attainment of the normal retirement age or the age of 65, whichever is the longer period. A component of the prescribed compensation is calculated by reference to the "normal weekly earnings" of the worker and that expression is defined in s 49(1) by reference to the "remuneration" of the worker.

[60]

Approach to the problem: Whilst I accept the criticisms that have been levelled at the current doctrine and the occasional difficulty of reconciling the outcomes of particular cases[36], the foregoing two considerations lead me, in the present case, to the conclusion that the appeals must be allowed. My reasoning is essentially the same as that of Heydon J[37].
Adjustment of entitlements: The scheme of the Work Health Act (NT) ("the Act") is designed to adjust the competing rights, claims and obligations of persons in the particular relationship of employment[38]. One can have views concerning the justice of particular adjustments made from time to time, and specifically of the adjustment in the present case which abolished (with retrospective operation) the inclusion of employer-paid superannuation payments as part of the "remuneration" of the "worker"[39], Mr Chaffey, upon which his entitlement to compensation would otherwise be calculated[40]. However, indisputably, the legislation in question here, which was justified as an attempt to restore the previous understandings of the operation of the Act[41], involved an adjustment in a statute containing a range of provisions burdening employers and favouring workers in specified ways.
Most importantly, the history of workers' compensation law in Australia, since its first introduction in the early years of the twentieth century, has been one of frequent and repeated legislative change and adjustment both in the types of available benefits and in their quantification. Commonly, the adjustment has seen the gradual increase in worker benefits. However, sometimes (as is said to be the case here), particular benefits have been reduced or abolished within a legislative "package" including a different mix of new entitlements and burdens. It was not too much to say, as Angel J did in the Full Court, with some hyperbole, that "[t]he percentage level of compensation, like interest rates and one-time goldmining 'booms' in Natal, may well have its 'ups and downs'"[42].
Inherent variability: Moreover, the particular provision of the Act, concerning the property right allegedly acquired by the removal of the superannuation component in the computation of the respondent's compensation benefits (s 53), contains a triple indication of the impermanency of the benefits accorded by the Act.
The three indications of this susceptibility are shown in the critical section, reproduced as it was in force at the time, with appropriate emphasis:

[65]

I therefore agree in the orders proposed in the joint reasons.
CALLINAN J. Subject to the matters which I later discuss, I agree with the construction of the relevant legislation adopted in the joint judgment, and the orders proposed by its authors.
The fact that a right or interest is the entire creature of an enactment does not, on that account, immunize its extinguishment, alteration, reduction or acquisition against an obligation on the part of the responsible polity to pay compensation. Many rights and interests, as well as obligations, are the creature of statute, but people coming to possess the former outlay money, time and effort by and on the faith of that possession. Others dealing with the possessor similarly do so. Everything that the Commonwealth lawfully does and creates, it does pursuant to statute and the Constitution. That certainly does not have the consequence that the Commonwealth may escape the operation of s 51(xxxi). It is subject to these basic propositions that various statements made by the Court, in a quite different setting, respecting repeals and amendments in Kartinyeri v Commonwealth[44] must be read.
Sometimes reference has been made to the "fragility" of a particular right, title or interest[45]. That description, although it may be relevant to value, has nothing to say about the existence of the right, title or interest.
All legislation is amendable or repealable. Amendments and repeals may however come at a price. It is not merely the inherent quality of legislative change that will defeat a right to compensation, but also the nature and quality of the object of the legislation, here the provision of benefits of specially adapted kinds to workers. Those benefits may not be confined to monetary benefits: for example, they might include access to rehabilitation or changed working conditions. So too, the benefits may fluctuate as the economy itself fluctuates. Workers compensation is a unique form of benefit, closely associated with working conditions generally. These are notorious matters. Sometimes the employer and its insurer may appear to be advantaged, at others the employees. Arrangements and transactions, for example, sales of going concerns employing many people are made with an awareness of these possibilities. These are considerations which distinguish workers compensation from conventional choses in action and other interests.
I do not doubt that s 50 of the Northern Territory (Self-Government) Act 1978 (Cth) should be construed in the same way as the Constitutional guarantee. It is not necessary however, for the purposes of this case to attempt to resolve the unsatisfactory state of the conflicting authorities and pronouncements in regard to it to which I referred in Smith v ANL Limited[46], and in respect of which my views remain unchanged.
The appeals should be allowed.
HEYDON J. The background is set out fully in the joint judgment, and the abbreviations in it are adopted below.
Mr Chaffey's rights to compensation under the Work Health Act were of a nature that rendered them inherently liable to variation by provisions such as those in the 2004 Act, and hence the 2004 Act did not effect an acquisition. This is so not because of the specific terms of s 53 of the Work Health Act read in isolation, but for the following reasons.
First, legislation relating to workers compensation has historically been peculiarly subject to frequent and often extensive amendment in the light of changes in economic conditions, the solvency of insurers, and the fluctuating positions of executive governments in relation to indemnifying under-funded workers compensation schemes. It is thus unlikely that persons affected by workers compensation legislation will commonly have any expectation that it will remain immune from amendment in a way which can alter existing rights.
Secondly, the Work Health Act reflects a particular balance between the interests of those affected by it.
From the point of view of workers, apart from the provisions for the payment of benefits in Pt V, the Work Health Act has the following purposes appearing in its long title:

[68]

How are these advantages for workers to be secured? The Act creates a system of insurers approved by the Work Health Authority, where approval depends in part on the ability to provide the necessary insurance services and on financial viability (ss 119(3)(a) and (c) and 120(3)(a) and (b)). Unless an employer is a self-insurer (s 120), it is compulsory to take out insurance with an approved insurer (s 126). There is a statutory duty on approved insurers to indemnify the employers they have insured (s 126(A)). There is provision for a Nominal Insurer (s 150) and a Nominal Insurer's Fund (s 162) to protect injured workers whose employers lack workers compensation insurance (s 150(1A)(a)) and to protect employers and injured workers where insurers default in payment of compensation (s 150(1A)(b); and see ss 137 and 167). The "viability and performance of the workers compensation scheme" is to be monitored by the Scheme Monitoring Committee (s 145(1)(a)), as are premium rates (s 145(1)(aa)) and overall underwriting results (s 145(1)(c)). The Committee has on it a representative of the Authority and other members appointed by the Minister (s 141), and the Authority is obliged to supply it with information (s 146). It is crucial to the operation of the Committee that insurers and self-insured employers be able to provide relevant statistical and other information, which is a matter material to their approval (ss 119(3)(d) and 120(3)(c)). Section 25(1) provides that the Work Health Advisory Council has the functions of inquiring into and reporting to the Minister on matters referred to it by the Minister, and of investigating and making recommendations to the Minister about any matter under the Act or relating to the administration of the Act (s 25(1)(a) and (b)). Thus the Council can inquire into and report on the adequacy of benefits payable to injured workers and the consequences, including the costs consequences of changing those benefits. The existence of these mechanisms for giving information and advice to the Minister about how the scheme is operating suggests that an implication of the legislation is that the scheme will remain workable, and that it will be amended if it is not.
The scheme involves reciprocity in the sense that the rights of workers to compensation depend on the duty of employers to pay it. Many employers will be unable to fulfil their duty to pay compensation unless they can obtain insurance in order to enable them to pay it. The availability of insurance depends on the willingness of insurers to enter the particular market, their ability to offer affordable premiums, and their capacity to pay on the policies entered by employers. It is possible that injured workers could receive payments until the attainment of the age of 65 (or normal retirement age if that is longer) (s 65(1)). The liability of insurers under particular policies could continue for very long periods.
Thus, as Angel J said in dissent in the Full Court, the scheme created by the Work Health Act[47]:

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (102 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (29)